Washington Wakes Up to East Africa's Importance

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Peace between Eritrea and Ethiopia will be a boon for regional stability, providing foreign powers with ample opportunity to increase their economic influence.

Fears of growing Chinese and Russian influence may be driving recent moves by the United States, which suddenly reversed its opposition to the removal of U.N. sanctions against Eritrea.

As part of a shift in focus to counter Beijing and Moscow, Washington will remove some of its Africa-based personnel, yet it will continue to focus on Djibouti and Somalia, especially because of Islamist militancy in the latter.

Editor's Note: This assessment is part of a series of analyses supporting Stratfor's upcoming 2019 Annual Forecast. These assessments are designed to provide more context and in-depth analysis on key developments in the coming year.

Somalia's Thorny Problems on the Horn of Africa

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Renewed relations between Ethiopia and Eritrea will boost stability in the Horn of Africa and create opportunities for greater political and economic integration in the region.

Somalia's deep internal problems will severely limit the country's ability to take charge of security within its borders.

Somalia's enduring challenges mean that the African Union Mission in Somalia (AMISOM) will remain a key force in the country for years to come in some form.

Editor's Note: This assessment is part of a series of analyses supporting Stratfor's upcoming 2019 Annual Forecast. These assessments are designed to provide more context and in-depth analysis on key developments in the coming year.

The African Threat

DAMBISA MOYO

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Although international engagement with Africa has evolved over time, it has never succeeded in putting the region on a path toward long-term and sustainable growth and development. Today, continued failure could expose the world to a new age of pandemics, terror, and mass migration.

NEW YORK – If the world never had to hear about Africa again, would anyone care? Setting aside Africa’s cultural contributions, I suspect that for many people the honest answer is “no.”

Ten years ago, in my book Dead Aid, I highlighted how a narrative backed by international aid policy cemented Africa’s status as the world’s problem child, rather than one destined for greatness.

The Gulf Scramble for Africa: GCC states’ foreign policy laboratory

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The Issue 

Arab Gulf states are intervening more assertively in sub-Saharan Africa to capitalize on economic opportunities and protect their security interests. 

They view Africa as a relatively uncontested arena in which they can experiment with foreign interventions as part of their strategy to prove their rising status on the world stage. 

The impact of Gulf states’ rivalries in Africa is becoming increasingly damaging, as their zero-sum rivalry has provoked retaliations, which have dangerously destabilized vulnerable parts of Africa, such as during the fallout to the GCC crisis. 

When the border dispute between Eritrea and Ethiopia descended into bloody conflict in 1998, few could have predicted where a peace agreement would be signed some 20 years later. On September 16, 2018, the Eritrean and Ethiopian leaders at at desks facing one another in the middle of a lavish hall in the Peace Palace in Jeddah. A huge portrait of Abdulaziz, Saudi Arabia’s first king, loomed over them. King Salman bin Abdulaziz sat underneath, with Crown Prince Muhammad bin Salman and the secretary general of the United Nations Antonio Guterres on either side. The optics were clear: It was under Saudi sponsorship that decades of conflict ended. The deal would be known as the “Jeddah Peace Agreement.”1 

What Will the US-China Trade War Mean for Africa?

By Bonnie Girard

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The arguments on all sides of the ongoing trade confrontation between the United States and China are by now well known. American, European, and Asian pundits and prognosticators have all weighed in, and predictions abound of the ultimate outcome of the Trump administration’s gambit to restructure the U.S.-China trade relationship.

But what of those countries that might be considered “innocent bystanders,” who may be either beneficiaries or victims in a trade war over which they have little control, and no direct involvement?

Many of those “bystander” countries are in Africa, a continent that is seeing an explosion of interest and investment from China, while at the same time, according to the Brookings Institution, the United States remains Africa’s largest investor. What are the concerns, and views from African experts?

