Africa Current Affairs

China pledges $60 billion of financial assistance to Africa

China has pledged $60 billion of financial assistance to Africa bolster industry, counter hunger, and enhance security in the continent. It was announced by Chinese President Xi Jinping in his inaugural address at third Forum on China-Africa Cooperation (FOCAC) held in Beijing.

FOCAC is an official forum between China and all states in Africa (except Eswatini). It was started as Ministerial Conference in 2000 in Beijing and since then it is held triennially in China and Africa alternatively.

2018 FOCAC Highlights

Focal areas: Eight focal areas of funding were mentioned that would premise emergence of China-Africa community with shared future in the new era. Energy, transport, telecommunications and tapping cross-border water resources will be China’s priority in this next phase of Africa’s infrastructural forays.

Economic and trade cooperation: China’s will also help to set up additional economic and trade cooperation zones to promote industrialisation in Africa. It will also encourage local currency settlements, instead of hard currency usage to settle transactions. It will also support Africa to achieve general food security by 2030.

Security: China also flagged its intent to bolster security in the continent. It will set up peace and security fund in partnership with Africa. It will also support countries in Sahel region and others bordering piracy-ridden Gulf of Aden and Gulf of Guinea apart from providing military aid to African Union.

50 China-Africa security assistance programmes will be launched under flagship Belt and Road Initiative (BRI).  China has already established naval base in Djibouti on the edge of the strategic Gulf of Aden, which links the Red Sea and Arabian Sea

Environment Protection: China-Africa Green Envoys Programme will be launched to strengthen Africa’s capacity for environmental management, pollution prevention and control, as well as green development. China-Africa environmental cooperation centre will also be set up where research on environmental issues will be conducted.

Financing Mechanism: For financing, China will nudge African countries to tap new multilateral lenders such as Asian Infrastructure Investment Bank (AIIB), New Development Bank (NDB) of emerging economies as well as Silk Road Fund marshalled by China.

Out of $60 billion offered, China will disburse $15 billion as aid, interest-free loans and concessional loans, $20 billion as credit line, channel $10 billion into special fund for China-Africa development and $5 billion special fund will be set up only for African imports.

Month: Categories: International Current Affairs 2018

Tags:

44 African countries sign agreement to establish African Continental Free Trade Area

The 44 African countries from total 55 members of African Union (AU) have signed agreement to create African Continental Free Trade Area (AfCFTA), one of the world’s largest free trade blocs. The agreement was signed at a summit held in Kigali, Rwanda.

The signed AfCFTA agreement contains legal framework for free trade area. It will come into force after it is ratified by individual countries through their respective domestic processes. 10 countries including Nigeria, Africa’s largest economy and most populous country have refused to sign the agreement.

African Continental Free Trade Area (AfCFTA)

AfCFTA will bring together 1.2 billion people with combined gross domestic product (GDP) of more than $2 trillion from entire continent of Africa comprising 55 countries. The continental trade bloc aims to remove barriers to trade, like tariffs and import quotas, allowing the free flow of goods and services between its members. It also seeks to liberalise services and aims to tackle so-called non-tariff barriers which hamper trade between African countries, such as long delays at borders. It will help in creating single continental market for goods and services and boost trade between African countries. It will boost commerce, growth and employment. The free trade area may also will free movement of people and even have single currency in future. It will also make Africa more competitive outwardly. Once AfCFTA becomes reality, it will be largest free-trade area in terms of participating countries since the formation of the World Trade Organization (WTO).

Background

African heads of government agreed to establish a continental free trade area in 2012 and started negotiations in 2015 to boost intra-Africa trade. Intra-African trade is relatively limited and it is made up only 10.2% of continent’s total trade in 2010. Within Africa, 43% goods traded are manufactured products. Between 2010 and 2015, fuels represented more than half of Africa’s exports to non-African countries, while manufactured goods made up only 18% of exports to rest of the world.

Month: Categories: International Current Affairs 2018

Tags:

Advertisement

12345...1020...23