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AfDB Encourages More Asian Investments in Africa

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AfDB President

Adedapo Adesanya

The African Development Bank (AfDB) has conveyed the continent’s immense investment and partnership opportunities to Asian business leaders, particularly as the continent prepares to return to economic growth in 2021 following the impact of the COVID-19 pandemic.

In a virtual workshop organised alongside the bank’s Asia External Representation Office, the regional lender offered participants from Asia an opportunity to learn more about the bank and its operations in line with the recently launched African Economic Outlook 2020 -Asia Supplement, which revised growth projections and outlook for Africa for 2020 and 2021.

Speaking on this, Mr Samuel Mugoya, the bank’s Director for Syndication, Co-financing and Client Solutions Department said, “I take this opportunity to strongly encourage Asian private sector entities gathered here today, to partner with the bank to take advantage of the multiple investment opportunities that exist on the continent”

Mr Mugoya praised Asian countries’ ongoing support for the bank and Africa’s development, saying, “There are four Asian member countries in the bank, namely China, India, Japan, and Korea that have been long-standing and strategic partners for almost 40 years.

“The Asian member countries have consistently contributed to the bank’s capital requirements and supported the African Development Fund’s successive replenishments.”

ADF is the bank’s concessional window. It contributes to the promotion of economic and social development in 38 least developed African countries by providing concessional funding for projects and programs, as well as technical assistance for studies and capacity-building activities.

Mr Takashi Hanajiri, Head of the Asia External Representation Office, provided an overview of the bank and its history and components before providing a summary of its flagship Africa Investment Forum (AIF) initiative and the opportunities it offers.

Referring to the AIF event held in Johannesburg in 2019, he said “So far the largest deal was an LNG project in Mozambique with a total cost of $24.6 billion,” adding, “many Asian institutions, both public and private, are sponsoring the project.”

The Asian member countries have consistently contributed to the bank’s capital requirements and supported ADF’s successive replenishments

Following a discussion of the bank’s responses to the COVID-19 pandemic, Mr Hanajiri concluded on a positive note that “Africa’s growth will rebound to 3 per cent in 2021 from -3.4 per cent in 2020.”

He also added that until the COVID-19 pandemic, Africa was the second-fastest-growing continent outside Asia. Over the past decade, the continent has experienced the longest period of unbroken growth in per capita incomes since the 1960s.

The webinar, which drew around 300 participants, closed with a question and answer session. Queries addressed such issues as the Bank’s representation in India, trade financing offerings and access to financing for women.

Participating corporations and institutions included Industrial and Commercial Bank of China, China Export & Credit Insurance Corporation, Export-Import Bank of India, JICA, Korea Eximbank, Korea Trade-Investment Promotion Agency (KOTRA), and Korea Overseas Infrastructure & Urban Development Corporation (KIND).

The bank views Africa’s private sector as a critical engine of economic growth and development but Asian companies often lack information about the business climate.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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African Leaders Back AfDB $1.5bn Food Production Facility

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Food Crisis

By Adedapo Adesanya

African governments and international development institutions have thrown their weight behind the $1.5 billion emergency food production facility of the African Development Bank (AfDB) Group aimed to help avert a looming food crisis on the continent.

Business Post had reported that the lender’s board approved the facility last Friday.

At a virtual meeting convened by the African Union Commission on Thursday, government ministers and development partners commended the initiative, which will boost domestic production of essential grains as imports of these staples have been hit by the ongoing Russia-Ukraine war.

During the meeting, African ministers of finance and agriculture and representatives of non-African member countries, including the governments of Ireland, the UK, Canada and Germany, reviewed the funding support and discussed their countries’ needs.

The President of Senegal, Mr Macky Sall, who doubles as the chairman of the African Union said, “I commend the African Development Bank’s initiative. There is no reason to do business as usual in this period of exceptional crisis.”

Sudan’s finance minister, Mr Gibril Ibrahim, said his country was facing the twin challenges of supporting a large population of refugees and managing a financial crisis and expressed optimism that Sudan could potentially be a breadbasket for Africa.

