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Eight African Countries to Start Trading Under the African Continental Free Trade Area

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In pursuit of accelerating large-scale trade and business development, a number of African countries have been chosen to begin exchanging goods and services under the  the the new African Continental Free Trade Area (AfCFTA). The continental free trade is planned to operate within the framework of the African Union Agenda 2063.

The AfCFTA makes trade between African countries easier by providing new export opportunities for African countries’ products and services to trade with each other without tariffs or other hindrances, and thus driving an improved access to the biggest market space and ultimately lead to sustainable economic growth. 

Now the continental trading is about to operate as a platform for creating and strengthening ties between business communities, it highlights the readiness of the business environment and its priority potential development for the Africa.

Under the agreement with partners and shareholders, the African Continental Free Trade Area (AfCFTA) has chosen about eight African countries including Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania and Tunisia that will soon start trading. The move is part of efforts to diversify and increase export among African countries through Export Trading Companies (ETCs) while achieving the continent’s industrialization drive and make it economically self-reliant.

Herbert Krapa, Deputy Minister of Trade and Industry (MoTI), said at a seminar to sensitize African countries on the role of ETCs in easing intra-African trade under the AfCFTA in Accra, Ghana, that the Secretariat had launched the AfCFTA Initiative on Guided Trade to translate all the progress on paper into action to make the continent’s industrial revolution and its ability for self-reliance attainable.

“In the coming weeks, the dream of our forebears will be off the ground. Trading goods and services from Harare in Bamako or Kigali, or exporting processed cocoa from Accra to the entire northern African region should no longer be a nightmare if we make the appropriate investments into ETCs,” Krapa said.

The Deputy Minister explained that ETCs would make Africa leave no one behind in the regional value chain particularly small and medium-sized enterprises (SMEs), young entrepreneurs, startups, light manufacturers as well as big industries. These value-chain players will be providing export and import services, warehousing, transportation, finance, insurance, risk management and market intelligence, around which the free trade area will thrive. 

He, therefore, encouraged governments and private sector players to have the right policy, finance, institutional framework, productive capacity and infrastructure to enjoy the benefits that AfCFTA provided. With the current developments in the global economy, African countries – government institutions, exporters, financing firms, manufacturers, SMEs, and everyone else in the export ecosystem – have to pursue industrialization and be self-reliant. The planned industrial revolution must be realized at all costs across Africa.

Dr Gainmore Zanamwe, Senior Manager of Trade Facilitation, Afreximbank, said the lack of access to market intelligence was impeding growth of ETCs in Africa, and contributing to inability of member states to know what other countries were producing and needed. That though ETCs were ineffective in many African countries, they were critical in helping the growth of smallholder farmers and traders through the aggregation and bulk purchase of goods produced.

Dr Zanamwe highlighted the benefits of industrialization, noting that it helped in adding value to raw materials produced to increase revenue and job creation and called for the enabling environment to make ETCs thrive in Africa.

“By promoting trade in Africa, we strengthen our own industrial base and produce goods for ourselves and for each other,” South African President Cyril Ramaphosa said in a speeche when South Africa last hosted a weeklong Intra-African Trade Fair (IATF), which provides a unique and valuable platform for businesses to access an integrated African market of over 1.2 billion people with a GDP of over $2.5 trillion.

He pointed at the need of using the combination of the continent’s raw materials and industrial capacity, finance, services and infrastructure to produce quality finished goods to local and global markets, and about creating a market large enough to attract investors from across the world to set up their production facilities on the continent.

Taking his turn at the Intra-African Trade Fair, Nigerian President Muhammadu Buhari pointed out: “Today, Africa starts a collaborative journey towards collective economic prosperity. We cannot achieve this goal by talking alone. The implementation, the difficult journey and the challenges are surmountable if both public and private sectors collaborate. On the public sector side, governments must support local entrepreneurs to build scale, and therefore improve productivity.”

He added that “the African Continental Free Trade Area must make the effort to ensure that Africa becomes a marketplace where no country is left behind, create jobs and enhance revenues for all parties.”

Those African countries begin trading will therefore showcase the strengths and advantages of the AfCFTA. It is an ideal investment destination for foreign investors in Africa. In practical reality, it aims at creating a continental market for goods and services, with free movement of businesspeople and investments in Africa. The African Continental Free Trade Area (AfCFTA) provides a unique and valuable access to an integrated African market of over 1.3 billion people. 

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

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South Sudan: Extended roadmap for lasting peace deal, a ‘way point, not an end point’

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Since 2018, the Revitalized Agreement between the key players in South Sudan’s long-running civil war has provided a framework for peace, the Head of the UN mission there, UNMISS, told the Security Council on Friday – “despite continued outbreaks of intercommunal violence”. 

