Finance and National Economy Minister meets Citibank officials

Manama, Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa held a meeting with Head of Citibank Group for the Middle East and North Africa (MENA) Elissar Farah Antonios and Citi Country Officer & Corporate Banking Head – Citi Bahrain, Michel Sawaya.

During the meeting which was attended by the Economic Development Board (EDB) Chief Executive Officer Khalid Humaidan, the minister commended years-long cooperation between the Kingdom of Bahrain and Citibank, which ranks among the pioneering international financial institutions.

He stressed keenness on supporting vital sectors to consolidate their contributions to national development, lauding the role of the financial and banking sector in bolstering the national economy and attracting investments.

The minister stressed the importance of further consolidating partnership and cooperation with international financial and banking institutions to exchange expertise and keep abreast of fintech strides in support of the national economic growth.

The meeting also focused on the latest global economic developments and issues of common interest.

Source: Bahrain News Agency

Analysts: China Expanding Influence in Africa Via Telecom Network Deals

Telecommunications networks funded and built by China are taking over Africa’s cyberspace, a dependence that analysts suggest puts Beijing in a position to exert political influence in some of the continent’s countries.

Bulelani Jili, a doctoral candidate at Harvard University’s Department of African and African American Studies, told VOA Mandarin in a phone interview that “Huawei is working and partnering with many governments across the continent, and it is those governments that are using quality technology to undermine democratic values.” 

Huawei, the world’s leading seller of 5G technology and smartphones, is seen by the U.S. and other countries as “beholden to the Chinese government, which could use the company” for spying, an accusation Huawei denies, according to the Council on Foreign Relations.

The Center for Strategic and International Studies (CSIS), a think tank in Washington, reported in May that worldwide, “the majority of [Huawei’s] deals (57%) are in countries that are middle-income and partly free or not free.”

The CSIS report added that Huawei’s cloud infrastructure and e-government services are handling sensitive data, services that “could provide Chinese authorities with intelligence and even coercive leverage.”

The “intelligence and even coercive leverage” language stems from China’s 2017 National Intelligence Law, which stipulated that any organization and Chinese citizen should “support, assist and cooperate with the state intelligence work.” The law does not limit these activities to China.

Goals and needs

The African Union has set the goal of connecting every individual, business and government on the continent by 2030, an expansion that is supported by the World Bank Group.

Africa needs 1,000 megawatts (MW) of new facility capacity or about 700 new data center facilities to meet growing demand in the continent, according to the Africa Data Centers Association.

The scale of need for data centers to meet population growth “is astoundingly significant,” Guy Zibi, principal analyst at Xalam Analytics, who is tracking the African data center boom, told the website DataCenterKnowledge.

On June 22, the West African nation of Senegal opened a national data center just outside Dakar, the capital. Financed by the Export-Import Bank of China, the center was built with equipment and technical backing from Huawei. Senegal’s status declined from free to partly free in the Freedom in the World 2020  report from Freedom House.

In July 2020, Cameroon completed a government data center on the outskirts of Yaounde, the capital. It was funded by the Export-Import Bank of China, built by the Beijing-controlled China Shenyang International Economic & Technical Cooperation Corporation and equipped with Huawei gear. Freedom House in 2020 rated Cameroon as not free.

In April 2019, Kenya and Huawei signed a deal for a data center, a smart city and surveillance project, according to DataCenterDynamics. The site also reported Huawei was working with the government of Zambia on a $75 million data center. Freedom House rated Kenya as partly free in 2020.

Huawei’s e-government services include elections, document digitization, national ID systems and tax services, according to the CSIS report.

While the digitization of government records may allow greater surveillance, it can also mean more effective tax collection and less corruption, according to a March 2021 post on a tech site of the Brookings Institution a Washington think tank.

“As the continent recovers from the COVID-19 pandemic, its leaders face a choice between harnessing emerging technology to improve government effectiveness, increase transparency and foster inclusion, or as a tool of repression, division and conflict,” said the TechStream post.

China’s expansion

China has a history of financing and supplying telecom and information and computer technology (ICT) throughout Africa, according to an April 2021 report from the Atlantic Council’s African Center.

Over the past two decades, Huawei has built about 50% of Africa’s 3G networks and 70% of its 4G networks, according to the report.

