These are key developments across Africa this week worthy of note.
BRICS nations meet without Putin
The BRICS group of countries, (comprising Brazil, Russia, India, China and South Africa) will hold their much-anticipated summit in South Africa from August 22 to 24.
One early highlight of the meeting is the absence of Russian President Vladimir Putin, who pulled out of the summit as South Africa came under pressure to arrest him for war crimes under an International Criminal Court warrant. Without the distraction of Putin, the attention has focused more on what BRICS means for the global economy as an attempt to shift from a dollar-dominated global trade system.
At least 40 heads of state are due to attend the summit, with many of the countries already applying or angling to become members. Among the BRICS leaders, China’s Xi Jingping (also on a state visit to South Africa), Brazil’s Inacio Lula and India’s Narendra Modi are expected to join President Cyril Ramaphosa for the summit. Russian Foreign Minister Sergei Lavrov will represent Putin, who will likely make a virtual appearance.
Issues likely to dominate the three-day meeting include:
- New memberships
With, at least 23 nations (among them Saudi Arabia, Egypt and Indonesia) currently seeking to become members, the summit will have to take a decision on whether to admit new members and the modalities, if they do.
- Trade currency
Another important decision to tackle is the issue of a trade currency in the face of the dominance of the U.S. dollar as the world’s main reserve currency. Members will have a choice of creating a different reserve currency or trading more with each other’s currencies, which has already started.
- The New Development bank
There is talk of the New Development Bank created by BRICS members to mediate transactions among members in their local currencies. Some justification for it is found in the increasing trade among members now valued at over U.S.$400 billion. The development bank, envisaged as an alternative to the World Bank and the International Monetary Fund, raised 1.5 billion South African rand is a recent bond sale in Johannesburg.
- BRICS and Ukraine
The summit will also likely provide another opportunity to revisit peace proposals made by China and another by a group of African countries led by South Africa’s Ramaphosa to end the war in Ukraine.
UNCTAD sees Africa supply chain potential
African countries have a unique opportunity to boost their prosperity by serving the emerging needs of the global supply-chain system, according to a new report by the UN Conference on Trade and Development (UNCTAD).
To achieve this the nations have to tap into the latest technological developments to move in step with global supply-chain trends, according to UNCTAD’s Economic Development for Africa 2023 released in Nairobi, Kenya, this week.
This requires more value-added production, such as setting up processing industries closer to the sources of the raw materials and improving service skills to meet the needs of evolving economic environment. The emergence of the African Continental Free Trade Area will provide added leverage to make the most of the new opportunities, according to the report.
“This is Africa’s moment to bolster its position in global supply chains as diversification efforts continue,” UNCTAD Secretary-General Rebeca Grynspan said while presenting the report on Thursday. “It’s also an opportunity for the continent to strengthen its emerging industries, foster economic growth and create jobs for millions of its people.”
Africa being the repository of many crucial minerals that will shape the industries of the future stands to benefit from the intensifying search for alternative sources of key supplies, such as energy, by key industrial nations, the report notes. These important resources include natural gas, aluminum, cobalt, lithium, copper and manganese.
The availability of these raw materials also creates the likelihood that industries to process them will be located near their sources, providing value-added production and boosting local economies.
Africa’s advantages, according to the report, includes “shorter and simpler access to primary inputs, a younger, technology-aware, and adaptable labour force and a burgeoning middle class, known for its growing demand for more sophisticated goods and services.”
Tinubu unveils cabinet, mixed signals
Nigerian President Bola Tinubu, who took office on May 29, finally assigned portfolios to cabinet members approved by lawmakers.
In the appointments, Tinubu tried the usual combination of rewarding party loyalists, close friends and then a sprinkle appointed because they might be able to do the job.
Tinubu scrapped some some old ministries, created altogether new ones while renaming some old ones to reflect his intent. The all-important position of minister of finance and coordinating minister of the economy went to his old pal and economic adviser, Wale Edun. It’s a nomenclature first adopted under former President Goodluck Jonathan for the position then occupied by Ngozi Okonjo-Iweala, now head of the World Trade Ogranization.
There was a name tweak to create the ministry of Culture and Creative Economy, occupied by Hannatu Musawa, in recognition of the country huge output of movies and music. The Ministry of Marine and Blue Economy, headed by Bunmi Tunji-Ojo, is an altogether new creation that will have to work out boundaries with the Ministry of Water Resources and Sanitation under Joseph Utsev.
Similarly, there might be some overlap in the functions of the Ministry of Commuication, Innovation and Digital Economy with the Ministry of Innovation, Science and Technology headed by Uche Nnaji.
As has been the case with successive regimes since the end of military rule in 1999 (with the exception of President Goodluck Jonathan), the all-important position of Petroleum Minister that oversees the lifeblood of the economy, was retained by Tinubu. Instead, he has created two new junior ministerial position: those of Minister of State Gas Resources (Ekperipe Ekpo) and Minister of State Petroleum Resources under Heineken Lokpobiri.
Among the old guard of politicians rewarded with appointments are Atiku Bagudu, the former governor of Kebbi state in the country’s northwest, who got the portfolio of Budget and Economic Planning. In a different world as an investment banker in the 1990s he famously helped then military ruler Sani Abacha move billions of dollars taken from state coffers to safe havens around the world.
Also rewarded with an important post, one that puts him in charge of the federal capital, Abuja, is Nyesom Wike, who as as a governor from the rival opposition party stuck out his neck in support of Tinubu. Opposition parties allege that Wike manipulated the vote in Rivers state, where he was the governor, to ensure Tinubu’s victory.
Regional war looms as Ecowas decides Niger D-Day
Military commanders from member countries of the Economic Community of West African State (Ecowas) have decided on a day of action for military intervention in Niger Republic to restore the elected President Mohammed Bazoum, who was ousted by soldiers on July 26.
“We’re ready to go anytime the order is given,” Abdel-Fatau Musah, the Ecowas commissioner for political affairs told reporters at the end of the meeting in Ghana’s capital, Accra on Friday. Ecowas is also keenly exploring the diplomatic option with a delegation sent to meet coup leader General Abdourahmane Tchiani over the weekend.
Tchiani on his part articulated his own plans in a national broadcast, indicating he intended to run a three-year administration that will organize elections and hand over to a new government. It’s a plan unlikely to be welcomed by Ecowas members supporting the ousted president and France, pushing the region closer the a military conflict.
Russian President Vladimir Putin warned about the consequences of external intervention in Niger, where the Russian-backed mercenary group, Wagner, are reported to have stationed troops in support of the new government. Mali and Burkina Faso, neighbouring countries also under coup leaders, are reported to have sent weapons and troops into Niger to support Tchiani.
Economic Indicators
- Angola’s inflation rate fell to 12.1%, Ethiopia’s decreased to 28.8%, while Ghana’s quickened to 32.7%.
- Namibia’s central bank held its benchmark interest rate at 7.75%; Rwanda’s central bank increased its own rate to 7.5%.
Ahead
- Aug. 23: Zambia to announce interest-rate decision; South Africa to release July inflation data
- Aug. 24: Botswana central bank to announce interest-rate; Zambia to release inflation data
- Aug. 25: Nigeria to release second-quarter GDP data
Insights Newsletter is published by Afrika Insights, an Ontario, Canada-based business advisory and publishing firm. Email: afrikainsights@afrikainsights.ca