World News

Let us look at the main data and statistics: this year the African Development Bank has forecast a 1.9% growth in Southern Africa; a 2.2% growth in Central Africa and even 3.4% in Eastern and Northern Africa.

However, the trend is towards a slowdown in economic growth across the world – a slowdown that will be ushered in by the reaching and exceeding of the 100 US dollar threshold of the oil barrel price.

In fact, if we analyse the data and statistical series, the recent great economic and financial crises have been triggered by a significant increase in the oil price – that the West is facing with increasing difficulty.

Reverting to the focus of our analysis, in East Africa growth will be even 5.7%, the current highest rate in the world, apart from some Asian countries.

Africa’s development, however, has two sides – the side of the GDP growth and the equally important one of the increase in the external debt of many African countries.

An African indebtedness that mainly concerns China.

Here two very severe cases can be seen: in fact, in January 2017, Mozambique declared it could not to repay its foreign debt, due to a hidden debt incurred by its companies to the tune of 1.8 billion euros.

Furthermore, in August 2017, Congo had to revaluate its debt to 120% of its GDP (it was previously 77%) for similar reasons.

Hidden indebtedness is currently one of Africa’s plagues. It is currently worth 34% of the total African GDP. It is a debt mainly denominated in foreign currencies, often run up by unsavory and deceptive bankers, including members of Italy’s and other regions’ organized crime. This obviously favours China’s purchase of African companies that now cost a handful of rice.

In Nigeria, currently 60% of State revenue is used for servicing the public debt, with evident and foreseeable internal turmoil in the near future, considering that the Nigerian government has no reserves for productive public spending and for the necessary poverty mitigation policies.

In Ghana, the government led by Nana Akufo-Addo, who has been in power since January 2017, has taken on the debt piled up by its predecessors, which today accounts for 80% of GDP.

Also Angola, the second sub-Saharan oil power, is debt-ridden and is reducing extraction activities.

In Angola the debt is supposed to account for 90% of GDP and it is rising quickly.

As previously mentioned, China already holds much of the African debt.

It owns 70% of Cameroon’s public debt. This holds true also for Kenya.

Moreover, international banks inform us of the fact that between 2010 and 2014 the appetite for Chinese credit has increased by 54% throughout Africa.

A figure never reached by any developed country in banking and economic development relations with Africa.

Until 2017, however, the average of the African public debt was 45% of GDP.

Currently, however, according to the African Development Bank, at least 11 out of the 35 low-income African countries are considered to be at very high over-indebtedness risk.

For years the low cost of raw materials has been the trigger of the crisis, which will certainly become very severe in the phase of the “debt peak” which, in the case of Africa, is expected to materialize in 2021.

At the same time, however, some African States have begun to lend money to some emerging African countries, obviously at a rate higher than the rate granted to them. Countries that had no access to international credit.

And with raw materials that have been on the wane for long time, as well as a growing cost of manpower and the increase in internal political instability, caused by the crisis in public spending for a minimum level of Welfare State.

A debt spiral that has already enabled as many as 32 African countries to accept the unfair conditions of the private Funds for debt recycling, which acquire the securities at derisory prices and then resell them at a higher price to good European and American clients.

In 1996, however, the Ivory Coast, Ghana, Cameroon, Gabon, Rwanda and Kenya accepted the PPTE program of the World Bank and the International Monetary Fund – the program for heavily indebted countries which imposed strict spending control on them so as to later enable them to return into the international credit mechanism.

The recipes are well-known: privatization, in the belief that the private sector is metaphysically better than the State one; heavy cuts in current spending, as well as reduction of spending on security and investments, including the productive ones.

As can be easily imagined, this has created a very profound crisis in the income of the poorest walks of society and has really annihilated the prospects for the young generations who, in fact, flee unreasonably towards the EU – or swell the ranks of the very strong exchange of manpower between the various African countries.

Currently the most indebted countries in Africa are South Africa, Sudan, Egypt, Morocco, Tunisia, Angola, the Democratic Republic of Congo, the Ivory Coast, Nigeria and Kenya. Hence a continent already destroyed before being made sufficiently productive.

Ironically, many of these countries are also on the list of the richest nations in Africa: Egypt, South Africa and Nigeria–again in descending order.

France, however, has lost its traditional role as top investor in Africa.

Between 2015 and 2016, for example, China invested as many as 38.4 billion US dollars in the Dark Continent, while the second largest investor in Africa, namely the United Arab Emirates, reached 15 billion US dollars over the same period.

Italy, however, is the top investor among European countries, especially through ENI.

France ranks only sixth with 7.7 billion US dollars invested.

Meanwhile the Russian Federation is strengthening its traditional ties with Algeria and it is arranging a free trade area in the Maghreb region, with the Alawite Kingdom of Morocco at the core. It is also building nuclear power plants in Egypt and Southern Africa, with further exports of Russian grain to the poorest African countries.

Russia is also organizing peer cooperation projects in Equatorial Guinea, Burundi, Zambia, Uganda and Zimbabwe.

Areas that are less relevant to China or where there may be cooperation between China and Russia, with the latter interested in agriculture and oil and the former building infrastructure and operating on the market of the other raw materials.

China already owns 98% of the world’s coltan -i.e. the columbite-tantalite used for all commercial electronic devices – which can be found in the Central African Republic.

France’s exports to Africa, however, have almost halved in 2018 compared to 2000, falling from 11% to 5.5%.

In Senegal, French exports fell by 25% in 2017 – a loss that locally favoured Turkey, Spain and, above all, China.

