Sub-Saharan Africa Faces First Recession in 25 Years—World Bank
By Adedapo Adesanya
The Sub-Saharan region in Africa will fall into recession in 2020 for the first time since 1995, the World Bank said in a new forecast released on Thursday.
The Bretton Woods institution noted that this will be driven primarily by the coronavirus pandemic which could shrink the region’s economy by as much as 5.1 percent.
In the report, Africa’s Pulse, the global lender said the region’s economy will contract between 2.1 percent to 5.1 percent against a growth of 2.4 percent recorded in 2019.
It was also revealed that the coronavirus will cost sub-Saharan Africa $37 billion to $79 billion in output losses this year due to trade and value as most countries are using lockdowns to control the virus spread.
Real Gross Domestic Product (GDP) growth was projected to fall sharply particularly in the region’s three largest economies – Nigeria, Angola, and South Africa.
The World Bank said that Nigeria and other oil exporting countries would also be hit by the impact of the pandemic, adding that growth would possibly weaken substantially in the West African Economic and Monetary Union (WAEMU) and the East African Community (EAC) due to weak external demand, disruptions to supply chains and domestic production.
The region could also face a possible food security crisis with agricultural production projected to contract between 2.6 percent and 7 percent as a result of trade blockages.
“Food imports would decline substantially (as much as 25 percent or as little as 13 percent) due to a combination of higher transaction costs and reduced domestic demand,” the bank said in a statement.
The World Bank said that sub-Saharan Africa could need an economic stimulus of as much as $100 billion to help it recover during this grim period.
It called on China, the United States and other bilateral creditors to temporarily suspend debt payments by the poorest countries so they can use the money to halt the spread of the disease and tackle its financial impact.
The package should include temporary debt relief amounting to $44 billion, the World Bank added.
The World Bank further called on African policymakers to focus on saving lives and protecting livelihoods by spending money to strengthen health systems and taking quick actions to minimise disruptions in food supply chains.
It also recommended social protection programmes, including cash transfers, food distribution and fee waivers, to support citizens, especially those working in the informal sector.
Africa has close to 11,000 confirmed COVID-19 cases and has recorded 562 deaths with 1,149 recoveries.
Kenyan Entrepreneurs to Access Funds with Hustler Group Loan
By Adedapo Adesanya
Kenyan entrepreneurs will access more loans with the launch of Hustler Group Loan, the second product of the Financial Inclusion Fund, an initiative of the President William Ruto administration.
President Ruto said this would boost the hustler spirit and deepen financial inclusion in the country since the Fund has witnessed 42.5 million transactions through which 20.2 million Kenyans have accessed about Sh30 billion.
He also noted that enterprises will now have access to affordable and accessible financing to spur their growth.
The birth of the Hustler Group Loan follows the launch of the Hustler Fund early in the year; out of the Sh30 billion, Sh19.7 billion has been repaid.
“Not a single shilling has been stolen through corruption,“ President Ruto insisted.
He said he was keen on ensuring that businesses access affordable credit.
“That is the route to ensuring that enterprises grow, generate more earnings and create more jobs for millions of underprivileged Kenyans,” the President said on Thursday, June 1, in Moi Stadium Embu during the Madaraka Day celebrations.
Comoros President Azali Assoumani, Deputy President Rigathi Gachagua, Prime Cabinet Secretary Musalia Mudavadi, Cabinet Secretaries, Embu Governor Cecily Mbarire, MPs, Former President of Niger Issoufou Mahamadou, among others, were present.
The Kenyan President also said he was keen on enhancing food production through subsidising production.
He said five million farmers have registered and benefited from the government’s subsidised fertilisers.
“As a result of these interventions, farmers have been able to plant 200,000 additional acres of food this year,” he said.
On health, the president explained that the government would reform the National Health Insurance Fund to meet the needs of Kenyans.
He noted that he was committed to delivering Universal Health Coverage.
He said the government has collaborated with counties to recruit community health promoters to deepen this goal.
“These promoters will facilitate early detection of conditions for referral to further attention.”
