Africa

🇿🇦 E-commerce giant Amazon said it would launch an online marketplace in South Africa next year. It also said independent sellers could start registering their businesses. The company’s sub-Saharan Africa general manager, Robert Koen, said the site would offer local sellers an opportunity to “rapidly launch, grow and scale their businesses.” The launch makes South Africa the second African country after Egypt where Amazon has set up a locally-dedicated website, and introduces competition to existing e-commerce companies like Naspers’ Takealot.com.

🇸🇳 A Senegalese administrative court last week quashed a decision to remove opposition figure Ousmane Sonko from electoral lists and ordered his reinstatement, making him eligible to run in the February 2024 elections. Sonko’s lawyers told the court in Ziguinchor that their client was tried in absentia and arrested, arguing that the conviction should be overturned and Sonko’s civil rights restored. Sonko, 49, remains the main political opposition to President Macky Sall, and has accused the state of political persecution aimed at deterring him from running for the country’s top seat.

🇸🇩 The Sudanese paramilitary Rapid Support Forces (RSF) is gaining ground in its devastating battle with the country’s army. RSF, which has control of the capital Khartoum, is reportedly moving south towards Gezira town. On Wednesday, the U.S. State Department raised concerns over reports of intensified shelling by the RSF in South Darfur and Omdurman, and called on the paramilitary forces to immediately end shelling of civilian neighborhoods. Over 5.75 million people have been displaced and thousands killed since fighting began in April.

🇬🇼 Guinea-Bissau said power in the capital Bissau had been restored on Wednesday, a day after Turkish company Karpowership cut off electricity supply over a $17 million debt. The economy minister told reporters that $6 million out of $15 million of arrears owed was settled, prompting Karpowership to restart operations in the city where over 400,000 residents had been affected after it was plunged into darkness on Tuesday. Karpowership signed a deal in 2019 to supply 100% of Guinea-Bissau’s electricity needs.

The price of a new 4G smartphone unveiled by Airtel Rwanda which it says is the cheapest device of its kind in the country. It was launched earlier this week in partnership with the government under the ‘Connect Rwanda’ initiative which was launched in 2019 to deliver smartphones to more than 1 million households across the country in a bid to plug the nation’s connectivity gap. Smartphone penetration in Rwanda stands at around 23.5%, despite network coverage of 99%. Netflix founder and chairman Reed Hastings is among supporters of the program.

A protracted Hamas-Israel war could set Africa back from its economic goals

THE NEWS

The escalating crisis in the Middle East looks likely to hamper hopes of strong economic recovery in many of Africa’s largest economies.

The conflict, which was triggered by a large-scale deadly attack by Palestinian militant group Hamas on Israel on Oct. 7, has so far claimed nearly 5,000 lives in 11 days. It threatens to pull in multiple other countries in the region and comes on top of the significant impact of the 20-month long Russian invasion of Ukraine which severely disrupted food supply chains to many African nations. This has caused food shortages and wider inflationary effects in countries which had not fully recovered from the economic damage caused by the global pandemic.

Long-term Africa watchers now worry the continent will slip down the priority list of major nations like the United States even as the continent seeks support with everything from regional geopolitical challenges to battered economies mired in debt and facing weakened currencies.

KNOW MORE

The International Monetary Fund and the World Bank have lowered their economic growth forecasts for Africa in 2023, to 3.3% and 2.5% respectively. The IMF found the average debt ratio in sub-Saharan Africa has almost doubled in just a decade — from 30% of GDP 10 years ago to almost 60% of GDP by the end of 2022. Rising interest rates have made it costlier to repay this debt.

YINKA’S VIEW

When U.S. President Joe Biden declared he was “all in” on Africa during last December’s U.S-Africa Leaders Summit, there was a hope that the United States would start to give greater priority to African affairs. This was especially because it was framed as being in America’s self-interest for its rivalry with China, particularly with regards to the supply of so-called ‘green minerals’ needed for the transition away from fossil fuels.

As part of the new U.S.-Africa era there were calls for Biden to visit the continent which he acknowledged and his team promised would happen this year. It’s important to acknowledge that an unprecedented number of top U.S. officials have visited the continent this year, including the treasury secretary and the vice president, yet the symbolism of a presidential tour is not to be dismissed. The chances of such a visit this year are slimmer now and such a trip by Biden in 2024 would be unlikely since it’s a reelection campaign year.

The Israel-Hamas war will effectively push Africa further down a growing priorities list for the United States, said W. Gyude Moore, senior fellow at Center for Global Development, speaking from Beijing. “Development spending can be “justifiably” diverted,” he said. “The global attention span is limited.”

Hannah Ryder, CEO of Development Reimagined makes a similar point about some of the aid to poorer countries in the region potentially falling victim to a “zero sum game” as wealthier countries put more funds towards backing Israel militarily. “It’s likely that military spending will go up, putting pressure on humanitarian and other aid resources in African countries, which may be challenging for some,” said Ryder.

Read more details with a Room for Disagreement and the View from Kenya

Nigeria’s 2024 budget

→ What happened? Nigeria’s President Bola Tinubu proposed a 26 trillion naira ($34 billion) budget for the 2024 fiscal year, his first as the country’s leader. The spending plan is 19% bigger than the last budget signed in January by his predecessor Muhammadu Buhari.

→ What’s the basis for the budget? Budget minister Atiku Bagudu said the government expects Africa’s largest economy to grow 3.76% next year — above the IMF’s 3.1% projection. The budget is based on a benchmark oil price of $73.96 and an exchange rate of 700 naira to the dollar. The dollar currently sells at 775 on Nigeria’s official central bank-mediated forex market for imports and exports, but goes for over 1,040 naira on the widely used parallel market.

