Welcome to Foreign Policy’s Africa Brief, good sirs and madams.
This week, we delve into the following happenings: Ethiopia’s easing of foreign exchange controls amidst projected growth, U.S. military presence in Nigeria to bolster counterterrorism, and China’s zero-tariff privilege for imports from 53 African nations.
Contents
Economic Developments in Ethiopia
Last week, Ethiopia’s Central Bank announced a significant easing of foreign exchange controls, all part of a grand scheme to liberalise the economy and lure foreign investments. Prime Minister Abiy Ahmed, not long ago, confidently projected a robust growth rate of 10.2% this fiscal year. A bold claim, indeed!
To put things into perspective, Ethiopia was once one of the continent’s top performers with an average growth near 11% until the unfortunate two-year civil war in Tigray disrupted the momentum. The conflict caused economic damages exceeding $28 billion, and over a million souls in northern Ethiopia are still reliant on humanitarian assistance.
Nevertheless, the economy shows signs of revival, attributed to reforms urged by the International Monetary Fund. These touch agriculture, mining, and exports. A sweeping reform programme in July 2024 saw the birr, Ethiopia’s currency, take to the waves of the market rather than governmental dictates. This devaluation, while leading to inflation, did wonders for exports.
Coffee and Gold: Ethiopia’s Twin Pillars
Remarkably, Ethiopia’s coffee exports are thriving. Last fiscal year reported earnings surged to over $2.6 billion from a mere $1.43 billion the previous year. Even without the benefits of the African Growth and Opportunity Act (AGOA), the U.S. remains a prime destination for their esteemed coffee.
Meanwhile, gold exports, although potentially ephemeral, have seen an astonishing leap. From a meagre 4 tons, it’s now 37 tons in the last fiscal year—accounting for a hearty 42% of export revenue. Yet, looming debt restructuring remains unresolved under the G-20 Common Framework, with creditors such as China and France playing hardball.
International and Domestic Vulcanisation
Reports emerged of Ethiopia’s alleged involvement in Sudan’s civil quarrel. According to a Reuters investigation, Ethiopian territories potentially serve as secret RSF training grounds near the Sudanese border. This could be Ethiopia’s strategic manoeuvre against Egypt, reflecting the ongoing Nile dam dispute.
Finally, potential conflict with Eritrea and unrest in regions like Tigray, Amhara, and Oromia further clouds Ethiopia’s economic prospects.
- Wednesday, Feb. 18: UN Security Council briefs on Libya.
- Thursday, Feb. 19: Zambian President delivers a state address.
- Feb. 21-24: Health ministers convene in South Africa.
U.S. Troop Presence in Nigeria
Recently, approximately 200 U.S. military personnel graced Nigeria’s north to aid in counterterrorism efforts. This is part of ongoing security cooperation, though tensions have risen courtesy of former President Trump’s controversial remarks.
The U.S. presence for military training dates back to the grim era of Boko Haram’s heinous kidnappings in 2014.
The Rise of Congolese Lithium
Over in the Democratic Republic of the Congo, Chinese Zijin Mining is set to kick off the nation’s maiden lithium production—an endeavour marred by legal disputes, given the revocation of AVZ Minerals’ mining rights.
China’s Trade Winds
This very week, China revealed its zero-tariff import policy effective from May 1. It’s a move allied with their fresh pact with South Africa for trade and renewable energy collaborations—excluding Eswatini, which favours Taiwan’s sovereignty.
Such gestures arrive as U.S. relations with African nations like South Africa face strain under protectionist tariffs. A rather tangled web, wouldn’t you agree?
Regional Challenges
Let’s not forget, however, the issues of terrorism and climate change plaguing the region. In Nigeria, counterterrorism responses remain notably reactive. Recent bloodshed in Kwara state claimed 170 lives, despite stark warnings that went unheeded, as reported by HumAngle.
And in Tunisia, rapid climate shifts threaten local fishermen. The Mediterranean warms, altering fish stocks and existentially challenging coastal communities, as noted by Inkyfada.
Such are the tides of change washing over the African continent. Until next week, old sport.
