Hot Issue – The Race for Bases, Ports, and Resources in the Horn of Africa Heats Up

By: Michael Horton

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Executive summary: The battle for access and influence in the Horn of Africa is intensifying as the Gulf States, Turkey, and China race to secure footholds. At the same time, rivalries between Saudi Arabia, the United Arab Emirates (UAE), Qatar, and Turkey are shaping how these countries interact with state and non-state actors in the Horn. The insertion of the Gulf States’, Turkey’s, and Iran’s regional disputes into the politics of the countries that make up the Horn will exacerbate instability in what are already fragile states.

Over the last five years, the battle between outside powers for influence in—and access to—the Horn of Africa has intensified. The Gulf States, Turkey, and China, in particular, are all competing for footholds in what is one of the world’s most strategic regions. After years of relatively little interest in the countries that make up the Horn of Africa, outside powers are investing billions of dollars in the region.

The race for bases and ports in the Horn of Africa is well underway. Somalia hosts Turkey’s largest overseas military base and Turkish companies run Mogadishu’s port and airport. Turkey’s ally and benefactor, Qatar, is also working to establish itself in southern Somalia. Further north in the independent but unrecognized Republic of Somaliland and in the autonomous region of Puntland, United Arab Emirates (UAE)-based companies operate the ports of Berbera and Bosaso. The UAE has also built a naval and air base at Assab in Eritrea. Djibouti, wedged between Somaliland and Eritrea, hosts bases for the United States, Japan, France, Italy, and China. Saudi Arabia has an agreement with Djibouti to build its first overseas base in the country, but construction of the base has not begun.

How should Africans respond to the investment, technology, security, and trade wars?

Peter Draper

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The tectonic plates of the global political economy are shifting, and with an accelerating pace: “Trade wars”; “Brexit”; “fake news” and election manipulation; “populism”; the appointment of a “geopolitical commission” in Brussels; unprecedented protests in Hong Kong; South China sea military confrontations; an increasingly assertive Chinese Communist Party—the list goes on. Facing these dramatic changes, smaller, relatively fragile, states, particularly those in Africa, need to build new reference points to anchor their future development or risk being swallowed in the emerging crevasses.

Rather than focus on current events Africans need to discern their underlying drivers and how they frame opportunities, as well as responses.

The modern world economy is now characterized by a rapidly shifting technological frontier within which several previously distinct realms are now converging. Sub-Saharan Africa could benefit from the increasingly interconnected global economy. At the same time, the United States’ tough response to China’s growing economic heft, as well as increased worldwide backlash to globalization, is incentivizing some economies to look inward. Trade policy and strategy is back in focus with a vengeance, and increasingly contested.

How should Africans respond to the investment, technology, security, and trade wars?

Peter Draper

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The tectonic plates of the global political economy are shifting, and with an accelerating pace: “Trade wars”; “Brexit”; “fake news” and election manipulation; “populism”; the appointment of a “geopolitical commission” in Brussels; unprecedented protests in Hong Kong; South China sea military confrontations; an increasingly assertive Chinese Communist Party—the list goes on. Facing these dramatic changes, smaller, relatively fragile, states, particularly those in Africa, need to build new reference points to anchor their future development or risk being swallowed in the emerging crevasses.

Rather than focus on current events Africans need to discern their underlying drivers and how they frame opportunities, as well as responses.

Executive Director, Institute for International Trade - The University of Adelaide

The modern world economy is now characterized by a rapidly shifting technological frontier within which several previously distinct realms are now converging. Sub-Saharan Africa could benefit from the increasingly interconnected global economy. At the same time, the United States’ tough response to China’s growing economic heft, as well as increased worldwide backlash to globalization, is incentivizing some economies to look inward. Trade policy and strategy is back in focus with a vengeance, and increasingly contested.

How might an Africa caught in the middle of these opposing forces navigate this new global trade environment while maintaining its growth momentum of the last two decades?

Trade integration is creating opportunities for growth

Intra-Gulf Competition in Africa’s Horn: Lessening the Impact

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What’s new? Middle Eastern states are accelerating their competition for allies, influence and physical presence in the Red Sea corridor, including in the Horn of Africa. Rival Gulf powers in particular are jockeying to set the terms of a new regional power balance and benefit from future economic growth.

Why did it happen? Regional instability, a relative power vacuum and competition among rising Middle East states have prompted Gulf countries to seek to project their power outward into the neighbourhood. They are looking at the Horn of Africa to consolidate alliances and influence.

Why does it matter? Many new Gulf-Horn relationships are highly asymmetrical, driven more by Gulf than African interests. Gulf states are injecting resources and exporting rivalries in ways that could further destabilise fragile local politics. Yet they also carry the potential to resolve conflict and fuel economic growth.

