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Africa 2025:
Prospects
and Challenges
Moscow
2024
Edited by Andrey Maslov
Handbook
Center for African Studies
HSE University
The publication was prepared with the support from
Africa 2025: Prospects and Challenges. Maslov A., Sviridov V. et al.; Higher School of Economics
Center for African Studies. – Moscow : HSE, 2024. – 192 p. – 500 copies.
Africa 2025: Prospects and Challenges is to serve as a handbook on Africa’s development,
challenges and opportunities. Its target audience is government officials, businessmen, scholars
and experts. The handbook aims to provide alternative positive vision on some issues that Africa
faces, among them being fight for food and energy sovereignty, debt crisis, digital transformation,
rapid urbanisation and population growth.
The book was prepared by the team of experts and scholars coordinated by the HSE University
Center for African Studies (Moscow, Russia).
© Center for African Studies of the National Research University
Higher School of Economics and authors, 2024
All rights reserved.
Edited by: Andrey Maslov.
Editorial coordinator: Vsevolod Sviridov.
Authors: Andrey Maslov, Vsevolod Sviridov, Egor Astrakhantsev, Valentin Bianki, Anna Bondarenko,
Anna Davidchuk, Xenia Guseva, Olesya Kalashnik, Nikita Panin, Kirill Smirnov, Andrei Shelkovnikov,
Daria Sukhova.
Typesetting: Denis Komarov.
3
Foreword
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Table of contents
Foreword 5
Measuring Africa’s wealth and money 7
Food for Africa: from food security to food sovereignty 34
African resources to African markets: making energy and mining work for Africa 58
African quest for digital sovereignty 76
Education is power: who teaches African leaders 107
Vision of Africa in the mirror of think tanks around the globe  131
Identifying the DNA of African creativity 152
African businesses – the emerging regional and global players 163
Authors 182
About HSE Center for African Studies 184
About Uralchem Group 186
4
Main
contributors Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Edited by Andrey Maslov, Director, HSE University Center for African Studies.
Editorial coordinator – Vsevolod Sviridov, Deputy director, HSE University Center for African Studies.
Foreword – Andrey Maslov.
Measuring Africa’s wealth and money – Anna Bondarenko, Kirill Smirnov and Andrey Maslov with the assistance
from Igor Demin, Mikhail Golubtsov, Daria Sukhova, Anastasia Svetlova and Semyon Voronin.
Food for Africa: from food security to food sovereignty – Vsevolod Sviridov and Anna Davidchuk with the
assistance from Anastasia Svetlova.
African resources to African markets: making energy and mining work for Africa – Vsevolod Sviridov with
the assistance from Nikolay Golovko and Mikhail Golubtsov.
African quest for digital sovereignty – Olesya Kalashnik and Daria Sukhova with the assistance from Igor
Demin, Angelina Pshenichnikova and Maxim Polyakov.
Education is power: who teaches African leaders – Andrei Shelkovnikov with the assistance from Angelina
Pshenichnikova.
Vision of Africa in the mirror of think tanks around the globe – Valentin Bianki.
Finding the DNA of African creativity – Xenia Guseva with the assistance from Vsevolod Sviridov.
African businesses – the emerging regional and global players – Nikita Panin, Egor Astrakhantsev and
Vsevolod Sviridov with the assistance from Igor Demin.
Organisational support – Polina Slyusarchuk, Lubov Boldyreva.
The main points, conclusions and recommendations of the Handbook’s chapters have been supplemented
and nuanced based on feedback and advice from officials, industry experts and businessmen from Algeria,
Egypt, Ethiopia, Kenya, Nigeria, Senegal, South Africa, Tanzania and Zimbabwe.
Main contributors
5
Foreword
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Africa remains a space of opportunity, the flip side
of that, as it has always been, that it is still unknown.
Although the African Union, AfDB, World Bank,
UNECA and other UN entities, many research or­
ganisations and universities across the continent
and beyond are working hard to collect and process
data and research on what is happening in Africa,
yet the tiny islands of reliable knowledge are being
swamped by the unknown.
We do not know how many people live in most count­
ries, how many diesel generators are installed and how
much electricity they generate, how much it actually
costs to service government debts, or where govern­
ment reserves are kept, what is the real contribution
of the creative industries to the economy. It is difficult
to get data on rainfall or water levels in rivers or lakes.
For many areas, it is difficult to even say whether they
are increasingly suffering from water scarcity or excess.
The HSE University Center for African Studies
is in its fifth year of operation. We are a group of
researchers and consultants from a wide range of
backgrounds, mostly young.
