China and Kenya Finalize Railway Deal
On Sunday, China and Kenya finalized an agreement to begin construction on a new railway that will run from the Kenyan port of Mombasa to Nairobi. Kenyan President Uhuru Kenyatta originally signed this deal in China last year, with Chinese Premier Li Keqiang confirming the agreement on his recent tour of Africa. The railway is expected to connect Kenya to South Sudan through Uganda as well as Rwanda. According to President Kenyatta, it will shorten travel times and significantly reduce freight costs.
The agreement has met some criticism. The Dock Workers Union has filed a lawsuit against the contract awarded to China Road and Bridge Company Limited, arguing that it did not have the requisite expertise to complete the work, and was awarded the contract without a competitive bidding process. Officials said that there was no public bidding as part of the agreement since China agreed to finance 90 percent of the initial stage of the project. Some lawmakers had also questioned whether the deal was overpriced and if it would substantially increase Kenya’s debts. However, these concerns were recently resolved in parliament, and the existing legal challenges are said to have little chance of success.
South Africa Mining Strike Continues
The platinum mining strike in South Africa continues into its fourth month amid rising tensions on both sides. Mining company Lonmin made several attempts to continue its operations by using threatening SMS and email communications directly to their 70,000 employees stating that they will be fired if they did not return for work. Lonmin furthered their efforts by calling for more police and increasing their private security presence. They were also contemplating going to court to end the strike. Meanwhile, the Association of Mineworkers and Construction Union (AMCU) received a R50,000 donation from the Economic Freedom Fighters in support of the striking workers.
There have been a number of attacks on workers on both sides of the picket line. As some miners returned for work, several were attacked while AMCU members opposing Lonmin were also attacked with at least one murdered. People were fearful of another massacre like the one at Marikana in 2012 where 34 striking workers were shot down by the police. Since it began, the strike has cost Lonmin R14.4 billion in revenue and the striking workers some R6.4-billion in earnings.
U.S. Secretary of Commerce Penny Pritzker Trade Mission to Ghana and Nigeria
U.S. Secretary of Commerce Penny Pritzker announced that she will lead 20 American companies on an Energy Business Development trade mission to West Africa on May 18 – 23 and will include stops in Ghana and Nigeria. This trip constitutes the first official visit to Africa by a fully confirmed U.S. Secretary of Commerce since 2002. The visit will promote U.S. exports and expand the business presence of American companies in the energy sector. The Department’s International Trade Administration is expected to more than double its presence in Africa, expanding offices in Kenya, Ghana, Morocco and Libya, while opening for the first time offices in Angola, Tanzania, Ethiopia and Mozambique. The DOC will be able to further assist U.S. businesses in Africa while improving transportation networks for trade in other places around the world. U.S. Assistant Secretary of Commerce for Global Markets Arun Kumar stated that the expansion will provide “infrastructure and ideas that improve quality of life for [West African] citizens and they will support the partnerships that spur innovation among local businesses.”
If you’re looking for new markets, Africa is the place to be. But right now, the U.S. is not leveraging Africa’s huge potential. By contrast, the Chinese are there, and they are willing to take risks.
China was the single largest infrastructure financier in 11 African countries between 2009 and 2012.