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France Clears Migrants’ Tent Camp, Evicts 2,000 People From Sudan, Ethiopia, Others

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French police have cleared a large migrant camp north of Paris, evicting about 2,000 people who had been living in “miserable conditions,” Interior Minister Gerald Darmanin tweeted.

The evictions at the makeshift encampment near the Stade de France stadium began in the early morning.

New accommodation would be found for the people who had been living there, local authorities said.

Police have cleared dozens of such sites in recent years around Paris.

But the unsanitary camps are formed again and again by migrants with few places to go.

There is a lack of permanent housing for the migrants, meaning it often takes only a few weeks until the first tents are erected again after an evacuation order.

Critics see the evictions as a purely symbolic political move that does nothing to address the problems of migration policy.

The newspaper Le Parisien wrote that the camp at the Stade de France – located near a highway bridge in the Seine-Saint-Denis department – had formed in August.

According to the newspaper, men from Afghanistan, Sudan, Ethiopia and Somalia were the main residents there.

Aid organisations also reported there were families with children.

East Africa News

Kenya Looks to China for COVID-19 Vaccine

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President Uhuru Kenyatta of Kenya has ordered the ministry of health to shop for coronavirus (COVID-19) vaccine in China, a government official has disclosed.

Health Minister Mutahi Kagwe, in a statement on Monday, said President Kenyatta gave the order following the increasing cases of the disease in Kenya.

“Covid-19 seems to be making a comeback with a vengeance and for us in Kenya, the cases in the counties seem to be growing,” Health Minister Mutahi Kagwe said on Monday.

“While Kemri continues to collaborate with AstraZeneca and Oxford University in the trials for this vaccine, the government remains open to other collaborative opportunities.”

On Monday, 302 people tested positive for the virus, from a sample of 3,038 bringing the total of positives since March 13 to 83,618.

The death rate remains high and yesterday 17 people succumbed to the virus, bringing total fatalities to 1,469.

There are now more than 80,000 people who have been confirmed Covid-19 positive in Kenya. More than 1,400 have died from the disease.

The country’s decision comes in the wake of rich countries in the west buying nearly 3.8 billion doses of vaccines currently in development, according to a study by Duke Global Health Innovation Centre.

China has five home-grown vaccine candidates in phase three trials, usually, the last step before government regulators vet the vaccine for approval.

Chinese President Xi Jinping already promised the successful candidates will be offered to Africa at a discounted price leading to China being accused of ‘vaccine diplomacy.’ However, countries, where the Chinese vaccines are being tested, will receive preference.

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East Africa Optimistic the U.S. Will Revive Trade Talks

This came to the fore as leaders from the EAC congratulated Biden for his election win, with many expressing hopes that his presidency will boost ties with the regional bloc.

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The East African Community is optimistic that U.S. President-elect Joe Biden will revive the negotiations and implementations of the EAC-U.S. Trade and Investment Partnership.

This came to the fore as leaders from the East African Community congratulated Biden for his election win, with many expressing hopes that his presidency will boost ties with the regional bloc.

The Trade and Investment Framework Agreement (TIFA), which is a trade pact that establishes a framework for expanding trade and resolving outstanding disputes between countries, was agreed between U.S. and EAC partner states in June 2012, but was never implemented.

TIFA was signed on July 16 2008, as a framework for expanding trade and investment between the U.S. and EAC.

But since United States President Trump took over from his predecessor Barack Obama in 2016, not much has been heard from the arrangement.

Read also: Kenya, UK, Secure Trade Deal

“We all look forward to working with the new US administration and of course hope that America’s trade and investment policies will also advance the interests of East Africa. Reviving TIFA is one of them,” said Prof Manasseh Nshuti, EAC chairperson of the Council of Ministers, who is also Rwanda’s Minister of State in charge of the East African Community.

“EAC is better negotiating multilateral trade rather than bilaterally. This is because at the end of the day, what happens in Kenya affects Rwanda, Uganda, and Tanzania, in terms of trade and investments.”

In April 2016, Ministers from EAC and U.S. signed the EAC-US Co-operation Agreement on Trade Facilitation, Sanitary and Phytosanitary (SPS) Agreement and Technical Barriers to Trade (TBT) but so far very little has been implemented despite the existence of agreed work plans.

Under the United States-East African Community-Trade and Investment Framework Agreement, partners consult on a wide range of issues related to trade and investment, but under President Donald Trump, this was never implemented.