Another key assumption is that Nigeria’s oil production will stand at 1.78 million barrels per day in 2024. The peak so far this year has been 1.3 million barrels per day in September. Oil pipeline sabotage has stifled export volumes.

→ What’s in the proposal? Nearly a third of the budget — about $10.8 billion — will be spent on debt service and another 30% on salaries and pensions. While the latter is a lower share of the budget compared to the spending bill for this year, Tinubu is committing more money into debt service than Buhari did. Nigeria’s debt stock has soared in recent years to over $113 billion, thanks in part to free wheeling borrowing from the central bank under the previous administration.

If past years are any indication, Tinubu will likely dip into the debt market again to fund what is sure to be a large deficit budget.

→ What happens next? Tinubu’s budget will be scrutinized by both houses of parliament. It’s widely expected to be approved and returned to the president for his signature in January. Observers will look out for ‘padding’ — the alleged inflation of costs by members of the legislature during the screening process. BudgIT, a Lagos-based nonprofit transparency organization, estimates that lawmakers inserted 1.2 trillion naira ($1.5 billion) across the 2021 and 2022 proposed budgets with “unethically exaggerated expenses or allocations.”

— Alexander Onukwue

Ethiopia’s bid to regain Red Sea access risks regional instability

ADDIS ABABA — A call by Ethiopia’s prime minister for his country to regain access to the Red Sea after a 30-year hiatus has sparked fears that the issue could destabilize the Horn of Africa.

Ethiopia lost direct access to the sea in 1993 when Eritrea seceded from it after a war that lasted three decades. Eritrea’s port at Massawa (pictured) is the largest natural deepwater port on the Red Sea and handles goods coming from neighbors including Saudi Arabia and Yemen. Ethiopian Prime Minister Abiy Ahmed last week called for a discussion about reopening access, arguing that his request was based on “historical, geographical, ethnic and economic grounds”. He said the lack of access was “a potential source of future conflict”.

Eritrea called the surprise request “excessive,” adding that it had “perplexed all concerned observers”. Somalia, which also rejected Abiy’s request, said the issue is “not open for discussion”. There is now fear that such an aggressive demand from Ethiopia might escalate into a regional war.

Ethiopia has relied on the ports of Djibouti for various imports and exports since it lost control of the strategically important sea in 1993, becoming one of Africa’s largest landlocked nations. An aid-dependent nation with an expanding economy, the inability to access the Red Sea and the accumulated cost of using the Djibouti port, along with recurring conflicts, have derailed its plans to become a middle-income nation by 2025.

“There is a great deal that links and unites the people of the Horn of Africa. There is no reason why — through diplomacy and consensus — its nations could not be united. The European Union has achieved this, even though it has been no easy task”, Martin Plaut, senior research fellow at the University of London said.

— Samuel Getachew

Read more details including Samuel’s View and Room for Disagreement.

South Africa’s foreign minister is at the center of a diplomatic storm following her call with the leader of Hamas. Naledi Pandor’s ministry said the discussion on Tuesday concerned getting humanitarian aid to Gaza and other Palestinian territories — and denied reports that the minister offered support to the militant group in its fight against Israel.

The head of the South African Jewish board of deputies said the call “has dragged South Africa into very dangerous waters,” saying the minister had already chosen a side in the ongoing conflict.

Pandor, 69, has been a member of parliament for ANC since the country’s first free democratic elections in 1994. She has courted controversy since taking up her current position in 2019, during which she has been a leading proponent of South Africa’s refusal to join the West’s condemnation of the Russian invasion of Ukraine and calling for Israel to be declared an “apartheid state.” She has served in various ministerial portfolios since 2004, including higher education and home affairs, as well as science and technology.

On the global stage she is perhaps best known for articulating South Africa’s stance when it was among the 58 countries that abstained on the resolution adopted by the United Nations General Assembly to suspend Russia from the Human Rights Council.

“South Africa has always opposed violations of the sovereignty and territorial integrity of member states, in keeping with the UN Charter,” she said. She added that abstaining meant adhering to the non-alignment movement whereby developing countries in Africa committed themselves to maintaining independent foreign policies and extending the hand of friendship to all countries which reciprocated that friendship.

— Muchira Gachenge

Kevin Chika Urama is the chief economist at the African Development Bank and this month participated in discussions around managing a rising debt challenge across the continent at the World Bank/IMF Annual Meetings in Marrakech, Morocco.

A new human evolution exhibition opened at Iziko South African Museum in Cape Town last month. It strives to offer a close look at the history of paleoanthropology while also decolonizing the story of human origin by looking at ways in which human evolution has been used to reinforce western biases and dehumanize Africans. The aim is to then remove those biases and make our understanding of human evolution scientifically accurate, broadly relevant and inclusive. “This is part of a broader reckoning happening in museum practice globally,” write a professor of archaeology at the University of Cape Town and the chief curator of Iziko South African Museums in The Conversation. “It is essential to consider how museums continue to alienate precisely the people who are owed reparations.”

• Israeli and American intelligence are tracking the movements of Iranian diplomats and military officers, fearing that Tehran could spur its network of proxies and allies to support Hamas in a coordinated war against Israel.
• A sector responsible for around a quarter of energy-related carbon emissions could drastically reduce its footprint with well-known, inexpensive, and easily deployable solutions. So why doesn’t it?
• Big news was buried in the campaign finance reports of participants in the U.S. presidential contest — both about key races and the overall political environment.

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— Yinka, Alexis, Alexander Onukwue, Martin Siele, and Muchira Gachenge