The expansion began in 1999, when China launched its Go Out policy, which pushed Chinese companies to invest abroad and strengthen China’s global business presence.

By 2018, China had expanded to at least 40 African nations, according to Africa Times.

Cobus van Staden, a senior China-Africa researcher at the Johannesburg-based think tank South African Institute of International Affairs (SAIIA), outlined why Chinese firms succeed in Africa.

“First is that the continent has very high demand for digital connectivity, at all levels, from network building to consumer handset sales,” he told VOA in an email.

Second, Chinese companies have easy access to large banks closely tied to Beijing. This, according to van Staden, means Chinese companies have the funding to roll out infrastructure quickly in a variety of environments.

Iginio Gagliardone, an associate professor at the University of the Witwatersrand in Johannesburg, South Africa, has done extensive research on the rise of China’s presence in Africa and is the author of China, Africa and the Future of the Internet.

He told VOA Mandarin that the relationship Chinese companies have with state-affiliated banks means the companies can lower their prices and maintain a competitive advantage over other bidders.

“The Export-Import Bank [of China] has been able to offer large loans, as part of deals with African governments, with the condition that these loans will be used to deploy technology using a Chinese company,” he said in a phone interview with VOA Mandarin.

Chinese state banks provide such generous financing to Huawei’s customers that most commercial banks cannot match the terms, “making Huawei equipment cheaper to deploy at any price,” according to a 2020 report by the Center for American Progress, a Washington think tank.

A third factor, according to van Staden, is that there has been relatively little attention paid to Africa as an emerging tech market. “There aren’t many credible competitors to Chinese companies on the scene,” he added.

Known player

Because Chinese enterprises are known players in Africa’s telecommunications infrastructure, countries transitioning to 5G often remain with the companies they know, according to analysts.

“Although the Trump administration’s policies successfully curbed Chinese expansion in Western countries, they did not address the growing presence of Chinese technology infrastructure on the African continent,” according to the Atlantic Council’s report. “In African markets, a lack of local champions and infrastructure financing and construction capacity constraints have created a dependence on Chinese-financed projects.”

Van Staden said that the dependence raises the question of possible political influence.

“Research has shown that Chinese companies are responsive to local regulations and governance. In both authoritarian and democratic countries, Chinese contractors have tended to follow local laws and to provide the systems these governments wanted, be these open and inclusive, or centrally controlled,” he said.

“There isn’t proof that China is ‘exporting’ its own domestic system or pressuring countries to emulate it,” he continued. “The issue is less that China is using data networks to influence local politics, and more that its position as a network provider is just one aspect of a much broader trade and investment presence. China’s role as a major trade, financing and development partner to many African countries naturally makes these countries less willing to cross any of Beijing’s ‘red lines.’ ”

Source: Voice of America

Reports: Kenya, Facing Fish Shortage, Will Not Ban Chinese Imports

WASHINGTON – According to local press reports, Kenya has opted out of banning imported Chinese fish, a prohibition that had been considered to protect the local industry, because the African nation is facing a fish shortage.

Kenya’s Agriculture Cabinet Secretary Peter Munya, quoted in the Daily Nation, said, “The challenge we have in the country is insufficient local fish to satisfy the market, and hence you cannot ban imports that fill that gap that we are facing. You only ban when you raise the capacity to produce locally.”

The AfricaNews website reported previously that Kenya’s agriculture committee had said it would ban fish imports from China, pointing to the availability of fish in local lakes and rivers and offshore.

The site also reported that local markets, facing a shortage of locally caught fish, had been selling imported Chinese fish and that the imported fish cost less.

Concern that inexpensive imported Chinese fish were undercutting the Kenyan fish industry was first raised in 2018, when President Uhuru Kenyatta said Kenyan government officials should figure out how to limit the imports, according to AfricaNews.

A report compiled by the Global Fishing Watch tracker between May and August showed some 230 fishing vessels off Kenya, many of them foreign owned, according to AfricaNews.

The site reported that most of the foreign-owned ships came from countries such as Italy and China.

China is “the world’s largest producer and consumer of seafood, and critics say its fleets engage in aggressive tactics as the nation tries to feed its 1.4 billion people,” VOA has reported. “Chinese ships have been accused of illegal and unreported fishing in many parts of the world – charges that China denies.”