Related: Kenya to be in breach of EAC, AfCFTA rules in proposed American trade deal

Topics for consultation and possible further cooperation include market access issues, labour, the environment, protection and enforcement of intellectual property rights, and in appropriate cases, capacity building.

However, since 2016, the negotiations for the regional investment treaty stalled due to lack of consensus on the approach for discussions on the regional investment treaty.

“The U.S. has TIFAs with countries at different levels of development and trade and investment interests but none with the EAC,” said Dr. Peter Mathuki, CEO East African Business Council.

“As the private sector, we are expecting the revival of an up-scaled US-EAC Trade and Investment Partnership under U.S. presidential elect Joe Biden.”

EAC’s Director-General of Customs and Trade Kenneth Bagamuhunda also said he looks forward to a return to a multilateral trading system “where the trade rules will prevail over unilateralism”.

“We look forward to engagement with the US as a bloc at EAC and Continental level.”

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Debt Default Haunts East Africa as Covid-19 Shrinks Exports, Taxes

The latest data by the United Nations Economic Commission for Africa (UNECA) shows that on average over 10 percent of export revenues and primary income in the region is spent on debt repayments.

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East African countries face a higher risk of debt defaults as governments grapple with shrinking tax revenues, lower export earnings, and limited access to external resources.

The Covid-19 pandemic has amplified this vulnerability with debt-to-GDP ratios exceeding 50 percent.

The latest data by the United Nations Economic Commission for Africa (UNECA) shows that, on average, over 10 per cent of export revenues and primary income in the region is spent on debt repayments.

Kenya spends 22.6 percent of its export revenue on debt repayment, followed by Burundi (14 percent), Rwanda (12.6 percent) Uganda (12.2 percent), and Tanzania (8.4 percent)

The debt levels have been brought into sharp focus by recent developments in the region.

In Uganda, the Parliament approved a plan to borrow $600 million from the International Monetary Fund (IMF) to plug funding gaps in the current budget, made worse by the effects of the coronavirus pandemic.

Read also: http://Uganda’s debt level approaches crisis status

In June, Uganda’s debt stood at an estimated $13.11 billion, according to a Central Bank report, with 20 per cent of all public revenues allocated to debt repayments, up to 100 per cent in a decade. The country’s public debt is projected to jump to 46 per cent of GDP in the current financial year to June, up from 43 per cent in the previous year.

In Kenya, the National Treasury announced that the country’s debt had risen to Ksh7 trillion, or 69.2 per cent of the country’s GDP.

“This, together with committed undisbursed debt of Ksh1.35 trillion translates to a stock of public debt of Ksh8.41 trillion against a ceiling of Sh9 trillion, which implies limited space for additional borrowing,” according to a Treasury paper released to chart the country’s post-Covid-19 strategy.

In June, Tanzania said it had begun negotiations with creditors over debt relief to manage the fallout from the coronavirus pandemic, including delaying debt repayments meant to start in May to December 2020.

The International Monetary Fund eventually approved $14.3 million worth debt relief, while the government pursued up to $272m more in relief from the European Union.

Reduced economic activity has reduced government takings across the region, but Zambia’s recent default on its debt obligations has raised the prospect of more governments struggling to pay while incurring penalties and higher interest rates on subsequent borrowings.

Related: Zambia delays loan receipt as debt piles

Zambia became the first African country to default on its debts following the pandemic after it missed a $42.5 million coupon payment on its bonds in October and another this month. The country is now negotiating with the IMF for a $1.3 billion loan.

Rwanda’s Finance Minister, Uzziel Ndagijimana told parliament last week that the country’s debt outlook has shifted from low to moderate due to lower projected economic performance after GDP dropped by 12 per cent in the second quarter to Rwf2.1 billion, down from Rwf2.3 billion in second quarter of 2019. 

Kenya is servicing a $2.1 billion Eurobond, while Rwanda is expected to make its repayment of its $400 million Eurobond in 2023. East Africa’s economic managers face difficult choices between meeting debt obligations, and rekindling economies throttled by a year of reduced activity partly because the region had maintained relatively high levels of debt before the pandemic, leaving little room to borrow.

The region entered the Covid-19 crisis with significantly less debt legroom space in 2019 than it had at the onset of the global financial crisis a decade ago, with most countries at high risk of debt distress or already in distress.

Debt relief negotiations remain inconclusive with many donor and lender countries preoccupied with containing the pandemic and stimulating their own economies. While countries have so far benefited from debt service relief from multilateral creditors including the IMF and the G-20 debt initiative, private and institutional creditors remain reluctant to postpone payments. 

