Africa Briefing - November - December 2022

SPECIAL REPORT: EAST AFRICA’S PORTS STEP UP COMPETITION

News. Analysis. Comment.

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December 2022

Vol.5 No.23

Ghana’s economic

headwinds Kenya: Ruto rings the changes

Sub-Saharan migration to Tunisia Key to ending coups

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23

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PUBLISHER’S NOTE

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From Africa’s rising star to a cautionary tale

Publisher Jon Offei-Ansah Editor

I

Desmond Davies

N the run-up to Ghana’s 2016 general elections, Africa Briefing published an op-ed by the then opposition leader Nana Addo Dankwa Akufo-Addo headlined, The Ghanaian economic paradox.

Contributing Editors

In the op-ed, Akufo-Addo took the John Mahama administration to task for “throwing away the economic credibility of the nation.” Mahama’s handling of the economy had raised serious questions that needed answers, he wrote.

Stephen Williams Prof. Toyin Falola Tikum Mbah Azonga Contributors

According to Akufo-Addo, government borrowing was at an all-time high and the NDC regime had been on a debt binge, which would result in a serious economic illness if the country continued down that path. “Despite more money in the economy than any time since independence, wealth inequality has increased as rising inflation continues to burn holes in our pockets. To put it simply – since our country’s independence, PUBLISHER’S NOTE a breath-taking 66 percent of all government debt has occurred under the Mahama regime. But we should be experiencing a golden Publisher time for our nation,” he said adding, “It beggars belief that in a time of plenty, Jon Offei-Ansah Africa bucks global the poorest are becoming poorer and the rich friends of the current administration Editor economic trend continue to profit.”

Desmond Davies

Justice Lee Adoboe Chief Chuks Iloegbunam Joseph Kayira Zachary Ochieng Olu Ojewale Oladipo Okubanjo Corinne Soar Kennedy Olilo Gorata Chepete

Then 2018, NDC, said, could not have been more reckless in their management ofDeputy the Editor six he of the 10 fastest-growing economies in the world were in nation’s economy and for the sake of “our future we need to take action.”

Africa, according to the World Bank, Angela Cobbinah

Designer

I

with Ghana leading the pack. With Based on his campaign promises of free high school education, one factory and GDP growth for the continent projected to Contributing Editor accelerate to fourfor pereach cent in district 2019 and 4.1 $1 million in the country, Akufo-Addo and the New Patriotic Stephen Williams per cent in 2020, Africa’s economic growth Party (NPP) won the elections a sizeable majority and assumed office in story continues apace.

Meanwhile, the Worldby Bank’s 2019 Doing Business Index reveals that five of the“We 10 most-improved countries are in Africa, and one-third of growth, create Director, January 2017. in the NPP will strive for double digit new Special Projects all reforms recorded globally were in sub-Saharan Africa.

Michael Orji

job opportunities and drive down the cost of doing business. We will create an Contributors all Ghanaians,” he promised

What makes the story more impressive and heartening is that the growth that a inlasting legacy for –agenda projected for to bechange broad-based – iswill being have achieved a challenging global environment, bucking the trend.

Ghanaians.

Justice Lee Adoboe

Chuks Iloegbunam In the Cover Story of this edition, Dr. Hippolyte Fofack, Chief Economist at the Now Export-Import in his second final four-year term in underpinning office, Ghana’s current economic African Bankand (Afreximbank), analyses the factors this Joseph Kayira performance.

Two factors, in my opinion, stand out in Dr. Hippolyte’s analysis: situation makes the gloomy picture he painted of his predecessor’s era look Zachary like Ochieng trade between Africa and China and the intra-African cross-border investment and paradise. development.

What was recently one of the world’s fastest-growing economies is now Olu Ojewale infrastructure Oladipo Okubanjo a cautionary of how tens of billions in foreign and infrastructure Much has been saidtale and written about China’s ever-deepening economic investment foray into Corinne Soar Africa, especially byevaporate Western analysts and commentators who have been sounding prospects can so suddenly. alarm bells about re-colonisation of Africa, this time by the Chinese. But empirical Designer evidence paints a different picture.

Akufo-Addo’s administration has been riddled with numerous corruption

Simon Blemadzie Country Representatives South Africa Edward Walter Byerley Top Dog Media, 5 Ascot Knights 47 Grand National Boulevard Royal Ascot, Milnerton 7441, South Africa Tel: +27 (0) 21 555 0096 Cell: +27 (0) 81 331 4887 Email: ed@topdog-media.net

Ghana Nana Asiama Bekoe China increased by 14.5 per cent in the first three quarters of 2018, surpassing Kingdom Concept Co. Country Representatives aregrowth the highest intrade the (11.6 country’s Inflation run away to an all-time high. the rate of world per cent),history. reflecting the deepeninghas economic Tel: +233 243 393 943 / +233 303 967 470 dependency between the two major trading partners.

After constantly ridiculing the Mahama administration for seeking an IMF bail out Africa South kingsconceptsltd@gmail.com Empirical evidence shows that China’s domestic investment has become highly Edward Walter and vowing never to go that route, the government has gone tail between the legs to Byerley linked with economic expansion in Africa. A one percentage point increase Top Dog Media, 5 Ascot Knights in China’s domestic investment withbowl an average the multilateral lendergrowth with isitsassociated begging for of a 0.6 $3 billion bailout.

47 Grand National Boulevard Royal Ascot, Nigeria percentage point increase in overall African exports. And, the expected economic Ghana’s hopes a futuristic, national cathedral have been Milnerton dashed as7441, South Africa development and tradefor impact of expanding 5,000-seat Chinese investment on resource-rich Nnenna Ogbu Tel: +27 (0) 21 555 0096 African countries, especially oil-exporting countries, is even more important. the nation’s currency is the world’s worst this year and the project’s priceCell: tag+27 has(0) 81 331 4887 #4 Babatunde Oduse crescent The resilience of African economies can also be attributed to growing intra-African Email: ed@topdog-media.net quadrupled from and $100 million,development. say analysts at Bloomberg. cross-border investment infrastructure A combination of the Isheri Olowora - Isheri Berger, Lagos two factors is accelerating the process of structural transformation in a continent Ghana Credit rating agencies have downgraded Ghana into junk status and the World Tel: +234 803 670 4879 where industrial output and services account for a growing share of GDP. African Nana Asiama Bekoe corporations and industrialists which aretotal expanding their industrial footprint across Bank projects the country’s public debt will hit 105 percent of GDP by the end getnnenna.ogbu@gmail.com Kingdom Concept Co. Africa and globally are leading the diversification from agriculture into higher Tel: +233 243 393 943 / +233 303 967 470 of this year. value goods in manufacturing and service sectors. These industrial champions kingsconceptsltd@gmail.com are carrying out transcontinental operations, with investment holdings around the Kenya It needs repay $3.5bn in loans andAsia, bonds in account 2023,for according to data compiled globe, with ato strong presence in Europe and Pacific together more Nigeria Patrick Mwangi than per cent of their outsideitAfrica. by 75 Bloomberg —combined a littleactivities more than is asking for from the International Monetary Taiwo Adedoyin Aquarius Media Ltd, PO Box 10668-11000 AFund. survey of 30 leading emerging African corporations with global footprints and MV Noble, Press House, 3rd Floor combined revenue of more than $118 billion shows that they are active in several Nairobi, Kenya 27 Acme Road, Ogba, Ikeja, Lagos industries, manufacturing Dangote Industries), materials, administration? The So, haveincluding Ghanaians been (e.g., hoodwinked by the basic Akufo-Addo Tel: +234 806 291 7100 Tel: 0720 391 546/0773 35 41 telecommunications (e.g., Econet, Safaricom), finance (e.g., Ecobank) and oil Ghana print and media are by discussions ontaiadedoyin52@gmail.com the sorry and gas. Inairwaves, addition to mitigating riskssocial highly correlated withdominated African economies, Email: mwangi@aquariusmedia.co.ke these global corporations are die-hard acceleratingsupporters the diversification of ruling party see the Kenya stateemerging of theAfrican economy.

Even some of the sources of growth and reducing the exposure of countries to adverse commodity Naima Farah current administration as deplorable and rue their decision to vote them in for terms of trade. ©Africa Briefing Ltd Room 22, 2nd Floor West Wing a second term in theabout 2020 elections. To say the current situation is aRoyal damning This makes me very bullish Africa!

Square, Ngong Road, Nairobi 2 Redruth Close, London N22 8RN indictment on the government is an understatement.

Tel: +254 729 381 561 United Kingdom naimafarah_m@yahoo.com Tel: +44 (0) 208 888 6693 Africa Briefing Ltd publisher@africabriefing.org 2 Redruth Close, London N22 8RN Gloria Ansah Despite the decelerating global growth environment, tradehuge between Africa and allegations.

The country is saddled with debts, which some economists say

United Kingdom Tel: +44 (0) 208 888 6693 publisher@africabriefing.org

Contents LEADER

6

African labour migration in the Gulf States

Vol.5 No.23 December 2022

08

COMMENT

07

Discussing removal of term limits is a distraction

COVER STORY

08

Ghana battles economic headwinds

The multiple downgrading by the international credit rating agencies have had their negative impact on the economy, as Ghana lost access to the international capital market where it could borrow to support budget implementation and debt substitution, writes Justice Lee Adoboe

13

Will another bailout solve Ghana’s economic crisis?

19

As debt soars, Ghana must take ownership of its financial troubles, starting with slashing public expenditure, Jon Offei-Ansah reports

ANALYSIS

16

Challenging times for demobilising rebels

19

Ruto rings the changes

More than 200,000 combatants have been shuffled through different demobilisation programmes over the years, making the process one of the world’s largest and longest-running, write Sam Mednick and Claude Muhindo Sengenya

36

The new Kenyan leader has taken aim at a variety of laws, regulations and programmes that were central to the administration of his predecessor by starting to dismantle them, writes Kennedy Olilo

BUSINESS & ECONOMY

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The regional investment imperative: diversification and resilience amid economic downturns Africa—the most demographically dynamic region of the world—has been making headlines for the massive investment potential it offers, and yet has been stubbornly ignored, some analysts say

SPECIAL REPORT

40

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LEADER

African labour migration in the Gulf States

T

HE ongoing World Cup in Qatar has presented the rest of the world with the opportunity to scrutinise human rights in a country that is seen as autocratic – just like other countries in the Gulf. For Africans, the main issue has been the droves of migrants from the continent who have travelled to the region in search of jobs but who have mainly had a raw deal.

Recently, the Kenyan government took up the case of the 400,000 Kenyan workers who are in the Gulf, especially in Saudi Arabia where there are 210,000 migrant workers from Kenya.

The government announced that 89 Kenyans died in mysterious circumstances in Saudi Arabia. As at November this year, the government said another 23 of its citizens had died in the Gulf State.

The poor treatment of these migrant workers is not just confined to Kenyans, but also to others from the continent. It is just that the Kenyan government has taken a robust stance on this grave violation of the human rights of Kenyan migrant workers in the region.

The International Labour Organisation has regularly highlighted cases of exploitation by recruitment agencies and employees that often create considerable hardship for workers in basically medieval societies. For instance, the admission and employment system implemented by most countries in Arab and Gulf States is based on restricted rights and limited duration of employment contracts and visas, known as the Kafala (sponsorship) system.

Employers and/or sponsors often have both liability for the conduct and safety of the migrant they bring into the country, as well as control over that migrant’s movement and employment.

The ILO points out that while in some cases employers may welcome the responsibilities of the Kafala system and treat the worker well, the inherent imbalance in the rights and responsibilities of each party can create a situation which is exploitative of the worker.

The ILO has noted that “the kafala system may be conducive to the exaction of forced labour and has requested that the governments concerned protect migrant 6

workers from abusive practices”.

It is high time that the African Union takes a more serious approach to deal with the matter. We know that African governments seldom show much interest in the way their citizens are treated abroad.

But this has to change from the perspective of the governments and the AU itself.

Of course, the AU regularly pays lip service to tackling the problems facing African migrants in the Gulf but nothing concrete has ever come out of this. During the pandemic, a virtual meeting explored the human costs of migration policies in Africa but the underlying issue was that because the Gulf States and Arab nations were “undemocratic” not much could be done.

This is a defeatist position. African

‘

the domestic work sector, the protections afforded are often inferior to those provided in the labour law; limited access to justice, weak and inefficient dispute settlement mechanisms and absence of compensation schemes; and limited or no freedom of association in some countries and inability of migrant workers to bargain collectively.

Given these severe restrictions, African migrant workers in the Gulf states are at the mercy of their employers who take full advantage of the lack of protection for their “employees”. It is not uncommon to hear of “employers” withholding salaries of their workers or not even bothering to pay wages that had been agreed earlier.

Physical abuse is also rampant.

It would seem that the human cost

African governments seldom show much interest in the way their citizens are treated abroad

governments naturally argue that because of the unregulated manner of migration – and the unscrupulous nature of some Africa-based employment agencies – it is difficult to regulate the flow of their citizens to the Gulf States, According to the ILO, in addition to abusive and fraudulent recruitment practices and the high costs associated with labour migration, other issues and challenges facing migrant workers in the region include: poor conditions of work and substantial occupational safety and health deficits combined with weak labour inspection in migrant-intensive sectors such as construction and domestic work; non-inclusion or only partial inclusion of certain categories of migrant workers, such as domestic workers, in labour laws – while a number of countries in the region have adopted separate laws regulating AFRICA BRIEFING DECEMBER 2022

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of migration far outweighs the financial benefits that these migrants were expecting so that they could help their families back home. Human rights must take precedence, as the Kenyan government has now done by informing migrant workers of their rights.

African governments must provide an enabling situation that will regulate the flow of their citizens to the Gulf States.

They must ensure that young women are properly protected because of the sexual abuses that many have undergone.

But because wealthy Gulf States provide funding to aid African governments, the continent’s leaders tend to turn a blind to abuses of their citizens in the Gulf. This should no longer be the case. The AU should take the lead in developing migration governance policies to halt the ill-treatment of African AB migrants.

COMMENT

Discussing removal of term limits is a distraction Desmond Davies

N

OT long after President William Ruto took over the reins of power in September for an initial term of five years, a member of his United Democratic Alliance in parliament, Salah Yakub, shot from the hip. Without careful consideration of the feelings of Kenyans who have been reeling under economic pressure, Yakub was more focused on presidential term limits.

He hinted that the UDA intended to remove these limits and replace them with age limits. So, instead of a president stepping down after two terms of five years each, Yakub would like to see this changed to a president going on until he or she is 75.

This is rather uncalled for, coming at a time when Ruto and his new administration are trying to set things right after yet another acrimonious presidential election. The new Kenyan president is 55, so an age limit would serve him well.

But he was quick to slap down Yakub’s

‘

charge since 1979, was re-elected for a sixth term with 94.9 per cent of the votes.

But there was scarcely opposition of any substance to challenge him.

On the economic front, people in the oil-rich country are struggling to make ends meet. But this has not stopped Obiang’s son, Teodorin, Equatorial Guinea’s Vice President, from frittering away the country’s wealth on luxury goods and pristine properties in Europe.

In Uganda, Museveni’s soldier son is said to be being prepared to take over from his father. Museveni might deny this, but let’s wait and see.

When term limits were introduced in the wake of the second wave of democracy in Africa in the 1990s, the argument was that they would stop tyrannical leaders and usher peaceful transition of power from one president to the next. But in Kenya, for instance, this has not worked, as the outcomes of the last three presidential elections have been hotly disputed by the candidates, with the courts being the final

Removing presidential term limits is just a self-serving exercise by African leaders

suggestion to amend the Constitution. He said the UDA should stop “pushing for selfish and self-serving legislation like changing the Constitution to remove term limits”.

Indeed, what’s with African politicians and their fascination with removing term limits? Let’s face it, can’t a leader deliver in two terms lasting 10 years?

Take, for example, Yoweri Museveni of Uganda, who has been in power since 1986, and the world’s longest serving president, Teodoro Obiang of Equatorial Guinea? Have they really delivered for their people during their time in power?

Recently, Obiang, who has been in

’

arbiter. This, though, does not mean that Kenya should abandon term limits.

