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EU Chief, Leyen urges more engagement with Africa

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European Commission (EU) President, Ursula von der Leyen, has called on countries in the region to engage more African countries.

Leyen made the charge in her annual policy speech to the European Parliament on Wednesday, while also accusing Russia of stirring chaos in the Sahel. She also stated military coups destabilised the region, making it prone to risk of terrorism.

At the same occasion, the EU extended its punitive measures against individuals who endanger or undermine Ukraine’s territorial integrity, sovereignty, or independence for an additional six months, until 15 March, 2024.

“Sanctions will continue to apply to almost 1 800 individuals and entities altogether, many of which are targeted in response to Russia’s ongoing unjustified and unprovoked military aggression against Ukraine”, the EU said in a statement.

“This is of direct concern for Europe – for our security and prosperity,” von der Leyen said.

“We need to show the same unity of purpose towards Africa as we have shown for Ukraine. We need to focus on cooperation with legitimate governments and regional organisations,” she added.

The EU’s promised massive infrastructure expenditure in the developing world is progressing slowly. Von der Leyen is generally anticipated to run for re-election to the EU executive after a continental election next year.

Nigeria and other African countries have been beneficiaries of the EU’s boycott of Russian goods, particularly its gas and grain following the body’s sanction on Russia over the invasion of Ukraine.

Musings From Abroad

AfDB, IDB on $20bn IMF reserve asset donor drive

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In line with a global initiative to increase the efforts of leading multilateral development banks (MDBs) to address poverty and climate change, the African Development Bank (AfDB) and the Inter-American Development Banks (IDB) intend to convert each SDR into $4 in additional funding through the use of hybrid bonds and other financial instruments.

“All these countries have shown a lot of interest, and I think that with the approval from the IMF to use it (SDRs), it’s going to make that conversation a lot better,” AfDB President, Adesina said.

Japan has also pledged to help as a potential contributor of SDR, and in Europe, France has indicated interest in contributing some of its SDR for a simultaneous “liquidity guarantee” that would reimburse donors should they encounter difficulties.

“There are a lot of things that that bacon can feed – electricity, water sanitation, education,” Adesina stated, adding that he and Goldfajn have the remainder of the year to “bring the bacon home.”

The board of the AfDB separately approved a $117 billion capital increase earlier this month, and it is currently seeking an additional $25 billion for its concessional lending arm, the African Development Fund.

It aims to allocate a portion of the funds to projects like credit guarantees, which lower project financing costs by utilizing the bank’s triple-A credit rating as a halo.

It plans to use them similarly for debt-for-nature or climate swaps, which enable governments to reduce debt in exchange for safeguarding important ecosystems. Currently, Tanzania is employing them for railways linking Tanzania to the Democratic Republic of the Congo, Burundi, and Nigeria.

The AfDB’s almost-final year in leadership, Adesina, stated that acknowledging the economic and global significance of Africa’s savannahs, rainforests, rivers, and seas is also necessary.

According to his estimation, their worth is at least $6.8 trillion, and the bank plans to adjust the GDP calculations for the continent to account for this amount. For instance, the Congo Basin is thought to be larger than the Amazon to be the world’s greatest carbon sink.

“In a world of climate change and green growth that ought to matter,” he added, saying that if “properly valued” countries like Congo and Gabon would have much better debt metrics.

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Musings From Abroad

World Bank grants Nigeria’s request for a $2.25 billion loan

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According to a statement released by the World Bank on Thursday, Nigeria has been granted a $2.25 billion loan to help stabilize its economy after implementing reforms and increasing aid to the underprivileged.

Nigeria wants to borrow up to $2.25 billion from the World Bank, according to Finance Minister Wale Edun’s April announcement. The proposal is expected to be approved by the bank’s board in June.

The boldest reforms the nation has seen in decades were started by Nigerian President Bola Tinubu in May of last year. He eliminated a popular but expensive fuel subsidy and twice devalued the currency substantially in an attempt to spur economic growth. However, the actions exacerbated a situation caused by rising costs of living and increased inflation.

The International Monetary Fund predicted that gasoline subsidies could account for as much as 3% of GDP this year due to the devaluation since rises in pump prices have not kept pace with their dollar cost.

Additionally, labour unions have been putting pressure on Tinubu to undo changes. According to the World Bank, it has authorized two loans totalling $750 million to speed up tax mobilization and $1.5 billion to support Nigeria’s reforms.

Nigeria has taken “initial critical steps to restore macroeconomic stability, boost revenues, and create the conditions to reignite growth and poverty reduction have been taken.” Nigeria has also started important reforms to address economic distortions and strengthen its fiscal outlook.

According to the World Bank, the loan will aid Nigeria in its efforts to increase non-oil revenue and foster fiscal sustainability, both of which will enable the West African country to provide high-quality public services.

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