Certainly the French-speaking Africa – linked to the CFA Franc – is a huge source of raw materials, with 14% of the world’s energy reserves and 22% of the world’s habitable areas.

Through the Africa using the CFA Franc, the French-speaking regions, which alone account for 4% of the world population, still account for 16% of world GDP and 20% of global trade in goods. France led by President Macron (but also France led by his more colourless predecessor Hollande) wants to create an autonomous common market – to be used also against an adverse EU – between the economy of the French Hexagon and the economies of the African French-speaking countries.

And this is precisely the point of geopolitical contrast with China.

China, however, still has many strings to its bow.

Last June, for example, Burkina Faso announced it had broken its relations with Taiwan to recognize only the People’s Republic of China.

The first step that China asks all its partners to take.

China also doubled US bilateral trade with Africa as early as 2013.

The beginning of the new relationship between China and Africa – after the “Three Worlds” Maoist theory in which, however, the People’s Republic of China became the leader of the Third World, after the two American and Soviet “imperialisms”-materialized after the Tiananmen Square protests and crisis in 1989, with a view to escaping the isolation imposed by the West (and by Russia which, at the time, had many problems to solve).

It should also be noted that many current African leaders have been educated in China.

Think of Joseph Kabila, the leader of the Democratic Republic of Congo, who studied at the National University of Defence in Beijing.

Or to Mulatu Teshoma, the President of Ethiopia, who studied philosophy and political economy with a PhD in international law at the Peking University, before continuing his studies at the Tufts University in the United States.

Or again to Emmerson Mnangagwa, the President of Zimbabwe, former student of the “School of Marxism” at the Peking University, who later spent a period of time in Nanjing studying combat training.

The current leader of Tanzania studied military engineering in China and then returned to the country in 1964.

Hence how is France responding to this? In July 2018 President Macron went to Nigeria -after having paid an official visit to Ghana – but he has the clear intention of gaining broad consensus not only in the old African French-speaking countries, but also in the English-speaking part of the Dark Continent.

The French President believes that also Africa is now “globalized” and hence he must go well beyond the old traditional perimeter of the so called Françafrique.

The concept underling the strategy of President Macron is no longer the traditional one of Françafrique, but rather that of AfricaFrance.

The offer made to the President of Rwanda, Paul Kagame, to become President of the International Organization of the Francophonie must be seen in this context.

From the African autonomous culture – which, according to President Macron, must be revitalized – to the recovery of the French economy and companies in Africa: the French market in Africa fell from 11% in 2003 to 5% in 2017.

Meanwhile China rose from 3% in 2001 to the pan-African 18% in 2017.

Even Germany has currently overtaken France in foreign trade with Africa.

Certainly the French President also wants his country to remain the “policeman” of Africa – as during the Cold War –  but he plans to confine his fight “to terrorism”, or more precisely to the sword jihad, in the Sahel region, which is and will be the future core of the French military presence in Africa.

Furthermore, President Macron intends to deal with business, thus limiting the security role played by France in Africa France as much as possible.

This is also the meaning of the increasingly important role that will be given to the G5 Sahel,i.e. the Joint Force of the Group of Five for the Sahel including Mauritania, Mali, Burkina Faso, Niger and Chad.

In short, according to its best strategic analysts, France wants to prevent future geoeconomic battles by preserving its global strategic role. Hence it wants to protect its old African colonies from the predatory and harmful effects of globalization.

This means that France tends to produce a new African “common market” between its economy and the developing economies if its old Françafrique.

Hence the recent France-G5Sahel military operations must be seen in this context: Operation Barkhane, which began in 2014 with 3,000 French soldiers, in addition to those of the G5-Sahel, based in ‘Ndjamena, the capital of Chad, as well as the Operation Serval aimed at ousting Islamic militants from the North of Mali, and Operation Epervier, a French counter-terrorist action between Cameroon and Chad.

The other two French military operations, namely Sangaris and Licorne – the former in the Central African Republic, which ended in 2016, and the latter a peacekeeping action in the Ivory Coast, replaced in 2015 by the “French Forces in the Ivory Coast” -were a relative success, but with a progressive support from the US African Command.

However, what about the CFA Franc, which is now a controversial topic inside and outside Africa France?

For some African Heads of State and Government, who obviously do not want to give in to China or to other new players in Africa, the CFA Franc “is a sound currency” and “does good to the African people”, just to quote the explicit words of Ivorian President Alassane Ouattara.

President Macron stated that the CFA Franc is “a currency that works and needs to be modernized together”.

It should be recalled, however, that France intervened militarily in Africa as many as 42 times from 1968 to 2013.

France will never give up Africa, but it has not the liquidity to really do so. China, too, will certainly not give up Africa and will never intervene militarily, if not directly hit, while investing massively in the Dark Continent.

Hence how will the CFA Franc be reformed?

It is easy to predict: with an increase of its value as against the Euro and new internal regulations governing the relations between France and the other African partners.

The French game in Africa will work until the Chinese economy slows down and hence there will be less Chinese capital to invest in Africa.

China, however, is already a net importer of semi-finished goods, as well as clothes and basic products from countries such as Ethiopia, while many African countries keep on importing high-value-added goods and capital for basic industrialization from China.

In Africa, China tends to replicate the same development as its development of the early days of the “Four Modernizations” phase.

Therefore, the most likely solution in the near future will be a concentration of French power on the G5 Sahel, with a parallel reduced role of France in the Eastern region of the Dark Continent.

While China will keep on expanding its influence in Africa, from the South to sub-Saharan Central Africa, up to Egypt and the Northern Atlantic Coast of Africa.