African Governments Are Paying for the World Bank’s Mauritius Miracle

BY MATT KENNARD, CLAIRE PROVOST

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PORT LOUIS, Mauritius—The security guard at Malawi Mangoes’ registered address at an office at the St Louis Business Centre in downtown Port Louis is not sure if we’re in the right place. The staff at the front desk are bewildered by our request to speak to someone from the company. The otherwise modest office block has flat-screen televisions on the walls and glossy magazines with titles like Savile Row and Family Business on a table in a small waiting area. After about 20 minutes, a woman in a suit appears, bearing apologies—she had been out to lunch. At first, she seems to mistake us for investors in Malawi Mangoes. We jump in to clarify: We’re journalists looking to talk to someone from the company, which in 2014 received a $5 million loan from the private investment arm of the World Bank, the International Finance Corporation (IFC). Our interlocutor appears confused, as if she knows little about the business, or why we might be attempting to learn more about it in Port Louis, Mauritius.

The Truth About the U.S. Military in Africa

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The role of the U.S. military in Africa isn’t clear to anyone. And that will only hurt American interests. The U.S. military has been expanding its presence and operations in Africa over the past decade. In doing so, it has obscured the nature of its actions through ambiguous language and outright secrecy. It limits the amount of information available about the objectives of its operations, how those operations are carried out, the facilities it uses, and how it partners with governments in the region. At times, this has involved subverting democratic processes in partner countries, an approach that runs counter to years of diplomatic engagement ostensibly designed to strengthen governance institutions. 

The Future Is in Africa, and China Knows It

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Noah Smith

Some Western observers worry that this represents a new form of colonialism. Given the continent’s history with European conquerors and rich countries trying to cheaply exploit its natural resources, that suspicion is understandable. But although China can sometimes be predatory — for example, when uneconomical projects saddle African companies or governments with unpayable debt — the new African investment bears little resemblance to the colonialism of old.

Colonialism, and the pseudo-colonial exploitation that sometimes followed independence, was mostly about extracting natural resources (and sometimes slave labor). Although securing access to natural resources is surely one of China’s goals, its investments in Africa go beyond extractive industries. The sectors receiving the most Chinese money have been business services, wholesale and retail, import and export, construction, transportation, storage and postal services, with mineral products coming in fifth. In Ethiopia, China is pouring money into garment manufacturing — the traditional first step on the road to industrialization.

Ending the Curse in the DRC: A Game of Thrones, Mines and Militias

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Erik Grossman

The Democratic Republic of Congo (DRC) has been in a continuous state of violence since its independence in 1960. For most, the problems of the DRC are multifaceted. These problems include weak democratic traditions and political representation, poor infrastructure, low standards of living, rampant corrupt, and the famed resource curse. Further, few explanations have been as pervasive as the argument that historical tribal enmities are the true scourge in the Congo. Ethnicity and identity however, are often exploited by warlords to increase recruitment and feign legitimacy, rather than a driving factor. This has been rightly referred to by Wendy Isaacs-Martin, an African scholar and professor with the University of South Africa, as "opportunistic associations of convenience”.

Africa's Reform Conundrum and Zimbabwe's Tragedy

By George B.N. Ayittey

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Despite immense mineral wealth, Africa’s economic success stories are few. Outside Botswana, Ghana, Mauritius, and Rwanda, economies on the continent have been held back by decades of state interventionism, corruption, petulant government spending, and irresponsible borrowing. National debts have reached unsustainable levels. In 2017, Mozambique defaulted on its euro bond payment, and default risk has been rising on Zambian debt since May. Only a strong regimen of reform can unshackle African economies from the suffocating grip of statism and free them to follow the path to prosperity. Reforms started out haltingly in the early 1990s but subsequently sputtered. In 1994, after spending $25 billion to sponsor Structural Adjustment Programs for economic reform in 29 African countries, the World Bank declared only six as economic success stories – Gambia, Burkina Faso, Ghana, Nigeria, Tanzania, and Zimbabwe. Countries soon disappeared from this phantom list, only to be replaced by others, some of whose successes were equally evanescent – Cameroon, Egypt, Uganda, among others.

