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African Union pushing financial independence?

By Jehron Muhammad | Last updated: Sep 18, 2018 - 3:47:11 PM

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In explaining why four million Rwandan citizens petitioned Parliament demanding that Paul Kagame be able to run for a third term, I’ll just refer to words spoken by a prominent Democratic advisor for U.S. President Bill Clinton, who once said, “It’s the economy, stupid.”

African human rights activist and blogger Gatete Nyiringabo Ruhamuliza, a critic of Kagame, says when the president was elected with over 90 percent of the vote he understood that sentiment. People outside of the country “thought we are mad” or being “intimidated” or “coerced to keep Kagame as our president.”

This Kagame critic said though Western media continues to deny Kagame his props, his economic success is undeniable. Under his leadership, Rwanda has cut aid dependency by half every ten years (from 86 percent in 2000 to 45 percent in 2010 to 16 percent in 2017), said Ruhamuliza. It’s still being reported at 40 percent because “this is unheard of.”   

Paul Kagame, President of the Republic of Rwanda, addresses the general debate of the General Assembly’s seventy- second session Sept. 20, 2017. Photo: UN Photo/Cia Pak

The blogger wrote, since Kagame took over the reins of the African Union “its self-funding improved by 17 percent, from 43-60 percent. In 2016 when Kagame was appointed to lead AU reforms, total contributions by African states were 36 percent. The self-funding mechanism suggested a 0.2 percent levy on eligible imports, have made possible a dramatic 24 percent jump in self-funding by Africans. The levy will generate around $1.2 billion annually and cover most of the AU activities, including programs, operations and peace and security missions.” 

In addition to Kagame’s efforts to make the AU self-sufficient, he helped spearhead African Union’s Continental Free Trade Area (AfCFTA), according to economist Cedric Muhammad,  that will determine “Africa’s economic future.”

During a wide ranging interview via email and focusing on the economics of Africa, Muhammad, a member of the African Union’s first Congress of African Economists and the NOI Research Team, wrote this “will require stable regional African currencies first and also a desire for nations like Nigeria and South Africa to prefer (to) being big brothers to African nations rather than junior partners to America and Europe.”  As of now, African nations prefer recognition from America, England and France more than autonomy in unity with one another,” he said. 

This could change. According to Carlos Lopes, appointed in July as the AU’s High Rep on the post-Cotonou talks, 49 out of 54 African countries so far have signed on to AfCFTA. He is confident that all but isolationist Eritrea will have signed by January.

“There is a political push in Africa for the continental free trade area to be the main instrument through which to conduct trade with Europe,” he said.

With a fight inside the European Union, including the United Kingdom’s exit, called “Brexit,” and an increasing global trade war with the U.S., Lopes said, “contrary to perceptions, Africa is not a minor partner when it comes to trade with the EU after the U.S. and China.”

Africa is apparently feeling a sense of empowerment, he said. “The African Union recognizes that we are stronger when we negotiate as one voice,” he added.

Responding to a question about Kagame’s recent claim, made while in Beijing, at the China-Africa Cooperation Forum that Africa’s China relationship has been “deeply transformational,” Muhammad responded, “It could be.” 

More questions than answers remain about the $60 billion in pledges made by China at the conference, he added. “There are still many questions about when and whether this full $60 billion will be distributed? Most of African and even Western financial media don’t understand how loans through Chinese policy banks work or how currency swaps between China and African central banks could play a role in how Chinese economic activity in Africa is financed on the ground.

“The breakdown of the $60 billion includes, $15 billion of grants, interest free loans and concessional loans, $20 billion in credit lines and $10 billion earmarked as development financing. A further $5 billion will serve as a special fund for financing imports from Africa.”

As Muhammad said, and as Hudson Wang Jiazin, the Counselor at China’s Economic and Commercial Department based in Kigali confirmed, through Rwanda’s The New Times, that there is no allocation plan for the amount of money pledged. And, “the provision of the financial support depends on the practical and feasible proposals of each African country, said the Rwandan outlet. 

Questions also include concerns about land reform in South Africa.

Since President Trump tweeted erroneously that White farmers were being killed and the South African government had began expropriating land much has been reported about land reform. In addition, Namibia is sponsoring an upcoming conference in October on land reform. Note: Most of Black Southern Africa suffers from a history of land displacement.

Muhammad said, “Despite years … of activism and suffering of the Mandela family and people of South Africa, the painful fact is that control of the South African economy was never relinquished by mineral and financial powers who benefited from apartheid.”  

He added, “The symbol of Black majority rule and a Black president was never married to a substantive resolution or program to address the land question in a way that both ensured wealth redistribution to oppressed Black South Africans and subsequent broad-based economic growth for South Africans of all races and ethnicities.” 

Muhammad concluded the interview discussing the incoming 2019 chair of the African Union, Egyptian President Abdel Fattah el-Sissi.

“President Sisi could rejuvenate the (African unity) movement if he would persuade the Maghreb Union to fully embrace its African identity and not just an Arab one. And if he would speed up the time table toward a single currency from 25 years (which Egypt’s Central Bank Governor Tarek Hassan Amer reportedly supports) up to 6 years.”

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