Chinese Investments in Africa: Four Anti-corruption Trends to Watch

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U.S. enforcement authorities are increasingly targeting corrupt practices among Chinese companies in Africa. Four trends are worth watching, writes Chinwe Esimai in this opinion piece. Esimai is managing director and chief anti-bribery officer at Citigroup, where she oversees the firm’s global anti-bribery program. This article reflects her personal opinions.

Last March, Patrick Ho, former secretary for home affairs in Hong Kong and a Chinese national, was convicted on international bribery and money-laundering charges. He was fined $400,000 and sentenced to three years in prison in New York in connection with activities on behalf of a Chinese company, the China Energy Company, which was doing business in Africa. According to the U.S. Department of Justice (DOJ), Ho bribed and schemed to bribe government officials from Uganda and Chad respectively, in order to secure unfair business advantages for China Energy.

Ethiopia: East Africa’s Emerging Giant

by Claire Felter
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Introduction

Ethiopia, Africa’s second-most-populous country, has suffered military rule, civil war, and catastrophic famine over the past half century. Yet in recent years it has emerged as a beacon of stability in the Horn of Africa, enjoying rapid economic growth and increasing strategic importance in the region. However, starting in 2015, a surge in political turmoil rooted in an increasingly repressive ruling party and disenfranchisement of various ethnic groups threatened the country’s progress.

Since taking office in April 2018, Prime Minister Abiy Ahmed has responded with promises of dramatic political and economic reforms and has shepherded a historic peace deal with neighboring Eritrea. The new leader’s aggressive approach to change has been met with exuberance among many Ethiopians, but experts warn that Abiy’s challenge to a decades-old political order faces major obstacles, and it is yet unclear whether he can follow through on his agenda.

U.S. Tariff Wars Penalize Chinese Development And African Futures

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Dan Steinbock

In the coming months, some of the worst collateral damage of US tariff wars will occur in sub-Saharan Africa. The adverse impact is likely to be aggravated by US protectionism, which shuns economic integration in Africa.

South Africa’s Xenophobic Turn Against Other Africans Is a National Failure

Howard W. French 

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When I landed in Johannesburg early last week, the newspapers that greeted me all carried alarming, front-page spreads about a fresh spree of violence against foreigners in South Africa’s biggest cities. There were shocking photos of foreign-owned shops that had been looted, and accounts of how non-South Africans were accosted and beaten. To capture it all, the bold headline of one tabloid simply screamed, “Anarchy.”

News like this, of course, can never be welcome, but the timing of this wave of xenophobic violence seemed particularly awful for a country that is badly struggling both economically and politically. This was all happening just as two major global gatherings were kicking off in South Africa: the World Economic Forum and an inaugural festival of ideas called Africa in the World. ...

28th WEF on Africa to Focus on Inclusive Growth in the Fourth Industrial Revolution

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Sub-Saharan Africa’s future prosperity hinges on the ability of its leaders to create inclusive, sustainable growth at a time of rapid transformation in the Fourth Industrial Revolution. This will be the main message coming from the 28th World Economic Forum on Africa in Cape Town, South Africa 4-6 September.

The meeting will bring together 1,100 leaders from government, business and civil society, including ten heads of state or government. Top of the agenda will be new partnerships to create sustainable employment opportunities for Africa’s large and growing workforce.

The meeting will highlight: improving the funding and regulatory environments for start-ups; developing new partnerships for re-skilling and upskilling workers; identifying opportunities for green growth such as the circular economy; scaling-up e-commerce for rapid business growth, especially in the SME sector; and how to leverage the new Africa Continental Free Trade Agreement to drive regional integration.

One Year On, South Sudan’s Stalled Peace Deal Is Proving Its Skeptics Right

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Julian Hattem

Last September, South Sudan’s president, Salva Kiir, signed a power-sharing deal with rebel leader Riek Machar, promising to bring an end to the five-year civil war that has crippled the world’s newest country, which declared its independence from Sudan in 2011. It wasn’t the first time. A similar agreement signed in 2015 broke down the following year, leading to fighting that prompted Machar to flee the country. 

Observers predicted the new agreement would share the fate of its predecessor. What was billed as a “revitalized” peace plan was still silent on many of the underlying drivers of violence and seemed in many ways to be a stale retread of a deal that had already failed to deliver on its promise.

One year later, the pessimists are mostly being proven right. A cease-fire has largely held, but it is a fragile peace. Key provisions of the agreement about demobilizing fighters and redrawing internal political lines remain unfulfilled. There are mounting fears that the deal’s eventual breakdown could lead to a return to large-scale violence in South Sudan. For now, the best prospect for the future involves a frustrating period of uncertainty defined merely by the absence of war, with only dim hopes for creating true political inclusion. 

