Connect with us

World

Europe and Africa Forging A New Relationship

Published

on

Prime Minister Giorgia Meloni and AU Moussah Faki Europe and Africa

By Kestér Kenn Klomegâh

Late January 2024, prominent African leaders and corporate business executives attended the summit intended to forge a new relationship between Europe and Africa. It was hosted by Italy’s hard-right Prime Minister Giorgia Meloni who who came to power in 2022. The significance of the summit was to reshape and place on track the European policy priorities and, at the same time, to highlight economic diplomacy and fix the long-trailed systematic development plans for Africa.

Within the context of the geopolitical changes, African political leaders have shown high enthusiasm and pragmatism, in developing relations with external countries. As trends in their approach with a new sense of diligent optimism show, African leaders fundamentally support the current global reconfiguration. Far beyond analytical talks of the scramble for resources by external powers, Africa is noticeably glued to the United States and Europe, while capitalizing on laudable offers from other players such as China, Russia, India, Turkey and those from the Arab world.

Given the current situation in the world, Africa has to step forward to harvest, with appropriate mechanisms and transparent procedures, concrete development-finance agreements, infrastructure engagements, trade and economic cooperation and above all humanitarian assistance for the most disadvantaged segments of the population that these external players offer at these summits. African leaders have to tone down all ideological manifestations and capitalize on existing challenges, contradictions and complexities of these geopolitical players including the United States, Europe Asia and Latin America to address instability, and socio-economic deficits and effectively coordinate strategic policies toward achieving sustainable development in this multipolar world.

At least during the past two decades, Africa’s invitations to international summits and conferences have been primarily due to, perhaps, a complex relationship with China. China started when Russia exited, and China has landmark achievements across the continent. Russia is struggling to regain or retrieve part of its Soviet-era influence. Now, the United States and Europe aim to counter the fast-rising influence of China and Russia.

Despite the lengthy process of persuasion and consensus building on previous partnerships, Europe still faces challenges. Late January 2024, Italy became the European country of convergence, with Italy as a key bridge between Africa and Europe. Approximately two dozen African leaders, the African Union, top European Union and United Nations officials and representatives from international lending institutions were in Rome for the summit, the first major event of Italy’s Group of Seven presidency.

Meloni’s so-called “Mattei Plan” is named after Enrico Mattei, the founder of Eni – Italy’s state-owned energy giant. In the 1950s, he advocated a cooperative stance towards African countries, helping them to develop their natural resources. “The basis of the Mattei Plan is a new approach – non-predatory, non-paternalistic but also not charitable,” Meloni told state-run RAI station. “It’s an approach of equals, to grow together.”

Political Diplomacy

Italy being part of the European Union has played on historical heart-settings with Africa. Over the past years, it has forged multi-dimensional cooperation as part of the foreign policy, and similarly the members of the European Union. Now these European Union members are pushing hard to showcase the future trajectory in their individual and collective relations with Africa. Europe promises to develop large-scale investment in various sectors, especially in the energy sectors in the continent, and straining efforts at curbing migration of Africans to Europe.

A former Prime Minister of the Republic of Chad and now the African Union Commission Chairperson, Moussa Faki Mahamat, jolted his Italian hosts with sharply worded comments at the opening of the summit dubbed “A Bridge for Common Growth” held in Rome. Rome holds the presidency of the G7 group of nations this year and has vowed to make African development a central theme, in part to increase influence in a continent where powers such as China, Russia, India, Japan and Turkey have been expanding their political clout.

“We are not beggars, our ambition is much higher, we want a paradigm shift for a new model of partnership that can pave the way towards a fairer and more coherent world. You can well understand that we can no longer be satisfied with mere promises that are often not kept,”  he told the gathering.

With the rapidly changing times, Europe has to wake up to the immense potential of Africa. European Union and individual members have made financial pledges but seriously lack practical evidence of undertaking projects. And African leaders at the summit were frank, unreservedly endorsed criticisms of making distinction between rhetoric and reality as suggested in remarks by the AU Chairperson Moussa Faki.

Reports pointed to Mahamat who categorically emphasized the necessity for Africa to be consulted on priorities and stressed the urgency of moving from promises to concrete actions. He underscored the frustration with unfulfilled commitments, calling for a more results-oriented approach.

The plan, which includes more than €5.5 billion ($6 billion) in investments, credits, gift operations, and guarantees – including building a training centre on renewable energy in Morocco, education projects in Tunisia, and other projects in Algeria, Mozambique, Egypt, the Republic of Congo, Ethiopia and Kenya – was not well received by the African leaders in attendance, who said that they had not been consulted in the formation of the plan.

