Category: Banking and Finance

ABUJA, NIGERIA — A Chinese official in Nigeria says Beijing plans to invest over $300 billion in Africa to increase African exports and help close the large trade gap with China. China’s plans for more investment in Africa have been welcomed by some, but critics worry about Africa’s growing debt with Beijing.

The recent signing of a multi-billion-dollar partnership between China and Africa marks a major step in China’s effort to spend more money in Africa in nine industrial sectors, including trade, digital innovation, medical, poverty reduction, culture and peace and security.

A Chinese official, China Africa Business Council head Diana Chen, signed a memorandum of understanding with Lagos Chamber of Commerce officials last week in Lagos.

Chen said the $300 billion will be invested in Africa over the next three years.

Many experts welcome the development and say it could increase the local manufacturing and export capacity of indigenous Nigerian and African brands.

Charles Onunaiji is the director of the Center for China Studies in Abuja.

“It’s not just in Lagos, it’s been holding across Africa. There have been discussions of the new opportunities of China-Africa cooperation. The Lagos meeting was one of the follow-ups on that very important meeting in Dakar, where the Chinese president offered nine programs to drive China-Africa cooperation to the next level. For me, this is a very important landmark in China-Africa cooperation,” he said.

China is Africa’s biggest trading partner, with over $30 billion in trade volume, surpassing the United States and Europe. Nigeria is one of China’s largest trading partners in Africa.

Onunaiji said the new partnership is expected to improve Africa’s trade with China, which analysts say is lopsided.

“China is responding to some of these concerns by giving more opportunities to Africa to access her market. And in my view, this particular proposal to import from Africa $300 billion worth of goods in three years is a game changer,” he said.

Chinese officials say the new partnership will see China establish special economic zones to accept more imports from Africa.

The president of the Nigeria Private Sector Alliance, Adetokunbo Kayode, said he worries the new partnership could further deepen Africa’s debt with China.

“Many African countries have sleep-walked into the debt trap. They’re already there, and it’s very obvious, because the facilities they’ve taken from several countries, including China, is such that they do not have the wherewithal to pay back. Secondly, the contracts are end to end,” he said.

Kayode said even though Bejing is investing heavily in Africa, Africans are not often part of the execution, creating a knowledge gap.

Experts say the success of the Chinese partnership will be dependent on favorable trade policies that will be drafted among China and African countries.

But Kayode has this to say, “What is our trade policy with China? In spite of my maybe fairly advantaged position in Nigeria, I’ve not seen any clear document showing the nitty gritty of Nigeria’s trade policy with China. I’ve not seen specific policies on areas like, for instance, how you drive the local contents of this multibillion-dollar contract.”

Since 2018, Chinese authorities began hosting the China-Africa Economic and Trade Expo in Changsha City in the central China province with the stated aim of exposing African products to the Chinese market.

While more African businesses may try to meet a more welcoming Chinese market for their products, many will be watching to see how the new partnership changes the status quo.

 

Source: Voice of America

The International Monetary Fund board on Monday approved a three-year $455 million loan for the Republic of Congo to help undergird the small African nation’s economic recovery.

The global crisis lender will provide $90 million immediately under the Extended Credit Facility to help the oil-dependent country deal with the effects of the COVID-19 pandemic.

The economy “is expected to strengthen in the second half of the year, supported by vaccine rollout, social spending, and domestic arrears, payments,” IMF Deputy Managing Director Kenji Okamura said in a statement

“However, the nascent recovery is facing significant risks, including a possible worsening of the pandemic (and) continued volatility in oil prices.”

But reducing the nation’s “debt vulnerabilities” will be key, Okamura said, noting the government is working on restructuring its debt.

The Republic of Congo, a land of 5 million people that abuts the vast Democratic Republic of Congo, relies on oil for most of its wealth and has built up debt to China through loans that helped build some of its petroleum infrastructure.

The IMF estimates the economy will grow 2.4% this year, after a slight contraction in 2021.

 

 

Source: Voice of America

Guinea and Vanuatu had their ability to vote at the United Nations restored on Monday, having been denied the right at the beginning of the month over their failure to pay their dues to the world body, a UN spokeswoman said.

“The General Assembly took note that Guinea, Iran and Vanuatu have made the payments necessary to reduce their arrears below the amounts specified in Article 19 of the Charter,” U.N. spokeswoman Paulina Kubiak said.

“This means that they can resume voting in the General Assembly,” she said.

Under Article 19, any country can have their voting rights in the General Assembly suspended if their payment arrears are equal to or greater than the contribution due for the past two full years.