Kenya has more than 600 kilometers of coastline on the Indian Ocean, and it claims 22 kilometers of territorial waters, according to the Food and Agriculture Organization of the United Nations. Beyond that, Kenya, like many other nations, claims an exclusive economic zone (EEZ) of 370 kilometers.

An EEZ is reserved to a coastal country under the United Nations Convention on the Law of the Sea (UNCLOS). According to UNCLOS, the coastal country retains “special rights to exploration and use of marine resources, but the water’s surface remains international territory.”

Kenya’s “marine fisheries can be classified into two subsectors: the coastal artisanal fishery, and the Exclusive Economic Zone (EEZ) fishery,” according to the U.N.’s FAO website. “A basic feature of the coastal fishery is the largely subsistence and artisanal nature of the fishers who operate small craft propelled by wind sails and manual paddles. The EEZ fishery, on the other hand, is characterized by distant-water fishing vessels which exploit target species mainly with purse-seines and long-lines.”

China has the world’s largest distant-water fishing fleet, which it says it will cap at 3,000 vessels, according to VOA reporting. But a U.S. Coast Guard report says an additional fleet of 3,000 ships of the People’s Armed Forces Maritime Militia “actively carries out aggressive behavior on the high seas and in sovereign waters of other nations” in pursuit of China’s maritime interests.

A British research center estimates China’s total fleet size is nearly 17,000 vessels when Chinese ships that fly the flags of other nations are included.

The U.S. Coast Guard report, citing a U.N. statistic, says 93% of the world’s marine fish stocks are fully exploited, overexploited or significantly depleted. 

Source: Voice of America

Biden Administration Launches Initiative to Build US-Africa Trade

NAIROBI – The administration of U.S. President Joe Biden has kicked off the Prosper Africa Build Together initiative by requesting $80 million from Congress to build trade and investment between the U.S. and Africa.

Dana Banks, U.S. senior director for Africa at the National Security Council, said Wednesday in an online news briefing that the U.S. was ready to do business with the continent.

“The campaign is a targeted effort to elevate and energize the United States commitment to trade and investment with countries across the African continent under the Biden and Harris administration,” Banks said. “And our goal is to substantially increase two-way trade and investment between the United States and Africa by connecting U.S. and African businesses and investors with tangible deal opportunities.”

It’s not the first time the U.S. government has engaged Africa on trade.

— In 2000, President Bill Clinton signed the African Growth and Opportunity Act (AGOA), the deal that provided African countries with unilateral, duty-free exports for 6,500 products to the U.S. AGOA still exists and is extended until 2025.

— According to the Brookings Institution, South Africa got $917 million in 2019 by exporting automobile and agricultural products to the U.S.

— A separate study done by the University of South Africa in 2017 found that the U.S. imported 10 percent of its wine from South Africa, worth $59 million.

— And the U.S. government is now negotiating a free trade agreement with Kenya.

More growth, jobs

Banks said America wants to participate in Africa’s growth.

“Africa’s increasing integration into the global markets, demographic boom and the thriving culture of entrepreneurship present a remarkable opportunity for us to strengthen those economic ties and promote new opportunities for both U.S. and African businesses to fuel economic growth and job creation and greater U.S. participation in Africa’s future,” she said.

Gerrishon Ikiara, an international economic affairs lecturer at the University of Nairobi, said the initiative would help strengthen the relations between the U.S. and Africa.

“The U.S. wants to tap that both for economic reasons, political and international relations reasons, because it is known all over the world that trade links also help to build political and diplomatic links. … This is key for both the U.S. and Africa as of now,” Ikiara said. “The U.S. is also knowing more about African products, African culture, with many migrant workers from Africa working in the U.S.”

However, some critics say the trade and investment plan could undermine the African Continental Free Trade Area, which was established in 2019. That agreement promotes the free movement of goods and people across the continent.

Source: Voice of America

World Bank Pauses Mali Payments After Coup as Leader Warns Against Sanctions

The World Bank said on Friday it had temporarily paused payments to operations in Mali following a military coup, while the man expected to become the new prime minister warned sanctions would only complicate the country’s crisis.

The World Bank’s actions added to pressure on Mali’s military leadership after chief security ally France announced on Thursday it was suspending joint operations with Malian troops in order to press for a return to civilian rule.

The military’s overthrow of Mali’s transitional president last week, its second coup in nine months, has drawn international condemnation and raised fears the political crisis will weaken regional efforts to fight Islamist militants.

‘Temporarily paused’

The World Bank, whose International Development Association (IDA) is financing projects to the tune of $1.5 billion in Mali, confirmed the suspension of payments in a statement to Reuters.

“In accordance with the World Bank policy applicable to similar situations, it has temporarily paused disbursements on its operations in Mali, as it closely monitors and assesses the situation,” it said.

Assimi Goita, the colonel who led both coups, was declared president last Friday after having served as vice president under Bah Ndaw, who had been leading the transition since September. Ndaw and his prime minister resigned while in military custody last week.

Goita is widely expected in the coming days to name as prime minister Choguel Maiga, the leader of the M5-RFP opposition coalition that spearheaded protests against former President Ibrahim Boubacar Keita before his overthrow last August.

At a rally in the capital, Bamako, on Friday to mark the one-year anniversary of the start of the protests against Keita, Maiga was alternately firm and conciliatory toward foreign partners.

“We will respect international engagements that aren’t contrary to the fundamental interests of the Malian people,” he said to thousands of supporters in the city’s Independence Square.

“Sanctions and threats will only complicate the situation,” he said.

French troops

France, the former colonial power, has more than 5,000 troops waging counterinsurgency operations against Islamist militants in Mali and the wider Sahel, an arid region of West Africa just south of the Sahara.

It hopes to use its leverage to press Goita to respect the 18-month timetable agreed to at the start of the transition by organizing a presidential election next February.

The African Union and a West African regional bloc responded to the coup by suspending Mali’s membership but did not impose further sanctions.