Italy’s first African-born parliamentarian Aboubakar Soumahoro, who is deputy and coordinator of the parliamentary intergroup for Sub-Saharan Africa, also criticized the plan.

Cristiano Maugeri of Action Aid Italia lamented that the government had excluded any consultation with civil society groups active in African development to formulate the plan, and said that it regardless represented something of a repackaging of existing projects. “We are talking about initiatives that have already been presented in other contexts, only with a new stamp on them,” he said.

The UN Deputy Secretary-General Amina Mohammed praised Italy for focusing on the key pillars of energy and food systems, saying they complement an approach already mapped out by the African Union. But she lamented that overall, the 2030 targets of the globally-approved U.N. Sustainable Development Goals are “falling woefully short” and further urged the government of Italy to make such deep, effective, and equal partnerships a reality, and to use its presidency of the G7 to work with other countries to do likewise.

Given the fact that Italy currently holds the rotating chair of the Group of Seven (G7) major Western powers, the narrative around Africa has to change, to promote African interests during the G7 presidency. Europe has to take advantage of the largest renewable energy resources the vast arable land for agriculture, and the possibility of industrial production for the latest – the African Continental Market (AfCFTA).

African-Italian Negotiations

Italian Prime Minister Giorgia Meloni unveiled a long-awaited initiative aimed at helping African countries prosper in return for curbing illegal immigration, pumping a preliminary 5.5 billion euros ($5.96 billion) into the scheme. The schemes include efforts to develop African agribusiness and mobilize Italian transport and major works companies.

During a post-summit news conference, Meloni acknowledged the importance of translating promises into tangible projects on the ground. With more than 25 countries in attendance, European Commission President Ursula von der Leyen and representatives of UN agencies and the World Bank, Meloni explained the plan would initially be funded to the tune of €5.5 billion, some of which would be loans, with investments focused on energy, agriculture, water, health and education.

The prime minister, however, emphasized the need for collaboration with the private sector and international bodies, such as the European Union, to ensure the initiative’s success.

Energy needs stand at the core of Italy’s initiative, with the country aiming to serve as a gateway for African natural gas into European markets. The ambitious plan gains significance in the context of the European Union’s efforts to diversify energy supplies following Russia’s invasion of Ukraine, the former Soviet republic. Meloni outlined a series of pilot projects in individual countries that would enable Africa to become a major exporter of energy to Europe, helping it reduce its dependence on Russian energy.

European Global Gateway

In the previous years, the European Union has sought to build strongly on its existing economic and trade relationship with Africa. It held the last summit in February 2022,  with African leaders and the African Union. It has been attempting to bring Africa and Europe closer together for strategic, long-term footing to develop a shared vision for EU-Africa relations in a globalized world.

In an official document, it said it would (i) Support AfCFTA implementation and the green transition; (ii) Improve trade and investment climate between the EU and Africa; (iii) Reinforce high-level public private dialogue; (iv) Enhance long-term dialogue structures between EU and Africa Business Associations; (v) Unlock new business and investment opportunities, including in the areas of manufacturing and agro-processing as well as regional and continental value chains development.

Referred to as the Joint EU-Africa Strategy, the document takes into cognizance the most common interests such as climate change, global security and the achievement of the United Nations Sustainable Development Goals (SDGs).

The potential to increase trade, economic growth, job creation and integration across the continent remains enormous, because today, only around 17% of African trade flows take place between African countries. “Of course, there will be challenges along the way, and the EU stands ready to help. We want to share the lessons from our process of economic integration, and with our new Global Gateway Strategy, we have demonstrated that we are ready to support massive infrastructural investment in Africa,” Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade as well as chairing the Commissioners’ group on an Economy that Works for People, noted when the EU-African Union Summit was held in February 2022.

Dombrovskis said: “We continue to support the implementation of the African Continental Free Trade Area. Achieving this will represent a historic milestone. the EU has a diverse range of trade agreements with countries in Africa. These are dynamic partnerships, in which we advance step-by-step for our mutual benefit. We aim to widen and deepen these economic and partnership agreements with those African countries that are willing to do so.”

The EU-Africa summit focuses on the search for more effective ways to scale-up sustainable development in Africa, according to various reports. Due to the shifting of geopolitics, the continent now increasingly turning into an intersection of global power players and it faces a precarious complex future. But what is important here is that the European players have to incorporate most aspects of partnership directions (adopt more effective ways to scale up sustainable development in Africa) within the framework of the 2030 Agenda of the United Nations and Agenda 2063 of the African Union.