The IMF has yet to grant a request by developing countries to access its reserves under Special Drawing Rights (SDR). The Trump administration reportedly blocked the initiative because it will also benefit unfriendly regimes in China, Iran, and Russia.

Read also: http://Kenya Didn’t Apply for Suspension of Debt Payments Under G20 Initiative – Minister

In April, the G-20 proposed the Debt Service Suspension Initiative (DSSI) which was originally made available until December but has now been extended until June 2021. Under the initiative, only approximately $5 billion in debt service relief to poor countries has been pledged, which experts say is insufficient. 

In June, Chinese President Xi Jinping pledged to cancel interest-free debt owed by “relevant” African countries as part of Beijing’s move to help the African continent during the Covid-19 pandemic.

China, which is one of the largest bilateral lenders to countries in the East African region is owed some $145 billion by the continent; it is part of the G-20 proposal, but it is yet to make specific indications of what bilateral debt relief it is willing to make to its debtors in East Africa and the rest of sub-Saharan Africa.

The Covid-19 crisis has revealed the fragmented nature of Chinese lending as well as Beijing’s reluctance to fully align with global debt relief plans.

However, the Chinese Foreign ministry said the country has signed debt-relief agreements with the majority of African countries that have requested it, and are holding consultations with the remaining countries.

In early November, the Chinese Exim Bank declined a request by Uganda for a repayment delay on the loans needed to build $1.7 billion Karuma dam project.

Estimates released in March by the United Nations Economic Commission for Africa (UNECA) after a meeting with Finance Ministers show African countries have an urgent financing need of approximately $100 billion to deal with the adverse impact of the COVID-19 pandemic, of which $44 billion will go towards debt relief for all African countries.

Related: IMF to Assist 22 African Nations With Aid

If the crisis continues, an additional $50 billion may be needed to support growth in 2021 including continued stay on interest payments. 

“Containing the pandemic permits a return to growth, but does not guarantee it. The ability of countries to finance economic recovery is highly variable. Africa, notably, does not have access to the monetary policy tools in more developed economies,” Rwandan President Paul Kagame said recently during the G-20 virtual summit hosted by Saudi Arabia, underscoring the central importance of the debt service suspension initiative.

“But this crucial programme will not be sufficient. Additional stimulus will be required in developing countries, just as it is in advanced economies,” added President Kagame, who has been actively lobbying for debt relief for African countries.

If fully implemented, the G-20’s DSSI is supposed to provide more than $12 billion in additional liquidity to the 76 least-developed countries in 2020, and an additional $14 billion in 2021, according to estimates by Africa’s high-level panel leading efforts to galvanize debt relief and mobilise resources.  

According to Ms Mama Keita, the Director, UNECA Sub-regional office for Eastern Africa based in Kigali, countries need fiscal space in order to cope with the crisis, save lives and livelihoods, and continue to provide the public goods and services under their responsibilities.

“Expenses of course include debt payments requirements. Obviously, without economic growth, the risks of default are increased.” Ms Keita observed, arguing that countries must create the conditions under which they can continue to experience growth if economies are to recover and be able to meet their debt service payments.

“We hope that the related conditionalities will be flexible and advantageous enough to encourage governments to join without fear that their access to international capital markets in the future will be compromised by a tarnished reputation as debtors. The fear is indeed to be degraded by the rating agencies,” Ms Keita said.

The World Bank says that between 2009 and 2019, countries in the region increased external borrowing by nearly four times, from $19.9 billion to $73.8 billion. Kenya was the biggest borrower raising the stock of external debt from $8.5 billion to $34.2 billion, followed by Tanzania, from $7.6 billion to $19.5 billion. Uganda and Rwanda accumulated $13.9 billion and $6.2 billion in external debt over the decade, from $2.7 billion and $1.1 billion respectively.

Related: East African Countries Amass $73b in External Debt

Now countries remain stuck between a rock and hard place. According to the IMF, without additional help from the international community, many countries in sub-Saharan African may find themselves in a situation where they have to raise tax rates to pay off debt and in doing so choke off near-term growth, adding to social tensions and trapping them in a low-growth, high-debt cycle.

Many countries have undertaken to put in place enhanced governance measures to track Covid-19-related spending, including independent audits of crisis-related spending and the publication of crisis-related procurement contracts (Cameroon, Central African Republic, Chad, Kenya, São Tomé and Príncipe, South Africa, Uganda).” According to the IMF in its 2020 October Regional Economic Outlook report for sub-Saharan Africa.

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