UN Special Representative Nicholas Haysom said that although key provisions of the Agreement are set to end by February, the parties agreed in August on a Roadmap that extends the current transitional period by 24 months. 

While a welcome development, he reminded that “there is no alternative to the implementation of the peace agreement”. 

“Let me underscore that the roadmap is a way point, not an end point”, he said. 

Inclusive political process 

The UNMISS chief flagged the importance of an inclusive political process and the opening of civic spaces as “essential conditions” for a robust and competitive electoral process. 

He then outlined some steps underway – from President Salva Kiir and first Vice-President Riek Machar’s agreement to resolve the parliamentary impasse, to the graduation of the first class of joint armed forces recruits – for which budgetary resources, integration and deployment, are vital to allow a broader security sector transformation. 

“Failure to address these critical issues…have the potential to reverse the gains made,” Mr. Haysom warned. 

Violence continues 

He went on to describe violence on the regional level, marked by cycles of cattle raiding, abduction, and revenge killings along with fighting in Upper Nile state that has displaced thousands of people. 

The Special Representative reported that while conflict-related violence is also increasing, UNMISS continues to support prevention through policy frameworks and other areas. 

“The Mission is strengthening its support to the justice chain in each state…to address crimes that risk destabilizing the peace, including those involving gender-based violence,” he told the ambassadors. 

‘Double pivot’ 

Mr. Haysom said that UNMISS has managed to accomplish a “double pivot” in its focus and operations, by channeling resources towards the political process; proactive deployment to violent hotspots; and expanding its protection presence for civilians. 

He assured that South Sudan’s natural resources have “tremendous potential” for either conflict, or cooperation.  

“It is always political that can make the difference”. 

Turning to the humanitarian situation, he acknowledged that food security continues to deteriorate, leaving some 8.3 million people in need and outstripping available funding. 

Noting that the Humanitarian Response Plan is only 44.6 per cent funded, he urged donors to fulfil their pledges. 

‘Litmus test’ 

He asserted that the next few months would be “a litmus test” for the parties to demonstrate their commitment to the Roadmap, warning against “delays and setbacks”. 

In closing, the Special Representative reaffirmed the importance of the international community’s support. 

“Our collective task now is to support the parties in fulfilling their obligations to the people of South Sudan as per the timing of the Roadmap,” he concluded. 

Indispensable timelines 

Meanwhile, Lilian Riziq, President, South Sudan Women’s Empowerment Network discussed a broad-based and inclusive process for all key participants, underscoring the need for a new transitional governance process.  

She underscored that election timelines are indispensable, noting that four years on, levels of revitalized agreement implementation have not brought security or ended humanitarian misery. 

She also highlighted ways that precious oil revenues in South Sudan, have been heavily misused. 

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Russia-Ukraine Crisis: its Impact and Implications for Southern Africa

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This article attempts to contribute to the discussions on the evolutionary political confrontations and contradictions between Russia and Ukraine, its impact on and implications for Africa. Historically, both Russia and Ukraine attained their independence after the collapse of the Soviet era in 1991. It has embarked on territorial expansionism, annexing neighbouring former Soviet republics. Its annexation ambitions started with Georgia, then Crimea and now Ukraine. That, however, Russia considered itself as a superpower and hopes to lead the emerging new world order. 

After these several months, the Russia’s “special military operation” approved by the Federation Council and the State Duma (legislative chambers) and that began Feb. 24, has tremendous impact on Africa. As already known, it has pushed the United States, European Union and a few Asia-Pacific states to impose draconian sanctions on Russia. This article helps to understand the impact, some of the implications and future directions by looking specifically at the Southern African region.

The Southern African Development Community (SADC) is a regional political-economic organization made up of 16 member states, with its population approx. 395 million. That compared, Russia is the largest by territory and has approx. 145 million population.

The SADC collectively aims at, among others, promoting sustainable social-economic development that will ensure poverty alleviation and enhancing ultimately the living standards of the people in Southern Africa. Despite differences in approach to politics in individual states, the group cooperates on issues of security in the region.

The Russian Federation maintains friendly bilateral relations practically with all these southern African states: Angola, Botswana, Comoros, Democratic Republic of Congo, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, United Republic of Tanzania, Zambia and Zimbabwe.

The diplomatic rhetoric is that it has uniquely supported struggle for political liberation particularly in Angola, Mozambique, Namibia, South Africa and Zimbabwe. And further to that, Russia claims to have a common understanding, solidarity and trusty position with African friends on important issues at international platforms including at the United Nations.

