Musings From Abroad

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

Published

2 weeks ago

June 15, 2024

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.

Musings From Abroad

Kenya: US condemns violence as Ruto reverses tax law

Published

24 hours ago

June 27, 2024

Ifeoluwa Dada

The violence in Kenya, where doctors reported that 23 people had died this week following violent battles between protesters and police, has been condemned by the United States.

William Ruto, the President of Kenya, backed down on Wednesday from his plans to raise taxes in response to protesters who had invaded parliament, started nationwide rallies, and threatened to take further action this week.

In the most critical crisis of Ruto’s two-year administration, the move will be viewed as a huge success for a week-old, youth-led protest movement that evolved from online condemnations of tax rises into large-scale marches seeking a political overhaul.

On social media, however, some protestors said that they would still go ahead with Thursday’s march despite Ruto’s backpedalling, with many of them restating their demands that he step down.

A day after violence between police and protestors at the assembly and across the country left at least 23 people dead and several others wounded, according to medics, Ruto declared he would not sign a finance measure that included the tax increases.

“The United States is deeply concerned about and we condemn the reported violence in all its forms,” White House national security spokesman John Kirby told reporters.

Shortly after MPs passed the tax proposals on Tuesday, police opened fire on crowds who had gathered around parliament and then broke into the assembly’s enclosure.

“The United States has been in touch with the Kenyan government to urge appropriate use of force by the police, to respect human rights … and we will continue to push for calm to prevail,” said Kirby.

Musings From Abroad

US intelligence warns of escalating insurgencies in West Africa following withdrawal from Niger

Published

1 day ago

June 27, 2024

Ifeoluwa Dada

American officials are cautioning that it is getting harder to keep an eye on the escalating insurgencies in West Africa as the United States military gathers what remains of its supplies and counterterrorism forces in Niger.

The military authorities of Niger have given the United States until September 15th to withdraw its forces from the nation. This includes closing a $100 million drone base close to Agadez in central Niger, which served as a vital source of intelligence regarding organizations associated with the Islamic State and al Qaeda.

“Our ability to monitor the threat is degraded because of the loss of Agadez,” one U.S. official told Reuters in an interview, speaking on condition of anonymity.

The expansion of the Islamic State and the al Qaeda affiliate Jama’a Nusrat ul-Islam wa al-Muslimin (JNIM) are of special worry to U.S. officials.

The main difficulty facing Michael Langley, the four-star Marine general in charge of American forces in Africa, is predicting when extremist organizations would develop to the point where they could pose a threat to the US or Europe.

“It has the potential (to become a threat to the United States) as they grow in numbers. But we want to be able to monitor … to see if it metastasizes into increased capability,” Langley said, speaking on the sidelines of a conference of African chiefs of defence in Botswana.

Experts warn that it won’t be simple, and some compare it to Afghanistan, where information about the Islamic State and al Qaeda is collected at a far lower level than it was prior to the withdrawal of the United States and the Taliban takeover in 2021.

“When we leave an area like the Sahel and Afghanistan, we not only cannot (act on) an immediate threat with military and intelligence forces, we don’t know about the plotting of an attack because of our reduced (intelligence) collection capabilities,” said Mick Mulroy, a former senior Pentagon official and CIA officer.