Two years ago, the Open Society Initiative of Southern Africa, in partnership with the National Democratic Institute, the Open Society Initiative for West Africa, and the Kofi Annan Foundation, hosted a Term Limits conference. Such was the uproar over the issue that a gathering of this nature was needed to look at how African leaders play games with their citizens when it comes to power.

The conference heard that from April 2000 to July 2018, limits were changed 47 times in 28 countries, with at least six failed attempted changes. In 2021, Alpha Conde in Guinea attempted to continue AFRICA BRIEFING DECEMBER 2022

in power for a third term by manipulating a referendum that extended his stay as president.

The soldiers disapproved and he was ousted. The sad thing about this was that Conde ought to have known better.

Having being in exile for ages because of tyrannical rule in Guinea, one would have thought that he would play by the rules.

Leaders like Conde and others who have removed term limits in Africa have clearly done so for self-serving reasons. It had nothing to do with them seeking the interests of their citizens.

However, removing term limits is not a problem in itself. What matters most is that the electoral process must be transparent and free from encumbrances that would stop voters from exercising their democratic rights. Then, if a leader does not deliver, there would change.

In South Africa, a recent survey by the Brenthurst Foundation showed that for the ANC, which has been in power since 1994, its share of the vote among those who will cast their ballots will fall to 46.7 per cent in 2024 from 57.5 per cent in the 2019 election.

Dr Greg Mills, Director of the Brenthurst Foundation, noted: “The results of this survey clearly show that South Africans are ready for change. South Africa is on the cusp of change, but it is up to political leaders to listen to voters and start working on ways to fix the country.

“They see the country in crisis and want leaders to work together to fix it.

While more will vote for the ANC than any other party, it is revealing that the vast majority want to see a coalition governing South Africa.”

This could be said for the rest of the continent. Africans want their leaders to provide jobs, fight corruption and help create economic prosperity. They do not want politicians who use the issue of removing term limits as a distraction from dealing with the real issues at hand.

AB 7

COVER STORY

Ghana battles economic headwinds The multiple downgrading by the international credit rating agencies have had their negative impact on the economy, as Ghana lost access to the international capital market where it could borrow to support budget implementation and debt substitution, writes Justice Lee Adoboe

T

HREE years after exiting the International Monetary Fund (IMF)’s Extended Credit Facility–backed programme, Ghana is at the crossroads again with debt sustainability crisis weighing down heavily on the country’s economy.

Finance minister Ken Ofori-Atta conceded during the reading of the 2023 budget statement late November that the economy continued to reel under the

adverse impact of the challenging global and domestic environment.

Despite the monetary and fiscal policy interventions deployed by the government, the economy is buffeted by the rapid exchange rate depreciation, high inflation, an unsustainable debt burden, fiscal stress and external sector shocks.

Moreover, revenue performance between January and September, 2022,

Ken Ofori-Atta: economy is reeling under the adverse impact of the challenging global and domestic environment

8

AFRICA BRIEFING DECEMBER 2022

according to Ofori-Atta, had experienced shortfalls, leading to a budget deficit of 7.4 percent, compared with a programmed 6.4 percent for the period. The government had to resort to borrowing from both domestic and external sources to finance the deficits.

To bridge the resource gap in budget implementation, the West African cocoa, gold and crude oil exporter resorted to borrowing, increasing total public debt provisionally to GH¢467.37 billion ($48.8

COVER STORY

Ghana’s inflation rate from Jan-October 2022

billion per official exchange rate) or 75.9 percent of Gross Domestic Product (GDP) as of the end of September. The comparable figure was about GH¢ 122.6 billion at the end of 2016.

“Ghana’s Debt Sustainability Analysis shows a moderate rated debt carrying capacity and an overall risk rating of high risk of debt distress and unsustainable due to the negative effects of exogenous shocks on the economy which worsened existing vulnerabilities,” the finance minister stated.

The minister attributed Ghana’s external and public debt vulnerabilities to “the perennial high fiscal deficits of the past,” and the rapid exchange rate depreciation, which the budget statement estimated had added GH¢ 93.8 billion to the stock of external debts which had increased to 58.1 percent of GDP from 48.4 percent of GDP over the same period in 2021.

Meanwhile, credit rating agencies responded swiftly to the challenging macroeconomic environment, with inflation soaring far above the mediumterm target band of 8±2 percent and rising budget deficit among other indicators in Ghana.

Fitch, Moody’s and S&P had at various times in the year downgraded the country’s credit rating, with dire consequences on the country’s ability to use the Eurobond market to raise the badly needed funds to support budget implementation.

As late as November 30, Moody’s further downgraded the Ghanaian government’s long-term issuer ratings to Ca from Caa2, changing the outlook to

stable.

“The Ca rating reflects Moody’s expectation that private creditors will likely incur substantial losses in the restructuring of both local and foreign currency debts planned by the government as part of its 2023 budget proposed to Parliament on November 24 2022,” the agency said in a statement on its website.

On its part, the government outlined various measures in the 2023 budget to deal with the debt situation while restoring macroeconomic stability.

‘

first three quarters of 2022. The debt management strategy implemented in 2022 resulted in increasing the cost and risk indicators of the public debt portfolio,” he said.

The government has also taken due cognisance of the underperformance of revenue, especially during a period when the doors to the external financial market have been shut to Ghana .

The government, therefore, seeks to undertake fiscal adjustments with revenue and expenditure measures to improve debt

Our access to the international capital market is largely closed

Chief among these is the proposed and yet to be defined Debt Exchange strategy which is linked to the proposal by President Nana Addo Dankwa Akufo-Addo at COP 27 in Egypt, urging rich countries to allow debt-laden African countries to swap their debts for Climate Action.This is to ensure Ghana’s public debt returns to sustainable levels.

This new debt-swapping, has is being dreamed up because the debt substitution method used so far, according to OforiAtta had fraught with challenges.

“The recent global and domestic macroeconomic developments have had adverse effect on the implementation of government financing strategy for the AFRICA BRIEFING DECEMBER 2022

’

sustainability and restore macroeconomic stability and fast-track discussions with IMF. Moreover, the Akufo-Addo-led administration also seeks to pursue macro-critical structural reforms to address structural bottlenecks in the economy to deal with some of the critical and potential sources of financial liabilities on the state.

The raft of measures to enable the government to cut expenditure and boost revenue include a 2.5 percentage point increase in value added tax (VAT). This will bring the total VAT burden, including National Health Insurance Levy, Ghana Education Trust Fund Levy and Covid-19 Health Recovery Levy, to 21 percent.

9

COVER STORY

Ghana’s high inflation worsens living conditions

The government also mulls a freeze on new tax waivers for foreign companies and a review of tax exemptions for free zones and extractive industry players.

The government also seeks to place a cap on salary adjustment of SOEs to be lower than negotiated base pay increase on Single Spine Salary Structure for each year; and “Negotiate public sector wage adjustments within the context of burdensharing, productivity, and ability to pay; with a freeze on new employments in the public sector.

"It has become even more urgent to mobilise domestic revenue especially in times like this when our access to the international capital market is largely closed," said the finance minister as he announced the intention of the government to impose a debt limit on non-concessional

10

financing among other reforms.

Under the circumstances, the government expects economic growth to slow to 3.7 percent in 2022 and 2.8 percent in 2023, after a 6.7 percent growth in 2021.

“We expect 2023 to end with an inflation rate of 18.9 percent, primary balance on commitment basis of a surplus of 0.7 percent of GDP, and gross international reserves to cover not less than 3.3 months of imports,” the minister told parliament.

Meanwhile, the government is seeking approval to spend GH¢205.4 billion ($14.1 billion) in the 2023 fiscal year, against projected revenue and grants of GH¢143.9.

A deal with the IMF "The government and the IMF have agreed on programme objectives, a

AFRICA BRIEFING DECEMBER 2022

preliminary fiscal adjustment path, debt strategy and financing required for the programme," he said, adding he hopes “to reach a deal very soon.”

The minister added that the objective was to fast track negotiations with the Fund to conclude these negotiations by year-end.

The multiple downgrading by the international credit rating agencies have had their negative impact on the economy, as Ghana lost access to the international capital market where it could borrow to support budget implementation and debt substitution.

As a direct consequence of the downgrading, and also due to the high import bill of petroleum products among other external factors, Ghana has recorded a significant decline in reserve buffers,

COVER STORY agencies, and increased foreign exchange demand. These have exerted intense pressures on the local currency,” Addison stated.

At the end of October 2022, the governor said the gross international reserves position had declined to $6.7 billion, equivalent to 2.9 months of import cover compared with the reserve level of $9.7 billion (4.3 months of imports) at the end of December 2021.

The net international reserves, which exclude encumbered assets and petroleum funds, were estimated at 2.8 billion dollars as of October 2022.

Ghana’s key source of foreign exchange is the export of cocoa, gold, and crude oil. In addition to these traditional sources are portfolio investments by offshore investors in the local capital market, Foreign Direct Investments, and the sale of bonds in the Eurobond market.

Whereas, the key primary sources performed creditably in 2022, Ghana’s downgrading by global rating agencies affected all the other sources and Addison thinks the country needs a more sustainable way of building foreign exchange.

“Risks to the external sector outlook are on the upside, and measures are being taken to gradually rebuild reserves in more sustainable ways to preserve stability going forward,” Addison added.

among other risks to its external sector.

Bank of Ghana governor Ernest Addison said during the 109th Monetary Policy Committee press briefing late November that despite the significant improvement in trade surplus due to higher export receipts from increased gold production and higher crude oil prices, the current account deficit widened.

He added that, “The balance of payments swung into a deficit in the first nine months, from a surplus last year due to continuing large current account deficit and, importantly, significant outflows in the capital and financial account.”

“The significant decline in reserve buffers was due to the loss of market access, significant portfolio reversals, rising petroleum import bill, market reaction to sovereign downgrades by rating

Already the bank has begun the purchase of gold from mining companies in the country to boost its gold reserves as a means of strengthening the country’s reserve position.

To deal with pressure from the higher cost of crude, the government also announced a Gold-for-Oil programme, as Ghana ordered large gold-mining companies to sell 20 percent of their products to the central bank, as the government embarks on a plan to barter gold bullion for fuel amid increasing cost of fuel on the international market and foreign exchange depreciation.

The governor said the government had informed the IMF of the “Gold for Oil” initiative and discussions were still ongoing as Ghana is yet to secure a fund programme from the Fund.

He added that when that was done, the pressure to spend foreign exchange to purchase petroleum products from the international market would ease as

AFRICA BRIEFING DECEMBER 2022

gold, rather than dollars would be used in exchange for fuel.

The central bank ramped up its policy rate by 250 basis points to 27 percent to rein in inflationary pressures and local currency depreciation.

“Inflation will likely peak in the first quarter of 2023 and settle at around 25 percent by the end of 2023. This forecast is conditioned on the continued maintenance of tight monetary policy stance and the deployment of tools to contain excess liquidity in the economy,” Addison projected.

He said there were, however, some risks to this forecast that needed monitoring, “including additional pressures from the proposed VAT increase, and exchange rate pressures. Continued vigilance to the evolution of these potential price pressures in the outlook will be key.”

He also hinged the achievement of some of the targets set in the 2023 budget on Ghana’s securing a programme with the IMF. Ghana took advantage of the Highly Indebted Poor Country (HIPC) initiative to receive debt forgiveness from 2001 when total foreign debt stood at around $6.7 billion.

However, debt has accumulated far beyond the HIPC threshold, putting its debt sustainability in serious doubt.

“The lesson the international community learned in the HIPC Initiative was that most African countries have not learned any good lessons, to the extent that just after exiting that programme, the first thing we did was to go into the Eurobond market to borrow $750 million and the debt keeps piling,” said John Gatsi, Dean of School of Business, University of Cape Coast.

Gatsi said the underlying factors in Ghana’s current debt situation was that, “We have over-borrowed, and are not managing the economy to provide the needed stable environment, so inflation surges, exchange rate is volatile to escalate the volume of the debt if you want to pay in Ghana cedis.”

Gatsi added: “Downgrading is an assessment of your performance, to see whether you are in the position to pay your debt. So it is an objective activity, and if government has a different record to indicate, the government would have

11

COVER STORY

President Akufo-Addo: battling economic headwinds

shown that record by now.”

Seeking a new IMF programme just three years after exiting the previous ones, Gatsi said was an indication that Ghana should have stayed longer in the previous programme.

“Staying a bit longer in the previous programme would have consolidated the gains and helped us manoeuvre when the crisis came during the pandemic. But we were in a hurry to ask for permission to exit the programme. So we were actually not fully prepared to exit, but we chose to exit the programme,” he stated.

Instead of an “unrealistic and uncertain” gold for oil deal, Gatsi urged the government to rather activate the wartime clause in the petroleum agreements, to compel the IOCs operating in Ghana to sell their crude to the country during this difficult era.

“Though this would be at international price, with cedi equivalent paid to them, 12

it could cut off the transportation cost , so that all the associated cost would have been gone and you’d be able to give the oil to TOR [the Tema Oil Refinery] to refine for domestic use and that will make the price far lower than we have now,” he stated.

Gatsi, however, lauded the government for finally deciding to promote and invest in food crop production, especially for staples such as rice, tomatoes and others to reduce their import burden on the scarce foreign exchange.

Touching on the proposed debt exchange for climate action, the academic did not see its plausibility as Ghana had demonstrated clearly that it could not control illegal mining locally, allowing the practice to wreck havoc on the environment.

“You have galamsey [illegal artisanal mining] here and government is not able to control it, or made any serious commitment

AFRICA BRIEFING DECEMBER 2022

to galamsey, but we go to Egypt and start talking about debt exchange, to swap debts for climate proceeds - it is just laughable when we are not controlling the things that are destroying our environment. That is difficult to appreciate,” he stated.

Gatsi, also a chartered economist and a barrister, projects a difficult year ahead of Ghanaians, considering the tax and labour proposals in the 2023 fiscal policy.

“The budget speaks volumes. The budget says that there will not be any employment in the public sector, which is a huge one. There are all kinds of increases in taxes, including VAT, which will cause hardships, and lead to increase in prices which will cause inflation especially in the first quarter of 2023,” he added.

Since he projected that the international capital market would not open to Ghana any time soon, Gatsi agreed with the central bank’s decision to have a mix of gold and foreign currency as its reserves.

COVER STORY

Will another bailout solve Ghana’s economic crisis?

As debt soars, Ghana must take ownership of its financial troubles, starting with slashing public expenditure, Jon Offei-Ansah reports

G

HANA’S economic woes continue as the country seeks International Monetary Fund (IMF) support for the 17th time. The bailout was necessary after the new electronic transaction levy (e-levy) – a 1.5 percent tax on all electronic transfers above GHS100 – failed to yield the expected results.

Previous IMF programmes have improved macroeconomic stability in Ghana. Fiscal discipline in the country often depends on these programmes, as self-imposed controls are rare. Nonetheless, the solution to Ghana’s crisis lies with its government and people.

The economy has suffered significantly since early 2022, plunging the country into

a full-blown economic recession. Inflation rose from 13.9 percent in January to 37.2 percent in September, and some analysts believe the actual level is more than twice the official rate – possibly as high as 98 percent. Petrol and diesel prices have jumped by 88.6 percent and 128.6 percent respectively. Most public transport fares have increased by more than 100 percent since January.

Likewise, water and electricity tariffs have risen by 27.2 percent and 21.6 percent respectively this year. According to the World Bank, Ghana has the highest food prices in sub-Saharan Africa, with prices soaring by 122 percent since January.

The country’s interest rate of 30

percent and lending rate of 35 percent are the highest in Africa. Bloomberg says the Ghana cedi is now the worst performing currency globally, and the IMF revised Ghana’s projected growth rate for 2022 from 5.2 percent to 3.2 percent.

Analysts trace the current problems to the downgrading of Ghana’s sovereign rating.

“Problems began when international credit rating agencies downgraded the country to junk status due to its unsustainable and growing debt. The relegation denied access to global capital markets, and prevented the raising of the $2-3 billion Eurobond required to service its debts and support the Ghana cedi, which

The 2018 financial sector clean-up cost Ghana about $4 billion in borrowed funds

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COVER STORY

The Ghana cedi is now the worst performing currency globally

then went into freefall,” says Enoch Randy Aikins, Researcher, African Futures and Innovation, at the Institute for Security Studies (ISS) in Pretoria, South Africa.

