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Somalia secures $4.5bn debt relief from lenders

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After a decade-long process of negotiations and reforms with creditors, Somalia has finally secured a $4.5 billion debt write-off from global lenders as the enhanced Heavily Indebted Poor Countries (HIPC) Initiative has spared the nation from repaying its debt.

 

The World Bank reports that the country’s debt has significantly decreased from a peak of $5.2 billion to $600 million as a result of the action taken by multilateral and bilateral lenders, including the International Monetary Fund (IMF).

Commercial creditors have contributed $3 billion towards the debt relief, with multilateral creditors contributing $573.1 million, the World Bank’s International Development Association contributing $448.5 million, the IMF contributing $343.2 million, and the African Development Fund contributing $131 million.

Following the Bretton Woods institutions’y boards’ approval process, a historic announcement regarding Somalia’s debt forgiveness is scheduled to take place in Washington DC on December 13.

HIPC completion points were reached by 37 nations, with Somalia following suit after Zimbabwe and Sudan were left behind. Under the leadership of the current president, Hassan Sheikh Mohamud, Somalia began holding HIPC talks ten years ago, and the nation has continued on the reform path despite political obstacles.

Kristina Svensson, the country manager for Somalia at the World Bank, praised Mogadishu for its “remarkable” commitment to reform last week.

“There have been a lot of political challenges within Somalia, but this thing (principles of HIPC), has held it quite high,” she said.

“This is satisfactory for them (Somalia) to achieve debt relief,” said Ms. Svensson. “Both the World Bank and IMF as well as other international partners, have been essential to providing technical assistance to support the achievement of these triggers.”

Over the past few weeks, Somalia has achieved huge milestones in its efforts towards socioeconomic and political liberation. It recently joined regional bloc, East Africa Community (EAC), as it seeks strategic partnerships with neighbours.

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Nigeria’s antigraft body EFCC to team up with UK prosecutors in ex-minister Diezani’s $2.5bn fraud case

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There were indications over the weekend that the Economic and Financial Crimes Commission (EFCC) intends to collaborate with UK prosecutors as an interested party in the trial of former Petroleum Minister Diezani Alison-Madueke in a UK court.

According to the Nation, a delegation from the anti-graft commission is due in London to start the process by filing essential documents.

According to a source familiar with the situation, the EFCC aims to share its findings, as well as the Abuja High Court’s forfeiture decision involving Diezani’s $2.5 million homes and vehicles, with the UK court.

“This country may not be able to retrieve questionable assets from Diezani if the EFCC does not apply to an interested party. We have received an advisory on this important bend to Diezani’s trial and we will be part of the case in the UK. A team will leave for London any moment from now to explore legal opportunities and file necessary papers as an interested party.

“The overall aim is for Nigeria to benefit from Diezani’s trial, especially the recovery of all assets linked to funds looted in this country. The EFCC has sufficient evidence against Diezani, including a court order on the former minister’s $2.5 million homes and cars.

“In another case, a former chairman of EFCC confirmed that the commission recovered $153 million and secured the final forfeiture of over 80 properties in Nigeria valued at about $ 80 million. The allegations against Diezani by the EFCC border on the alleged stealing of about  $2.5 billion from Nigeria’s coffers as a minister.” the source said.

The source continued, “This nation must rise to the occasion because, in March 2023, the NCA also provided evidence to the US Department of Justice that enabled them to recover assets totalling $53.1 million linked to Mrs Alison-Madueke’s alleged corruption.

“Like the P&ID case, the EFCC has sufficient evidence to pull through a case against Diezani. We want all stolen, diverted and questionable assets back in the custody of Nigeria for the good use of our citizens. I think the EFCC is collaborating with the NCA in the UK on this.

“It is also unclear if the UK court will ask Diezani to return to Nigeria to serve prison terms if convicted. This is why we also need to be an interested party in the case in the UK.”

Diezani is currently on trial in the UK’s Southwark Crown Court for an alleged £100,000 bribe. The National Crime Agency claimed Diezani could have received at least £100,000 in benefits, including cash, chauffeured cars, private jet flights, luxurious family trips, and several London apartments.

On October 2, 2023, a Magistrate Court granted the former Minister £70,000 bail, citing her potential flight risk. The trial in Diezani’s case is set to begin in November 2025. In October 2023, Lateef Fagbemi, Attorney-General of the Federation and Minister of Justice requested the immediate extradition of Diezani Allison-Madueke, former Minister of Petroleum, from the United Kingdom.

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African leaders seek innovative methods to boost agriculture

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African authorities are seeking innovative methods to enhance funding for the agriculture industry in the continent and to improve the price and accessibility of fertilizers. This urgency arises from the recognition of the deteriorating condition of arable land in Africa.

Recent studies indicate that over 65% of agricultural land in Africa is currently experiencing degradation as a result of insufficient fertilizer utilization, soil erosion, and acidification. This alarming situation has raised concerns among leaders, as it poses a significant existential danger to the foundation of the continent’s economies, namely agriculture.

The Heads of State and government, along with the leaders participating in the Africa Fertiliser and Soil Health Summit in Nairobi this week, believe that increased funding and intra-Africa trade in fertilisers will be essential for sustaining agriculture across the continent.

The extent of land degradation in sub-Saharan Africa is a topic of ongoing debate. Conflicting perspectives exist regarding its regional and local scales, methodologies and reliability of indicators, and the effects of past and current degradation on food security, rural livelihoods, and the future of Africa.

“Fertiliser access and affordability must be improved. Financing tools such as trade credit guarantees, working capital, and targeted subsidies must be consolidated to reduce market distortions, reduce costs and strengthen input supply chains,” said the leaders in the Nairobi Declaration published on May 9.

“The need for regional cooperation on the issue of fertiliser and soil health is greater than ever before as opportunities for investment and great inter- and intra-regional trade are now significantly enhanced by AU member states’ adoption of the Africa Continental Free Trade Area (AfCFTA).”

“The majority of Member States are still over-dependent on imported fertilisers, especially non-phosphate-based fertilizers which expose Africa to external market shocks and price volatility,” they explained.

Based on data from the African Union, fertilizer utilization in Africa is significantly lower compared to other regions globally. The global average for fertiliser use is 135kg per hectare, however, in Africa, it is just 18kg. This is far lower than the aim of 50kg/ha set in 2006 at a conference in Abuja.

What’s more, “the recent global fertiliser crisis has disproportionately affected Africa, with a year-on-year decline of 25 percent in fertiliser consumption in 2022,” said the declaration.

“Recent global economic crises, compounded by supply chain disruptions from the Covid-19 pandemic and geopolitical dynamics, have worsened fertiliser affordability and availability, and disrupted agriculture, resulting in reduced acreage and lower yields,” Kenyan President William Ruto said in his address at the summit.

“We call upon the private sector to increase investments in Africa’s fertiliser industry and promote sustainable soil management practices.”

Private sector entities operating in agricultural production and fertiliser manufacturing assert that reducing the price of fertilisers to ensure accessibility for small-scale farmers is vital, although it is a challenge that they are unable to do single-handedly.

“Governments should relook tax policy for fertilisers and could remove some items to lower overall costs,” said William Ngeno, country representative in Kenya and Uganda for fertiliser manufacturer Yara International.

“Partnership in the building last mile access to fertiliser with private sector is crucial. Farmers need to access the fertiliser as close to them as possible.”

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