Africa must use tech to chase corruption out of the shadows

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Large-scale corruption is the elephant in the room in the ongoing conversation about Africa’s growth story. If countries on the African continent want to successfully attract the investment required for inclusive growth, governments and private sector players must take urgent action to tackle corruption. This is not to say that graft is not a serious problem elsewhere in the world, but lessons from the fastest-growing economies in the world show that the fight against corruption must be prioritized if investors are to have confidence that their money will be safe in a particular country.

Too much talk and too little action on corruption is one of the biggest barriers to investment on the African continent. Despite commitments from African leaders in declaring 2018 as the African Year of Anti-Corruption, this year’s Corruption Perceptions Index (CPI) published by Transparency International presents a largely gloomy picture. Only eight of the 49 participating countries scored more than 43 out of 100 on the index. In short, corrupt activities continue to stifle economic growth and good governance across the continent.

While advanced digital technology is now available to forensic investigators to help them uncover and prosecute corruption across Africa, the fight is being hampered by a lack of supporting legal frameworks, a lack of law-enforcement capacity and skills and, in some cases, increasing administrative hurdles imposed by data-protection laws. However, there are a number of ways African governments can use forensic technology to root out fraudulent activity, improve governance and bring those guilty of corruption to book.

What’s Next for Vietnam-South Africa Military Ties?

By Prashanth Parameswaran

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Last week, South Africa’s defense minister embarked on a scheduled trip to Vietnam. The visit spotlighted the ongoing efforts by both sides to continue to develop the security aspect of their relationship amid ongoing changes at home and abroad.

As part of their wider bilateral ties, Vietnam and South Africa share a defense relationship that was institutionalized during the inking of a memorandum of understanding back in 2006. The two sides have continued to work to develop this aspect of their relationship in various areas, including visits, exchanges, and dialogue mechanisms like the Vietnam-South Africa Defense Dialogue.

Last week, their defense ties were in the spotlight again with the visit of South Africa’s defense minister to Vietnam. Nosiviwe Noluthando Mapisa-Nqakula led a high-ranking defense delegation for an official visit to Vietnam that lasted from August 22 to August 26, which was billed by both sides as a way to boost momentum for the development of their defense relationship.

It’s Time the Pentagon Finds an Alternative to Djibouti

by Michael Rubin

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BERBERA, SOMALILAND—Djibouti’s role in U.S. national security has for decades been inversely proportional to its size. The tiny East African country has long been a logistical hub for the U.S. military. Its airfield helped supply U.S. forces in Somalia in the early 1990s, and U.S. Navy vessels visited its port frequently. Because Djibouti—a French colony or territory for nearly a century before its 1977 independence—hosted French forces, the U.S. military could utilize the French infrastructure when necessary.

The real import of Djibouti to U.S. security calculations, however, came after the September 11, 2001, terrorist attacks, when the George W. Bush administration formed Combined Joint Task Force-Horn of Africa (CJTF-HOA) first to coordinate and conduct regional stability operations and then to oversee counterterrorism operations in both Yemen and across the broader region. The Obama administration’s growing reliance ondrone strikes—many of which it launched from Djibouti—only increased the country’s importance. Since formally arriving, the Pentagon has invested several billion dollars in Camp Lemonnier, today the largest U.S. military base in Africa and the keystone of U.S. Africa Command operations, hosting four thousand soldiers, sailors, and Marines spread over five hundred acres.

Africa Is a Continent on the Brink ... but of What?

It makes sense that a continent home to 54 countries and 1.2 billion people would also house a mass of contradictory developments. Africa features several of the world’s fastest-growing economies and a burgeoning middle class. But much of the continent remains mired in debt, ravaged by conflict, disease or terrorism, and plagued by elites clinging to power.

Even as economies expand, people are driven to migrate—either within Africa or across continental borders—because of humanitarian catastrophes or because opportunities are not coming fast enough for everyone. Yet, many remain behind and look to disrupt the status quo. Civilian-led reform movements have toppled regimes in Algeria and Sudan already this year.

From a geopolitical perspective, European nations and the United States are looking to shore up bilateral trade across the continent. These moves are driven both by an interest in spurring individual economies to help stem migration flows, but also to counter China’s growing presence in Africa. On the back of its Belt and Road Initiative, China has been leveraging infrastructure financing deals for access to resources and increasing influence.

In Africa, China Is the News

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By Aubrey Hruby

Beijing’s infrastructure projects may grab headlines, but its efforts to shape the media are more dangerous.

Washington has long been concerned about China’s “no strings attached” infrastructure deals in African markets. These large port, rail, and road projects grab headlines and stoke fears about African government debt levels and Chinese political influence. But the real strategic threat for the United States is not bricks-and-mortar projects but rather China’s efforts to reshape African countries’ media landscape.