Aikins says the major problem now is rising debt, which stands above 80 percent of GDP and is projected to reach 104 percent by the end of 2022. Ghana has been thrust into debt distress as 70 percent of its total revenue must go towards debt servicing. This leaves little room for other statutory obligations or investment in education, health and infrastructure.

Aikins dismisses the government’s claims that Covid-19 and the war in Ukraine are the cause of the current headwinds. “While the government blames the economic crisis on Covid-19 and Russia’s invasion of Ukraine, the political opposition and some civil society 14

organisations believe state mismanagement is largely responsible,” he says.

In Aikin’s opinion, several structural problems need fixing. “For instance, the country’s inability to produce for export and its reliance on imports for daily consumption has led to a perpetual deficit in its balance of trade. That means the Ghanaian currency is fated to be inherently weak compared to the dollar, leading to high import prices that hit consumers.

“Poor public financial management is also a factor, especially the high levels of unproductive and profligate government expenditure. From 2017 to 2020, Ghana – a small country – had over 120 ministers and 1 000 presidential staffers. These lucrative appointments drained the public purse.

“The crisis was further aggravated by government spending on flagship AFRICA BRIEFING DECEMBER 2022

programmes that didn’t yield the expected results, such as NABCO (a graduate apprenticeship programme) and One Village, One Dam.” The 2018 financial sector clean-up cost Ghana about $4 billion in borrowed funds, says the government – a figure experts believe could have been less had implementation been more efficient. Debt was also driven by the 2014 capacity charges agreement that enabled independent power producers to address energy shortages. The government says the country paid $937.5 million in capacity charges between 2017 and 2020.

Ghanaian governments also have a history of large fiscal deficits in election years. In 2020, the deficit was 15.2 percent of GDP compared to the 8 percent average from 2017 to 2019.

COVER STORY Domestic revenue mobilisation is also weak due to tax exemptions for large corporations, government cronies and corruption. The country loses about GHS2.2 billion ($300 million) annually this way. According to the AuditorGeneral, public sector irregularities from 2016 to 2020 amounted to about GHS48 billion (more than $8 billion). And a recent report to Parliament flagged GHS17.4 billion ($3 billion) in financial irregularities in 2021, 36 percent higher than in 2020.

To achieve macroeconomic stability, the government has applied for a $3 billion IMF bailout programme starting in the first quarter of 2023, with discussions focused on debt restructuring to give the government fiscal space but Aikins believes the government can boost public confidence in the economy through other measures in the meantime.

“First, the Fiscal Responsibility Act capping government deficit at 5 percent

Ghana’s debt exchange programme kicks in The government of Ghana’s proposed debt exchange programme aimed at easing is debt burden kicked in Monday with the launch of the domestic debt exchange amid the ongoing economic crisis.

Ken Ofori-Atta, the finance minister launched the programme (just as Africa Briefing was going to press on December 4) explaining that debt restructuring was inevitable in order to redeem the economy from its current crisis.

Ofori-Atta said the government was inviting eligible holders to voluntarily exchange approximately 137.3 billion Ghana cedis ($9.8 billion) worth of domestic debts “for a package of new Bonds to be issued by the government.”

He said the domestic bond investors would receive new Government of Ghana bonds with 0 percent coupon in 2023 that steps up to 5 percent in 2024, and 10 percent from 2025 onwards.

The minister first announced the government's intention on the debt swap when he presented the 2023 budget to parliament in late November.

of total revenue that was suspended in 2020 due to Covid-19 should be restored.

Second, measures are needed to drastically reduce government’s size, including allowances and bonuses. Foreign travel and new vehicle purchases should be banned unless vital. Initiatives such as the Free Senior High School programme must be reviewed to improve their efficiency.

“Third, revenue mobilisation measures are needed. The newly passed tax exemption bill, which has clear eligibility criteria and provides for monitoring and evaluation, should be implemented. The new bill could reduce tax exemptions to at least GHS500 million ($66.7 million).

The government must also seal the leaks at ports to realise more from excise and import duties.”

In addition, Aikins believes that parliament should enact legislation to establish a debt limit and cap government borrowing to prevent the crisis from recurring. Constitutional amendments to limit the number of ministers and appointees in government, abolish exgratia payments and review emoluments to public servants must be considered.

“Using technology, the government could improve property tax collection, which has been sporadic and low due to poor information about ownership and accurate valuations. The extractive industry could bring in revenue if the tax regime is tightened and properly implemented.

“Finally, Ghana needs a national industrialisation plan anchored in its strong manufacturing sector with links to agriculture. The country must establish import-substitution and export-driven industries based on its comparative advantages. The One District One Factory industrialisation agenda should be reviewed and better implemented. These measures can improve the country’s trade balance and government revenue,” he says.

“The Debt Sustainability Analysis of the country’s economy demonstrated that Ghana’s public debt is unsustainable and that the government may not be able to fully service its debt down the road if no action is taken,” the minister stated.

statement, underpinned by a successful IMF program, Ghana will witness a stable and thriving economy from 2023, with a return to single-digit inflation to ensure that real returns on bonds are protected,” said the minister.

He added that “debt servicing is now absorbing more than half of total government revenues and almost 70 percent of tax revenues. Total public debt, including that of State-Owned Enterprises, exceeds 100 percent of our GDP.”

Ghana’s economy has been hit by multiple crises including fiscal deficit, debt overhang, current account deficit, exchange rate depreciation, and galloping inflation, causing international rating agencies to downgrade Ghana’s creditworthiness multiple times in 2022.

The minister said the debt exchange would restore the capacity of the West African cocoa, gold, and crude oil exporter to service its debt.

“This domestic debt exchange is part of a more comprehensive agenda to restore debt and financial sustainability.

We are also working towards debt restructuring, which we will announce in due course,” added the minister.

He added, “This is a key requirement to allow Ghana’s economy to recover as fast as possible from this crisis and a key requirement to securing support from IMF.” “We are confident that with these measures and those in the 2023 budget

The IMF staff team has been in Ghana since December 1, following up on negotiations with the government for a possible support program toward economic recovery.

Moody’s further downgraded the Ghanaian government’s long-term issuer ratings to Ca from Caa2 ,changing the outlook to stable on November 30.

“The Ca rating reflects Moody’s expectation that private creditors will likely incur substantial losses in the restructuring of both local and foreign currency debts planned by the government as part of its 2023 budget proposed to Parliament on 24 November 2022″, the agency said in a AB statement.

By Justice Lee Adoboe

AFRICA BRIEFING DECEMBER 2022

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ANALYSIS

Challenging times for demobilising rebels More than 200,000 combatants have been shuffled through different demobilisation programmes over the years, making the process one of the world’s largest and longest-running, write Sam Mednick and Claude Muhindo Sengenya

T

HE Democratic Republic of Congo has been encouraged to accelerate the rollout of a new programme to demobilise rebel fighters amid surging conflict with armed groups, including the M23, which has seized yet more territory in eastern parts of the country.

But there are limited funds for the programme – which is yet to begin activities more than a year into its creation – and local analysts and combatants are sceptical it will succeed given the failure of three prior demobilisation schemes to ease violence.

“You can take a thousand fighters out

from armed groups today, but tomorrow they will be able to recruit another thousand people,” said Nene Morisho, director of Pole Institute, a Congolese think tank specialising in conflict prevention and resolution.

The demobilisation scheme – which comes after several years without a nationwide programme – is one of several initiatives introduced by President Félix Tshisekedi, who came to power in early 2019 promising to quell long-running conflict in the east.

Tshisekedi has initiated dialogue with some armed groups and launched largescale military offensives against others.

Roughing it: former rebels sleep in makeshift tents Credit: Sam Mednick/TNH

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AFRICA BRIEFING DECEMBER 2022

He has also introduced martial law in two eastern provinces, and approved the deployment of a controversial East African military force.

Yet insecurity has only worsened, as a renewed offensive by the M23 – which Rwanda is accused of backing – uproots nearly 240,000 people. Conflicts involving other armed groups are also flaring, with almost six million Congolese internally displaced overall.

Experts say the new programme must improve on prior schemes in order to reduce violence. Past efforts did not create durable livelihoods for rebels nor address the political factors that drew them into

ANALYSIS armed groups – of which there are now over 120.

But the latest demobilisation initiative has been marked by controversial appointments – its top official, Tommy Tambwe, has prior links to rebel groups, including the M23 – and a sluggish start that has left some questioning the government’s commitment.

Several Congolese officials involved in the programme told The New Humanitarian they do not have funds to implement projects, while a senior diplomat said international donors were not willing to release money until the government put “skin in the game”.

Local residents in conflict-hit areas called for faster action from authorities.

“The government needs to disarm people quickly,” said Henri Ngabu, from north eastern Ituri province. “People will restart fighting because they need a means to live.”

The DRC’s first disarmament, demobilisation, and reintegration (DDR) programme began in 2004, following two devastating wars. The conflicts were linked to the 1994 genocide in neighbouring Rwanda and the subsequent exodus of genocidaires into eastern DRC.

More than 200,000 combatants have since shuffled through different demobilisation programmes, making the DDR effort here one of the world’s largest and longest-running. International donors have invested hundreds of millions of dollars in the processes.

Yet some funds have been misappropriated by the state and poor implementation has meant combatants who disarmed often ended up re-joining rebel groups – which have proliferated in numbers in recent years.

Almost a dozen current and former rebels who spoke to The New Humanitarian said they spent several hard years in cantonment camps, waiting to demobilise. Some were so ill-equipped that rebels and their families died of hunger and disease.

Combatants who reintegrated into civilian life, meanwhile, said assistance was scant and poorly tailored. Others were stigmatised by communities, which were left out of programme implementation, and questioned why rebels were the only ones being assisted.

“It’s because [combatants] are not treated well that they re-join groups,” said Joseph Byenda, an ex-rebel who demobilised in 2005, having started fighting in the 1990s. Byenda said he was still stigmatised and struggled to survive on a paltry income.

Despite the failure of past programmes, the absence of a national scheme in recent years led to missed opportunities. For example, a wave of rebels surrendered in 2019 when Tshisekedi came to power, but they then received little support.

Known as the Disarmament, Demobilisation, Community Recovery and Stabilisation Programme, the new scheme differs from past ones in that it will be run from provinces rather than Kinshasa – a measure supposed to decentralise decisionmaking.

There will also be a strong emphasis on sensitising and supporting communities to accommodate ex-combatants, with both parties standing to benefit from job creation schemes such as on farms and in road construction.

“Ex-fighters and the populations will work together in order to create an environment of understanding and trust,” said Joseph Ndayambaje Sukisa, deputy coordinator of technical and operational

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matters for the demobilisation programme in North Kivu.

Like past programmes, the initiative will focus on bringing rebels back into civilian life and excludes the wholesale integration of armed groups into the army.

Amnesty for serious rights abuses is ruled out too.

“Impunity is the root of all the cycles of violence in [the] DRC," said Stewart Muhindo, of the campaign group LUCHA. “Until now, all the dialogues in DRC seem to consecrate the impunity of militiamen by granting them a general amnesty or integration into the army.”

Still, while some combatants expressed optimism in the new programme, many remained jaded by past iterations and few seemed aware of specific details about the initiative, indicating a lack of communication from authorities.

A slow rollout has also undermined trust. Though Tshisekedi first called for a new DDR programme in 2019, the initiative is not yet operational, even with provincial and national coordinators appointed over a year ago.

“We don’t feel the political will on the part of the Congolese state to actualise this programme, more than a year after facilitators were appointed,” said Xavier Macky, executive director of Justice Plus, a local rights group. “We’re still going in circles.”

Trust is especially low at cantonment sites where surrendered combatants have been waiting for several years to be demobilised. Hundreds tried to leave a camp near Goma, North Kivu’s capital, in July, but were urged by authorities to stay and wait.

“Patience is running out because the conditions aren’t good,” said Sadock Assani, an ex-combatant who has been living at Mubambiro cantonment site near Goma since 2019. “If the programme is delayed longer, there will be a catastrophe.”

Analysts warn the new scheme may face the same problems as past ones. A weak economy, for example, makes it hard to find lasting livelihoods for rebels, while a militarised political system means elites often use armed groups to further their interests.

Unresolved local conflicts and the presence of foreign armed groups may also leave Congolese combatants AB 17

ANALYSIS wary of disarming. Few have much trust in army soldiers who are poorly paid and regularly responsible for abusing the rights of civilians.

In recent months, meanwhile, the military has been providing support to a number of local and foreign armed groups willing to support its offensive against the M23, raising questions about the force’s commitment to demobilisation.

Earlier this year, even cantoned fighters who were awaiting DDR in North Kivu were asked by the army to reinforce their positions 100 kilometres away, according to a local human rights activist who asked not to be named citing security risks.

“Why would we demobilise when the government needs youth to defend the country, which is under attack?” said Jules Mulumba, spokesperson of a rebel group called the Collective of Movements for Change, which is currently allied against the M23.

Rules around amnesty and army integration may further weaken the motivation of combatants to demobilise.

This is especially the case for rebel leaders seeking the same rewards and ranks, which armed groups and commanders enjoyed in the past.

A combatant with the Front for Patriotic Resistance in Ituri (FRPI) told The New Humanitarian that rebel officers who return to civilian life rather than the military are likely to recruit people again.

The combatant, who asked not to be named, was part of a local demobilisation

initiative in 2019 and 2020 that was based on promises of army integration and amnesty. However, the deal fell apart in late 2020 with only a few weapons handed over.

‘

Daniel Owen, a development specialist at the World Bank – which has spent

The latest demobilisation initiative has been marked by controversial appointments and a sluggish start

“The militiamen were no longer reassured that their demands were taken into account… namely general amnesty and integration into the army with recognition of ranks,” said an employee of a local NGO in Ituri. They asked for anonymity due to security fears.

If the programme does move forward – some analysts fear elections scheduled for next year will get in the way – government officials said combatants will initially be received at the Mubambiro cantonment site near Goma.

Yet this camp already hosts around 1,600 ex-fighters, and officials there worry they would not be able to receive more.

When The New Humanitarian visited in September, people were sleeping in shared tents on muddy ground and lacked food and medicine.

A spokesperson for the UN’s peacekeeping operation, MONUSCO, said the mission was not currently providing “life support” to government-run DDR

Still awaiting demobilisation: ex-combatants in eastern DRC Credit: Sam Mednick/TNH

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sites, though it does run its own sites in the east.

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’

some $190 million on demobilisation in DRC since 2003 – said the organisation was preparing a new “investment project” focusing on the communitybased reintegration of fighters and “local institutional capacity building”.

However, other donors are reluctant to directly support the government’s efforts.

The senior diplomat said the “major donor position” was to only release funds when authorities take tangible steps to support the programme.

If rebels agree to disarm but do not receive benefits and timely assistance, they may commit even more abuses against civilians, cautioned Chober Agenonga, an international relations professor at the University of Kisangani in northern DRC. “All commitments not accompanied by support are followed by relapses [from the combatants],” Agenonga told The New Humanitarian. “It pushes them to AB commit atrocities.”

ANALYSIS

Ruto rings the changes The new Kenyan leader has taken aim at a variety of laws, regulations and programmes that were central to the administration of his predecessor by starting to dismantle them, writes Kennedy Olilo

P

RESIDENT William Ruto has already begun the process of amending Kenya’s Constitution and the Independent Electoral and Boundaries Commission Act, not long after his inauguration on September 13.

Additionally, he has undone important policies, orders and projects earmarked by his predecessor, a move largely perceived as a signal that former President Uhuru Kenyatta made mistakes during his administration.

Immediately after he was sworn in, Ruto appointed the six judges that the Judicial Service Commission (JSC) had recommended but who were rejected

by Kenyatta due to purported integrity difficulties after taking the oath of office.

Kenyatta had insisted that he would not be forced to make the appointments in the face of numerous court wrangles over the matter.

“My administration would respect court rulings as we cement the place of Kenya as a country rooted on democracy and the rule of law,” Ruto stated. “This will help to consolidate the place of the judiciary in our constitutional and democratic regime.”

