Like everything Trump, it’s bold and brutal. The US will deal with Africa based on a three-pronged policy of advancing US trade and commercial ties with nations across the region, countering the proliferation of radical Islam and other forms of violent conflicts across Africa.
The other one was ensuring that all US aid sent to the continent is used efficiently to advance peace, stability, independence and prosperity in the region.
In many aspects, Trump’s policy is not unlike Obama’s. Obama’s running theme for Africa was “trade, not aid”.
Speaking in Ghana in 2009 as he announced his policy for Africa, retired President Obama declared: “I will focus on four areas that are critical to the future of Africa and the entire developing world: democracy, opportunity, health, and the peaceful resolution of conflict.”
It was the first comprehensive policy drafted for the continent. Hardly 10 years later, President Trump has a similar project, only bolder.
In principle, the new policy resembles the Marshall plan – the European Recovery Programme launched by the then Secretary of State George Marshall in 1948 to help western European countries rebuild after the Second World War.
It was also the first diplomatic strategy on the 40-year-long cold war between the US and the Soviet Union, meant to insulate Europe from the advancing communist ideology.
In his speech, Bolton puts it more overtly: “In developing our strategy, we are revisiting the foundational principles of the Marshall Plan.”
The US-China trade war is finding its way to Africa. With it, Trump is drawing a line on the sand with an old American demand: “you are either for us or against us.”
As long as this titanic battle focused on Africa is economic, Marshall-like investment is inevitable to the benefit of Africans. If it gets militant, however, we may see a new round of coups and counter-coups just like during the cold war era.
The scramble for Africa is on.
Already, the Trump administration has created the International Development Finance Corporation (IDFC) with an arsenal of $60 billion (Sh6 trillion) for Africa to counter China’s fund for Africa announced during its Sino-Africa Summit in Beijing last year.
I foresee a scenario where this money will be used to draw a new line of ideology in Africa; those countries allied to the US and those that are not.
But why did Africa tilt towards China? At the end of the cold war in the 90s, Western aid to Africa reduced significantly – propelled by the demand for reforms. This was further exacerbated by the global economic recession of 2009. Realising the diplomatic void, China moved into Africa and started dangling unconditional loans for development.
To date, it has investments worth over $40 billion (Sh4 trillion) strewn across the continent. As Bolton said after his remarks, “China thinks over a longer structural timeframe.”
To effectively counter China, the US needs to offer an alternative development partnership and tone down on its ‘big brother’ overtures. It’s a tight balance. The new policy is full of contradicting statements that suggest an internal conflict and a desire for that balance.
First, the US is in Africa for its self-interest – to support American jobs and expand export market access.
This is exactly why China is in Africa. In fact, China is using the US cold war era diplomatic rulebook, albeit with a few modifications.
It was the era of economic hit men who forced leaders of smaller nations to take up unsustainable debts, of financing development for natural resources, mainly oil and ignoring human rights abuses by dictators and governments allied to them in South Africa, Egypt, Uganda, among other countries. A change of tack with similar objectives makes for an intriguing diplomatic thesis.
There is a commitment to fight terrorist groups and conflicts, on one hand, while proposing to withdraw dollar support to failed states, a move that would make these groups thrive in those countries.
South Sudan, Somalia and Libya will require delicate management. “America’s vision for the region is one of independence, self-reliance and growth — not dependency, domination and debt”.
This might work contrary to the interests of former colonial powers in Africa, US allies, who perpetuate neo-colonialist ideals with their former colonies.
For instance, France demands that all revenues from their former colonies are banked with them before they then give debts to the governments for expenditure.
The long-standing comradeship between France and the UK would definitely come in the way of these noble objectives.
Perhaps, the most overt irony is when he said: “Countries that repeatedly vote against the US in international forums, or take action counter to US interests, should not receive generous American foreign aid.”
This while promising that they want African nations to “succeed, flourish and remain independent in fact and not just in theory. Like a typical step-uncle who’s all of a sudden remembered an old relation, Uncle Sam’s Christmas gift, the US policy for Africa, was a bag of mixed fortunes.
-The writer is an independent analyst based in Nairobi.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.