World

Trump’s Tariffs, Russia and Africa Trade Cooperation in Emerging Multipolar World

Published

on

Trump's Tariffs

By Kestér Kenn Klomegâh

With geopolitical situation heightening, trade wars are also becoming increasingly prominent. The 47th United States President Donald Trump has introduced trade tariffs, splashed it over the world. China, an Asian trade giant and an emerging economic superpower, has its highest shared.

South Africa, struggling with its fragile foreign alliances, is seriously navigating the new United States economic policy and trade measures, at least to maintain its membership in the African Growth and Opportunities Act (AGOA) which is going to expire in September 2025.

It is a well-known fact that AGOA waived duties on most commodities from Africa in order to boost trade in American market. The AGOA also offers many African countries trade preferences in the American market, earning huge revenues for their budgets. Financial remittances back to Africa also play mighty roles across the continent from the United States.

That however, the shifting geopolitical situation combined with Trump’s new trade policies and Russia’s rising interest in Africa, the overarching message for African leaders and business corporate executives is to review the level of degree how to appreciably approach and strengthen trade partnership between Africa and Russia.

The notion of a new global order and frequently phrased multipolar world, indicating the construction of a fairer architecture of interaction, in practical terms, has become like a relic and just as a monumental pillar. Even as we watch the full-blown recalibration of power, the geopolitical reshuffling undoubtedly creates the conditions for new forms of cooperation.

In this current era of contradictions and complexities we are witnessing today, we must rather reshape and redefine rules and regulations to facilitate bilateral and multilateral relations between African countries and Russia, if really Russia seeks to forge post-Soviet strategic economic cooperation with Africa.

In fact, post-Soviet in the sense that trade is not concentrate on state-to-state but also private – including, at least, medium scale businesses. The new policy dealing with realities of the geopolitical world, distinctively different from Soviet-era slogans and rhetorics of ‘international friendship and solidarity’ of those days.

Bridging Africa and Russia, at least in the literal sense of the word, necessitates partial departure from theoretical approach to implementing several bilateral and multilateral decisions, better still agreements reached at previous summits and conferences during the past decade.

Understandably Africa has a stage, Russia termed ‘the struggle against neo-colonial tendencies’ and mounting the metal walls against the ‘scrambling of resources’ across Africa. Some experts argued that Africa, at the current stage, has to develop its regions, modernize most the post-independence-era industries to produce exportable goods, not only for domestic consumption. Now the emphasis is on pushing for prospects of a single continental market, the African Continental Free Trade Agreement (AfCFTA).

This initiative, however, must be strategically and well-coordinated well, and here I suggest integration and cooperation starting at country-wide basis to regional level before it broadly goes to the entire continent, consisting 54 independent states.

These are coordinated together as African Union (AU), which in January 2021 initiated the African Continental Free Trade Agreement (AfCFTA). With this trading goals in mind, Africa as a continent has to integrate, promote trade and economic cooperation, engage in investment and development. In that direction, genuine foreign partners are indiscriminately required, foreign investment capital in essential for collaboration as well as their entrepreneurial skills and technical expertise.

For instance, developing relations with Asian giants such China and India, the European Union and the United States. A number of African countries are shifting to the BRICS orbit, in search for feasible alternative opportunities, for the theatrical trade drama. In the Eurasian region and the former Soviet space, Kazakhstan and Russia stand out, as potential partners, for Africa.

Foreign Affairs Minister Sergey Lavrov has said, at the podium before the staff and students at Moscow State Institute of International Affairs in September, that trade between Russia and Africa would grow further as more and more African partners continued to show interest in having Russians in the economic sectors in Africa. This provides greater competition between the companies from Western countries, China, and Russia. With competition for developing mineral resources in Africa, it is easier and cheaper for African colleagues to choose partners.

As far back in October 2010, Russian Foreign Affairs Ministry posted an official report on its website that traditional products from least developed countries (including Africa) would be exempted from import tariffs. The legislation stipulated that the traditional goods are eligible for preferential customs and tariffs treatment.

Thereafter, Minister Sergey Lavrov has reiterated, in speeches, trade preferences for African exporters, but terribly failed to honour these thunderous promises. Notwithstanding the above granting trade preferences, there prevailing multitude of questions relating to the pathways of improving trade transactions, and removing obstacles including those Soviet-era rules and regulations.

Logistics is another torny hurdle. Further to this, Russian financial institutions can offer credit support that will allow to localize Russian production in Africa’s industrial zones, especially southern and eastern African regions that show some stability and have good investment and business incentives.

In order to operate more effectively, Russians have to risk by investing, recognize the importance of cooperation on key investment issues and to work closely on the challenges and opportunities on the continent. On one hand, analyzing the present landscape of Africa, Russia can export its technology and compete on equal terms with China, India and other prominent players. On the other hand, Russia lacks the competitive advantage in terms of finished industrial (manufactured) products that African consumers obtain from Asian countries such as China, India, Japan and South Korea.

Compared to the United States and Europe, Russia did very little after the Cold War and it is doing little even today in Africa. On 27th–28th July 2023, St Petersburg hosted the second Russia-Africa summit. At the plenary session, President Vladimir Putin underscored the fact that there was, prior to the collapse of the Soviet, there were over 330 large infrastructure and industrial facilities in Africa, but most were lost. Regarding trade, Putin, regrettably, noted Russia’s trade turnover with the African countries increased in 2022 and reached almost US$18 billion, (of course, that was 2022).

Arguably, Russia’s economic presence is invisible across Africa. It currently has insignificant trade statistics. Until the end of the first quarter of 2025, Russia still has a little over $20 billion trade volume with Africa. Statistics on Africa’s trade with foreign countries vary largely.

For example, the total United States two-way trade in Africa has actually fallen off in recent years, to about $60 billion, far eclipsed by the European Union with over $240 billion, and China more than $280 billion, according to a website post by the Brookings Institution.

According to the African Development Bank, Africa’s economy is growing faster than those of any other regions. Nearly half of Africa is now classified as middle income countries, the numbers of Africans living below the poverty line fell to 39 percent as compared to 51 percent in 2023, and around 380 million of Africa’s 1.4 billion people are now earning good incomes – rising consumerism – that makes trade profitable.

Nevertheless, there is great potential, as African leaders and entrepreneurial community are turing to Russia for multifaceted cooperation due to the imperialist approach of the United States and its hegemonic stand triggered over the years, and now with Trump new trade tariffs and Washington’s entire African policy.

China has done its part, Russia has to change and adopt new rules and regulations, pragmatic approach devoid of mere frequent rhetorics. It is important discussing these points, and to shamelessly repeat that both Russia and Africa have to make consistent efforts to look for new ways, practical efforts at removing existing obstacles that have impeded trade over the years.

Sprawling from the Baltic Sea to the Pacific Ocean, Russia is a major great power and has the potential to become a superpower. Russia can regain part of its Soviet-era economic power and political influence in present-day Africa.

Certainly, the expected superpower status has to be attained by practical multifaceted sustainable development and by maintaining an appreciably positive relations with Africa. We have come a long way, especially after the resonating first summit (2019 and high-praised second summit (2023), several bilateral agreements are yet to be implemented. The forthcoming Russia – Africa Partnership summit is slated for 2026, inside Africa and preferably in Addis Ababa, Ethiopia.

Kestér Kenn Klomegâh is a frequent and passionate contributor. During his professional career as a researcher specialising in Russia-Africa policy, which spans nearly two decades, he has been detained and questioned several times by Russian federal security services for reporting facts. Most of his well-resourced articles are reprinted in a number of reputable foreign media.

Continue Reading

World

Tariff War Threatens Global Economy, US-China Goods Trade By 80%—WTO DG

Published

on

Okonjo-Iweala

By Adedapo Adesanya

The Director General of the World Trade Organization (WTO), Mrs Ngozi Okonjo-Iweala, has said the US-China tariff war could reduce trade in goods between the two economic giants by 80 per cent and hurt the rest of the world economy.

President Donald Trump raised tariffs on China to 125 per cent on Wednesday as the world’s two largest economies fought over retaliatory levies.

The American President earlier ramped up duties on Chinese goods to 104 per cent, only to hike them further when China retaliated by raising tariffs on US imports to 84 per cent.

In a social media post announcing the moves, President Trump said China had been singled out for special treatment because of “the lack of respect that China has shown to the world’s markets.”

In her reaction to the development, the WTO DG said in a statement that, “The escalating trade tensions between the United States and China pose a significant risk of a sharp contraction in bilateral trade. Our preliminary projections suggest that merchandise trade between these two economies could decrease by as much as 80 per cent.”

She said the United States and China account for three per cent of world trade and warned that the conflict could “severely damage the global economic outlook”.

Even as he slapped further tariffs on China, Mr Trump paused higher tariffs on the rest of the world for 90 days, claiming that dozens of countries reached out for negotiations.

Mrs Okonjo-Iweala warned that the world economy risked breaking into two blocs, one centred around the United States and the other China.

“Of particular concern is the potential fragmentation of global trade along geopolitical lines. A division of the global economy into two blocs could lead to a long-term reduction in global real GDP by nearly seven percent,” she said.

She urged all WTO members “to address this challenge through cooperation and dialogue.”

“It is critical for the global community to work together to preserve the openness of the international trading system.”

“WTO members have agency to protect the open, rules-based trading system. The WTO serves as a vital platform for dialogue. Resolving these issues within a cooperative framework is essential,” she added.

Continue Reading

World

AFC Tops $1bn Revenue in 2024 Financial Year

Published

on

Africa Finance Corporation

By Adedapo Adesanya

Africa Finance Corporation (AFC), the continent’s top infrastructure solutions provider, has announced its strongest financial performance to date, with total revenue for the year ended December 31, 2024 surpassing $ 1 billion for the first time in its history.

This record performance marks a significant milestone in AFC’s mission to close Africa’s infrastructure gap through scalable, de-risked investments that attract global capital and deliver tangible development outcomes.

The corporation posted a 22.8 per cent increase in total revenue to US$1.1 billion and a 22.3 per cent rise in total comprehensive income to $400 million, up from $327 million in 2023.

AFC’s earnings growth was driven by improved asset yields, prudent cost-of-funds management and sustained traction in advisory mandates.

Further significant financial highlights include net interest income up 42.5 per cent to $ 613.6 million; fee and commission income rose to $109 million, the highest in over five years; operating income climbed 42.7 per cent to $709.7 million; total assets reached a record $14.4 billion, a 16.7 per cent year-on-year increase; liquidity coverage ratio strengthened to 194 per cent, providing over 34 months of cover; and cost-to-income ratio improved to 17.3 per cent from 19.6 per cent in 2023.

According to a statement, AFC said throughout 2024 it continued to scale its impact by mobilising capital for landmark projects across energy, transport, and natural resources.

These included the Lobito Corridor – a cross-border railway development spanning Angola, the Democratic Republic of Congo (DRC), and Zambia. AFC led the initiative to secure a concession agreement within one year of the initial Memorandum of Understanding (MoU), an unprecedented achievement for a project of its scale. In the DRC, AFC also invested $150 million in the Kamoa-Kakula Copper Complex, Africa’s largest copper producer and one of the most sustainable globally, thanks to its high-grade ore and renewable-powered smelter.

Other milestones transactions included financing support for the commissioning of the Dangote Refinery, the largest in Africa, and continued progress on AFC-backed Infinity Power Holding’s 10 GW clean energy ambition, with power purchase agreements secured in Egypt and South Africa.

AFC also invested in the 15GW Xlinks Morocco-UK Power Project, providing $14.1 million to support early-stage development of a transcontinental renewable energy pipeline between North Africa and Europe.

AFC strengthened its capital base and expanded its investor network through several landmark funding initiatives. These included a $ 1.16 billion syndicated loan – the largest in its history, a $500 million perpetual hybrid bond issue, and the successful execution of Nigeria’s first-ever domestic dollar bond, which raised $900 million at 180 per cent oversubscription.

AFC also returned to the Islamic finance market after eight years, closing a $400 million Shariah-compliant facility.

The year also saw strong momentum in equity mobilisation, with $181.8 million in new capital raised from ten institutional investors. These included Turk Eximbank – AFC’s first non-African sovereign shareholder – the Arab Bank for Economic Development in Africa (BADEA), and several major pension funds spanning Cameroon, Seychelles, Mauritius, and South Africa. Ratings agencies affirmed AFC’s robust credit profile, with AAA ratings from S&P Global (China) and China Chengxin International, and a stable A3 Outlook from Moody’s.

Speaking on the result, Ms Samaila Zubairu, President & CEO of AFC said, “These results send a clear message that strategic investment in African infrastructure creates lasting value for both beneficiaries and investors.”

“In 2024, we exceeded the billion-dollar revenue mark, delivered game-changing projects, and reinforced our financial resilience—demonstrating the scalability of our unique model that blends purpose with performance to accelerate Africa’s economic transformation,” she added.

Continue Reading

Trending