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Building Back Better on U.S.-Africa Economic Partnership

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Corporate Council on Africa (CCA), the leading reputable U.S. business association with a strategic focus on connecting business interests between the United States and Africa, has held the 13th U.S.-Africa Business Summit. The U.S. government and private sector leaders together African political and corporate business leaders have been working consistently over these years to share insights on critical issues and policies influencing the U.S.-Africa economic partnership.

The three-day Summit held virtually included 5 plenaries and 12 panel sessions highlighting key economic recovery strategies and focused on a range of sectors and issues, including health and vaccine access, trade, digital transformation, infrastructure, financing, small and medium scale enterprises, tourism, women’s leadership and investment opportunities in various African countries.

Here are some highlights:

The high-level dialogue set the scene for reviewing the opportunities for United States and African public and private sector leaders, how to strengthen the economic partnership between the United States and Africa. Prosper Africa, investments in key sectors such as gas, exploration of possible new bilateral trade agreements, extension of the African Growth and Opportunity Act (AGOA).

The Role of Women’s Leadership in Driving an Inclusive Recovery: The United States will drive a pandemic recovery and put women at the forefront. It has contributed 25 million vaccines for Africa. It implies to make sure incorporating women’s perspective in their efforts. “When women are empowered, they empower their families, they empower their communities and they empower their countries.”

Thokozile Ruzvidzo, Director of the Gender, Poverty and Social Policy Division, United Nations Economic Commission for Africa (UNECA) said that there are six critical things for women to benefit from the African Continental Free Trade Area (AfCFTA). These include: closing the gender gap as it relates to access to finance, empowering women in the export sector, regional value chains and procurement and ensuring that we include the voice of women in the AFCFTA implementation efforts.

New Pathways to a Strong U.S.-Africa Trade Relationship focused on a range of issues, from implementing the African Continental Free Trade Area agreement (AfCFTA), boosting Africa’s trade with the U.S. including through the African Growth and Opportunity Act (AGOA), pursuing agreements that go beyond AGOA, such as the U.S.-Kenya FTA. It will be pursuing public private partnerships that support U.S. and African businesses, including women owned and led SMEs.

U.S. Trade Representative, Katherine Tai, noted as top priorities for the Biden-Harris Administration the defeat of COVID and helping facilitate a robust global economic recovery. She pointed to trade as a key part of that effort and the determination to implement policies that benefit not only those at the top but foster inclusive and sustainable development, support regional integration, and ensure that all citizens benefit from the global economy.

H.E. Wamkele Mene, Secretary General of the AfCFTA Secretariat, highlighted the significant progress that has been made in advancing the AfCFTA — with 40 countries that have now ratified the agreement, Phase 1 covering trade in goods and services concluded, and 86% of the rules of origin completed. He noted that “AfCFTA has unlocked value chains for investors – especially U.S. investors – in key sectors such as pharmaceuticals, automobiles, agro-processing, and financial technology.”

Ethiopian Airlines CEO Tewolde GebreMariam noted that as the largest air cargo carrier in Africa with hubs in countries across the continent and the airline is successfully connecting Africa with the rest of the world – both for cargo and for passengers and tourism. He urged, though, that more be done to facilitate increased investment, trade and tourism in Africa and to support the AfCFTA vision and goals.

That the U.S. trade policy now transforms beyond the African Growth and Opportunity Act (AGOA) was at the core of remarks by Assistant U.S. Trade Representative Constance Hamilton. She noted that under the Biden-Harris Administration, they will be ramping up engagement with the AfCFTA Secretariat to support African regional integration, while looking to build stronger relationships with willing African nations through bilateral engagement. She noted the plans to hold a Trade Ministerial conference in 2021, and to engage with a range of stakeholders to explore ways to enhance the U.S.-Africa trade relationship.

Infrastructure Development: Catalyst for Economic Reboot. The Infrastructure session highlighted the growing financing gap in Africa and the importance of renewed public-private partnerships in the development of infrastructure projects.

Minister de Lille of South Africa and Serge Ekue of the West African Development Bank and other panelists suggested that a way to address those flaws is to “implement rigorous master planning that will first help identify bankable projects and then prepare them efficiently while raising local capacity.” Infrastructure is not just about the value of the money. It is about the value of the social impact on our communities. These indicated that countries pursue ways to bridge financing infrastructure in Africa.

Beyond Covid-19: Pathways to Resilient Health Systems in Africa. Building blocks for pathways to resilient health systems in Africa: Lessons from preparation and addressing the pandemic including a one-health multi-sectoral approach in addressing current and future pandemics. WHO and other partners have continued to play a critical role in building the capacity of African countries to cope with an overstretched health system during the pandemic.

