Jump to navigation

confidentially speaking

The Africa Confidential Blog

  • 3rd June 2019

AFRICAN ECONOMIES: Continent-wide Free Trade pact starts but faces key tests on the ground as multiple non-tariff barriers remain

Patrick Smith

This week we start with some better news about the continental trade treaty. And then to Khartoum for reports of a massacre at the protestors' sit-in and to Kinshasa for a funeral of one of the continent's most determined opposition campaigners. And finally, to Nairobi where the Kenyatta government piles on more debt and to Lusaka where the debt-ridden government is trying to extract bigger royalties from the mining companies.

AFRICAN ECONOMIES: Continent-wide Free Trade pact starts but faces key tests on the ground as multiple non-tariff barriers remain
At last the African Continental Free Trade Area (AfCFTA) comes into force on Thursday (6 June) but there are plenty of obstacles in the way of an upsurge in commerce across the region.

Getting the agreement to ratification is a victory, although Nigeria– Africa's largest economy – is still not a signatory to the pact. Nigeria's Trade Minister Okechukwu Enelamah has said his country will sign, but President Muhammadu Buharihas yet to set a date.

Intra-African trade still amounts to only about 18% of the total trade conducted by African countries. By comparison, in the European Union – on which the African Union is modelled – internal trade between the 28 member states is 70%.

Under the existing regional economic communities governments have frequently ignored provisions on tariff-free trade to protect critical industries. These trade blocs have failed to eliminate most customs costs, let alone the 'behind the border' costs that are the main barriers to modern trade. The European Commission is helping to finance the AU's technical teams who will draw up the regulations and implementing measures. They say that AfCFTA will take at least a decade before it becomes a reality that can drive a trade boom across the region.

SUDAN: Rapid Support Forces militia massacre civilians and break up protests in Khartoum while army fails to act
Over a hundred fighters from the state-backed Rapid Support Forces (RSF) militia stormed the sit-in outside the military headquarters in Khartoum at around 04.00 this morning (3 June), firing live ammunition and tear gas and beating men, women and children with rifles and sticks. Within an hour, hundreds more heavily-armed fighters arrived on the RSF's distinctive dark green pick-up trucks.

The attack could block further negotiations over a transitional government between civilians and the military. It may also have been an attempt to pre-empt a rally of a million people at the main protest site to celebrate Eid (end of Ramadan) this week.

At least nine people were killed in the first round of attacks. Protestors told Africa Confidential that the fighters were telling them: 'You are calling us the Janjaweed. Yes, we are the Janjaweed.' This is a reference to the RSF's origins as a militia hired by the government in Darfur to suppress opposition there 15 years ago.

Last week, RSF leader General Mohamed Hamdan Dagalo 'Hemeti', seen as the most powerful man in the junta, had warned that his forces would have to 'restore order' around the protest site. A senior army officer, General Bahar Ahmed al Bahar, said the protest site had 'become unsafe' and threatened national security. While the army played no role in today's attacks it did nothing to protect the protestors either.

In response, the Sudan Professionals' Association, which has coordinated national protests since last December, has called for a general strike. Protestors are regrouping in the city of Omdurman across the Nile, where many opposition parties have their headquarters.

Kenya: World Bank loan
Despite growing disquiet about his government's appetite for new debt, Uhuru Kenyatta's government has borrowed another $750 million, this time from the World Bank. The loan, which follows last month's $2.1 billion Eurobond issue, was requested by Treasury Secretary Henry Rotich in March.

Rotich has conceded that the funds, from the Bank's new Development Policy Financing scheme, will constitute 'budget support' for Uhuru's 'Big Four' agenda of affordable housing, food security, healthcare and manufacturing. It will also be used to pay for the government's new national ID card scheme Huduma Namba, which is coming under growing commercial and political criticism.

While the country's increasing debt burden is causing consternation among domestic analysts and activists, there is little sign yet that financial markets are perturbed by the level of Kenya's debt service. Lending to the Kenyatta government remains good business for them.

Congo-Kinshasa: President Tshisekedi turns his father's funeral to his diplomatic advantage
Two years after his death in Brussels, the body of veteran opposition leader Etienne Tshisekedi finally came home to a state funeral attended by Rwandan and Angolan Presidents Paul Kagame and João Lourenço. It was an opportunity for President Félix Tshisekedi to boost his standing with the opposition movement that his father had pioneered.

The funeral, attended by tens of thousands at the Martyrs' stadium in Kinshasa, was a victory for President Tshisekedi, whose predecessor Joseph Kabila had long resisted the return of the body to Congo-K.

The presence of Kagame was significant, following years of conflict between Kigali and Kinshasa. Facing worsening disputes with Burundi, Tanzania and Uganda, Kagame seized the opportunity to take to the regional stage. In his lifetime, Etienne Tshisekedi had been one of the fiercest critics of Rwanda's interventions in Congo.

Zambia: Vedanta pushes back against government take-over attempt
The row between President Edgar Lungu's government and mining conglomerate Vedanta is escalating, with the company taking the government to international arbitration, in the wake of Vedanta executives being locked out of the Konkola Copper Mines facility. Zambia has already appointed a provisional liquidator. Lungu's attempt at resource nationalism may be bearing fruit. Vedanta's Chairman Anil Agarwal has said that his firm was seeking to comply with Zambia's new, higher tax regime. Many see Lungu's move as a tactic to extract more revenue from mining firms.

Vedanta says the government has given assurances that it has not entered into any agreements to sell KCM to other investors.

THE WEEK AHEAD IN BRIEF

NIGERIA: Securities & Exchange Commission sends interim management to Oando after suspending its directors

TUNISIA: Prime Minister Chahed to lead secular Tahya Tounes party ahead of presidential and parliamentary elections

ALGERIA: Protestors call for exit of President Bensalah after regime cancels elections due on 4 July

SENEGAL: BP under fire for payments in oil deal to Frank Timis and politicians in Dakar