Source: Voice of America

Summit on the Financing of African Economies, Paris, 18 May 2021: Declaration

The Covid-19 pandemic has led to an unprecedented economic crisis worldwide, with disastrous social consequences. After 25 years of continuous growth, Africa is severely hit and has suffered a recession in 2020. The International Monetary Fund (IMF) estimates that additional financing of up to $285 billion would be needed during 2021-25 for African countries to step up the spending response to the pandemic, with about half of it for African low-income countries. The middle-income countries also require special attention. Absent a collective action, the financing and objectives of the 2030 Agenda for Sustainable Development and the African Union’s 2063 Agenda will be compromised.
Most regions of the world are now launching massive post-pandemic recovery plans, using their huge monetary and fiscal instruments. But most African economies suffer the lack of adequate capacities and such instruments to do the same. We cannot afford leaving the African economies behind.
We, the Leaders participating to the Summit, in the presence of international organizations, share the responsibility to act together and fight the great divergence that is happening between countries and within countries.
This requires collective action to build a very substantial financial package, to provide a much-needed economic stimulus as well as the means to invest for a better future. Our ambition is to address immediate financing needs, to strengthen the capacity of African governments to support a strong and sustainable economic recovery and to reinforce the vibrant African private sector, as a long-term growth driver for Africa.
In the very short term, solving the pandemic remains the top priority. We recognize the role of extensive immunization against Covid-19 as a global public good, and stand united to ensure equitable access in Africa to safe and affordable vaccines, treatments and diagnostics through the ACT-Accelerator and its COVAX facility, as well as through the African Union’s AVATT. We will strive to accelerate these efforts, to make sure more vaccines are allocated to Africa, including through dose sharing, supporting advance market commitments and facilitating trade along the entire value chain, as well as building the local capacities needed to distribute vaccines. We also need, in partnership with the private sector, to speed up vaccine production, by developing local manufacturing capacities in Africa. This can be facilitated by voluntarily sharing intellectual property and actively transferring technologies and know-how, consistent with international legal frameworks, such as through entering into license pooling and manufacturing agreements to enable local production.
We will leverage on the international financial system to create the much-needed fiscal space for African economies. We call for the swift decision on and implementation of an unprecedented general allocation of IMF’s Special Drawing Rights (SDRs) that is expected to amount to $650 billion, of which about $33 billion to increase reserve assets of African countries, and urge countries to utilize these new resources transparently and effectively. We are determined to significantly magnify its impact for Africa, by exploring on-lending SDRs on a voluntary basis through the IMF’s Poverty Reduction and Growth Trust (PRGT), and by exploring a range of additional options with the IMF, World Bank and other MDBs to enable possible on-lending of SDRs to support IMF members’ green, resilient and inclusive recovery, as we emerge from the pandemic, in line with Sustainable Development Goals. This support will be complemented by official development assistance (ODA), an ambitious IDA-20 replenishment, the future ADF-16 replenishment in 2022 and the mobilization of scaled-up concessional financing from the IMF, MDBs and funds, as well as bilateral development agencies. We ask the MDBs to mobilize more private financing into Africa by developing and reinforcing the relevant risk sharing instruments.
This multilateral effort will be closely articulated with the network of African Public Development Banks (PDBs), mobilizing the African Development Bank (AfDB) as well as sub-regional and national public financial institutions. Deeply rooted in their respective constituencies, their ability to originate more quality projects notably for climate, health, education, infrastructure and the private sector is a prerequisite for the success of all international measures taken to effectively financing African economies.
To relieve African economies suffering from external public debt vulnerabilities, G20 and Paris Club creditors are acting upon the agreement as stated in the April G20 FMCBG communiqué, and in the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI) adopted in November 2020.
To boost growth and jobs, we support the African national strategies and we welcome the ambition to develop an Alliance for Entrepreneurship in Africa, with a broad pan African reach and a strong business focus. The Alliance will help mobilize all partners ready to support, through financial and technical resources, the development of the African private sector, micro, small & medium-sized enterprises (MSMEs), including women entrepreneurs promoted by the Affirmative Finance Action for Women in Africa (AFAWA). We look forward to the IFC, in coordination with the AfDB, the EBRD in its countries of operations, the EIB and other relevant MDBs and interested bilateral DFIs to advance efforts to launch this Alliance, in collaboration with the African Union Commission, in a progressive and targeted way. This builds on the efforts made under a Team Europe approach with the European DFIs in the context of contributing to the objectives of this Summit.
We reiterate our continued support for the G20 Initiative on Supporting the Industrialization in Africa and LDCs, G20 Africa Partnership and the Compact with Africa (CwA), and other relevant initiatives. Given the importance of private sector reform to recovery and long-term prosperity, we take note of the joint proposal of France and Germany for further strengthening the G20 initiative Compact with Africa.
We welcome the implementation of the African Continental Free Trade Agreement and the digital transformation of the continent to close the digital divide and accelerate adoption of open, fair and non-discriminatory digital ecosystems, which will lead to significant gains in terms of productivity, innovation and durable growth. In light of our joint belief in the developmental impact of trade, we will explore options that would enhance African value-added in global supply chains.
While international support is required to fuel recovery plans of the scale that is needed, it could be accompanied by more flexibility on debt and deficit ceilings where appropriate, alongside necessary reforms at the national level, with the assistance of the international community when needed. Financing key public policies for an inclusive and sustainable growth like education, health, social protection and infrastructure will require greater mobilization of domestic resources, increasing transparency and efficiency of public debt management and expenditure, improving governance and financial integrity, and developing the enabling environment for private sector solutions through PPPs and commercial financing. We will also improve infrastructure project preparation and financing.
We will promote the sustainable, circular and low carbon development pathways of Africa and ensure its climatic and environmental resilience for the next decades. We will strive to widen the donor and investor base for climate and biodiversity finance and for technological development in Africa, including by channeling more resources to the continent through the Green Climate Fund and the Global Environment Facility. We also call on the IFIs to set ambitious targets for their projects related to climate, with a balance between adaptation and mitigation, and to fully align their operations with the Paris Agreement, as soon as possible.
Ultimately, growth and resilience rely on human capital. Our overarching objective is to tap the human capital and demographic potential of Africa and to provide the private sector with the assets it needs. We commit to strengthen health and social protection systems and education and training institutions on the African continent, recognizing that they are key factors to increase productivity on the continent and to ensure economic resilience by protecting the African lives, jobs and skills.
We will work together to increase the mobilization of African talents and strengthen public sector expertise and local resources and knowledge. We believe that country engagement is essential and the set of actions we commit to must be supported by strong capacity development. We will work to develop and mobilize African expertise, within and outside the continent.
Investing in African economies’ sustainable development and their active and growing labor force today will contribute to making Africa the next champion of global growth.
In the margins of the next IMF/WBG Annual meetings in October 2021 there will be an opportunity to take stock of our efforts to ensure the effective implementation of these measures and to refine our proposed initiatives.

Source: Government of France