The payment Friday of more than $18 million by Iran, via an account in Seoul and most likely with the approval of the United States, which has imposed heavy financial sanctions on Tehran, had been announced at the end of last week by UN sources and confirmed by South Korea.

For their part, Guinea had to pay at least $40,000 and Vanuatu at least $194 to recover their right to vote.

Kubiak later added three other countries that lost their U.N. voting rights in early January had also recovered them after paying the minimum arrears required last week.

Those countries were Sudan, which had to pay about $300,000, Antigua and Barbuda, which owed some $37,000 and Congo-Brazzaville, with around $73,000 in arrears, said the spokeswoman.

On the other hand, Venezuela, which is facing a minimum payment of nearly $40 million, and Papua New Guinea, which must pay just over $13,000, remain deprived of the right to vote, according to the U.N.

They are the only two countries out of the 193 members of the United Nations that will not be able to participate in votes this year.

 

 

Source: Voice of America

UNHCR, the United Nations Refugee Agency, is appealing for nearly $60 million for tens of thousands of victims of intercommunal clashes over dwindling resources in Cameroon’s Far North region.

The United Nations Refugee Agency Friday released an appeal for just under $60 million for support for those fleeing intercommunal violence in Cameroon’s Far North region.

The appeal is aimed at helping UNHCR and its partners provide needed humanitarian aid for those displaced by the crisis during the next six months.

An ongoing dispute over diminishing water resources between herders on one side and fishermen and farmers on the other last month erupted into a violent confrontation. The U.N. refugee agency says 44 people were killed, more than 100 injured, and 112 villages burned to the ground.

In the space of two weeks, UNHCR spokesman Boris Cheshirkov said 100,000 people fled to neighboring Chad or elsewhere in Cameroon.

“This has become a severe crisis because of the climate emergency. And the surface waters of Lake Chad shrinking and the Logone river, which runs along the border between Cameroon and Chad. It demarks the border and this is where the tensions began,” he said.

This crisis follows a previous deadly encounter in August. Some 45 people reportedly were killed, dozens injured, and more than 30 villages set ablaze. An estimated 23,000 fled to Chad or elsewhere in Cameroon.

Cheshirkov said the appeal will provide critically needed relief over the next six months for both the displaced and those sheltering them in Chad and Cameroon.

Priority needs, he said include shelter, blankets, mats, and mosquito mats.

“The funds will also cover growing water, sanitation, and hygiene needs. Child protection, prevention, and response to gender-based violence, documentation, education—all of these are urgent priorities. We estimate that 9 out of 10 of the Cameroonian refugees that are now in Chad as a result of this crisis are women and children,” he said.

Cheshirkov said the situation has calmed down in the last few weeks. He says security has been reinforced. He notes government-led reconciliation efforts, supported by the UNHCR are underway. He added urgent action is needed to address the root causes of the conflict.

 

 

Source: Voice of America

The World Food Program (WFP) says it is seeking $65 million to ease food insecurity in Zimbabwe. The U.N. agency says its assessment shows that more than 5 million people in the southern African nation are looking at food shortages in coming months.

A WFP Zimbabwe spokeswoman told VOA on Monday that the U.N. agency had started looking for funds to import food for those in need.

“The latest 2021 rural Zimbabwe vulnerability assessment committee rural report indicates that 2.9 million people in rural areas – that’s 27% of rural households – continue to be food insecure during the peak lean season between January and March 2022. In urban areas up to 2.4 million people are expected to be food insecure according to the latest 2021 urban livelihoods assessment,” she said.

The government says Zimbabwe experienced a bumper harvest this year, but the lack of food in rural areas indicates the harvest was in fact disappointing.

Information Minister Monica Mutsvangwa says Zimbabwe’s perennial food shortages will end with more production in the farms in the coming 2021/2022 season, which is expected to start anytime now.

She says the government will make sure farmers have the supplies and money they need to meet national requirements for both human consumption and industrial use.

“The strategy will result in more area being put to crop production as evidenced by the proposed increases of the following crops: maize, sorghum, pearl millet, finger millet, soybeans and tobacco. The financing of the summer cropping and livestock will be through the private and public sector as well as development partners,” Mutsvangwa said.

Zimbabwe, once the breadbasket of the region, has for years been facing food shortages, forcing it to rely on humanitarian organizations such as World Vision, USAID and the WFP to feed the people.

The government blames the problems on recurring droughts, but its critics point to a chaotic land reform program which started in 2000 and displaced experienced white farmers from their land.

 

 

Source: Voice of America