It is important to invest in sustainable approaches that bring services close to the patients. These include strong primary healthcare (PHC) as the foundation for strengthening health systems, including the integration of services with a multi-disciplinary team. Looking forward, there are opportunities for impact investing in health in Africa by deploying financial resources that can have financial returns/commercial opportunities while improving health outcomes. 

Closing the Trade Finance Gap: A Pathway to Supporting More SMEs, Diaspora, and Women Owned Businesses
This session highlighted the trade finance gap with African, Diaspora, SMEs and Women owned businesses and how organizations can contribute to reduce (or eliminate) the gap. 

Participants discussed the impact of the pandemic on their organizations and initiatives contributing to economic activity recovery, as well as improving business operations. Panelists also highlighted the importance of diversifying both suppliers and clients, in addition to looking beyond the immediate market to new partnerships.

The diverse panel emphasized the growing trend of digitalization of SMEs and African business operations. Moving to digital and connected operations will help businesses not only simplify operations but also allow them to reach customers in places they were not able to operate before. This also will positively impact the relationship between Diaspora businesses and businesses on the continent. Panelists concluded that implementing strategies that will enable African SMEs to grow, build capacity, find new U.S. partners, and access cheap and easily available capital will be crucial to close the trade finance gap. 

Building a Sustainable Agribusiness Ecosystem

Panelists agreed that diversification was the way to improve the agribusiness sector. Collaboration between U.S. and African companies will help achieve sustainable development through increased access to investment financing and access to global markets for African companies.

Achieving diversification will require producing more value-added products, which will be achieved through investment in industrialization, R&D, and technology. Public-Private Partnerships (PPP) and favorable government policies will be key to funding these efforts. Investing in SMEs will be vital to improving agribusiness value chains since SMEs are deeply integrated at every level from retailers to crop transporters. Helping scale up these SME’s make the value-chains more productive and improve the sector’s output.

Digital Transformation – Pathway for Enabling African Business Environment

Digital Transformation – Pathway for Enabling African Business Environment plenary highlighted the role of the private sector and government to drive all-inclusive African digital transformation. 

In his remarks, South African Minister of Trade, Industry, and Competition, Ebrahim Patel highlighted that digital technology is a critical tool and a critical enabler to build economic growth and economic opportunities. 

Digital technologies will help create new products and new markets for millions of Africans. Policymakers, corporations, and entrepreneurs have a unique partnership opportunity to develop digital infrastructure, skills, and ecosystems. Minister Patel invited the private sector to share ideas and suggestions to make the AfCFTA e-commerce protocol fit for purpose. 

The COVID-19 pandemic has transformed the digitalization of life and work. As a result, technology companies are developing lifesaving products and services. For example, Google and Apple developed exposure notification technology, which helps slow the spread of COVID-19. Google also developed a range of products for remote education. 

As African businesses and consumers have shifted towards e-commerce and digital payments, companies like Visa have accelerated the rollout of payment infrastructure. For digital trade and digital economy to work effectively, panelists recommended that the African Continental Free Trade Agreement (AfCFTA) be implemented to establish a continent-wide harmonization of business-friendly rules and regulations. 

The Future of Energy in Africa: Transition and Pathway to Cleaner Energy

The session drew high-level participants from the U.S. Government, African countries, and the private sector to discuss the need for public-private sector collaboration on energy transition in Africa and innovative thinking on the critical need to address energy poverty and access to electricity in Africa while advancing the urgent fight against global warming.

Joining U.S. Special Presidential Envoy for Climate, John Kerry, from the USG were senior U.S. government officials from the Departments of Energy and State, and the U.S. Development Finance Corporation (DFC). Also participating in the dialogue were Ministers of Energy and senior African officials from Angola, Egypt, Ghana, Mozambique, Nigeria, and Senegal, as well as CEOs and other top executives from a range of U.S. and African oil, gas, and power companies and major investors in the sector.  

The Hon. John Kerry stated that tackling climate change is a top priority for the United States and reiterated the U.S. government commitment to encouraging other countries to achieve their respective climate and clean energy goals. It was noted that more African countries need to sign on to the Paris Agreement to tackle climate change as it is important that all countries work together to address global climate change. 

Other U. S. government officials acknowledged energy poverty in Africa and noted that improving energy access in Africa is paramount to the U.S. government as it continues to invest in electricity systems in Africa through initiatives like Power Africa. They also noted that even while the United States is pushing for a strong political commitment from African to prioritizing and meeting climate change goals, the U. S. government will continue to support and finance energy projects (including some in gas) in Africa, particularly where renewable energy options may not be viable.

African Ministers and government officials shared the strategies they have adopted in their respective countries to both adopt clean energy technologies in oil and gas, while also investing in renewable energy options. In Senegal, Egypt and Angola, renewable energy is at the forefront of energy transition strategies and initiatives, and it was noted that collaborations with international partners is essential to achieving long term energy and climate change goals in Africa.

CEOs and senior executives of companies with operations in Africa who participated in the session highlighted that they are actively working on energy access in Africa, see gas (particularly abated gas) as a medium term, low cost transition option to address climate change, while some are also investing in and financing renewable energy projects in Africa.    

There were calls for fair treatment of Africa, in terms of climate change, as well as for the U. S. government to prioritize development over climate change when it comes to Africa, and to continue financing gas projects in Africa for the next 5-7 years, which some thought could actually help meet climate goals faster as Africans (especially those in rural areas) shift from wood burning to use of gas to cook. Noting the complexity of these energy issues, many agreed that public-private partnerships are crucial to renewable energy transitions, and thought that further dialogues like this one leading up to the COP 26 talks scheduled to take place in Glasgow in November 2021 would be crucial in the U.S. and Africans reaching a common understanding about the way forward on the future of energy and climate in Africa.  

Looking Forward: Biden-Harris Administration is prioritizing economic relationship with Africa. Dana Banks, White House Senior Director for Africa, announced the White House Administration made a request for $80 million in additional funding to push for the Prosper Africa Build Together Campaign that will drive billions of dollars of investment in Africa, build new markets for American products and create thousands of jobs for African and American workers.

The U.S.-Africa Business Summit 2021 was sponsored by leading global businesses and organizations. U.S. government has Prosper Africa, the African Growth and Opportunity Act (AGOA) and the Young African Leaders Initiatives among other tools for connecting and working effectively with Africa. The summit outcomes were highly appreciated, as it offers grounds for scaling up U.S.-Africa relations. The 13th summit, was organized and coordinated by Corporate Council on Africa, was broadly viewed as an effort directed at building new pathways to strengthen further the economic partnership between United States and Africa. [….]

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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Africa

The Transitioning Democracy of Sudan

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Sudan has been the focus of conflict for much of its six decades as an independent nation. Despite being an anomaly in a region crippled with totalitarian populism and escalating violence, the country hasn’t witnessed much economic or political stability in years. While the civic-military coalition, leading a democratic transition towards elections, has managed to subside the fragments of civil war, growing hostility in the peripheries has begun threatening the modest reforms made in the past two years. The recent coup attempt is a befitting example of the plans that are budding within the echelons of the Sudanese military to drag the country back into the closet. And while the attempt got thwarted, it is not a success to boast. But it is a warning that the transition would not be as smooth a ride as one might have hoped.

The problems today are only a reflection of Sudan’s issues in the past: especially which led to the revolution. The civil unrest began in Sudan back in December 2018. Sudan’s long-serving ruler, Omer al-Bashir, had turned Sudan into an international outcast during his 30-year rule of tyranny and economic isolation. Naturally, Sudan perished as an economic pariah: especially after the independence of South Sudan. With the loss of oil revenues and almost 95% of its exports, Sudan inched on the brink of collapse. In response, Bashir’s regime resorted to impose draconian austerity measures instead of reforming the economy and inviting investment. The cuts in domestic subsidies over fuel and food items led to steep price hikes: eventually sparking protests across the east and spreading like wildfire to the capital, Khartoum.

In April 2019, after months of persistent protests, the army ousted Bashir’s government; established a council of generals, also known as the ‘Transitional Military Council.’ The power-sharing agreement between the civilian and military forces established an interim government for a period of 39 months. Subsequently, the pro-democracy movement nominated Mr. Abdalla Hamdok as the Prime Minister: responsible for orchestrating the general elections at the end of the transitional period. The agreement coalesced the civilian and military powers to expunge rebellious factions from society and establish a stable economy for the successive government. However, the aspirations overlooked ground realities.

Sudan currently stands in the third year of the transitional arrangement that hailed as a victory. However, the regime is now most vulnerable when the defiance is stronger than ever. Despite achieving respite through peace agreements with the rebels in Sudan, the proliferation of arms and artillery never abated. In reality, the armed attacks have spiraled over the past two years after a brief hiatus achieved by the peace accords. The conflict stems from the share of resources between different societal fractions around Darfur, Kordofan, and the Blue Nile. According to UN estimates, the surging violence has displaced more than 410,000 people across Sub-Saharan Africa in 2021. The expulsion is six times the rate of displacement recorded last year. According to the retreating UN peacekeeping mission, the authorities have all but failed to calm the rampant banditry and violence: partially manifested by the coup attempt that managed to breach the government’s order.