Cuts to the judiciary’s budget in the past had led to vehement complaints from the Chief Justice about how the financial reduction affected the operations of the courts. Ruto has committed to increase financing for the judiciary by $26.4 million a year over five years.

For the 2022/2023 financial year, the judiciary received $155.2 million, only $8 million more than the year before. On the other hand, the judiciary was seeking $324.8 million.

The opposition, led by former presidential contender Raila Odinga, has expressed concern about the Kenya Kwanza Alliance regime's growing ties with the judiciary, warning that it could undermine the courts' independence.

According to the opposition, Ruto's public declaration that he will provide additional funds to the judiciary is a “ruse to endear himself to and eventually control the judiciary”.

Next on Ruto’s list was the appointment of the Inspector General of

President William Ruto is ringing the changes

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ANALYSIS Police to the position of Accounting Officer of the National Police Service (NPS). In his inaugural speech, Ruto had promised to give the police service financial independence by removing its budget from the Office of the President and designating the Inspector-General as the accounting officer.

Ruto’s argument was that this arrangement had jeopardised the operational independence and autonomy of the NPS. He often used to refer to this as “political weaponization of the criminal justice system”.

Ruto’s axe then fell on the dreaded Special Service Unit after accusing it of indiscriminately killing Kenyans. He claimed that his administration, following the dissolution of the SSU, now had a plan in place to keep Kenya off the list of countries with the highest rate of extrajudicial killings by the security forces.

On the socio-economic front, Ruto, who campaigned on a platform of lowering the cost of living, immediately repealed the fuel and maize flour subsidies instituted

by Kenyatta's administration. He said that the fuel subsidy programme had cost $1.18 billion, while the maize flour subsidy was costing the government $57.5 million in

a month. For many Kenyans, though, the subsidised maize flour was nowhere to be found.

On the removal of the maize subsidy, Ruto said that his administration would focus on interventions to make fertilizer, good seeds, and other agricultural inputs more affordable and accessible. These efforts are seen as long-term, given the uncertainty of the impact of climate change on the continent.

Additionally, Ruto ended the programme that stabilised fuel prices, which led to a litre of fuel being sold at the pump for $1.47. In particular, fuel price inflation has been the main factor influencing consumer prices in Kenya.

Ruto thinks that consumption subsidies can be abused, causing market distortion and artificial scarcity.

But he has become unpopular because of the high cost of living in the first two months of his presidency – to the point where thousands boycotted the Heroes’ Day celebrations on October 20. Is this an early sign of things to come for Ruto during his first term?

The battle is already being fought on the electoral front. Ruto’s Kenya

Kwanza Alliance has proposed changing the composition of the team tasked with recruiting new Independent Electoral and Boundaries Commission members.

Ruto's allies want the composition of the recruitment panel changed in the new law, which critics say will "favour the Executive”. Kenya Kwanza proposes reducing the number of political party nominees in the IEBC commissioner's recruitment panel from four to two. The proposal seeks to reduce the Parliamentary Service Commission's current allocation, which nominates four of the seven members of the selection panel.

Instead, the new Bill gives one of the slots to the Public Service Commission, which is widely perceived to be under the Executive's tight grip, to nominate one person to sit on the panel. The other slot on the selection panel will be filled by the Political Parties Liaison Committee, whose leadership is currently favouring Ruto's Kenya Kwanza Alliance.

The IEBC commissioners are currently recruited by a team of seven. Two men and two women are to be nominated by the Parliamentary Service Commission, representing the majority and minority sides in Parliament. One person is to be

Kenya Supreme Court: Ruto has committed to increase financing for the judiciary by $26.4 million a year over five years

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ANALYSIS nominated by the Law Society of Kenya, and two others are to be nominated by the Inter-Religious Council of Kenya.

Odinga's coalition, Azimio la Umoja, has slammed the proposed changes to the Independent Electoral and Boundaries Commission Act, saying this was “the real state capture”.

The battle for control of the IEBC so soon after the August 9 elections is, indeed, underway, with political heavyweights already planning for the 2027 polls. Unusually, the IEBC leadership was divided, with four of the seven commissioners opposing the declaration of Ruto as president. Whether Ruto replaces the commissioners who backed his election victory remains to be seen.

Meanwhile on the economic front, Ruto has relocated port operations and cargo clearance to Mombasa. The previous regime, in which he served as Deputy President, had directed that all onward cargo arriving at the port be transported via the Standard Gauge Railway to the Embakasi and Naivasha inland container depots (ICDs) to increase the use of the railway in order to repay the construction loan.

Importers can now clear goods at ports or ICDs and transport them by road or rail. The directive is likely to hurt the businesses that had been set up in Naivasha after the directive. The Naivasha ICD was at the heart of Kenya’s ambition to become the transport corridor of choice for neighbouring countries like Tanzania, Uganda and South Sudan.

Kenya also launched an upgraded ICD in Nairobi to promote efficient transportation of bulk cargo from the port of Mombasa to the hinterland. The Nairobi ICD that was built by the China Roads and Bridge Corporation (CRBC) was expected to decongest the port of Mombasa while lowering the cost of transporting goods.

On the agriculture front, the government reversed the November 2012 decision prohibiting the open cultivation of genetically modified crops as well as the importation of food crops and animal feeds produced through biotechnology innovations. Opposition politicians have promised to fight the effective lifting of the ban on genetically modified food through legal channels and public awareness campaigns.

They argue that the introduction of genetically modified foods into the country

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will jeopardise the country's biodiversity and create health risks. Experts in the sector have alleged that the country will lose its organic seeds to mutated forms of crops.

Ruto has also changed the focus of the National Hygiene Programme, which was established to provide work for young people during the Covid-19 pandemic. He said that it was outdated and was robbing the youth of half of their wages.

The programme now will be transformed into a tree planting initiative in order to help mitigate the negative effects of climate change in the country, with five billion trees planted over the next five years through the Special Presidential Forestry and Rangeland Restoration Programme In a short space of time, Ruto has been ringing the changes at breakneck speed, giving the impression that he did not approve of the decisions taken by a government of which he was Deputy President. Having now made a bold move to stamp his authority, many Kenyans will be watching with keen interest to see whether Ruto will deliver on his elections promises to make life better for the people.

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ANALYSIS

Sub-Saharan migration to Tunisia: the untold story A film by a young Tunisian director pointedly highlights how Africans from south of the Sahara are faring in the North African country. Mounira Chaieb looks at the complex situation facing migrants there

T

OURISTES Hors Saison (Off Season Tourists) is the title of a short Tunisian film I watched recently, as part of the 2022 Alyssa Tunisian Film Festival in London.

It tells the true story of Hervé, an Ivorian man, who after the political crisis in his own country in 2010, when disputed presidential elections led to widespread violence, decided to leave and settle in Tunisia.

Hervé seeks to support himself and his wife by obtaining decent work, but faces major challenges: living and working illegally means he is constantly dodging the authorities, a situation made worse by ongoing prejudice from Tunisians. These issues prevent Hervé from integrating into Tunisian society.

Hervé’s case highlights the precarious situation of thousands of sub-Saharan immigrants, itself a subject rarely covered by the Tunisian media in neither its journalistic nor cinematic outlets.

Ivorians are among other sub-Saharan Africans who once chose Tunisia as a place of study. Up until the mid-1990s, the number of foreign students numbered a few hundred, predominantly coming from the Maghreb and in smaller groups from the Middle East and sub-Saharan countries.

Most of the incoming students benefited from scholarships provided either by the governments of their countries or by the Tunisian state within the framework of bilateral agreements.

By the new millennium, this number had started to climb toward the thousands, as the establishment of private universities beckoned in a new generation of students primarily coming from sub-Saharan Africa.

Tunisia presented an attractive

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A view at Carthage International Airport in Tunis. Most of the assessed migrants from sub-Saharan Africa arrived in Tunisia via air

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ANALYSIS study destination for a combination of reasons. It is geographically accessible for Maghrebian and sub-Saharan students, situated along the North coast of the continent and made even more convenient by the lack of visa requirements for entry into the country.

Such visa exemptions mean visitors from the region can stay in the country for a maximum period of three months. More than 20 African countries, including those in the Maghreb, are on this list.

Even those who come from countries that do not have bilateral agreements with Tunisia can easily obtain a visa as soon as they present proof of their enrolment

in a Tunisian university. The fact that some private Tunisian universities offer programmes delivered in French also played a major role in attracting students

‘

Islam and Sufi currents and historical through European colonialism of the continent.

At the height of the conflict in Libya in 2011, almost a million Libyans crossed the border into Tunisia

’

from Francophone Africa, while other universities teach courses in English to attract those from English-speaking subSaharan Africa.

Many other factors contribute to making Tunisia an attractive destination for students from the continent. They include security and stability (especially before the events of 2011, often referred to as The Arab Spring); the relatively developed infrastructure in the capital, Tunis, and in other major cities where private universities are concentrated; the diverse range of disciplines offered by these universities, which provide the students with choices; the international recognition of Tunisian university qualifications; and the low cost of living compared with European countries.

The nature of the sub-Saharan presence in Tunisia has however changed in recent years. At the height of the conflict in Libya in 2011, almost a million Libyans (nearly 10 per cent of Tunisia’s population) crossed the border into the country. Before that year, only a hundred refugees arrived each year.

The volatile situation in Libya also rendered the country too dangerous as a route to Europe and immigrants from subSaharan countries began transiting through and settling in Tunisia in larger numbers.

Many others found themselves in Tunisia after being turned back on the other side of the Mediterranean and decided to stay temporarily, while they plan to cross again towards European shores.

Historical ties connect Tunisia and North Africa as a whole with the countries and communities of sub-Saharan Africa.

Ifriqiya was the original name of Tunisia and a part of Algeria, from which the continent derived its appellation. The ties were economic through commercial convoys and slavery, religious through AFRICA BRIEFING DECEMBER 2022

The country’s location makes it a perfect transit point and the “road to Rome passes through Carthage”, as some say.

This means that migrants aspiring to reach Europe can access the penultimate stage, Tunisia, within hours, which buys them time and allows them to avoid the dangers of the desert route.

The small nation, strategically placed between Libya and Algeria, is still considered more accessible than its neighbours and there are several factors contributing to this. For instance, the long coastline and its proximity to European shores and especially the Italian ones.

The island of Lampedusa is less than 150 miles away from the southern, central and eastern Tunisian shores.

The island of Pantelleria is only 50 miles away from the Tunisian north eastern shores. This proximity via multiple ports means faster access and lower risks, especially when the means of transportation usually involved is unsafe and not made for long-distance travels.

Another factor is the rigidity of the European Union’s migration policies and the many agreements/deals it has reached with governments of countries of the Maghreb to ensure that they control their borders more tightly and address African migration flows “properly”. At the beginning of the new millennium, Europe and some of its Mediterranean allies started to close all the maritime routes, which the smugglers and irregular immigrants had resorted to.

People smugglers have therefore looked for alternatives. One of their options was the Tunisian-Italian route which was, until the late 1990s, mostly used by Tunisian, Algerian and Moroccan illegal immigrants, known as Harragas.

But while inward-looking Europe exerts pressure on Tunisia to address 23

ANALYSIS illegal immigration from Africa and wants it to translate this into stricter laws and an enforcement of the security services patrols, the country finds itself struggling alone to accommodate the ongoing complex issue that its neighbours are refusing to deal with.

20,000 African immigrants settling in Tunisia, but official statistics from the General Population and Housing Census put the number at less than 10,000.

Citizens from Nigeria, Cote d’Ivoire, Cameroon, Mali and Senegal emerge as the top five among them.

According to Médecins Sans Frontières (MSF), thousands of immigrants have been deported from Algeria and Libya in recent years, leaving them stranded in the middle of the desert on the border region with Niger. Among those left in the desert are immigrants with physical injuries, as well as survivors of sexual violence and people suffering severe psychological trauma, according to MSF.

But given the irregular arrival of immigrants to Tunisia, official figures remain in a permanent state of fluctuation.

And they only consider those who carry a legal residence permit issued by the ministry of interior.

Nearly 70 per cent of those cared for by MSF reported being subjected to violence and abuse while stranded on the borders of Algeria and Libya. At least 38 people have also been confirmed dead in the area between 2020 and 2021.

Some groups working with refugees estimate that there are currently around

A great number of immigrant workers from sub-Saharan Africa live in the country without any legal documents, for either a short or long stay and work in the informal sector. Others, such as students, have residence permits which do not allow them to work officially, but they also resort to the informal sector to improve their living conditions.

While migrant flows remain complex and varied, the general trend in Tunisia indicates that an increasing number of

Tunisia presented an attractive study destination for a combination of reasons

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sub-Saharan immigrants are settling and building their lives in major cities: Tunis in the north, Nabeul and Sousse on the coast, Sfax and Medenine in the south.

African men tend to work in construction and agriculture; as kitchen porters in restaurants and cafes; or sales assistants in shops. The women often take jobs as household helpers, while others sell African goods in the souks and on the streets.

Without any legal avenues to pursue work in Tunisia, immigrant workers are left vulnerable to trafficking and other forms of smuggling. Their situation also limits their access to social services. To stay lawfully in the country and have the same benefits as Tunisian citizens, individuals must acquire residence permits – a difficult process locked behind a legal maze of its own.

To make matters worse, skirmishes and quarrels between African immigrants and Tunisians are frequent occurrences across several areas, especially those where there is a large immigrant population. The

ANALYSIS visas on the countries of the South and the implementation of intra-African restrictions, sub-Saharan immigration to the countries of the north of the continent has been growing.

The election in Italy in September of a far-right party, The Brothers of Italy, known by even the politically disengaged for its anti-immigration stance, poses new blockades on migration to Europe.

This, coupled with widening North-South economic disparities resulting in constant socio-political instability, means subSaharan Africans will have no other choice but to stay within the continent.

A great number of immigrant workers from sub-Saharan Africa live in the country without any legal documents

unresolved tension builds a simmering atmosphere of resentment among local inhabitants, liable to escalate into violence at any given moment for any reason.

For example, the defeat of the national football team by Equatorial Guinea in January 2015, and Tunisia’s subsequent failure to make the finals of the Africa Cup of Nations, led to a wave of attacks against immigrants from sub-Saharan Africa.

In June 2021, more than 100 subSaharan immigrants fought with Tunisian residents of a neighbourhood in Sfax.

Security forces intervened to end the clashes. These skirmishes were not the first in the region.

Sfax, being a coastal city, the industrial capital of Tunisia and the second largest city in the country, with more job opportunities, is among the areas with the highest influx of immigrants from subSaharan Africa. Most of them arrive from Libya. It also faces continuous attempts at migration via clandestine boats.

The troubles with the inhabitants have created a social stigma, leading to prejudiced thinking that links sub-Saharan migration to increased crime around the country. Human rights activists, though, often report the contrary; rather than an increase in crime, sub-Saharan immigration has healed a different kind of social ill: unemployment has gone down as the immigrants step in to fill gaps in the labour market that are there because Tunisians are not interested in doing the jobs.

For many Tunisians, the issue of sub-Saharan migration to the country is somewhat surreal. Young and even elderly Tunisians could be seen in long queues outside embassies of European and Gulf

countries, hoping to get a visa. Others, often including entire families, have been embarking on what are called “death boats” heading towards Italian shores almost every day in recent months.

They believe that as long as they survive the trip, they will be free of the social problems brought on by a chronic economic crisis currently plaguing their country. This October, nearly 20 people, some of them small children and a baby, drowned while risking one such trip in Jarjis, off the south east coast of Tunisia.

For the entire month, local coast guards were searching for their bodies.

This is becoming a common choice, with many preferring to risk dying at sea since they are “already dead in their own country”, as many of them say publicly.

Tunisia is currently in the grip of a severe cost of living crisis, with unemployment reaching critical levels last year at almost 20 per cent.

Since the advent of “Fortress Europe”, the subsequent imposition of individual

While Maher Hasnaoui, the young Tunisian director of Touristes Hors Saison, highlights Hervé’s precarious situation, he is never portrayed as a victim. Hervé is instead presented as one symbol of a community that is constantly striving to improve its conditions. The audible reactions of Tunisians in the audience reaffirmed just how invisible sub-Saharan immigrants are, along with the problems facing their community and Tunisian official negligence.

