Theresa May and Angela Merkel in Africa; Kenyatta visits the US
This week, British Prime Minister Theresa May met with the presidents of Nigeria, South Africa, and Kenya as part of her three-nation tour of Africa. During the trip, May committed to shifting her government’s development focus from short-term programs to focusing on longer-term economic and security issues. As part of the commitment, the British government will invest an additional $5.2 billion (4 billion pounds) on the continent focusing on youth employment. Part of the trip also focused on issues of security and corruption. In Nigeria, discussions focused on security as May committed to new support for the Nigerian military. In Kenya, May and President Uhuru Kenyatta signed an agreement that will direct any proceeds of Kenyan corruption found in the U.K. back to the country.
Research Analyst - Africa Growth Initiative
On Wednesday, German Chancellor Angela Merkel began a three-day trip to West Africa where she will visit Senegal, Ghana, and Nigeria. The trip is expected to focus on migration and investment in Africa with several German business leaders joining the trip. Addressing migration from Africa to Europe, the Merkel through her spokesperson said, “We must fight illegality but also create legality and conditions for work here on the ground.”
In other news, on Monday, President Kenyatta met with U.S. President Donald Trump in Washington, DC. Following the meeting, trade advisers from both countries announced the creation of the U.S.-Kenya Trade Investment Group. Several deals were also signed alongside the meeting, including $233 million funding for a wind farm in Kenya through the U.S. government’s Power Africa initiative and a $50 million loan to Acorn Housing to build and operate affordable student housing in Kenya.
Ethiopian Prime Minister Abiy cancels dam contract with state-run firm METEC
Last weekend, Ethiopian Prime Minister Abiy Ahmed announced that the government canceled its contract with the state-led firm Metals and Engineering Corporation (METEC), which was responsible for installing turbines for the Grand Ethiopian Renaissance Dam (GERD). At a press conference on Saturday, Abiy argued that METEC was delaying the project, stating, “It is a project that was supposed to be completed within five years, but seven or eight years later not a single turbine is operational.” METEC is run by the military, and according to the Financial Times, is seen by many as an extension of the former ruling elite and a beneficiary of political patronage. The firm’s ousting will allow a new company to take over the contract, and as noted by Quartz Africa, demonstrates Abiy’s ongoing efforts to end military and government control over strategic sectors. Once completed, the GERD is expected to be the largest hydroelectric dam in Africa, with a generation capacity of 6,450 megawatts. It is currently 60 percent finished.
Abiy also announced reforms targeting the country’s political environment this week, stating that the country would aim to hold democratic multiparty elections in 2020. Abiy declared, “My dream and ambition is for democratic elections to be held…Otherwise, what legitimacy can any official have without the mandate earned through elections?” Since coming to office, Abiy has released political prisoners and signed a peace agreement with Oromo Liberation Front opposition group.
South Africa power sector update and post-brexit SACU, Mozambique, UK trade deal
South Africa released an updated national energy plan this week that drops the country’s planned nuclear expansion and instead focuses on adding additional capacity from wind, solar, natural gas, and hydropower. The 2018 Integrated Resource Plan is an update on the original plan from 2010 that envisioned a significant expansion of nuclear power, which would have added up to 9,600 megawatts. The new plan will see the country adding 8,100 MW each from wind and natural gas, 5,670 MW from solar, 2,500 MW from hydropower, and 1,000 MW from coal.
In addition, during Prime Minister May’s trip to South Africa this week, the Southern African Customs Union, Mozambique, and the U.K. government announced a new trade deal that will maintain current market access once the U.K. leaves the European Union. Currently trade between the U.K. and African countries in the new agreement is covered by the EU’s Economic Partnership agreements with Mozambique and the South African Development Community.