“We need strong support to feed both Sudanese and refugees. We think we can fill the gap if we can invest more money in food production,” he said.

Mr Ken Ofori-Atta, Ghana’s finance minister, said: “We must move fast to save our people from this hunger and increased cost of living.”

He added that the continent, weakened by COVID-19, now faces the worst inflation and food crisis in two decades and urged African finance ministers to adopt a new mindset to meet the current crisis.

Liberia, a country that relies heavily on food imports, is responding to supply chain disruptions by promoting local food production and adopting innovation, its agriculture minister, Jeanine Cooper, said.

As an example, she said nearly 80 per cent of Liberians have mobile phones.

“Digital payment solutions have become the new normal for rural financing,” she said.

Ms Kristalina Georgieva, Managing Director of the International Monetary Fund, urged African countries not to close down trade while calling for deeper investment:

“The message the world needs to hear is, keep trade open. Africans can help Africans by urgently investing in more food production in the continent. We are looking for ways to invest with you in resilience to shocks, especially climate shocks.”

On his part, Mr Akinwumi Adesina, President of AfDB, said the institution stood ready to meet the looming crisis. He stressed that securing the continent’s emergency food requirements should be built on higher productivity rather than aid dependency.

Mr Adesina said the success of the initiative would hinge on solving fertilizer shortages. One way to do this is by providing subsidies to farmers, including the possibility of the private sector delivering them.

The emergency facility will also extend trade credit guarantees and other mechanisms to fertilizer importers and intermediaries, he said.

“We look forward to working closely with the German and French plans and the broader plans of the G7 on food security for Africa. With bilateral financing support to close the $200 million financing gap, we can ensure the Africa emergency food production facility’s success,” Mr Adesina said.

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African Union to Send Delegates to Russia, Ukraine

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African Union AU Active Collaboration

By Kestér Kenn Klomegâh

The African Union (AU) is planning to wade into the crisis between Russia and Ukraine with a view to finding a lasting solution and averting the looming food shortage that may hit the continent.

On February 24, 2022, Russia invaded its neighbour, Ukraine and this action has sent prices of food, especially cereals and fuel higher in the markets.

On May 18, the AU delegates were supposed to be in Moscow but the trip was aborted. However, the Chairman of the group and President of Senegal, Mr Macky Sall, confirmed at a joint news conference with visiting German Chancellor, Mr Olaf Scholz, that the visit will happen.

“As soon as it’s set, I will go to Moscow and also to Kyiv. We have also accepted to get together all the heads of state of the African Union who want to meet with President (Volodymyr) Zelensky of Ukraine, who had expressed the need to communicate with the African heads of state. That too will be done in the coming weeks,” he said.

The invasion of Ukraine by Russia has divided Africa. In early March, Senegal abstained from voting on a United Nations resolution – overwhelmingly adopted – that called on Russia to withdraw from Ukraine.

The AU, Regional Economic organizations have officially called for the adoption of diplomacy mechanisms and negotiations through which to end the seemly endless crisis between Russia and Ukraine.

Besides the official statements from the AU, Southern African Development Community (SADC ) and Economic Community of West African States, at least, half of the African countries from the continent voted to condemn Russia’s action in the neighbouring republic. According to reports, 17 African countries abstained from voting on the resolution at the United Nations.

Some policy experts say this Africans’ voting scenario at the UN opens a theme for a complete geopolitical study and analysis. There are so many interpretations and geopolitical implications though.

Nevertheless, the African Union, Regional Economic organizations and the African governments are still and distinctively, divided over the Russia-Ukraine crisis due to divergent views and worse, afraid of contradictions and confrontations posed by the crisis and its effects on future relations.

President Cyril Ramaphosa has also come under fierce criticism over the official stand on the Russia-Ukraine crisis.

Prior to the February 24 crisis, Russia indicated strong preparedness and high interest to broaden cooperation in trade and in the economic sectors in Africa. With an invariable commitment to strengthen and develop relations in a positive and constructive manner, and especially in these challenging circumstances, Moscow is still planning for the second Russia-African summit.