Land redistribution in South Africa, Trump’s tweet, and US-Africa policy

Witney Schneidman and Landry Signé
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United States President Donald Trump’s incendiary August 22 tweet, contending that white farmers are being killed on a “large scale” in South Africa and that farms and other lands are being expropriated, has become part of his well-known toolkit for boosting appeal among his political base while sowing racial discord at home and abroad. Appropriately, South African President Cyril Ramaphosa hit back at Trump within hours of the tweet, in a clear and forceful message in the Financial Times. The essence of Ramaphosa’s statement is that South Africa is a profoundly unequal society and the distribution of land is at the heart of that inequality, along with education, income, jobs, and skills. As president of South Africa, Ramaphosa has pledged to address this inequality resulting from land dispossession during the colonial and Apartheid eras. In light of the attention on South Africa’s land distribution issue, it is important to present the facts.

China has spent billions in Africa, but some critics at home question why

By ROBYN DIXON

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China has promoted its massive global infrastructure plan, the Belt and Road Initiative, with dancing children singing a propaganda pop song, an animated rap and TV bedtime storieswith tinkly background music on how “it helps everyone.” “We’ll share the goodness now, the Belt and Road is how,” the children sing in a 2017 video about President Xi Jinping’s foreign policy cornerstone. But lately the government’s big spending in Africa and elsewhere faces a growing domestic backlash, from leading academics to everyday Chinese on social media websites. “Why is China, a country with over 100 million people who are still living below the poverty line, playing at being the flashy big-spender?” wrote an influential Tsinghua University law professor, Xu Zhangrun, in a wide-ranging critique of Xi in July. “How can such wanton generosity be allowed?”

All of Africa is now competing for Chinese money. Except for one country.

By Rick Noack

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As more than 40 African heads of state arrived at the China-Africa Cooperation summit Monday, one figure stood out: $60 billion. That's how much additional funding Chinese President Xi Jinping promised the continent as the two-day summit got underway. And all of Africa is competing for it — except for one country: Swaziland, an absolute monarchy that has in recent months renamed itself eSwatini. The tiny kingdom was absent from this week's Africa summit and appears to have no plans of attending anytime soon. It's the last African nation that still recognizes Taiwan as an independent country, much to the dismay of the Chinese leadership in Beijing, which considers Taiwan to be a wayward province. 

In Nigeria, Politics and Militancy Go Hand in Hand

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Nigerian President Muhammadu Buhari, whose political coalition and party have suffered dozens of defections in the National Assembly, will face a significant election test in February, when he hopes to win a second term. The country's main opposition alliance will select a northern presidential candidate to match Buhari; the two sides could split votes in the northwestern areas, making competition elsewhere the deciding factor. Militancy will play a critical role in next year's elections as Nigeria's various stakeholders try to exploit the country's insecurity for political gain. Editor's Note: This assessment is part of a series of analyses supporting Stratfor's upcoming 2018 Fourth-Quarter Forecast. These assessments are designed to provide more context and in-depth analysis on key developments to watch in the coming quarter.

Land redistribution in South Africa, Trump’s tweet, and US-Africa policy

Witney Schneidman and Landry Signé

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Appropriately, South African President Cyril Ramaphosa hit back at Trump within hours of the tweet, in a clear and forceful message in the Financial Times. The essence of Ramaphosa’s statement is that South Africa is a profoundly unequal society and the distribution of land is at the heart of that inequality, along with education, income, jobs, and skills. As president of South Africa, Ramaphosa has pledged to address this inequality resulting from land dispossession during the colonial and Apartheid eras. In light of the attention on South Africa’s land distribution issue, it is important to present the facts The inequality of land distribution in South Africa is rooted in the 1913 Natives Land Act that reserved almost 93 percent of the land for the white minority. This act legalized the historical dispossession of the African population. The 1936 Native Trust and Land Act slightly decreased that share to 87 percent, but the vast inequality of land ownership persists today.

Can China Free Africa from Dependency on the Mighty Dollar?

By Peter Fabricius

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Is China, aided and abetted by the other BRICS member countries – Brazil, Russia, India and South Africa – making a bid to dislodge the dollar from its global pedestal and replace it with the yuan? And if so, will it help African countries, in particular, to escape from the iron and often onerous grip of the greenback? One way China is expanding the reach and influence of the yuan is through currency swaps – many with African countries. The latest was with Nigeria, for the equivalent of US$2.4 billion. For Nigeria, the currency swap was a lifeline as its dollar reserves had largely drained away and the naira had plummeted against the dollar after the 2015 drop in oil price.

China steps up courting of Africa ahead of summit

TETSUSHI TAKAHASHI

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BEIJING -- China is expanding its influence campaign in Africa as it prepares to host a summit with leaders from the continent, ready to offer economic assistance as part of its Belt and Road infrastructure initiative. The Forum on China-Africa Cooperation is scheduled for Sept. 3 and Sept. 4 in Beijing, with leaders from more than 50 African countries expected to attend. The summit is aimed at bringing China and Africa closer and building a shared destiny, Chinese Foreign Minister Wang Yi said at a press briefing on Aug. 22. The forum will serve to create a new chapter connecting the Belt and Road initiative with Africa's development, Wang added, revealing plans to announce economic assistance.

Hope Fades in South Africa

Xander Snyder 

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When South Africa’s new president, Cyril Ramaphosa, was sworn into office in February, there was hope that he would open a new chapter in South African politics and address some of the country’s structural economic problems. But that hope is beginning to fade. The government is reportedly considering providing a bailout worth 59 billion rand ($4.1 billion) to several South African state-owned enterprises, in addition to another proposed assistance program worth 43 billion rand. Unsurprisingly, this has raised concerns about the government’s financial position. Several SOEs, including the South African National Roads Agency, Eskom (an energy company that provides 90 percent of the country’s power) and South African Airways, have been struggling financially for years. The South African Post Office, which has recently taken over responsibility from the South Africa Social Security Agency for disbursing social security payments to 17 million citizens, may also need government assistance.

Hope Fades in South Africa

By Xander Snyder 

When South Africa’s new president, Cyril Ramaphosa, was sworn into office in February, there was hope that he would open a new chapter in South African politics and address some of the country’s structural economic problems. But that hope is beginning to fade. The government is reportedly considering providing a bailout worth 59 billion rand ($4.1 billion) to several South African state-owned enterprises, in addition to another proposed assistance program worth 43 billion rand. Unsurprisingly, this has raised concerns about the government’s financial position. Several SOEs, including the South African National Roads Agency, Eskom (an energy company that provides 90 percent of the country’s power) and South African Airways, have been struggling financially for years. The South African Post Office, which has recently taken over responsibility from the South Africa Social Security Agency for disbursing social security payments to 17 million citizens, may also need government assistance.

Water Wars on the Nile

By Daniel Benaim and Michael Wahid Hanna

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In Ethiopia, Africa’s largest-ever dam and hydroelectric power plant is inching closer to completion. The Grand Ethiopian Renaissance Dam (GERD) on the Nile River has the potential to transform Ethiopia’s economy and revolutionize the agricultural sector of its northwestern neighbor Sudan. But further downstream in Egypt, where 95 percent of the population live on the Nile’s shores or along its delta, many object to the dam, which they see as a fundamental threat to their way of life. As Ethiopia prepares to operationalize the dam and divert Nile waters to fill its massive reservoir, the international dispute over the river has reached a make-or-break moment. In the coming year, Egypt and Ethiopia will either set their differences aside and forge a cooperative path forward together—an outcome that is technically feasible but politically fraught—or face a diplomatic downward spiral.