On his part, the Deputy President said the government had initiated practical measures that would put more money in the people’s pockets.
Mr Gachagua said he would lead town hall meetings with farmers to develop sustainable plans to uplift them.
Imagine the Strategic Partnership between Asmara and Moscow
By Kestér Kenn Klomegâh
In this extremely poor Eritrea nation located in the Horn of Africa, with a population of 3.6 million, what factors could attract to strengthen cooperation in the spheres highlighted by Russian President Vladimir Putin during a meeting with President of the State of Eritrea Isaias Afwerki at the Kremlin.
According to reports from the Kremlin on May 31, Putin referred to the fact that Eritrea has recently marked 30 years of independence. This was when the two countries established diplomatic relations too.
Russia is attracted due to its highly strategic location. Eritrea is bordered to the northeast and east by the Red Sea, Sudan to the west, Ethiopia to the south, and Djibouti to the southeast. The undemarcated border with Ethiopia is the primary external issue currently facing Eritrea. Geopolitical history informed us that Eritrea’s relations with Ethiopia turned from that of cautious mutual tolerance, following the 30-year war for Eritrean independence, to a deadly rivalry that led to the outbreak of hostilities from May 1998 to June 2000 that claimed approximately 70,000 lives from both sides.
Despite the differences between Ethiopia and Eritrea, Russia maintains good relations with the two. But the main significance, as stressed during the meeting, was trade and economic relations which deserve primary attention. There could only be a few, of course not a lot, of potential in many areas. From our studies, agriculture makes up 11 per cent of the wider economy’s value and is the main economic activity in Eritrea.
In 2013, the pickup in growth had been attributed to the commencement of full operations in the gold and silver Bisha mined by Canadian Nevsun Resources, the production of cement from the cement factory in Massawa and investment in Eritrea’s copper and zinc. Chinese are very active in the mining sector, and the Australians operate Colluli potash mining. In 2020, the IMF estimated Eritrea’s GDP at $2.1 billion.
With that economic background, however, Russia sees an opportunity to develop trade and economic ties between the two countries. “Of course, we must, first of all, pay attention to the development of trade and economic ties, here we have good prospects in many areas,” Putin said.
As expected, there was a display of passion for packing official documents. After a series of substantive consultations on partnership and intensive preparations between Asmara and Moscow, the delegation signed several intergovernmental agreements. “I am sure that our talks today will be successful and will benefit the development of relations between the Russian Federation and Eritrea,” Putin stressed.
The trade turnover between Russia and Eritrea in 2022 amounted to $13.5 mln, including $11.5 mln from wheat exports, according to materials for the talks between Putin and Isaias Afwerki in the Kremlin.
“The trade turnover between Russia and Eritrea in 2022 amounted to $13.521 mln (exports: $12.745 mln, including $11.5 mln – wheat (27,500 tons); imports: $776,000),” the statement said.
In 2021, the trade turnover between the two countries amounted to $9.314 mln. Exports of wheat amounted to $8.125 mln, oil products – $175,000, and sulfates – $888,000. At the same time, imports of ready-made clothes reached $126,000.
According to the statement, Eritrea is highly interested in strengthening ties with Ural Automobile Plant and Kamaz. In 2018, Kamaz delivered 56 cars and 5 buses valued at around $5 million to Eritrea.
“In my view, the global order, which is on the cusp of a radical transformation, requires an objective appraisal and mutual consultations on the timeless subject matter and phenomena of paramount importance and significance. The common assessment that we undertake will, in turn, revitalise the formulation of programmes and partnerships that we chart on,” Isaias Afwerki said during the meeting.
Isaias Afwerki believes that Russia was the primary competitor and rival of the policy of encirclement and containment by the forces of domination from the early 1990s, and its global impact in the past 30 years was considerable indeed. Russia did not undertake, at the outset, all the necessary preparations for effective resistance.
An integrated and comprehensive strategy of resistance was not accordingly set in motion. But with time, as the latent policy of containment against China becomes more transparent, international awareness of the free people has increased.
“It is imperative to expand and deepen this awareness, chart out a comprehensive strategy and concrete plans that encompass all fields, create dynamic mechanisms, marshal the necessary resources to ascertain the advent of and transit to a civilised international order of mutual respect, cooperation, complementarity and prosperity, where justice and the rule of law prevail. This is not an option but an obligation,” he explicitly pointed out to Putin.
It is important to remember that Russian Foreign Minister Sergey Lavrov visited Eritrea in January 2023. He said the agenda for Russia-Eritrea cooperation focuses on implementing potential joint projects, including the logistics hub in Asmara. At a meeting at that time, Afwerki and Lavrov also discussed the radical changes in the international situation and key directions for the development of Russian-Eritrean relations. Lavrov reported to Putin about the results of his African tour at a Security Council meeting.
Afwerki has been president since 1993, when Eritrea gained independence from Ethiopia. He is the first and the only person to hold the post. Sergey Lavrov visited Eritrea in January as he toured Africa. The commercial activities revolve around this strategic location as a transit point, and the strategic location also makes the country prime for an increased military presence. This is the strategic importance for Russia.
Lavrov spoke extensively about economic cooperation. According to him, Russia’s truck maker KAMAZ was already working in Eritrea, supplying its products to that country, as was Gazprombank Global Resources, which was building cooperation in the banking sector. In the same year, 2018, concrete talks were held to build a logistics centre at the port of Eritrea, which makes the world’s class logistics and services hub for maritime transportation through the Suez Canal and is definitely set to promote bilateral trade.
Still that same year, Eritrea was interested in opening a Russian language department at one of the universities in the capital of the country, Asmara. Lavrov further indicated: “We agreed to take extra measures to promote promising projects in the sphere of mining and infrastructure development and to supply specialized transport and agricultural equipment to Eritrea.”
In April 2022, Eritrea’s top diplomat, Osman Saleh, made a quick reciprocal visit to Moscow to receive honour and congratulations for opposing the resolution in New York. That was in March 2022; Eritrea was one of the countries who voted against the resolution condemning Russia over the situation in Ukraine at the United Nations.
Eritrea is now a member of the African Union. The Eritrean government previously withdrew its representative to the African Union to protest the AU’s alleged lack of leadership in facilitating the implementation of a binding border decision demarcating the border between Eritrea and Ethiopia. Eritrea is also a member of the United Nations.
Africa Day in Russia: A Large-scale Program to Celebrate 60th Anniversary of Liberation of Africa
Africa Day is traditionally celebrated in Russia on May 25. This day commemorates the establishment of the Organization of African Unity in 1963, which later transformed into the African Union.
For Russia, the development of relations with Africa is an important strategic direction. Russia plays a vital role in supporting the political, economic, and technological sovereignty of African states while also fostering partnerships and cooperation with African countries. Additionally, Russia actively promotes awareness and understanding of Africa’s rich cultural heritage.
To mark Africa Day, various cultural and business events are planned in cities across Russia. These events include exhibitions, performances by creative groups, and business missions.
Russian universities take an active part in educational activities on this day. The Centre for African Studies at the Higher School of Economics will host a special celebratory event and present the book “Africa 2023: Opportunities and Risks.”
Furthermore, Peter the Great St.Petersburg Polytechnic University will host the Youth Festival “Africa in St. Petersburg,” aimed at capturing the attention of young people and showcasing Africa’s cultural and educational legacy.
Importantly, the African agenda is not limited to a single day of celebration. The International Festival of African Culture “AFROFEST” will be held in Moscow on July 22-23 and in St. Petersburg on July 28-29, marking its fourth occurrence. This festival serves as a platform to broaden cultural horizons and challenge stereotypes by acquainting Russians with Africa’s history, customs, and traditions.
A high-profile business event, the Russia-Africa Summit and the Economic and Humanitarian Forum is scheduled to take place from July 26 to 29 in St. Petersburg.
This Summit and Forum is paramount in Russian-African relations, aiming to strengthen comprehensive and equal cooperation between Russia and African countries across various spheres, including politics, security, economy, science and technology, culture, and humanitarian affairs.
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