Next Africa: Ethiopia faces a new crisis

Welcome to Next Africa, a weekly newsletter about where the continent is now – and where it’s headed.

First there was a war, now Ethiopia is facing a debt crisis.

The nation’s demand to restructure them the external debt in a Group of 20 program highlights how many circumstances have changed for the country and for Prime Minister Abiy Ahmed in just over a year.

In 2019, Abiy won the Nobel Peace Prize for ending two decades of conflict with Eritrea. After coming to power in 2018, he was hailed for his commitment to opening up the economy and creating more space for democratic expression.

The outbreak of the coronavirus and a war with the rebel region Tigray suppressed this. Little progress has been made on privatization deprivation and in the civilian field the victims and displacements in Tigray have condemned internationally the leader of one of Africa’s fastest growing economies.

Now, the country is worried about fulfilling its debt obligations, and the announcement that it is discussing liabilities with official creditors has caused panic among private creditors. The country’s Eurobonds fell the most in the past week.

“The World Bank has stepped in to fill the gap,” said Mark Bohlund, a senior analyst in credit research at REDD Intelligence. This “is becoming more politically difficult as a result of alleged human rights abuses committed during the Tigray war,” he said.

For now, there is no immediate way out for Abiy.

Coronavirus has reduced demand for horticultural and textile exports from the country, and tourism has ceased.

The war, which threatens to take the form of a guerrilla war resistance, did not help.

News and opinions

Inoculation of Africa | Covax, the program that strives for equitable access to coronavirus vaccines, has allocated millions of AstraZeneca vaccines to African countries, with the first deliveries seen by the end of February. Meanwhile, Moderna offered to supply its vaccine to South Africa, in what was to come the first such agreement with an African nation. The largest in South Africa the companies are in talks with the government to facilitate national vaccination in an estimated $ 802 million program.

Auto Boost | Ford Motor Co. will show $ 1.05 billion in South Africa the largest investment so far in the country. The carmaker, which is expanding to other regions, including Brazil and Europe, will modernize the Silverton plant near the capital Pretoria, with an annual capacity of 200,000 units and create about 1,200 direct jobs. Separately, Rolls-Royce intends to do so is expanding into Africa to develop the power systems division after the main activity of wide-body jet engines was derailed by coronavirus.

Enigma sanctions | Several MPs urge Treasury Secretary Janet Yellen to do so reverses the Trump administration’s decision to ease sanctions on Israeli billionaire Dan Gertler. The US sanctioned Gertler and his companies in 2017 for allegedly corrupt mining and oil businesses in the Democratic Republic of Congo. But in his last days in office, President Donald Trump’s Treasury Secretary Steven Mnuchin issued a license allowing Gertler and his companies to resume operations until January 2022.

WTO job | Former Nigerian Finance Minister Ngozi Okonjo-Iweala is left as the only candidate for the top position of the World Trade Organization, after the South Korean trade minister gave up his offer to lead the institution. Yoo Myung-hee’s retirement comes after some former US government officials urged President Joe Biden to support Okonjo-Iweala after the Trump administration blocked his selection. The opposition has stopped the selection process because WTO decisions are made by consensus.

State takeover | Following the acquisition of Glencore and Vedanta’s local operations over the past two years, Zambia is not trying to take over several mining companies, nor does it intend to nationalizes the industry, according to Finance Minister Bwalya Ng’andu. He feared a new wave of government takeovers following President Edgar Lungu’s remarks in December that Africa’s second-largest copper producer wanted “significant stakes” in unspecified mines. Other miners operating in Zambia include First Quantum Minerals and Barrick Gold.

Past and Prologue

Date Watch

• Absa’s South African procurement managers’ index rose to 50.9% in January from 50.3% in December. It was the best January index recorded since 2015.
• The central bank of Ghana has left its key interest rate unchanged at 14.5%. The rate was kept to a minimum of almost nine years for the fifth consecutive meeting, as inflation returned above the target range.

Coming

• February 8 Mauritius January inflation, presidential election in Djibouti, Central African Republic holds second round of parliamentary elections
• February 10 South African confidence index and inflation in Ghana for January
• February 11 South African President presents State of the Nation address, mining production in South Africa and production output data for December

The last word

The number rhinos killed by poachers in South Africa, which has the largest animal population in the world, fell by 33% last year – partly because coronavirus blockages have reduced incursions into game reserves. About 394 rhinos have been killed for their horns, which are being smuggled to East Asia, where they are believed to cure cancer. South Africa has about 20,000 white rhinos and a few black rhinos. Most animals live in the Kruger National Park, an Israel-sized reservation on the border with Mozambique. Of the rhinos killed, 245 were in the park.