The film ends on a hopeful note: Hervé and his wife are expecting a baby girl, and with her birth, the possibility of citizenship is renewed. This is a phenomenon known well to Western countries, but somewhat foreign to a developing nation like Tunisia, facing all kinds of challenges. One can only hope Hervé’s family is granted citizenship and able to live an easier life.

If sub-Saharan immigration can achieve greater legal recognition, perhaps attitudes from Tunisians will change for the better.

Ivorians are among other sub-Saharan Africans who once chose Tunisia as a place of study

Mounira Chaieb is a Tunisian journalist and writer based in London.

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ANALYSIS

Financing for peacebuilding goes beyond money Readily available funds may indeed facilitate timely action to prevent violent conflict or soothe its ravages after it occurs, but such action may not by itself build selfsustainable peace, argues Youssef Mahmoud

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N September 8, the UN General Assembly adopted a resolution on financing for peacebuilding. At first glance, this fourpage document appears to be a reiteration of previously agreed text on peacebuilding financing which can be easily found in the 2016 twin resolutions on peacebuilding and sustaining peace; in the subsequent ones in 2020 on the review of the peacebuilding architecture; or more recently, in a letter from the Chair of the Peacebuilding Commission to the president of the General Assembly, ahead of the April 27 high-level debate on the same subject.

resolution would also miss the historical significance of the explicit and implicit political messages it was sending to the secretary-general and UN membership at large, to the Fifth Committee and indirectly to the Security Council.

Under the terms of this long-awaited resolution, the Assembly affirms its commitment to consider all options for adequate, predictable and sustainable financing for peacebuilding, including through voluntary, innovative and

assessed funding and other means of resource mobilisation. In this connection, it notes the significance non-monetary contributions can play in peacebuilding efforts.

Among other provisions, the resolution stresses that assessed funding is not meant to be a substitute for voluntary contributions, and encourages all member states and other partners to consider increasing their contributions to peacebuilding and sustaining peace

Those who followed the debate could also argue that the resolution draws on the common language that can be gleaned from the official summary of that debate or from the outcome of the various round tables and related background papers that had preceded it.

But for those who have followed the intergovernmental negotiation process leading up to this resolution, such a partial reading does not tell the whole story. It overlooks the fact that this is the first time the General Assembly (GA) membership unanimously agreed on the use of assessed funding for peacebuilding and sustaining peace, among other financing modalities, and recognises the benefits of peacebuilding for the “countries concerned” without confining the peacebuilding agenda to a specific region.

Its adoption by consensus would not have been possible without the extensive listening exercises and intergovernmental consultations co-facilitated by Kenya and Sweden. Through their combined multilateral diplomacy, they were able to forge compromise where widely divergent views would have dictated otherwise.

Such a cursory reading of the Martha Ama Akyaa Pobee, Assistant Secretary-General for Africa in the Departments of Political and Peacebuilding Affairs and Peace Operations, briefs the Security Council meeting on peace and security in Africa, May 18 2022

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ANALYSIS activities. It stresses the importance of multi-year, flexible, and risk-tolerant funding commitments, including pooled funding.

agenda is not an ancillary activity but a core mandate of the organisation, and its implementation cannot and should not depend solely on voluntary contributions.

Most importantly, such a discourse tends to marginalise indigenous peace systems that enable some societies under stress to be antifragile.

It also encourages the secretarygeneral to develop a strategy for resource mobilisation from the private sector in support of financing for peacebuilding.

Addressing the Fifth Committee, the Assembly, in paragraph 18, expects it to translate this above-stated, political commitment into tangible action. It encourages it “to continue and conclude” its consideration of the report of the secretary-general on investing in prevention and peacebuilding, including by requesting the secretary-general to review the terms of reference of the Peacebuilding Fund (PBF) in close consultation with member states.

The overarching argument singlemindedly hammered since 2018 by the UN secretary-general in his various reports to the GA on peacebuilding and sustaining peace is that adequate, predictable, and sustained financing is necessary to effectively assist conflict-affected countries to build and sustain peace. He further argued that, because the demands for such an assistance had far outpaced available funding, additional resources were required to replenish the PBF.

It should be noted in this connection, that the Committee, unable to reach consensus on the subject in its May session, decided to defer the matter to the main part of the 77th session. Time will tell whether some of the views expressed by key member states in their explanations of vote – including accountability in the use of assessed contributions and the criteria for approving funding – will enable the Committee to find consensus and deliver on the mandate entrusted to it by the resolution.

In his March 2022 report on investing in prevention and peacebuilding, he recalled his vision of achieving a “quantum leap” in terms of overall contributions to the fund and renewed his call to provide funding from assessed contributions as a means “to provide for a modicum of baseline stability and predictability that the Fund currently lacks”.

One of the key messages the resolution is sending to the secretary-general is that his repeated call, including in his Common Agenda report, for adequate, predictable and sustainable financing for peacebuilding has been finally heard by the General Assembly. Operative paragraph 17, while not explicitly mentioning the $100 million annually he had requested from assessed contributions, clearly conveys that the provision of assessed contributions to financing for peacebuilding would represent “a shared commitment of member states to peacebuilding and sustaining peace”.

As such, the resolution is reflecting the sentiment of the membership that the peacebuilding and sustaining peace

In addition to the explicit messages outlined above, the GA is sending an indirect message to the UN membership at large. Namely, unlike the Security Council where polarised geopolitics and structural limitations have at times sucked the oxygen out of multilateral cooperation, the Assembly, despite its decisions not being binding, can still forge consensus and demonstrate leadership on the core mandate of the organisation as it relates to peace and security.

What arguably facilitated the adoption by consensus of this landmark resolution is the removal in the early phase of the negotiations of the notion of “fragility” and related set phrases used to describe the plight of conflict-affected countries. Some member states and key regional groupings objected to its use.

It conjures up the ideology of failed states and the unsuccessful interventions carried out under its banner. The use of fragility as a policy framework by international financial institutions and in the liberal peacebuilding arena tends also to obscure the colonial and post-colonial foundations of present-day political systems judged to be failing or fragile.

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The intense consistency with which the above arguments have been hammered out over the past several years gives one the impression that the means to an end (funding) has become an end in itself. The assumption underpinning this resource mobilisation campaign is that securing more money to satisfy increasing peacebuilding demands will help sustain peace in conflict-affected countries.

Readily available funds may indeed facilitate timely action to prevent violent conflict or soothe its ravages after it occurs.

But such action, however laudable, may not by itself build self-sustainable peace.

What it produces at best is half the peace or a modicum of unstable, negative peace.

For the PBF to be a catalytic artisan of peace, several key conceptual and methodological shifts need to occur. The first would be to place a greater focus on durable peace outcomes and not just “quantum” of financing, thus righting the logic that seems to have been reversed.

The second shift would involve interrogating the dominant, international understanding of peace in “peacebuilding” which tends to tie the fortunes of peace to the presence or absence of conflict.

The science of sustaining peace which has studied or measured the dynamics of peaceful societies has shown that there is no one way of conceiving of peace and

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ANALYSIS

For many societies, including in Africa, peace is conceived as a complex non-linear, relational process of becoming, an ongoing quest, constantly in the making

multiple ways to work for it, drawing on local knowledge and wisdom.

For many societies, including in Africa, peace is conceived as a complex nonlinear, relational process of becoming, an ongoing quest, constantly in the making.

In many of these societies, peace is often treated as the norm not the exception and when interrupted or threatened by violence, communities, however vulnerable or broken they may appear, tend to draw on their reservoirs of indigenous, self-corrective mechanisms to address interruptions.

This pluriversal understanding of peace beyond the absence of conflict has several practical implications for the PBF. For example, at the design stage, peacebuilding projects would identify not only the drivers of conflicts and how to urgently address them but also simultaneously map out the weakened but still resilient homegrown peace capacities and propose ways of strengthening them so they can sustain the short-term outcomes of the PBF projects.

Additionally, and in order to ensure genuine national ownership and leadership, external funding, including from the PBF should, to the extent possible, support initiatives co-designed and co-led by local communities, that allow for the transformative-not instrumentalparticipation of women and youth, in

close collaboration with local and national institutions. This would mean, among other things, having these communities identify and integrate in the early stages of the project design the local infrastructures of peace which in their view would enhance the catalytic impact of external funding.

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aimed at building peace from the inside out would look like. Using strength, rather than deficit-based approaches that build on what people know and what they have lay better foundations for self-sustaining peace. The resolution on financing for peacebuilding and the possible granting

For the first time the General Assembly unanimously agreed to use assessed funding for peacebuilding

These communities should also be asked upfront to make non-monetary contributions, as suggested in the resolution, towards the implementation phase of the project, however modest these may be. Such contributions could take the form of building material, or other in-kind goods and services to maintain, for example, the physical structures of a school beyond the lifespan of the project.

This would not only lessen dependency but may even discourage the tendency of some local beneficiaries to abandon their own “solutions” to take advantage of the material and financial opportunities offered by external projects.

The above examples are merely an illustration of what a project design process

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of assessed contributions, provide a unique opportunity for the fund to explore, in close coordination with other peacebuilding funds, these and other alternative approaches, where peace is treated as the entry point and end goal, even when transiting through violent conflict is inevitable.

Without seizing this opportunity, the fund is likely to sacrifice sustaining peace on the altar of agile and flexible spending and the achievement of short-term results, however appreciated they may be by those at the receiving end. More importantly, it may unwittingly entrench assumptions, biases and power dynamics inherent in the current donor system and its requirements that may inhibit local ownership and the emergence of peace from the inside out.

Youssef Mahmoud is a Senior Advisor at the International Peace Institute (IPI) and the author of “Whose Peace are We Building?

Leadership for Peace in Africa” with Albert Mbiatem. This article was first published by the IPI Global Observatory.

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ANALYSIS

Partnerships are key to ending coups in Africa African Union collaboration with civil society organisations could sustain the momentum against unconstitutional changes of government

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HE second coup d’état in Burkina Faso in September brought to the spotlight, once again, the unconstitutional changes of government (UCGs) in Africa with renewed concern across the continent about the threat of coups. It has also focused attention on African Union (AU) instruments and processes to deal with coups and other UCGs. In October, the AU Peace and Security Council (PSC) dedicated its maiden meeting with African civil society organisations (CSOs) to discussing greater cooperation in advancing recent decisions to address UCGs. The meeting, convened by the Ghanaian chair of the PSC for September, was a follow-up to the March 2022 Reflection Forum in Accra, which was a precursor to the extraordinary AU summit in Malabo in May 2022. The summit decided, among others, to activate the PSC sanctions committee, address underlying root causes of UCGs and implement frameworks adopted to address insecurity on the continent.

Political observers applaud the AU’s decision saying, discussing the involvement of CSOs in fulfilling recent decisions on UCGs is, therefore, important

and praiseworthy. To take it forward, however, momentum generated against UCGs since last year must be sustained and the role of CSOs in implementing the Accra and Malabo declarations has to be explored.

“A cursory look at data on UCGs, particularly coups, and regional and continental responses suggest that the continent has witnessed two major resurgences since the promulgation of the 2000 Lomé Declaration,” says the Pretoria, South Africa-based Institute for Security Studies (ISS). “The first was in 2008, when military interferences in Guinea and Mauritania, and a failed coup attempt in Guinea-Bissau caused enormous unease in policy circles. Policy responses included the resolve to react ‘firmly and unequivocally’ to UCGs and the 2009 establishment of the PSC sanctions committee.”

The second resurgence was in 2021 to early-2022. The policy momentum spurred by this has rekindled the debate about the cause-effect relationships surrounding UCGs. It has also prompted discussion about the extent of implementation of decisions and policies to manage insecurity in Africa and how to prevent relapse in cases where commendable progress has

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been made. The central question currently, however, is whether momentum since 2021 will be sustained in a way that prevents another surge in the near future.

According to the ISS, three major interrelated factors are indispensable to sustain the current momentum, translate decisions into outcomes and, ultimately, contain relapse in the years ahead. First is the need for sustained leadership among member states in dealing with UCGs. “Since the surge in coups in 2021, successive PSC chairs, including Ghana and The Gambia, have persisted in tabling the issue for discussion. The need for a lead state or champion in this conversation cannot be overemphasised. As has become clear over the years, the AU is more robust when its capable member states champion particular issues in the context of collective continental commitments.

“The second way to sustain momentum is to ensure that the current policy debate on UCGs places accountable governance at the centre of both entry points and policy solutions. UCGs are a pathology; a symptom of ill-governance.”

Over years, the AU has developed strong and sophisticated norms and frameworks that complement the African Peace and Security Architecture and

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ANALYSIS

The head of the Burkinabe junta, Capt. Ibrahim Traore

African Governance Architecture. It is essential to use existing continental structural risk and fragility assessment frameworks and tools. Tools such as the African Peer Review Mechanism, and the AU’s structural vulnerability assessment and country structural vulnerability and resilience assessment processes are crucial and often underestimated.

The next factor is to ensure collective commitment and consistent political will to implementing decisions and frameworks on UCGs. No matter how well commitments and responses are framed in discussions and consultations, actual progress can be made only through sustained implementation.

This is probably one of the most important entry points for CSOs' support for continental progress in managing

insecurity. Civil society is a strong partner in the implementation of policies and decisions. CSOs have a near-ubiquitous presence across Africa and at all levels on the issues policy actors seek to address.

They, therefore, need to be strategically harnessed and positively engaged to help translate policy into effective outcomes.

How will CSOs best provide muchneeded support to realise the Accra and Malabo declarations and maintain current momentum? CSOs’ value in the latter is manifold. They can hold governments accountable for agreed constitutional provisions and organise resources to implement milestones. They are often innovative in creating awareness to enhance the population’s contribution to achieving a stable and prosperous Africa.

For various reasons, the potential of

CSOs in Africa has been only marginally exploited. But the trend is positive.

The recent engagements by the AU Commission and the PSC are welcomed.

The role of CSOs and thinktanks in providing evidence-based knowledge that informs policymaking is key. Research is essential, and rigorous ongoing analysis is paramount in generating informed policy options and breaking down barriers between policymaking and knowledge generation.

“All this implies that the way forward should be built on a partnership among CSOs, between the PSC and CSOs and with the involvement of all other actors.

Efforts to enable CSOs to interact with the PSC and among themselves need to be upheld to solve security challenges and achieve the Africa we want,” says the ISS. AB

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ANALYSIS

Russian annexations of Ukrainian territories: a sense of déjà vu?

At first glance, one might think that the events of 2014 and 2022 are based on the same model, but unlike Crimea which is entirety under the control of Russia, the four recently annexed Ukrainian regions are not completely so, write Catherine Maia and Marie Corcelle

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N October 5, 2022, Russian President Vladimir Putin signed the law of annexation of Donetsk, Lugansk, Zaporizhzhia and Kherson, accepting these regions “into the Russian Federation in accordance with the Constitution of the Russian Federation”.

Such a scenario, which comes after contested referendums, is reminiscent of the 2014 referendum, by which Crimea opted to be part of Russia.

On March 11, 2014, the Crimean Parliament adopted a declaration of independence of the Autonomous Republic of Crimea and the city of Sevastopol from Ukraine. On March 16, while the territory was under Russian military occupation, a referendum was organised, offering voters the choice between remaining within Ukraine with enhanced autonomy or joining the Russian Federation.

allow the unilateral secession of any part of its territory. In this sense, the UN General Assembly resolution of

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it have “no validity, [as it] cannot form the basis for any alteration of the status of the Autonomous Republic of Crimea

For the time being, sanctions as well as the condemnations of the illegalities committed do not seem to shake the will of Putin

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March 27, 2014 stressed that the March 16 referendum “was not authorised by Ukraine”. Consequently, not only does

or of the city of Sevastopol”, but states, international organisations and specialised agencies must not “recognise any alteration

This second option won by an overwhelming 96 per cent, leading two days later to the signing of a treaty attaching the “Republic of Crimea” and the city of Sevastopol to Russia. Under the appearance of legality, if not legitimacy, the annexation of this peninsula was then justified by Russia, which invoked the precedent of the unilateral declaration of independence of Kosovo in 2008, due to the policy of “neo-fascists” who had come to power in Kiev, a discourse very close to that developed by Putin to justify his special military operation launched on February 24, 2022.

