This week in Africa 52023: African leaders’ initiative to end the Russia-Ukraine war; IMF $3 billion loan for Ghana; Kenya-Somalia agreement to reopen their land border; Egypt’s central bank’s decision to maintain interest rates, and others
We begin with the news of a report from the South African President, Cyril Ramaphosa, on the war in Ukraine. Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy have agreed to hold separate meetings with a delegation of leaders from six African countries to discuss a potential plan to end the war in Ukraine. South African President Ramaphosa confirmed the initiative, stating that the discussion is aimed at resolving the conflict peacefully. The delegation will consist of leaders from Zambia, Senegal, the Republic of Congo, Uganda, Egypt, and South Africa. The involvement of South Africa, the leading country in the delegation, has drawn scrutiny, as the US ambassador recently accused South Africa of siding with Russia in the war and providing weapons to Moscow. South Africa denies these allegations and maintains its neutral stance.
Shifting the spotlight to Ghana, where on Wednesday, May 17, the International Monetary Fund (IMF) approved a $3 billion loan for Ghana, providing a potential solution to the country’s severe economic crisis. The programme includes an immediate disbursement of around $600 million and aims to address Ghana’s policy and financing challenges. The IMF emphasised the importance of reaching debt restructuring agreements with external creditors to implement the loan effectively. The approval of the loan is expected to attract additional external financing from development partners and contribute to Ghana’s debt restructuring efforts. IMF Managing Director Kristalina Georgieva congratulated Ghana on its reform programme and expressed optimism about the commitment of bilateral creditors to support debt sustainability, which is seen as progress for the G20 common framework for debt relief in developing countries.
In a report from Kenya this week, the number of bodies exhumed from mass graves in Shakahola, Kilifi County, has increased to 235 as the investigation into cult leader Paul Mackenzie and his Good News International Church progresses. Forensics teams have been conducting the search for the remains of Mackenzie’s followers, who were persuaded to starve themselves to death to meet Jesus. Postmortems on the 123 bodies exhumed in the second phase of the operation will begin next Wednesday at the Malindi Sub-County hospital, with forensic teams taking a break starting Friday. The search and rescue efforts are ongoing, and police have rescued four individuals, while 89 people have been rescued. The number of arrests stands at 31, and there are still 613 people reported missing. The area remains a crime scene, and a 24-hour curfew remains in effect as the investigation continues.
It was all jubilation in Somalia on Monday when Kenya announced its consideration of opening a fourth border crossing in Wajir County to facilitate entry into neighbouring Somalia, according to Interior Cabinet Secretary Kithure Kindiki. The announcement follows high-level ministerial consultations between Kenyan and Somali officials. The proposed Wajir border would supplement the three existing border points between the two countries, which are set to be reopened within the next 90 days. The closures were implemented in 2011 due to increased attacks by the Al-Shabaab terrorist group. The decision to open the additional border crossing aims to strengthen cross-border cooperation and bilateral ties between Kenya and Somalia. The first border point to be opened will be Mandera-Bula Hawa after 30 days, followed by Liboi-Harhar-Dhobley on the Somalia side and Kiunga-Ras Kamboni border point in Lamu within the next ninety days. The move is part of ongoing efforts to improve regional connectivity and security cooperation.
In the Democratic Republic of the Congo (DRC), on Tuesday, May 16, the World Bank suspended over $1 billion in funding for humanitarian and development projects in the DRC after the government dissolved the project fund without warning. The suspension will impact more than 600,000 beneficiaries, including victims of sexual violence. The World Bank has requested documentation on the status of the $91 million already advanced for the projects out of the total amount. President Felix Tshisekedi dissolved the “Social Fund of the Democratic Republic of Congo” and created another public fund, citing changes in the legal framework governing public institutions. The World Bank expressed the need for transitional measures to ensure funds are used as intended. The finance ministry of Congo is awaiting guidance from the presidency before commenting. However, the presidential spokesperson denied any suspension of funding and stated there would be transitional management of the fund. The sudden decision to change the financing structure has raised concerns about poor governance, and four opposition politicians have requested an audit of funds in Congo, suspecting misuse.
