Africa round-up: Free trade area, EU's Global Gateway programme and Ethiopia-Eritrea tensions

Thu 26 Oct 2023
Posted by: Benjamin Roche
Trade News

Continent of Africa in digital project coming out of phone

In the IOE&IT Daily Update’s round-up of African trade news, we cover the launch of the EU’s alternative to China’s Belt and Road Initiative, a possible update to the continent’s free trade area and news from Ethiopia on a new port development.

Global Gateway gets going

The EU’s Global Gateway investment initiative launched yesterday (25 October), as the bloc held its first Global Gateway Forum.

The programme is widely regarded as the EU’s answer to China’s Belt and Road Initiative, which has seen Beijing pour vast sums into infrastructure projects in developing nations.

One of the first countries set to take advantage of the EU’s new offering is Namibia, according to a European Commission (EC) press release.

Namibian president, Hage Geingob, and EC president, Ursula von der Leyen, jointly endorsed an EU-Namibia partnership on “sustainable raw materials value chains and renewable hydrogen”, enabled by a €1bn investment from Europe.

Also included is EU support for an investigation into how the Port of Walvis Bay could be developed into an industrial and logistics centre.

Von der Leyen called Namibia a “front-runner in green hydrogen”, and said the EU is “proud to be a partner in this transformative journey towards green industrialisation”.

Geingob concurred, calling the agreement a “transformative partnership”, noting that developing Namibia’s green industrial base will require the country to “mobilise fit-for-purpose capital”.

Trade area aims for export growth

Aliko Dangote of the Nigerian industrial Dangote Group has led discussions in recent weeks on accelerating the success of the African Continental Free Trade Area (AfCFTA). They took place as part of a meeting organised by the Manufacturers Association of Nigeria, per Jambo Africa.

AfCFTA could help its members achieve growth similar to that of Asian nations over recent decades, Dangote said, if improved infrastructure is implemented across Africa to help the continent meet its export potential.

Journeys to Ghana and Togo from Lagos, in particular, must be improved, while fair gas pricing is also necessary to facilitate the smooth flow of goods between nations.

Dangote added that these reforms would require political will.

Ethiopia-Eritrea unease

Ethiopia’s prime minister, Abiy Ahmed, has insisted his country “will never invade” another after a comment earlier in the week on his country’s need for a sea port sparked fears it could invade neighbouring Eritrea.

Ahmed called access to a port a “matter of existence” for Ethiopia when speaking to legislators, according to the BBC.

The country relies on neighbouring country Djibouti for more than 85% of its imports and exports, and Bloomberg also reports that Ahmed said the lack of a port “prevents Ethiopia from holding the place it ought to have”.

Tensions with Eritrea last erupted into war between 1998 and 2000, when the two countries fought over contested borders. They signed a peace agreement in 2018. Ethiopia has itself recently endured a two-year civil war that and killed hundreds of thousands and collapsed its economy.

Morocco-Africa investment

The Moroccan government has signed a memorandum of understanding with the African Export-Import Bank (Afreximbank) to create a US$1bn Morocco-Africa Trade and Investment Promotion initiative, Jambo Africa reports.

The country’s ministry of economy and finance will give support for trade within Africa, as well as to facilitate trade out of the continent.

It will focus on enabling access to credit for exporting firms, as well as providing risk-bearing and trade information and advisory services. Trade missions and other engagements will also be supported.

Morocco’s finance minister, Nadia Fettah, said:

“This agreement marks an important step towards consolidating the relationship between the Kingdom of Morocco and Afreximbank.

“It also affirms the continued commitment of the government to increasing trade promotion and cooperation, and the development of Africa.”

President of Afreximbank, Benedict Omrah, added that “our mandate to transform trade and support economies in Africa is firm”, adding that the “agreement is another crucial step in achieving this objective”.

Kenya-Angola agreement

Kenyan trade is set to get a boost, following an announcement by Kenya’s president, William Ruto, that his country is set to resume direct flights to Angola, and that Angolans will be able to enter the country without a visa.

João Lourenço, president of Angola, met Ruto for talks in Nairobi to discuss the changes, as well as Angola’s potential membership of the African Union Peace and Security Council, according to Kenya’s Capital News.

A variety of legal agreements were signed between the two nations during the meeting, encompassing sectors from shipping and mining to agriculture and energy.