However, the referendum of independence was contrary to Ukrainian constitutional law, which does not

UN Secretary-General António Guterres warned against a “dangerous escalation”

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ANALYSIS

Russian President Vladimir Putin annexed the Ukrainian regions of Donetsk, Lugansk, Zaporizhzhia and Kherson

of the status of the Autonomous Republic of Crimea and the city of Sevastopol on the basis of the above-mentioned referendum”.

Eight years later, the scenario of Crimea seems to be repeating itself with new annexations by Russia of four Ukrainian regions. Following the referendums held from September 23 to 27, 2022, which resulted in an overwhelming victory for their attachment to the Russian Federation by 99 per cent in Donetsk, 98 per cent in Luhansk, 93 per cent in Zaporizhzhia and 87 per cent in Kherson, these regions, representing 15 per cent of the Ukrainian territory are now considered as its own by Russia, the world’s largest country.

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At first glance, one might think that the events of 2014 and 2022 are based on the same model. While there are many similarities in terms of strategy, one major difference should be noted. Indeed, unlike Crimea which had passed in its entirety under the control of the Russian armed forces, the four recently annexed Ukrainian regions are not completely under Russian control. On the ground, the referendums were organised in haste, in territories that the Russian army only partially controls, and in the middle of a Ukrainian counteroffensive.

The UN Secretary-General, António Guterres, immediately warned against a “dangerous escalation”. Stressing the UN’s AFRICA BRIEFING DECEMBER 2022

commitment to Ukraine’s sovereignty and territorial integrity, he declared that “the so-called ‘referendums’ – conducted during active armed conflict, in occupied areas, and outside Ukraine’s legal and constitutional framework – cannot be called a genuine expression of the popular will”. He added: “Any annexation of a state’s territory by another state resulting from the threat or use of force is a violation of the Principles of the UN Charter and international law” and that Russia, as a permanent member of the Security Council, “shares a particular responsibility” to respect the Charter.

Unsurprisingly, on September 30, an attempt by the Security Council to

ANALYSIS On the occasion of this vote, the Russian delegate criticised the manoeuvre of the instigators of the draft resolution, the voting of which would only be an instrumentalisation of the Security Council

or a referendum on the future status of a territory – is a fact which is neither prohibited nor permitted by international law. In other words, while the principles of territorial integrity and intangibility

to Moscow, ‘ According occupied zones in

Ukraine are now Russian territories being attacked by Ukrainian armed forces

to force Russia to use its veto, before responding to the General Assembly. Under the terms of the resolution adopted earlier in the year, any veto now automatically triggers a meeting of the Assembly within 10 days, so that this use can be discussed by all UN member states, including the permanent member concerned, which is invited to justify itself.

Whether in Crimea in the past or in the regions of Donetsk, Luhansk, Zaporizhzhia and Kherson in the present, Russia’s discourse relies on international law to justify annexations. Yesterday as today, the protection of Russian-speaking populations is invoked and, more specifically, the right of peoples to self-determination, which is brandished as a banner of independence claims. condemn Russian annexations was vetoed by the Russian Federation. Presented by the US and Albania, a draft resolution declaring that the referendums held in the four Ukrainian regions under the temporary control of Russian forces are neither valid nor form the basis for any alteration of the status of these regions, including any purported annexation by Russia.

The text, which demanded that the annexation decision be immediately and unconditionally annulled and that Russian military forces withdraw completely, received only 10 votes in favour, with China, India, Brazil and Gabon preferring to abstain.

Peoples would have a right to external self-determination that they would have expressed through the referendum – as early as the 2014 referendum in the cases of Donetsk and Luhansk recognised by Russia as independent states three days before invading Ukraine – and, then, that they would have exercised by concluding a treaty of accession with Russia.

Politically, the justification is ingenious. As such, as recognised by the International Court of Justice in its 2010 Advisory Opinion on the Accordance with international law of the unilateral declaration of independence in respect of Kosovo, a secession – materialised by a unilateral proclamation of independence

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of borders protect the state from external intervention, they do not in any way protect it from dislocation. The validity of secession must, therefore, be assessed in the light of the national law of the state concerned, which is responsible for determining its internal self-determination.

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Russia’s political choice to integrate Ukrainian territories into its national territory thus allows it to circumvent the prohibition imposed on it by Article 47 of the Fourth Geneva Convention of 1949 against annexing occupied territory.

According to Moscow, these territories are no longer Ukrainian zones occupied by Russian armed forces, but Russian zones attacked by Ukrainian armed forces.

Therefore, its military operation is not an aggression, but an action of selfdefence, giving it the possibility to retaliate against any large-scale attack against its territory, including with nuclear weapons in the event of danger threatening the existence of the country.

Legally, the justification is questionable. The self-determination of peoples, recognised by the UN Charter as one of the purposes of the organisation, has a narrow scope.

In positive law, this right can only be invoked in an indisputable way to create a new state in the context of colonised peoples subject to foreign subjugation, domination or exploitation, according to General Assembly Resolution 1514 of 1960 or even, according to a broader

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ANALYSIS

Russian troops in Crimea

interpretation from the 1970s onwards, in the context of peoples under foreign occupation or victims of apartheid.

This external self-determination, however, has never been extended to the point of benefiting any minority with independent aspirations. It could only be claimed – according to the controversial notion of remedial secession – in the context of peoples suffering massive, persistent and systematic violations of their fundamental human rights, this oppression making separation an ultima ratio. The Ukrainian regions concerned

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Moreover, while the incorporation of a territory into another territory is possible, the conditions of this incorporation must not violate international law in line with the maxim ex injuria jus non oritur (according to which illegal acts do not create law).

In the present case, whether it concerns the serious violations committed during the war, with both camps accusing each other of war crimes and crimes against humanity currently under investigation by the International Criminal Court, or the violation of principles as fundamental as

The self-determination of peoples, recognised by the UN Charter as one of the purposes of the organisation, has a narrow scope

by the annexations, endowed with a large autonomy, are certainly not in such a context.

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the territorial integrity and the prohibition of armed force, recognised as early as March 2, 2022 by the General Assembly in its Resolution (in the absence of a

condemnation by a paralysed Security Council), the context of the annexations is clearly illicit.

Faced with Russia’s annexation measures, the Ukrainian President, Volodymyr Zelensky, announced on September 30 that he would submit an application for accession to NATO under an accelerated procedure, a request which has little chance of uniting the unanimity of the 30 member countries of this defensive alliance, especially Turkey.

Indeed, although Turkey unequivocally condemned the invasion of Ukraine, it did not join the sanctions against Russia. Anxious not to compromise its close political and trade relations with Moscow, it seeks above all to position itself as a mediator in the Ukrainian conflict to strengthen its role in the region Moreover, Zelensky also proclaimed that Ukraine will continue to act to defend its people in the occupied regions, while the European Union voted, on October 5, an eighth package of sanctions. For the time being, these sanctions as well as the condemnations of the illegalities committed do not seem to shake the will of Putin.

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Catherine Maia is Professor of international law at Lusófona University in Portugal and Visiting Professor at Sciences Po Paris in France. Marie Corcelle is a journalist.

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AFRICA BRIEFING DECEMBER 2022

For in-depth analysis on developments in a fast-changing continent

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BUSINESS & ECONOMY

The regional investment imperative: diversification and resilience amid economic downturns Africa—the most demographically dynamic region of the world—has been making headlines for the massive investment potential it offers, and yet has been stubbornly ignored, some analysts say

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VER the past ten years, investors in developed markets have been struggling with low returns: Yields maxed out between 4 percent and 5 percent. Today more than $10 trillion sit in negative yield bonds, and private equity funds sit on nearly $1 trillion in dry powder. With the rapid slowdown

in European and US economies and fear of recession looming large, the situation is worsening. The war in Ukraine has made blatant what the Covid-19 crisis had already revealed—the world’s economic dependency on critical sectors and markets.

In the same way, institutional capital has remained concentrated in developed

Africa is the most demographically dynamic region of the world

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markets. Investors have sought to optimise for near-term returns rather than sustainable returns through diversification.

The situation has resulted in unprecedented levels of liquidity: Global assets under management (AUM) have grown by more than 40 percent since 2015 and are expected to grow from more than $110

BUSINESS & ECONOMY trillion today to $145 trillion by 2025.

Writing for the think thank, Atlantic Council’s AfricaSource, Aubrey Hruby and Guillaume Arditti urge investors looking for returns to look to new markets, specifically, Africa. They describe the region as “the most demographically dynamic region of the world that has been making headlines for the massive investment potential it offers, and yet has been stubbornly ignored.” The continent’s average growth over the past two decades has oscillated between 4.5 percent and 5 percent, with five countries averaging over 6 percent. “While the recession induced

by Covid-19 hit wealthy countries of the Organisation for Economic Co-operation and Development hard with a 5.5 percent contraction in 2020, African countries were more resilient, only shrinking by 2 percent,” they say.

Hruby and Arditti lament that despite the compelling economic data, the African growth story has not resulted in the concomitant boost in investment from global players. Investment into the region is made by the same long-time investors, including development finance institutions.

Meanwhile, mainstream institutional investors remain on the sidelines.

Making the case for Africa as a viable business destination, Hruby and Arditti cite surveys that have long documented the difference in risk perception between investors with established operations on the continent and those that are considering opportunities from afar.

“Those already invested in the region see Africa as the most attractive investment destination, while those that don’t have operations in African markets view it as the second-least attractive region. For funds and firms that have yet to enter African markets, a stubborn dichotomous view of African risk—one that oscillates between seeing the continent through a lens of foreign aid and another that embraces the high risk/high return view— creates confusion and causes hesitation.

Furthermore, the mainstream investment strategy used by investors in developed markets—one that is data dependent and push-oriented—is ill-suited to the opportunities in African markets,” they add.

Developed markets are data rich. In North American or European economies, investing is governed by subsector experts who focus on niche industries and

The map of Africa is no longer a swath of autocratic regimes as it was in the 1980s but rather a mosaic with standout democracies

specialised asset classes. The accelerating financial complexity and sophistication of highly public markets in developed countries progressively made specialists critical to finding opportunities and delivering returns. The internet economy of the 2000s and the growing importance of real-time data has accelerated the specialisation. Now, large data sets and artificial intelligence-powered analysis have become quantitative assets to specialist investors.

This was not always the case. Prior to the 1980s, top-level generalists who deeply understood political economy dynamics were successful investors. In the postwar era, international investors navigated domestic social change, reconstruction, decolonisation, and oil shocks to build the continent’s first private equity firms and iconic multinational companies. Over the same period, the emerging computer revolution transformed economics from the study of human behaviour in an environment of scarcity to a series of equations and advanced mathematical modelling. Economics as a science grew up alongside Masters of Business Administration (MBA) programmes, resulting in a disconnect between economic and geopolitical analysis and an elevation of data in business decision-making.

“In contrast to developed economies, African markets are defined by a lack of real-time, reliable data and strong AFRICA BRIEFING DECEMBER 2022

interaction between political and economic realities, thus developed market analytical approaches will fall short. Cutting and pasting the data-dependent, specialist model in African markets leaves managers unable to understand and mitigate the operational, on-the-ground market risks.

Country risk assessments, developed by economists at international financial institutions, tend to position geopolitical risk as a matter of insurance instead of being central to investment decisionmaking in projects and deals with mediumto-long-term returns horizons,” they add.

Taking a more intersectional perspective bringing together economic and geopolitical analysis requires an understanding of the trends currently reshaping the continent.

Most investors still operate on dated perceptions of African markets driven by oft-repeated factoids and the news cycle, failing to recognise the mutually reinforcing trends that have over the past twenty years restructured many African economies and enhanced their resilience.

They state: “Coups grab headlines but dayto-day political stability makes for boring news. Despite the recent coups in Mali and Burkina Faso, the map of Africa is no longer a swath of autocratic regimes as it was in the 1980s but rather a mosaic with standout democracies such as Ghana and Senegal, which have—for the most part— been fortifying their institutions.”

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BUSINESS & ECONOMY Nigeria, Egypt, South Africa, and Kenya, and with over 60 percent of the capital coming from US-tied entities.

The interaction of political stabilisation, better macroeconomic management, technological change, and young demographics will support the continent in returning to growth after the Covid-19 crisis. Just like in the case of the 2016 oil shock, African growth bounced back to 3.7 percent in 2021, showing unanticipated resilience after the continent’s economy contracted by 1.7 in 2020. By analysing the trends and accepting that rapid growth is neither linear nor smooth, investors can find success in African markets.

While climate investors rightfully eschew investments in coal, natural gas generation may prove a good opportunity

Providing examples of positive developments across the region, Hruby and Arditti say regional powers such as Kenya and Nigeria, despite setbacks, have been on a trajectory of democratic progress.

“After the 2007 post-election violence in Kenya, the country reformed its electoral process and promulgated a new constitution in 2010 which devolved power. In Nigeria, the 2015 elections marked a turning point: the first time since the return of civilian rule in 1999 that an opposition party, the All Progressives Congress, won against the People’s Democratic Party that had ruled until then.

In the 1990s, the Economist Intelligence Unit (EIU) only identified three democratic countries in Africa. In 2020, the EIU ranked twenty African countries as hybrid or higher on a democratic scale, despite democratic backsliding globally (including in the United States).”

Accompanying the increasing political stabilisation, economic diversification has also shored up African economic resilience. The continent’s sustained growth cannot only be attributed to high commodity prices but also is the result of a progressive shift away from raw material export models toward services and middleclass-based consumption.

The “oil curse” that colours the conversation of African economic growth is proving to be less powerful even in

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major oil exporters such as Nigeria. The oil price collapses of 2008 and 2014-16 revealed a previously unrecognized level of resilience on the continent. When oil hit a low of twenty-six dollars a barrel in 2016, regional gross domestic product fell to 2.2 percent from 3.4 percent the previous year, but the continent did not become mired in stagnation as it did in the “lost decades” of the 1980s and 1990s. Instead, growth recovered in 2017, revealing structural improvements (particularly in Nigeria).

Diversification has been supported by increased investments made in infrastructure, deepening regional integration culminating in the creation of the African Continental Free Trade Area in 2019, and greater amounts of disposable income that have supported domestic markets for consumption. African countries have had greater choice in international partners. Over the past two decades, China has become Africa’s most significant trading partner and the largest financier of infrastructure in the region to the tune of $23 billion between 2007 and 2020. More than $7 billion of that financing went to telecom infrastructure. Increasing mobile penetration and digitisation accelerated by Covid-19 are undergirding an exponential growth in venture capital into African markets. In 2016, total venture capital flowing into the region was just above $350 million. Five years later, it crested $4 billion, with the lion’s share going to AFRICA BRIEFING DECEMBER 2022

Understanding transformative macro trends is sine qua non, but not enough to guarantee successful ventures. It is also critical to employ a pull strategy rather than a push approach. The latter focuses on creating new consumer needs and desires and then pushing relevant products into the market. The former instead rests on identifying unserved market needs and then creating products to meet that latent demand. Push strategies work well in consumption-based economies supported by efficient capital markets such as the United States or Europe in which affluent consumers can be convinced that their want of the newest mobile phone is actually a need. African markets are bestsuited for pull strategies.

Most large European and US investors have a self-referential bias whereby they consider African opportunities through the lens of their own market operating environments. Many of them are looking to simply add a high-risk premium to compensate for investing in African markets on top of their familiar underlying asset structures. Some seek short-term, liquid, and safe assets such as treasury bonds while others pursue high internal rates of return (IRRs) in a seven-year fund lifecycle. Some are looking for real assets with developed secondary markets to ensure liquidity, while others want to deploy billions of dollars through thematic strategies such as infrastructure or climate.

Each “push” strategy will be exposed to difficulties that can create Goldilockstype scenarios: not enough market depth, too few “bankable” projects, too much volatility, not enough liquidity, too much risk, inadequate profitability, and other such conditions. The list of reasons not to invest therefore becomes overwhelming

BUSINESS & ECONOMY By recognising that market absorption capacities will limit their deployment, they can invest smaller amounts in the nascent private debt industry, which will grow rapidly in the next three to five years given the continuously growing financing gap in African markets.