Let’s take a closer look at the war in Sudan. The United Nations reported on Wednesday that over half of Sudan’s population needs aid and protection as civilians seek shelter from air strikes and clashes between rival military factions in the Khartoum area. The conflict, now in its second month, has led to power cuts, food shortages, and a scarcity of drinking water. The UN has launched an appeal for $3 billion in aid, stating that 25 million people in Sudan require assistance, the highest number ever recorded. The violence between the Sudanese army and the paramilitary Rapid Support Forces (RSF) continues, with clashes occurring in various locations, including the capital city. The conflict has displaced around 1 million people, with 220,000 seeking refuge in neighbouring states. Efforts to secure a ceasefire through international mediation have not yet succeeded, although a statement of principles on protecting civilians and allowing aid supplies was agreed upon. The situation in Sudan is expected to be discussed at an upcoming Arab Summit hosted by Saudi Arabia.
Stepping into another headline. Egypt’s central bank decided on May 18 to maintain its overnight interest rates, citing a slowdown in growth during the fourth quarter and a decline in international commodity prices. The lending rate will remain at 19.25% and the deposit rate at 18.25%, according to the Monetary Policy Committee (MPC). Despite inflation reaching 32.7% in March and then decreasing to 30.6% in April, analysts had predicted that the rates would remain unchanged. The MPC noted that inflation had decelerated due to improvements in the domestic supply chain, commodity prices, and the exchange rate. The central bank has raised rates by 1,000 basis points and allowed the currency to depreciate by 50% since Russia invaded Ukraine last year. In its efforts to curb inflation, the bank increased rates by 200 basis points during its previous meeting in March.
In a separate development, on Thursday, May 18, Uganda announced that construction of its long-delayed $2.2 billion Standard Gauge Railway (SGR) project would finally begin this year. The country’s Ministry of Works and Transport revealed that it is in the advanced stages of engaging the Turkish firm Yapi Merkezi to develop the SGR eastern route. This comes after Uganda terminated its agreement with Chinese firm China Harbour and Engineering Company Ltd. (CHEC), which was initially responsible for securing funding from the Chinese government. Uganda is now exploring alternative financing options in Europe. The planned SGR will span 273 kilometres (170 miles) from Kampala, Uganda’s capital, to Kenya’s border. It is expected to connect with Kenya’s own Standard Gauge Railway line, which leads to the Indian Ocean port of Mombasa. The railway project is a crucial development for Uganda’s landlocked economy, as it aims to improve the speed and reduce the cost of transporting key exports like coffee and tobacco.
In Tanzania, there is a development in regards to the traders in Kariakoo market, the busiest market in the country, who closed over a thousand stores since Monday in a protest against a new tax policy. Prime Minister Kassim Majaliwa addressed the traders in a public meeting, announced a moratorium on tax collection, and formed a committee comprising government members and traders to address the issue. The Prime Minister assured the traders that their grievances would be heard and urged them to reopen their stores. The market closure is unprecedented in Tanzania, and the government aims to resolve the dispute and ensure security for people and their property. The country has been under the leadership of President Samia Suluhu Hassan since 2021, who has taken a different approach compared to her predecessor. The rise in food and transport prices has affected the purchasing power of the Tanzanian population, despite relatively contained inflation.
Finally, in our news brief this week, we have the news from Zimbabwe. On Monday, the 15th of May, the African Development Bank (AfDB) announced that it had developed financial tools to facilitate compensation payments of over $3 billion to white farmers who lost their land and assets during the land reform programme in Zimbabwe. AfDB President Akinwumi Adesina made the statement during a press conference in Harare, mentioning using innovative financial instruments and structures to mobilise the funds without exacerbating Zimbabwe’s debt situation. Details regarding the specific mechanisms were not provided. The compensation scheme was agreed upon in 2020 as part of efforts to address the consequences of the land seizures from 2000 onward. These land reforms, implemented under the presidency of Robert Mugabe, resulted in international sanctions and economic challenges for Zimbabwe, including high inflation and debt. The AfDB’s proposal aims to leverage capital markets and calls for collaboration among development partners to support the compensation programme while avoiding additional debt for Zimbabwe.