In just over a decade, China has dramatically expanded its media presence in Africa, urging not just African publics to “tell China’s story well” but also influencing the continent’s underlying telecommunications, data, and information standards. Given that the United States has historically held a competitive advantage in communications and media, it should pay attention.

Africa Is a Continent on the Brink ... but of What?

It makes sense that a continent home to 54 countries and 1.2 billion people would also house a mass of contradictory developments. Africa features several of the world’s fastest-growing economies and a burgeoning middle class. But much of the continent remains mired in debt, ravaged by conflict, disease or terrorism, and plagued by elites clinging to power.

Even as economies expand, people are driven to migrate—either within Africa or across continental borders—because of humanitarian catastrophes or because opportunities are not coming fast enough for everyone. Yet, many remain behind and look to disrupt the status quo. Civilian-led reform movements have toppled regimes in Algeria and Sudan already this year.

From a geopolitical perspective, European nations and the United States are looking to shore up bilateral trade across the continent. These moves are driven both by an interest in spurring individual economies to help stem migration flows, but also to counter China’s growing presence in Africa. On the back of its Belt and Road Initiative, China has been leveraging infrastructure financing deals for access to resources and increasing influence.

From the Gulf to Egypt, Foreign Powers Are Playing With Fire in Sudan

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Richard Downie

A cast of foreign actors is seeking to shape Sudan’s incomplete political transition after the fall of longtime President Omar al-Bashir, each nudging it in the direction they favor. Their competing agendas are complicating negotiations between the ruling Transitional Military Council and civilians in the pro-democracy movement represented by the Forces for Freedom and Change. The two sides reached a major agreement on July 5 to jointly manage a three-year transition to civilian rule, and there was a recent breakthrough on Aug. 4, as they finalized that July deal and thrashed out its details. Yet the transition remains fragile and vulnerable to spoilers.

The involvement of so many outside powers in Sudan’s affairs underlines the country’s strategic importance, not only to its African neighbors but to the broader Red Sea region and the Persian Gulf. The danger for Sudan is that it could get sucked into geopolitical rivalries that do not serve its national interests, dashing the hopes of its citizens for a peaceful, democratic future. ...

Why President Essebsi, and Tunisia, Stood Alone

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By Allen James Fromherz

Last Thursday, Beji Caid Essebsi, the president of the Republic of Tunisia, died in a military hospital at the age of 92. His death fell on a national holiday of particular resonance: Republic Day commemorates the founding of modern Tunisia on July 25, 1957, when the country abolished its monarchy and became a republic.

Essebsi had an important connection to the events of 1957. He belonged to the party and government of the Republic of Tunisia’s first president, Habib Bourguiba, who was among the most important, and most stridently secular, nationalists in the Arabic-speaking world. Bourguiba was friends with U.S. President John F. Kennedy and Jackie Kennedy. He made headlines for drinking orange juice on television in the middle of the day during Ramadan, as well as for policies against veiling. Less famous, but more profound, were the changes Bourguiba made to Tunisia’s economy and social fabric—reforms that propelled Tunisia to become one of the most developed and educated countries in the Muslim world.

Corruption Is Corroding Democracies Around the World

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The world is constantly reminded that corruption knows no geographic boundaries. In South Africa, former President Jacob Zuma is embroiled in an inquiry into whether he ran a patronage system that drained money from the country’s treasury. A money laundering investigation launched in Brazil in 2008 expanded to take down a vast network of politicians and business leaders across Central and South America. And U.S. President Donald Trump’s administration has been plagued by officials who have used their offices for private gain and been forced to resign.

The impact of actual corruption is devastating, whether it siphons money from public use or drives policy that is not in the public interest. The effects can be particularly pernicious in developing countries, where budgets are tight and needs are vast. The United Nations estimates that corruption costs $2.6 trillion in losses every year.

AI across Africa and the Middle East: The Microsoft view

Lewis Page

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According to a new study of AI in business across Africa and the Middle East, commissioned by Microsoft and carried out by EY, AI is an important topic of discussion in 80 per cent of C-suites across the region: but the majority of companies in the study hadn't yet gone further than piloting its use. Twenty-four of the companies surveyed were based in South Africa, and of the respondents 39 per cent worked at C-suite level and a further 52 per cent in senior management.

The relatively low uptake of AI by business across the region may be due to the fact that organisations, excusably given media coverage of the subject, tend to focus on the headlining application of AI: Machine Learning. This was defined for the purposes of the study as "A computer's ability to ‘learn' from data, either supervised or non-supervised". Some 61 per cent of companies in the study stated that they were using or planning to use Machine Learning, a much higher proportion than was the case with any other sort of AI deployment. The study authors added: