All posts by Michael Patotschka

General

Blinken’s latest diplomatic trip will take him to Africa as crises continue to vex US foreign policy

By MATTHEW LEE
Updated 6:55 PM MEZ, January 18, 2024

WASHINGTON (AP) — Secretary of State Antony Blinken is planning to visit four African countries as the Biden administration tries to keep its eyes on all corners of the world while being consumed by crises in Ukraine, the Mideast and the Red Sea.

The State Department announced on Thursday that Blinken will go to Cape Verde, Ivory Coast, Nigeria and Angola starting Sunday for talks focused on regional security, conflict prevention, democracy promotion and trade. Nigeria is West Africa’s regional heavyweight and plays a major role in security issues, especially those involving Islamic extremist violence in the Sahel, the vast arid expanse south of the Sahara Desert.

The trip will be his third overseas mission in the new year. He returned from a Gaza-focused, weeklong 10-nation trip to the Middle East last Thursday and a three-day trip to the World Economic Forum in Switzerland on Wednesday.

Source: AP,  18th January 2024

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Kenya

IMF approves new $941 m loan for cash-strapped Kenya

Kenya President William Ruto speaks during a plenary session at the COP28 U.N.   –  Copyright © africanews Peter Dejong/Copyright 2023 The AP. All rights reserved.
By Rédaction Africanews

The International Monetary Fund has granted Kenya a new loan of more than $941 million to help reinforce the finances of the cash-strapped East African nation.

Kenya is grappling with a host of economic challenges including a vast debt mountain, cost of living crisis and tumbling currency.

The IMF said in a statement published on Wednesday that its executive board had approved the $941.2 million loan, with an immediate disbursement of $624.5 million.

Total payments under various credit facilities amount to about $2.6 billion, it added.

The Washington-based agency said it forecast Kenya’s economic growth at around 5 percent this year, from an estimated 5.1 percent in 2023.

“Kenya’s growth remained resilient in the face of increasing external and domestic challenges,” said Antoinette Sayeh, IMF deputy managing director and acting chair, said in the statement.

The credit arrangements for Kenya “continue to support the authorities’ efforts to sustain macroeconomic stability, strengthen policy frameworks, withstand external shocks, push forward key reforms, and promote more inclusive and green growth”.

According to the latest Treasury data released this month, Kenya’s public debt stands at 10.585 trillion shillings ($65.5 billion).

In December, Kenya ditched a promise to buy back a portion of a $2 billion Eurobond that is due to mature in June.

Instead, Finance Minister Njuguna Ndung’u said the country had paid $68.7 million in interest on the bond, sidestepping a potential default.

“In its unwavering commitment to upholding a resilient sovereign credit rating and facilitating access to new development financing, Kenya remains dedicated to fulfilling all debt obligations with international lenders,” Ndung’u said.

President William Ruto had announced a plan in November to buy $300 million of the Eurobond, saying public debt had “become a source of much concern to citizens, markets and our partners”.

Ruto has imposed a raft of new or increased taxes to try to replenish government coffers, but they are deeply unpopular among people struggling with rising costs for basic goods, and several have been challenged in court.

Additional sources • RFI

Source:  AfricaNews, 19th January 2024

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General

UNDP launches “timbuktoo” initiative in Davos to revolutionize Africa’s startup ecosystem

Annalena Baerbock, Federal Minister of Foreign Affairs of Germany; H.H. Prince Faisal bin Farhan Al Saud, Minister of Foreign Affairs of Saudi Arabia; Christopher A. Coons, Senator, USA; Yusuf Tuggar, Minister of Foreign Affairs of Nigeria; Elina Valtonen, Minister for Foreign Affairs of Finland; and Jens Stoltenberg, NATO Secretary-General, in a session of global security on 16 January. Image: World Economic Forum

Davos 2024

In Davos, the United Nations Development Programme (UNDP) launched the “timbuktoo” initiative in collaboration with African countries. The initiative, unveiled during a special session at the 24th Annual Meeting of the World Economic Forum, aims to be the world’s largest financing facility, uniting catalytic and commercial capital to bolster Africa’s startup ecosystem.

H.E. President Paul Kagame of Rwanda, H.E. President Nana Akufo-Addo of Ghana, the Secretary-General of the African Continental Free Trade Area Secretariat, HE Wamkele Mene, and UNDP Administrator Mr. Achim Steiner presented the initiative to global corporate leaders and African financial institutions. The timbuktoo initiative is poised to spark the African Startup Revolution, leveraging Africa’s youth demographic and innovative talent.

The initiative targets critical gaps in the African startup ecosystem, collaborating with governments, investors, corporates, and universities to foster innovation. H.E. Paul Kagame pledged an immediate contribution of US$3 million to kickstart the timbuktoo Africa Innovation Fund hosted in Kigali, with a billion-dollar target to create opportunities for Africa’s youth.

H.E. Nana Akufo-Addo emphasized the need for supportive structures to enable young Africans to create innovative businesses, contributing to job creation and sustainable economic growth. Administrator Steiner highlighted timbuktoo as a new development model, focusing on startup-friendly legislation, global-class startup building, de-risking capital, and UniPods (University Innovation Pods) across Africa.

Africa currently holds just 0.2 percent of the global startup value, and 89 percent of venture capital comes from foreign sources, with 83 percent concentrated in four countries. timbuktoo seeks to revolutionize Africa’s knowledge-driven economy, turning ideas into pan-African enterprises, attracting global and local investment.

With private venture capital investments in Africa surging six times faster than the global average in 2022, a vibrant youthful population, and expanding tech startups, timbuktoo aims to mobilize US$1 billion to transform 100 million livelihoods and create 10 million new jobs. The initiative’s unique design blends commercial and catalytic capital to de-risk private investment, fostering a pan-African approach to supporting startups and strengthening the entire ecosystem.

Source: AfricaNews, 18th January  2024

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General

Oil drops more than 1 % despite Middle East conflict

Storage tanks are seen at the Petroineos Ineos petrol refinery in Lavera, France, March 29, 2022. REUTERS/Benoit Tessier

By

LONDON, Jan 15 (Reuters) – Oil prices lost more than 1 % on Monday as the Middle East conflict’s limited impact on crude output prompted profit taking after oil benchmarks gained 2 % last week.

Brent crude futures were down $1.14, or about 1.5%, at $77.15 a barrel by 1250 GMT and U.S. West Texas Intermediate crude lost $1.15, or 1.6%, to $71.53.

Several tanker owners steered clear of the Red Sea and multiple tankers changed course on Friday after U.S. and Britain launched strikes against Houthi targets in Yemen after the Iran-backed group’s attacks on shipping in response to Israel’s war against Hamas in Gaza.

The conflict has also held up at least four liquefied natural gas tankers travelling in the area.

“The realisation that oil supply has not been adversely impacted is leading last week’s bulls to take profit, with the move down somewhat exacerbated by a slightly stronger dollar,” said Tamas Varga of oil broker PVM.

On Sunday the Houthi militia threatened a “strong and effective response” after the United States carried out another strike overnight. The U.S. later said it shot down a missile fired at one of its ships from Yemen.

The chief negotiator for Yemen’s Houthis on Monday warned that attacks on ships headed towareds Israel will continue.

“As the Middle East conflict is currently not affecting oil production, the geopolitical risk premium priced in oil prices now appears modest based on the implied volatility of options,” Goldman Sachs analysts said in a note.

There have been no oil supply losses so far, but the shipping disruption is indirectly tightening the market by keeping 35 million barrels at sea owing to longer journeys shippers have to take to avoid the Red Sea, Citi analysts wrote.

Source: Reuters, 15th January 2024

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Ethiopia, Somaliland

Ethiopia-Somaliland deal: A pivotal move for sea access and regional relations

The International Monetary Fund predicts a ‘soft landing’ scenario in 2024 for the global economy.

The Fund’s spokesperson however warned that leaders should be preparing for future shocks and challenges.

Julie Kozack spoke to journalists on Thursday from Washington DC.

“We’ve had a relatively resilient global economy so far. We expect that resilience to continue into 2024,” Kozack said.

“At the same time, inflation is coming down. Labor markets continue to be, uh, resilient. Of course, the news is not all good because this resilience with growth, um, around hovering around 3 percent both last year and over the expected over the medium-term, that’s much lower than previous global average growth rates, which were about 3.8 percent. So we do have work to do to lift global growth, especially over the medium term.”

Africa is projected to be the second-fastest-growing economic region in the world.

The Fund’s executive board has completed the third review of Mozambique’s three-year loan program, allowing for an immediate disbursement to Maputo of about $60.7 million.

The fund’s executives met with representatives of Egypt to discuss reforms as the war rages in Gaza, on Egypt’s eastern border.

“Our team is in discussions with the authorities on a set of policies that would support completion of the first and second reviews of the EFF that Egypt has with the Fund. This strong engagement that we’ve had with the authorities has helped achieve important progress in the discussions, and we do expect those discussions to continue in the coming weeks to operationalize the key policy priorities,” Kozack revealed.

The Fund will update its global growth forecast and unveil the World Economic Outlook report in Johannesburg on January 30.

Additional sources • IMF – Mail & Guardian

Source: AfricaNews, 12th January 2024

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