African representatives and their votes were considered very interesting. Some 17 African countries abstained from the vote at the UN General Assembly to deplore the Russian invasion of Ukraine while some other 28 countries in the continent voted in favour. Among those in the SADC bloc abstaining from vote include South Africa, Mozambique, Mauritius, Namibia, Angola, Zimbabwe, Madagascar, Tanzania and Democratic Republic of Congo.

The Russia-SADC Economic Scenerio

The Southern African countries are struggling to overcome multiple challenges that have originated due to the endless Russia-Ukraine crisis. But a careful study and analysis show that prior to the Feb. 24 crisis which unfolded in Ukraine, Russia indicated strong preparedness and high interests to broaden cooperation in economic sectors in Africa. 

In efforts to reposition itself to become a major partner, the following priorities as an economic strategy in the region were jointly put forward during Russia-SADC meeting held back in September 2019:

– Prospecting, mining, oil, construction, mining, purchase of gas, oil, uranium, and bauxite assets (Angola, Namibia and South Africa);

– Construction of power facilities: hydroelectric power plants on the River Congo (Angola, Namibia, and Zambia,) and nuclear power plants (South Africa);

– Creation of a floating nuclear power plant, and South African participation in the international project to build a nuclear enrichment centre in Russia;

– Railway construction (Angola);

– Creation of Russian trade houses for the promotion and maintenance of Russian engineering products (South Africa); and

– Participation of Russian companies in the privatisation of industrial assets, including those created with technical assistance from the former Soviet Union (Angola).

Of course, there are disparities in the level of development and cooperation between Russia and individual states in Southern Africa. At least during the past few years, Russia has notably strengthened relations with most them. For example, it has leveraged unto exploring lucrative platinum project at Darwendale (Zimbabwe). 

Foreign Minister Sergey Lavrov launched this $3 billion project back in 2014, after years of negotiations, with the hope of raising its economic profile in Zimbabwe. Few other anticipated projects have sprung up in Angola, DRC, Mozambique, Zambia, Zimbabwe and South Africa. 

While Covid-19 impacted on development progress, there are currently signs of the disarray caused by restrictive foreign exchange policies and continuing inability to determine funding sources for Africa. Russia has been engulfed with crisis and worse under serious sanctions, bilateral agreements might take years to realize fully in most Southern African countries.

Our research shows that ten SADC member-states have diplomatic offices in the Russian Federation: Angola, Democratic Republic of Congo, Madagascar, Mauritius, Mozambique, Namibia, South Africa, Tanzania, Zambia, and Zimbabwe.

Impact of Russia-Ukraine Crisis 

According to the United Nations Food and Agriculture Organization, many African countries rely on Russia and Ukraine for wheat imports. Russia is a major supplier of fertilizers to 15 African countries. Reuters news agency reported that Africa is suffering from disruptions in food supply and soaring prices of basic goods and risks “disastrous consequences” if the situation endures. This position was supported by African Union Chairman Macky Sall during a conversation with philanthropist Mo Ibrahim at the Ibrahim Governance Forum, far ahead before he travelled to Sochi, Russia. That Sochi trip discussed measures which could alleviate the escalating problems related to the food and agricultural inputs, and further reviewed strategic solutions within the context of Russia-African relations. 

Despite the assurance of reversing the situation offered at Putin-Sall-Faki meeting, the Russia-Ukraine never-ending crisis still flushing up commodity prices world-wide. Africa’s economy is currently worsening, a direct primary result of rising energy cost. With this economic instability, it further generated social discontent and tension among vulnerable impoverished groups across the population. Some have asked for wage indexations as well as increment in pensions and unemployment payments.

Local South African media have reported, during the previous months, about workers protesting against inflationary prices in Angola, Democratic Republic of Congo, Mozambique, South Africa and Zimbabwe. There has been sharp currency fluctuations throughout the southern African region. Southern Africa depends on some imported goods, such as agricultural produce and fertilizers, from Russia and Ukraine. In terms of negotiations, much has to be done in order to reach comprehensive agreements to free movement of these to the Africa’s market. 

Experts suggested in seperate interviews that it was necessary to implement the memorandum between Russia and the UN on exports of Russian agricultural products and fertilizers. Argubaly, there are indications that Washington and Brussels anti-Russian sanctions do not apply to foodstuffs and fertilizers. While some explain further that there are still obstacles to banking settlements, insurance and carriage of cargoes at shipping terminals due ot Western sanctions.

From our analytical position, first as African countries face continued uncertainty, the International Monetary Fund (IMF) and the World Bank (WB) interventions be necessarily seen only as short-term solutions. And second, in an article published by the French Press Agency (AFP), it says negotiations between the AU leadership and the Russian president illustrate the importance of enhancing the bilateral relations. While African leaders are attempting to build international solidarity and alliances aims at achieving genuine peace and global security, and for emerging new order, it also important to initiate a new reform drive to transform agricuture and industry throughout Africa. African financial institutions, such as the African Development Bank (AfDB), urgently have to prioritize investing more food production in the continent. 

Highly commendaly the initiative, the Feed Africa strategy for Agricultural Transformation in Africa (2016 to 2025), to move the continent to the top of export-orientated global value chains where it has comparative advantage. This aims at making Africa a net-exporter rather than importer of basic agricultural products and contributing to eliminating extreme poverty in Africa and ending hunger and malnutrition in Africa by 2025.

Our research shows the bank’s efforts has brought home $1.5 billion for the African Emergency Food Production Facility. It has been advocating for expanding social protection programmes, strengthening economic resilience and responsiveness to shocks of Russia-Ukraine crisis. The African Development Bank Group is Africa’s premier development finance institution.

Emerging Economic Prospects

Despite the negative impacts and consequences, the Russia-Ukraine crisis has simultaneously open doors (opportunities) for Africa. Europe has seen potential supplies of energy especially gas from the region. As Mozambique is gradually emerging as an exploration hub, its is attracting investors from Europe. Meanwhile, leading energy companies such as TotalEnergies, ExxonMobil, Bristish Petroluem (BP), Shell and Eni are already working in the region, seeking alternative supplies in light of the Russia-Ukraine conflict.

Mozambique’s President Filipe Nyusi and stanch member of the Southern African Development Community (SADC), has spearheaded multiple initiatives and partnerships with international partners to boost security and ensure project resumption. As a result, the European Union recently announced a plan to increase financial support for Mozambique while energy majors TotalEnergies, ExxonMobil and Eni are focused on getting projects back on track.

Mozambique is increasingly stepping up efforts in the production of liquefied natural gas and consequently become one of the suitable reliable suppliers to Europe. While it might not replace Russia which cuts its export of gas as a reciprocal action against European Union members, Mozambique seeks ultimately to earn some revenue from its natural resources. Late July, the outgoing European Union (EU) Ambassador to Mozambique, Sánchez-Benedito Gaspar, argued that natural gas from Cabo Delgado was among the alternatives in Europess plan to diversify energy sources in the face of constraints caused by Russia’s military operation in Ukraine.

“Mozambique’s gas, with the presence of large European multinational companies, now has an even more important and strategic value,” Sánchez-Benedito Gaspar said in an interview with Lusa, Mozambican News Agency, in Maputo. According to the diplomat, Europe came to the conclusion that “it cannot trust its old partner (Russia, among the world’s biggest gas exporters), which is authoritarian and uses gas as an instrument of war,” and is making efforts to secure alternative sources.

With an approximate population of 30 million, Mozambique is endowed with natural resources. With the untapped huge resources, if it is strategically well-managed and exploited in the southern states – Angola, Mozambique, Namibia, Tanzania and South Africa, it will possibly be making energy poverty history in southern region and possibly entire Africa.

The Puzzling Politics

On the political perspectives, a majority of African leaders have in principle endorsed multilateralism, and also reminded respect for territorial sovereignty, independence and human rights. Reference has been made to non-interference into nations internal affairs that brought to the fore the general priniciples on which the Non-Alignment Movement organization was created.

South African President Ramaphosa called for promoting international peace and security by advocating inclusive dialogue and the peaceful settlement of disputes. “We must safeguard the principle of multilateralism. We need a United Nations that is fit-for-purpose and clear in its benefits to all humanity, especially in times of insecurity and crises,” the President said late June.

Nearly all the experts contacted for this article have the same arguable points, especially safeguarding and walling (fencing) to be used by key powers as “political playing grounds” the Southern African region. Despite the contradictions, the experts acknowledged the fact that western hegemony and “rule-based order” be halted, and make way for the new emerging world order.

Russia’s Foreign Minister Sergey Lavrov, however, informed about broadening African issues in the “new version of Russia’s Foreign Policy Concept against the background of the waning of the Western direction” and this will objectively increase the share of the African direction in the work of the Foreign Ministry. It was last updated 2013.

The development of a comprehensive partnership with African countries remains among top priorities of Russia’s foreign policy, Moscow is open to its further build-up, Lavrov said in an Op-Ed article for the African media, and originally published on the ministry’s website late July.

The Future Roadmap

We have seen the extent African leaders express political sympathy for Russia. For Russia to regain part of its Soviet-era influence, it has to address its own policy approach, this time shifting towards new paradigms – implementing some of those bilateral agreements; secondly to promote development-oriented policies and its strategic efforts have to be more practical, more consistent, more effective and result-oriented with African countries.

In the context of building post-Soviet relations, Russia has to attempt creating a new model of template for itself, and for what it often refers to as “non-Western friends” in this crucial geopolitical changes occuring now in order to bring them into its armpit from Asia, Africa and Latin America. For African leaders, under the auspices of the African Union, have to design a broad roadmap. Significantly it is necessary to adopt “a collective voice and approach” for the continent. 

On other hand, a major rethink is urgently required in the current evolutionary processes of the new world order. The first drastic step is for Africans to identify their weaknesses, understand the fact that it is endowed with huge natural resources and therefore work together in complete harmony by pulling their own large-scale resources to fund the development agenda.

From our analytical perspectives, it is now time for Africa and its youth to stand up and defend its history and riches. And the significant challenge is the need for adoption of a unified strategy to avoid being used as a pawn in global power games. This should be the continental task for the SADC and the African Union.

Specifically, South African Development Community leaders have to follow the same line of procedures for the region. In the process of seeking additional support and whatever contributions from foreign partners and foreign investors, either government or private, these have to fall within the roadmap as re-emphasized during the 42nd summit of the South African Development Community. 

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Can this portable dam help Africa counter rising waters?

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Two people can fill a 100-metre-section of the barrier with water in an hour – a process that is 20 times faster than using sandbags. Photo: Reuters/Evrard Ngendakumana

In the Mpanda Commune in north-western Burundi, a long ribbon of rubber – about a metre high and two metres wide – snakes through a farmer’s field before disappearing into foliage.

A woman is sowing her crops alongside the structure, which is bulging with water and circles much of the commune.

The ribbon of rubber, called Slamdam, is designed to protect Mpanda and its 25,000 people from flooding while also acting as a warehouse for water during times of drought — weather extremes expected to become more common as Burundi’s climate changes.

“The project has been very well received by the local population,” said resident Gerard Bucumi. “The cost of installation was very cheap.”

Slamdam is part of a wave of cutting-edge technologies that experts hope will help the developing world adapt to the fallout from climate change, which includes floods, rising seas, scorching temperatures and more severe storms. Africa is especially vulnerable. It contributes only around 4 percent of global greenhouse gas emissions, and yet 6 of the 10 countries most threatened by climate change are located on the continent.

“Today, we are reeling from the impacts of climate change,” said Alvin Chandra, Head of the Global Adaptation Network at the United Nations Environment Programme (UNEP). “The reality, therefore, is that even if we suddenly halt all greenhouse gas emissions, there would still be an urgent need for the world to adapt to withstand extreme weather events. Technological innovation for adaptation opens the door to scale-up solutions.”

If humanity does not start reducing greenhouse gas emissions immediately, the need for technological innovation to adapt to climate change will only increase, say experts.

Race to adapt

Through the Adaptation Fund Climate Innovation Accelerator, UNEP, the Climate Technology Centre and Network, and the UN Development Programme are administrating grants to innovative adaptation technologies, such as Slamdam. The hope is that those solutions can be scaled up and help Africa build resilience to flooding and drought. (The fund’s third call for proposals is open for applications until 30 September 2022.)

According to UNEP’s Adaptation Gap Report 2021, there is an urgent need to scale-up climate adaptation measures and finance. Estimated adaptation costs in developing countries are five to 10 times greater than current public adaptation finance flows, and the gap is widening.

UNEP has a mandate to help member states scale up planning and action for adapting to climate change. UNEP has supported around 70 adaptation projects in over 50 countries. By 2020, its adaptation project portfolio had mobilized US$340 million on the strength of funding from the Global Environment Facility, the Green Climate Fund and the Adaptation Fund.

Holding back the waters

Slamdam, which is portable, was invented in the Netherlands. Two people can fill a 100-metre-section of the barrier in an hour by pumping water into it from a nearby lake or river, explains Omar Saleh, Managing Director of Zephyr Consulting, which helped deploy the Slamdam in Mpanda. Building a traditional 100-metre flood barrier with sandbags would take 14 people at least 20 hours, he said.

Saleh explained that Mpanda is prone to flooding which destroys crops and this discourages the community from planting. “Slamdam was able to harness the flood water enabling the community to plant and also to use the harnessed water for irrigation during the dry season, thus improving their food security.”

He added that the Mpanda Commune project was a pilot and that there were plans to scale up to include a larger area and a larger population.

“With this technology and these kinds of projects, food production will increase, and the negative impacts of floods and other climate changes will be reduced,” he added.

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