The regional instability is only half the story. Since the displacement of Bashir’s regime, Sudan has rarely witnessed stability, let alone surplus dividends to celebrate. Despite thawing relations with Israel and joining the IMF program, Sudan has felt little relief in return. The sharp price hikes and gripping unemployment which triggered the coup back in 2019 never receded: galloped instead. Currently, inflation runs rampant above 400%, while the Sudanese Pound has massively devalued under conditions dictated by the IMF. And despite bagging some success in negotiating International debt relief, the Hamdok regime has struggled to invite foreign investment and create jobs: majorly due to endemic conflicts that still run skin-deep in the fabric of the Sudanese society.

While the coup attempt failed, it is still not a sigh of relief for the fragile government. The deep-rooted analysis of the coup attempt reveals a stark reality: the military factions – at least some – are no longer sated in being equal-footed with a civilian regime. Moreover, the perpetrators tried to leverage the widening disquiet within the country by blocking roads and attempting to sabotage state-run media: hoping to gain public support. The population is indeed frustrated by the economic desperation; the failure of the coup attempt means that people have still not given up hope in a democratic government and a free-and-fair election. Nonetheless, it is not the first tranche of the army to rebel, and it certainly won’t be the last. The only way to salvage democracy is to stabilize Sudan’s economy and resolve inter-communal violence before leading the county towards elections. Otherwise, it is apparent that Bashir’s political apparatus is so deeply entrenched in Sudan’s ruling network that even if the transitional government survives multiple coups, an elected government would ultimately wither.

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Money seized from Equatorial Guinea VP Goes into Vaccine

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As a classic precedence, the Justice Department of the United States has decided that $26.6m (£20m) seized from Equatorial Guinea’s Vice-President Teodorin Nguema Obiang Mangue be used on purchasing COVID-19 vaccines and other essential medical programmes in Equitorial Guinea, located on the west coast of central Africa.

“Wherever possible, kleptocrats will not be allowed to retain the benefits of corruption,” an official said in a statement, and reported by British Broadcasting Corporation.

Obiang was forced to sell a mansion in Malibu, California, a Ferrari and various Michael Jackson memorabilia as part of a settlement he reached with the US authorities in 2014 after being accused of corruption and money-laundering. He denied the charges.

The agreement stated that $10.3m of the money from the sale would be forfeited to the US and the rest would be distributed to a charity or other organisation for the benefit of the people of Equatorial Guinea, the Justice Department said.

The UN is to receive $19.25m to purchase and administer COVID-19 vaccines to at least 600,000 people in Equatorial Guinea, while a US-based charity is to get $6.35m for other medical programmes in Equatorial Guinea.

Teodorin Nguema has been working in position as Vice-President since 2012, before that he held numerous government positions, including Minister of Agriculture and Forestry. Known for his unquestionable lavish lifestyle, he has been the subject of a number of international criminal charges and sanctions for alleged embezzlement and corruption. He has a fleet of branded cars and a number of houses, and two houses alone in South Africa,

Teodorin Nguema has often drawn criticisms in the international media for lavish spending, while majority of the estimated 1.5 million population wallows in abject poverty. Subsistence farming predominates, with shabby infrastructure in the country. Equatorial Guinea consists of two parts, an insular and a mainland region. Equatorial Guinea is the third-largest oil producer in sub-Saharan Africa.

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African Union’s Inaction on Ethiopia Deplorable – Open Letter

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The crisis in northern Ethiopia has resulted in millions of people in need of emergency assistance and protection. © UNICEF/Christine Nesbitt

A group of African intellectuals says in an open letter that it is appalled and dismayed by the steadily deteriorating situation in Ethiopia. The letter, signed by 58 people, says the African Union’s lack of effective engagement in the crisis is deplorable. The letter calls on regional bloc IGAD and the AU to “proactively take up their mandates with respect to providing mediation for the protagonists to this conflict”.

The letter also asks for “all possible political support” for the AU’s Special Envoy for the Horn of Africa, Olusegun Obasanjo, whose appointment was announced on August 26, 2021. A United Nations Security Council meeting on the same day welcomed the former Nigerian president’s appointment.

Earlier in August 2021, UN  chief Antonio Guterres appealed for a ceasefire, unrestricted aid access and an Ethiopian-led political dialogue. He told the council these steps were essential to preserve Ethiopia’s unity and the stability of the region and to ease the humanitarian crisis. He said that he had been in close contact with Ethiopian Prime Minister Abiy Ahmed and had received a letter from the leader of the Tigray region in response to his appeal. “The UN is ready to work together with the African Union and other key partners to support such a dialogue,” he said.

August 26, 2021 was only the second time during the conflict that the council held a public meeting to discuss the situation. Britain, Estonia, France, Ireland, Norway and the United States requested the session.

Fighting between the national government and the Tigray People’s Liberation Front broke out in November 2020, leaving millions facing emergency or crisis levels of food insecurity, according to the United Nations. Both sides have been accused of atrocities.

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