If large asset managers want the diversification and returns that these markets can offer, they must accept the intrinsic trade-offs found in emerging markets. If liquidity is the priority, an investor can buy bonds in Cairo, Lagos, or Johannesburg but must accept the concomitant volatility and depreciation risk resulting from the underlying assets being valued in local currencies.

and results in the accumulation of dry powder.

Fundamentally, African market realities are different—liquidity more often than not comes with volatility due to systemic local currency risk on the continent. The days of making 20 percent IRR in relatively safe private equity (PE) environments are also long gone: The first and second vintage in the early 2000s of African PE funds invested in banks, telecoms, and other low-hanging fruit, leaving only difficult operational, consumer-facing firms for today’s investors to build. Reports from both the International Finance Corporation and the African Private Equity and Venture Capital Association—better known as AVCA—show returns of less than 10 percent in African PE due to currency fluctuations. High returns can be found in the African early-stage venture space, but those opportunities are often too small for institutional investors.

To gain access to the tremendous opportunities that African markets offer at scale, emerging market investing must be built on pull strategies based on intersectional approaches, incorporating an understanding of existing demand and working to find overlaps between

the realities of African markets and the requirements of investors. For example, the billions flowing into climate and environmental, social, and corporate governance (ESG) funds can deliver good returns, strong developmental impact, and advancement of United Nations sustainable development goals if investors think beyond immediate climate resilience within today’s economic context and recognize that African countries have a dual imperative–stimulating rapid green growth and alleviating poverty.

On a continent where 600 million people lack reliable access to electricity, additional generation capacity is a critical priority on which the green or digital revolutions depend. While climate investors rightfully eschew investments in coal, natural gas generation opportunities may prove a good opportunity as they can create the base power necessary for broadbased solar. Likewise, attractive carbon reduction opportunities can be found in agribusiness, so having the flexibility to invest outside the energy sector increases the potential for success.

A flexible and intersectional approach can also help asset managers wanting to deploy billions of dollars in the short term.

If predictability and stability are desired, then an investor must prepare for illiquidity. While investing in illiquid assets in the real economy offers opportunities ranging from infrastructure to agribusiness to renewable energy, exits are difficult to time. The classic high risk, high return investment profile does exist but is now concentrated in the emerging tech and creative industries.

With recession looming on the horizon in the United States and Europe, investors who want to participate in the next wave of growth and create wealth from—and in—fast-growing emerging and frontier markets in Africa and beyond need to adjust their approaches to invest along transformational trends, navigate political economy concerns, and tap latent demand.

“Twenty years ago, the Economist dubbed Africa ‘The Hopeless Continent.’

Today, the associated risks with investing in Africa are very different. Risk perception must be updated to reflect the increasing resilience, digitisation, and integration that now are taking hold in African markets.

Investors will succeed if they work to understand market realities instead of coming with pre-defined investment strategies, if they find the overlap between their internal requirements and market needs, and if they embrace flexibility and intersectional approaches. The geopolitical and economic dynamics of this postCovid-19 world make looking at African markets not a niche option but rather a mainstream necessity,” the conclude.

Guillaume Arditti is founder of Belvedere Africa Partners and a lecturer in international relations at the Political Sciences Institute of Paris (Sciences Po)

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Aubrey Hruby is a co-founder of Tofino Capital, a senior fellow at the Atlantic Council’s Africa Centre, and an adjunct professor at Georgetown University AFRICA BRIEFING DECEMBER 2022

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SPECIAL REPORT

East Africa’s ports step up competition over Indian Ocean market share From the Horn of Africa on the strategic Red Sea to the buoyant ports of Mozambique, East Africa’s ancient “Swahili Coast” provides a logistical nexus between Africa’s massive population centres and other continents. Foreign direct investment is driving expansion and rehabilitation of existing seaports, while entirely new facilities are also being rolled out. Ports that shun partnerships with experienced foreign investors are set to lose out as competition for market share intensifies, says a new report by boutique business advisory firm GBS Africa

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N East Africa, the traditional dominance of the Port of Mombasa is being challenged by other regional facilities that are attracting more investment and are less resistant to reform, while entirely new deep-water seaports are being constructed to diversify regional trade and shipping routes. Turkish, Emirati,

South African, and Chinese investors are leading the pack in the region to refurbish and expand East Africa’s ports. The UAE and UK-led expansion of the Port of Berbera in Somaliland is a benchmark for other facilities as it creates a highly lucrative trade corridor to inland markets and population centres, while attracting

Port of Mogadishu

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fresh investments into associated sectors.

However, some foreign investments are creating ESG concerns or do not have the potential to reach their full potential.

The Chinese plans for a new trade corridor at Lamu in Kenya are stalling, while revitalised Chinese plans for a new seaport at Bagamoyo are open to criticism over

SPECIAL REPORT

Port-of-Berbera

environmental and debt sustainability concerns. This two-part report lists some of East Africa’s major port facilities and explains their drivers of success, or disappointment.

Somalia/Somaliland The successful elections in 2022 have thrown the restive country of Somalia back into the spotlight as a growing economy in the Horn of Africa, a nascent oil producer, and exciting trade interconnector to the massive population centres of landlocked Ethiopia. Along its 3,333 kilometres long coastline, Somalia currently has five international port facilities, of which three lie within Somalia itself, one within the autonomous Puntland state, and one – perhaps with the most exciting prospects – in the de facto state of Somaliland.

Out of the five seaports, only those three operated by foreign specialised companies are thriving, while only one is embarking on a massive development and expansion strategy that will benefit the entire Horn of Africa region.

1) Port of Mogadishu - Turkish conglomerate ensures effective administration Somalia’s largest port facility in the federal capital Mogadishu has been operated since 2014 by Turkish multinational conglomerate company Albayrak Group, which also runs Conakry port in Guinea in West Africa. Albayrak has made investments of approximately USD 80 million in the port as part of its rehabilitation project, which has doubled revenues from Mogadishu Port to the federal government. According to Albayrak, most of its revenue share will be re-invested in the seaport through additional port-based trade and new docks.

Due to the Albayrak investments, the port of Mogadishu is attracting new deals with African shipping lines and logistics services that also connect other ports in the country and wider region. By early 2022, the port contained six wharves, including five general cargo berths and a container berth. Around 245 cargo laden ships visit the port annually, predominantly shipping AFRICA BRIEFING DECEMBER 2022

containers, as well as breakbulk such as cement, sand, and fuel. Some of Somalia’s key exports are channelled through Mogadishu Port, including livestock, frankincense and myrrh, bananas, fish, animal hides, scrap metal, and charcoal.

Despite insecurity and political instability in the capital city over the past few years, operations at the port have usually continued without major interruptions, while Albayrak has ensured effective administration of these operations.

2) Port of Bosaso – DP World entity operates livestock export hub that competes with Australia Bosaso is the commercial capital of the autonomous Puntland region in northeastern Somalia. Its port, which is also known as Bender Qaasim, is now classified as a major class port just like Mogadishu’s port facility. Following an expansion phase that started in 2012, Dubai-based P&O Ports in 2017 won a 30-year concession for the management and development of a multi-purpose port 41

SPECIAL REPORT

Port of Kismayo

project. P&O Ports, which is owned by DP World, has since committed to a USD 336 million investment in Bosaso. The work has included building a 455 metres long quay and a 5.5 hectares storage area.

The port has been dredged to a depth of 12 metres and P&O Ports has also invested in the installation of the latest IT terminal operating system and port equipment.

Bosaso Port is geared towards exports of livestock such as cattle, sheep, and camels to the Arabian Peninsula, while also providing transhipment services for Yemen. Imports include bulk shipments comprising cement, sugar, rice, and construction material. P&O Ports’ operations were temporarily disrupted in 2019 by the killing of its manager by local Islamist militants, but otherwise 42

the port facility has been able to flourish and Bosaso now ensures that Puntland can compete with Australia for livestock exports to Saudi Arabia.

3) Port of Merca – Insecurity hampers port development Despite its proximity to the major city of Mogadishu and its history as a banana export facility, the Port of Merca has been unable to develop at the same level as its Somali peers. Merca was destroyed during the civil war and port infrastructure was burnt. Since then, the area is vulnerable to militant activity and as recent as 2016, Merca was completely abandoned to the militant group al-Shabaab (later recaptured). As a result, no foreign investment has gone into the facility, and it is classified as no more than a jetty class AFRICA BRIEFING DECEMBER 2022

port that is mostly used by small fishing vessels. Foreign investors have expressed interest in develo- ping Merca’s port but only if the government can assure local security and stability.

The Port of Merca offers a clear example of how poor governance and insecurity can obstruct commercial development and result in missed opportunities for local communities.

4) Port of Kismayo – Lost opportunity for agricultural exports and humanitarian supply chain Only slightly larger than the port of Merca, the facility in Kismaya, in Somalia’s southern region of Jubbaland, offers exports of bananas but little else of major commercial value. Some 80 percent

SPECIAL REPORT Kenya. However, in the absence of good governance and foreign investment, Kismayo port attracts no more than 50 small ships and barges annually. The Mediterranean Shipping Company is the largest company that infrequently visits the facility.

5. Port of Berbera – Foreign investment provides game-changing opportunity for Horn of Africa The Port of Berbera is by far the most exciting seaport facility in the region. The DP World New Port of Berbera is a gamechanging project for Somaliland, providing a second trade gateway to neighbouring Ethiopia, which has been looking to diversify supply lines from Djibouti’s congested ports that have also suffered from arbitrary government intervention in recent years. The Berbera Trade Corridor is expected to attract significant foreign investment, even while Somaliland remains unrecognized internationally.

The strategically located Port of Berbera has benefited since 2016 from a $442 million agreement signed between the government of Somaliland and Emirati multinational logistics company DP World to operate a regional trade and logistics hub. The DP World port expansion has added a new dock and an economic free trade zone, while the $100 million road corridor connecting Berbera with Ethiopia has been tested and is in use since 2020.

Since 2018, DP World holds a 51 percent stake in the project, Somaliland 30 percent (although Ethiopia has been late in acquiring its stake in the port). of port facilities are not operational, and the port is in urgent need of maintenance.

However, no foreign investors have expressed interest in developing Kismayo’s port, which is mostly due to weak governance by the local government of the Federal Member State of Jubbaland, which is corrupt and inefficient, while also open to foreign interference.

Revenues and resources generated from the port are channelled into Jubbaland’s service delivery and security sector, rather than reinvested into the port.

Kismayo port lacks sufficient handling equipment and has only four warehouses, while there are also no cold storage facilities. The port of Kismayo could be developed as a major humanitarian facility to connect to Somalia’s faminestruck regions, as well as conflict zones further inland in Ethiopia and parts of

As part of the deal agreement, Ethiopia has committed to building infrastructure to develop the Berbera Corridor as a trade gateway, while the government of the UAE and Somaliland have put in place an additional Memorandum of Understanding to advance their strategic relationship. The Port of Berbera’s new container terminal includes a new 400 metre berth and three ship gantry cranes. The terminal’s container capacity has increased from 150,000 twenty-foot equivalent units (TEU) or containers to 500,000 TEU annually, and work is already under way for an expansion to handle up to 2 million TEU a year. Djibouti’s port currently handle one million TEU annually. The revamped port of Berbera now offers an alternative to Djibouti as a gateway t lucrative trade routes through the Suez Canal.

The DP World Berbera New Port is AFRICA BRIEFING DECEMBER 2022

the first major foreign direct investment (FDI) and the first international non mineral concession known in Somaliland.

According to the World Bank’s 2018 fact sheets, the volumes handled in the Port of Berbera are expected to increase from a 3 million tonnes in 2016 to 18.1 million tonnes in 2050. By 2035, the Port of Berbera is expected to facilitate trade equivalent to nearly 27 percent of GDP and 75 percent of total trade, supporting indirectly 53,000 jobs in Somaliland. Berbera port also plays a key role in enabling humanitarian aid to enter the region, reaching close to a 2 million refugees and internally displaced populations.

In October 2021, the UK’s development finance agency CDC Group (now British International Investment, BII) joined DP World’s investment project, which has almost doubled funding. The latest investment in the Port of Berbera comes as part of the CDC Groups $ 1.7 billion joint initiative announced last year. The long-term partnership is aimed at multiplying the capacity of the Port of Berbera and improving surrounding logistics facilities to create a regional trading hub.

The Port of Berbera expansion also has regional strategic significance. Ethiopia in particular, is benefitting from DP World and the CDC Group’s joint initiative.

According to CDC Group, “in Ethiopia, Berbera port is expected to enable trade equivalent to 8 per cent of national trade by 2035. This will support 1.2 million jobs in the economy – where 60,000 of these employment opportunities will be created through the port expansion – and increase access to vital goods and staples for 10 million people in Ethiopia.”

Ethiopia’s government is seeking new access to ports after Tigrayan rebels disrupted supply lines to Djibouti in 2021, while promised access to Eritrea’s ports has not materialised. Today Djibouti handles up to 95 percent of all of Ethiopia’s inbound trade.

Alternative gateways to Ethiopia, such as the Lamu Corridor from Kenya, have been delayed or are only partially complete. Ethiopia’s government’s therefore developing the Berbera Corridor, while it has also expressed interest in expanding the port of Zeyla (Saylac) in northern Somaliland. While Ethiopia’s Chinese allies would support the expansion of Zeyla, such a move is likely to be 43

SPECIAL REPORT opposed by Somaliland and its partners in the Port of Berbera such as the UAE and UK. The UAE is heavily invested in the Berbera Corridor, including a UAE-funded new airport.

DP World previously owned the Port of Doraleh, which is an extension of the Port of Djibouti and the main container terminal. In 2018, the Djibouti government expropriated the facility and placed it under the control of the government owned Doraleh Container Terminal Management Company, arguing inaccurately that the DP World contract violated Djibouti’s sovereignty. In fact, the Doraleh port was then frequently ranked as the most efficient in Africa and DP World has won several international arbitration cases since then.

Djibouti has since offered China Merchants Ports Holdings (via its subsidiary China Merchants Group) a quarter of the port’s stake, in a perceived repayment on some of its debt owed to China.

will challenge Mombasa’s dominance, unless a new investor and operation partner can be found.

Kilindini Harbour is managed by the Kenya Ports Authority (KPA), which is a state corporation with the responsibility to “maintain, operate, improve and regulate all scheduled seaports” on the Indian Ocean coastline of Kenya, including principally Kilindini Harbour.

Mombasa receives an average of 3,000 containers daily. Following an expansion and refurbishment from 2013, the annual handling capacity of the port is 2.65 million TEUs. In comparison, Morocco’s Tanger Med Port Complex handled over 7 million TEU in 2021, up 24 percent compared to the previous year.

Kenya: urgently needed investment and partnerships for East Africa’s top port Kenya’s ports sphere is completely dominated by the Port of Mombasa, which despite its massive size and handling capacity is suffering from congestion, delays, mismanagement allegations, and frequent industrial action. However, longtime plans to attract foreign investment and take onboard operational partners have been obstructed by localised concerns over sovereignty in Kenya’s Coast region and misunderstandings by port labour unions over such a collaboration. If Mombasa does not soon attract fresh investment, it will lose its ranking to Chinese operated Lamu port and other regional facilities.

Port of Mombasa – East Africa’s logistics hub faces challenges from newer and improved ports Kilindini Harbour is the main facility of the Port of Mombasa, the only international seaport in Kenya, the biggest port in East Africa and the second largest on the continent after Durban in South Africa. However, Mombasa is steadily losing its edge over more recently developed or expanded facilities – it now only ranks as the fifth best port in Africa according to recent industry rankings.

Mombasa port trails Tangier Med in Morocco, which is ranked as Africa’s top port with a capacity to handle nine million containers. The new developments in Lamu, Kenya, and Bagamoyo, Tanzania, Port of Mombasa

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The wider Mombasa Port complex comprises 19 berths, a grain terminal, 2 oil terminals, 6 container berths, and 12 berths that handle only general cargo. The Port of Mombasa exists of Kilindini Harbour, the Mbaraki wharf that is operated by the Bamburi Cement Company, Mbaraki Bulk Terminal that deals with petroleum products. There is a separate gran handling terminal that is the biggest grain handling facility in Africa. There are two major oil terminals at the Mombasa Port including the Shimanzi Oil Terminal and the Kipevu Oil Terminal. Further expansion at the Kipevu Terminal has been ongoing for several years, including construction of a hydraulic dock and an onshore pipeline, which would greatly increase Kenya’s oil

SPECIAL REPORT transportation capacity.