Gerrit Olivier, an Emeritus Professor at Pretoria University and former South African Ambassador in Russia and Kazakhstan, said South Africa, a member of BRICS and an economic powerhouse in Africa, abstained from voting against Russia. There have been many conflicting reports about South Africa’s position on the Russia-Ukraine crisis. For many, both inside and outside the country, this was a controversial decision resulting in a rare local public debate about foreign policy.

What followed was indeed a case study of expedient, if not downright ‘Walter Mitty’ diplomacy. First, President Cyril Ramaphosa rushed to telephone Putin, obviously to bask in the reflected glory and honour of speaking to the ‘great man’. Afterwards, he subserviently thanked “His Excellency President Vladimir Putin” for taking his call. At the same time, our ‘great negotiator’ refused official engagement with the local Ukrainian ambassador as well as with ambassadors of the European Union, our biggest trading partners, wrote Professor Gerrit Olivier.

As a direct result of the crisis, Europe has abandoned importing oil and gas from Russia. It has been looking for alternatives in Africa. Sall said Senegal would be ready to supply Europe with liquefied natural gas (LNG) as the continent seeks to wean itself off Russian energy sources. Along with neighbouring Mauritania, Senegal hopes to exploit gas and oil deposits found in the Atlantic in recent years.

Sall has estimated LNG production starting in December 2023 and reaching 10 million tonnes per year in 2030. The Senegalese leader said he had asked Germany to help Senegal develop future projects. Scholz said discussions should continue “in an intensive manner” because it was in our mutual interest to achieve progress.

In late February and early March, Mr Macky Sall, and the Chairperson of the African Union Commission, Ms Moussa Faki Mahamat, issued official statements urging both Russia and Ukraine to employ diplomatic means to solve the crisis, and further said they were following closely the developments in the former Soviet republic of Ukraine.

Meanwhile, as a direct result of the “special military operation” launched on February 24, Russia has come under a raft of sanctions imposed by the United States and Canada, the European Union, Japan, Australia, New Zealand, and a host of other countries.

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100 million People Displaced in Nigeria, Afghanistan, Ukraine, Others—UNHCR

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Nigerian Refugees in Chad

By Adedapo Adesanya

The United Nations Refugee Agency (UNHCR) has disclosed that the Ukraine war and other conflicts have forced about 100 million people to flee to safety.

According to UNHCROpens in a new window report, the number of forcibly displaced people worldwide rose to 90 million by the end of 2021, propelled by new waves of violence or protracted conflict in countries including Ethiopia, Burkina Faso, Myanmar, Nigeria, Afghanistan and the Democratic Republic of the Congo.

So far in 2022, the war in Ukraine has displaced 8 million within the country this year and forced around 6 million to leave the nation.

Speaking on this, the UN High Commissioner for Refugees, Mr Filippo Grandi said, “One hundred million is a stark figure — sobering and alarming in equal measure. It’s a record that should never have been set.

“This must serve as a wake-up call to resolve and prevent destructive conflicts, end persecution, and address the underlying causes that force innocent people to flee their homes.”

By calculation, the 100 million people forcibly displaced worldwide represents one per cent of the global population and is equivalent to the 14th most populous country in the world.

The number includes refugees and asylum seekers as well as the 53.2 million people displaced inside their borders by conflict.

Speaking further, Mr Grandi added, “The international response to people fleeing war in Ukraine has been overwhelmingly positive.

“Compassion is alive, and we need a similar mobilization for all crises around the world. But ultimately, humanitarian aid is a palliative, not a cure.”

He then called for peace and stability to ensure that the number doesn’t grow any further in the coming years.

“To reverse this trend, the only answer is peace and stability so that innocent people are not forced to gamble between acute danger at home or precarious flight and exile.”

Last week, the International Organization for Migration (IOM) informed that a record 59.1 million people were displaced within their homelands last year, four million more than in 2020.

Conflict and violence triggered 14.4 million internal displacements in 2021, a nearly 50 per cent increase over the previous year.

Meanwhile, weather-related events such as floods, storms and cyclones resulted in some 23.7 million internal displacements in 2021, mainly in the Asia-Pacific region.

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