Some of the persistent challenges at Mombasa port have been congestion and high ship turnaround time, low cargo handling productivity, especially at berths designated for bulk cargo, and inadequate water depth to berth high tonnage vessels.

In 2021, reports emerged that the Port of Mombasa was experiencing a threeweek congestion following a commercial dispute. The KPA subsequently denied such claims. Substantial investments at the port between 2017 and 2021 have seen significant improvements, although these expansions have not been sufficient to keep up with more sophisticated and larger ports such as Tanger med, or regional upstarts such as Lamu and eventually the new

Bagamoyo port. Moreover, Mombasa also faces greater competition from Tanzania and other ports in the region.

Since 2015, the Kenyan government has considered a partnership between KPA and DP World. However, this process has been stalled by objections from labour unions in Mombasa that fear job and wage cuts – concerns with no real basis – and the local Coast region community, which has traditionally been highly sensitive to any perceived loss of sovereignty over Mombasa port. The matter has become highly politicised, particularly ahead of the 2022 general elections. However, without an actionable investment and expansion strategy, Mombasa Port risks losing out to other regional ports, and could fall

into neglect like many of the other KPA facilities across the country.

Kenya’s other ports – Various ports are neglected or too small to make a major economic impact Kenya has about 15 ports, but at a far smaller scale than Mombasa’s complex.

Mombasa’s Port Reitz has been neglected for years, while Kenya’s coast is dotted with other small ports such as Kilifi, Malindi, Kiunga, Mtwapa, and Shimoni, which depend on modest tourism, fishing, and small-scale cargo. The KPA is planning developments at most of these facilities, although the impact of these investments will be small-scale and highly localised.

Lake Victoria has Kisumu Port, which is a regional hub for petroleum exports to landlocked countries, such as Uganda and DRC. KPA plans to increase Kisumu’s local imports to 130,000 tons by 2025, and 180,000 tons by 2035, from 22,000 in 2014.

Port of Lamu – Fresh investment and expertise required to drive impetus to the stalled LAPSSET In 2014, the KPA agreed a deal with China Communications Construction Company (CCCC) for the construction of three Port Lamu berths that form part of the long envisioned $24 billion Lamu Port and Lamu-Southern Sudan-Ethiopia Transport Corridor (LAPSSET), also known as the Lamu Corridor. If completed, Lamu Port will have 32 berths and replace Mombasa’s Kilindini Harbour as Kenya’s largest port facility. The new port at Manda Bay would have the latest infrastructure and would comprise a railway terminal, storage tanks, container freight stations, an oil pipeline, oil refineries, and several airports.

However, the LAPSSET project has been stalled due to regional insecurity concerns on the border with Somalia, political instability in Kenya, and a lack of other investments. For several years, KPA has been in talks with DP World and other companies to operate the new Manda Bay port facility, once complete. The aim of the project is to cut over-dependence on Kenya's main Port of Mombasa, yet there are more commercially viable alternative pipeline and trade routes options through Tanzania or Ethiopia (and indeed AB Somaliland).

AFRICA BRIEFING DECEMBER 2022

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EXECUTIVE INTERVIEW

Zindi: building a LinkedIn for data scientists South Africa-based Zindi, the first and fast-growing data science competition platform in Africa, hosts an entire data science ecosystem of African scientists, engineers, academics, companies, NGOs, governments and institutions focused on solving Africa's most pressing problems. In a recent conversation with Africa Briefing, CEO Celina Lee outlined the importance of having a platform like Zindi Africa Briefing (AB): Can you tell us more about your platform?

Celina Lee (CL): We have a community of data scientists from across the continent, 50,000 data scientists that have joined the online platform and are using the data science skills, to learn artificial intelligence to solve problems for companies. And as a by-product they are just really meeting each other and connecting with each other to learn new skills and even find job opportunities on the platform.

AB: And how would you describe data science to the uninitiated, or, can I say, the uninformed?

CL: It’s a form of analysing data – customer data, satellite data, transactional data - that’s all being digitised so that now the question is: how do you use data to make better decisions, to even automate some of your services? So data science is really the science of data analysis taken to another level where you’re dealing with much more data and much more sophisticated algorithms to help you develop new services and value.

things like natural language processing, so looking at a local African language tweet on social media and being able to develop algorithms to understand what these tweets are about. Are they positive or negative, what are they talking about, or even translating them into English or French – this is also data science as well.

AB: Can you also tell me the importance of having a platform like yours, or creating a community for data scientists?

CL: Well, we like to think that data science is a team sport. It’s such a quickly evolving field, it’s a new field, it’s a field where very few universities offer programmes in data science right now so it’s very important to have a community, it’s very important to have a place where you can connect with other people working on the same types of problems as you and where you can learn from them, as peers. You can also connect with people as mentors. So community is incredibly fundamental to any data scientist’s career

journey.

AB: So right now, how would you describe Zindi’s business model, as you are operating now?

CL: We run challenges on the platform where companies can essentially put up their data sets and problems and then have up to 1,000 data scientists working on that problem and competing to build the best solution. Secondly, we also offer recruitment from our platform. Currently, we have 50,000 data scientists across 51 out of the 54 countries in Africa. 26 percent of them are women and a lot of companies are interested in how they can recruit. And then third, is this idea that a lot of companies are interested in putting their brand in front of our community to make sure that this community knows about the latest data science tools or resources that are available to them or even career opportunities in some of the largest pan-African brands. So it’s a combination of those three things – solutions, talent and brand awareness.

AB: So that means that these days just about every business entity, government services… they all use data science?

CL: Yes, any organisation that has data probably uses data science. And just to give you concrete examples: the types of challenges that we run on Zindi can range from very familiar things for businesses like predicting customer return, product crossselling where any business has multiple products, which products to offer to your client, fraud detection, demand forecasting.

These are all standard problems, but what’s much more important is we’re dealing with much more data, much more computing, much more sophisticated algorithms. And then there’s more advanced, more complex cutting edge applications which can be Zindi CEO Celina Lee: “We’re really excited about Zindi becoming a global player”

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AFRICA BRIEFING DECEMBER 2022

EXECUTIVE INTERVIEW

AB: How do you go about acquiring and retaining clients?

CL: The clients that we serve fall into three main buckets – we work with the global tech giants like Google, Microsoft, Nvidia. Secondly we also work with the large African corporates. How do we attract them? A lot of it’s by word of mouth and organic growth so far. We’re really starting to build an awareness of Zindi as the ecosystem for data science in Africa, so a lot of companies come to us when they’re looking for any of these values that we deliver.

AB: How long has Zindi been in existence and how fast is it growing” CL: The platform launched four years ago. It’s been growing quickly by 100 percent year-on-year in both the users and on our revenue. And the monthly active engagement on our platform has more than doubled in the last six months.

AB: So far, how does your team define product market fit? And if not, how soon do you hope to achieve that market fit?

CL: We have two audiences that are very important to us – the data scientists (50,000) and the companies that work with us. So those are two different audiences we obviously need to find. And that’s what is so powerful in Zindi because we have deliberately prioritised finding market fits for our data scientists to give them real value in terms of their career trajectory, their skill and their networks. And in essence, we’re building like a LinkedIn for data scientists, plus a lot more. So I feel we are very close to finding product market fit in our community. We hardly spend anything on marketing, most of it is word of mouth. Our user acquisition and engagement has been growing month on month.

Then on the client side, we have companies like ABSA as one of our strategic partners. So for these corporates we mostly focus on selling annual strategic engagements where we combine all of those values, where they can get solutions through the platform, they can get talent through the platform, they can get brand awareness through the platform, but the biggest pinpoint for them is the scarcity of talent, and that Zindi is able to deliver.

AB: What is the scale story of Zindi as a business and also from a commercial perspective?

CL: One – we are the community for Africa, and I think that there are so many opportunities and also challenges that the data science community in Africa is solving, that we’re helping to create on this platform. We’re creating opportunities, creating the ability for this talent that wouldn’t have been seen before and also uncovering and building new value to the market. I think that’s what’s really important. And I do see that other emerging markets, whether it’s the Middle East, Asia, South Asia, Latin America – they’re faced with similar challenges in terms of access to skills, access to talent, access to networks. So one of the things that we’re really excited about is Zindi becoming an emerging market player, a global player.

AB: Who are your biggest competitors currently?

CL: There is US-based data science platform called Kaggle. They’re massive, with a community of about 8 million users. They’ve been around for over 10 years and they were acquired by Google a few years ago. They’re a competitor but I think there’s a pocket in the emerging market that has been left out of their story.

And that’s the pocket Zindi is filling.

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AB: So, would you describe Zindi as the only authentic African company of its kind?

CL: Yes, we’re the only African company of its kind. We’re the largest community, we’re the only online community of this kind in Africa.

AB: What would you say are the biggest obstacles that you’ve encountered so far as a business?

CL: Can I say something about the last question, there’s one another thing…

Because I think other competitors in a sense could be recruiters or traditional recruiters or maybe some of the recruitment platforms and I think that something important that Zindi is doing is that we’re not just helping companies find talent in the existing pool but we’re expanding the pool because we’re creating more skills in the pool.

AB: So now we go on to the biggest obstacles so far…

CL: The funding landscape is a bit more constrained for African startups.

We raised the seed round last year, and we’re raising another round right now. For African start-ups, we struggle a lot to find VC’s that are willing to take bets on plays like this. Another challenge is that data science is still a new field but we see that as an opportunity because it’s wide open and there’s so much excitement about it.

But the talent pool we have is very young, a lot of the companies that we talk to are still in a somewhat immature stage in terms of their own data science journeys, so while there are challenges there are also huge opportunities.

AB: So you say you did a round last year. Can you tell me how much you raised? And how much you hope to raise in the second round?

CL: Last year we raised $1 million, and that was the seed round. And this year we’ll be raising $2 million as a seed extension AB: Where do you see Zindi in 5 years’ time?

CL: I think the emerging markets play is huge. I want Zindi to be the place for data scientists, where they know that they can come and create opportunities for themselves and their communities, where they know they can meet other likeminded people, or where they can create new skills and find amazing career opportunities for themselves. I want everyone to have their Zindi profile as their new CV, their new profile that they can be proud of, that companies can look at and know that they’re choosing the right person. AB 47

REVIEW

Thoughts on Peter Obi’s biography

By Ike Okonta

P

ETER Obi’s burgeoning popularity has led author and journalist Chuks Iloegbunam (who is also an Africa Briefing Columnist) to write a semi-biography of the politician and 2023 Labour Party presidential candidate. I use the word ‘semi-biography’ advisedly. The book is not a full-fledged biography in so far as it does not follow Peter Obi’s life from childhood through to adulthood. Rather, it concentrates on those aspects of Obi’s life that bear on his rise to presidential candidate and then drills down into the social and political malaise of present day Nigeria and Obi’s plans to clean up the Augean stable should he be elected president next February.

According to Iloegbunam, the motivation to write the book, The Promise Of A New Era, (published by the Awkabased Eminent Biographies and available on Amazon), came from Odia Ofeimun, the famous poet and essayist. Ofeimun was anxious that Peter Obi’s life story be documented by a Nigerian author before Europeans swooped down on the prize.

Iloegbunam was at first reluctant to take on the project but eventually saw reason with Ofeimun - this was in June 2002, following the conclusion of the presidential primaries of the main political parties, when it became clear that Nigerians were going to be served by those same old, tired and selfserving presidential candidates who had thrown the country into the pit of perdition in the first place.

The book traces Peter Obi’s growing popularity in the Nigerian political world, particularly among the youth who constitute the bulk of the voting public, to his sudden decision to leave the People’s Democratic Party (PDP) a few days before its presidential primary in May, when it

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Peter Obi’s life story is pretty simple and straightforward

became clear to him that considerations other than merit and competence were going to play a key role in determining who emerged the party’s flagbearer.

Insisting that he would not be part of a process where ill-gotten wealth was leveraged for votes from party delegates, Peter Obi turned his back on the charade and joined the lesser-known Labour Party whose members promptly made him their presidential candidate.

When news of Obi’s unusual action filtered out to the Nigerian public, youths began to rally around the Labour Party presidential candidate. Nigerian youth were quick to see Peter Obi as the embodiment of the politician they had long been waiting for – a credible, honest and hardworking

AFRICA BRIEFING DECEMBER 2022

public figure who was disgusted with the regime of corruption and cynicism that has marked Nigerian political life ever since the return of democratic rule in May 1999.

Their enthusiasm was boundless. They took to social media to announce the advent of their new hero. They spread his name by word of mouth. They began to organize neighbourhood by neighbourhood, town by town. Soon Obi fever took on a life of its own. The youth and their not-so-young compatriots began to call themselves “Obidients.” A new term in Nigeria’s political lexicon was born.

Chuks Iloegbunam captures this unusual development in the book: “The people rose with one voice, swearing that they were not followers of Peter Obi but

REVIEW Peter Obi’s real heart lies in public service, not business. He entered the world of politics as governorship candidate for the All Progressives Grand Alliance (APGA) in Anambra State in the 2003 election. Chris Ngige of the PDP rigged himself into office as governor, but Peter Obi contested the result. He fought all the way through the courts and reclaimed his mandate in 2006.

Hardly had he settled down to govern when the state House of Assembly, following directions from Abuja, illegally impeached him. Obi again fought back, and eventually returned to office and governed for his full term of eight years.

The book concludes with a set of essays, each providing insight into the political phenomenon that is Peter Obi. The authors of these essays include leading intellectuals such as Festus Adedayo, Okey Ndibe, Farooq Kperogi and Obi Nwakanma. All agree with Chuks Iloegbunam’s main thesis that Peter Obi emerged as a shining star in the Nigerian political firmament because previous politicians had pushed the country into the gutter of poverty, corruption and bad governance and that at long last ordinary Nigerians are standing up and saying that enough is enough. Festus Adedayo even compares Peter Obi to Rosa Parks, the quiet and demure African American lady who embraced immortality by triggering the Civil Rights Movement in the United States in the 1950s.

Quaison-Sackey with his friend Malcom X

advocates for a better Nigeria who see Mr Obi’s candidacy as an instrument for actualising their political objective. Soon posters appeared, bearing the message that ‘Peter Obi is not contesting for President of Nigeria. It is Nigerians that are contesting through Peter Obi.’” So, who actually is this atypical politician that has so captured the imagination and devotion of Nigerian youth? Peter Obi’s life story is pretty simple and straightforward. He was born in the commercial city of Onitsha to doting parents in 1961. He attended the famous Christ the King College, Onitsha, (CKC) and then the University of Nigeria,

Nsukka where he studied philosophy, graduating with honours in 1984. Upon completing his education, he began his public career as a businessman. Obi has always proudly identified himself as an ‘Onitsha-based trader.’ He is actually a very savvy businessman with interests spanning banking, wholesale and retail, and became the youngest chairman of a publicly-quoted bank when he took charge of Fidelity Bank. He in fact cut his teeth as an entrepreneur as a teenager in Christ the King College when he began to sell goods to his classmates, and he has not looked back since. However, as Chuks Iloegbunam argues in this eminently-readable book,

The book makes clear the author’s outrage that personalities such as Atiku Abubakar and Bola Tinubu are offering themselves to be elected president when they are both morally and intellectually compromised. As Iloegbunam states, Bloomberg, the New York-based news service, has referred to these two presidential candidates as having been investigated for corruptly enriching themselves.

It is clear that in the 2023 presidential election the Nigerian people will be called upon to make a choice between the old politics of plunder and corruption, and the new regime of honesty and public service that Peter Obi represents.

Chuks Iloegbunaam’s passionatelyargued book, The Promise Of A New Era, leaves no one in doubt as to who Nigerians should vote for.

AB

Dr Okonta was until recently Leverhulme Early Career Fellow in the Department of Politics, University of Oxford. He now lives in Abuja.

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