The work that has been carried out by our Center
over the past four years has been very concrete
and practical in nature. Basically, we prepare re­
ports and proposals on the strategy for commercial
vehic­
les operating or intending to operate across
Africa. These were all based on the identification
of prospects and challenges.
In solving those practical problems, we often enter
the realm of the unknown. We always look carefully
for a relevant piece of research, but we do not al­
ways find anything that we can rely on. We also come
across some stereotypes that at first seemed to be
just mistakes. So, we had no choice but to start our
own research programme to fill some gaps.
The relationship between population growth and
hunger was one of the first times we encountered
such a gap. Overpopulation is commonly port­
rayed as the cause of many of Africa’s troubles,
especially hunger. The 1992 Club of Rome report
­
Beyond the Limits was one of the first to impose
such a framework. It has since been used to explain
many of the continent’s conflicts and crises, inclu­
ding the infamous Rwandan genocide.
At the same time, the case studies we have been
able to conduct show that the relationship may be
the opposite. The causes of hunger are the lack of
infrastructure to store and transport food in remote
areas, as well the lack of fertilisers, soil treatment, and
water management in the vulnerable areas. Reports
often underestimate these factors, while exaggera­
ting the role of climate change and overpopulation.
As the population grows, the infrastructure gap
is filled rather than expanded, local food markets
develop, and undernourishment gradually decrea­
ses. A growing population also provides a more sus­
tainable market for fertilisers and advanced agricul­
tural technologies. The more people there are, the
easier it is to achieve food self-sufficiency.
Moreover, Africa is still a sparsely populated con­
tinent and has vast underpopulated areas suitable
for living, farming and community development.
Their sustainable development is an important
condition for continued economic growth and the
formation of the continent’s infrastructural cohe­
sion and integrity. However, this requires maintai­
ning a balance between human settlements and
the environment.
In Tanzania, keeping a piece of land out of agricul­
ture as a wildlife sanctuary brings in several times
more income to the budget than the same piece
of land used for agriculture. This means that land
should be saved and developed intensively rath­
er than extensively. While population growth is
a solution rather than a problem for this strategy,
it has to be complemented by technology transfer,
infrastructure development and investment.
Foreword
6
Foreword Africa 2025: Prospects and Challenges
HSE University Center for African Studies
This was just one example, but an important one,
that convinced us that our findings, based on prac­
tice, can significantly add to established percep­
tions, sometimes amending them. Therefore, their
publication, further discussion and criticism can be
of interest to a wide range of readers in Africa.
This Handbook is intended for decision-makers
across Africa who shape government and corporate
policies, and for those who might be interested in
reviewing and challenging their decisions. It is also
for our colleagues, the experts, from whom we ex­
pect to criticise and contribute to our hypotheses.
As an institution, we are interested in expanding our
network across Africa. As the think-tank at the forefront
of our own home market of ‘Africa’ expertise, our hope
is that some of our knowledge could be also competi­
tive in the African markets if refined and tailored duly in
close cooperation with our colleagues on the ground.
Of course, Africa is not a country. From Algiers
to Cape Town, from Dakar to Dar es Salaam, the
diversity of cultures and civilisations is breathtak­
ing. But the common history, the Agenda 2063, the
­
African ­
Union, UNECA, NEPAD, the Cup of ­
African
Nations and many other events and evidences
prove that Africa is a space of communication full of
unity. The diversity of cultures and forms of social
life does not detract from the fact that it is all Africa.
And there is room for more books about Africa.
Leopold Senghor and Nkwame Nkrumah spoke
of Africa as a unified space. Africa teaches us that
unity does not necessarily mean giving up anything
of oneself. States do not have to give up their sove­
reignty, and people do not have to give up their
rights to join unity. On the contrary, by becoming
part of another whole, they gain new opportuni­
ties and new bonds. African civilisation deserves
respect for its avoidance of artificial contradictions
and imposed choices, for its ability to form allian­
ces
without compromising sovereignty, and for its abili­
ty to communicate despite all the obstacles.
As we have mentioned hunger, we may admit that
the list of challenges facing Africa has not changed
for a long time. But what is changing is the set of tools
that are solutions. In recent years, artificial intelli-
gence is emerging as an important option. Perhaps AI
algorithms are what we have been missing to restore
harmony between humans and ecosystems, as they
are instrumental to defeat hunger and malnutrition.
The penetration of mobile payments in remote and
rural areas has reached a level where big data can
be collected on a wide variety of risk indicators,
such as prices for food. The ‘internet of environ­
ment’ may also become a network for crisis pre­
vention. Nature can speak to us in the language of
big data – and so we may have a better chance of
understanding it.
This book mentions experiences and options for
the implementation of AI in various fields, and the
issue of information and data sovereignty is central
to the discussion.
Obviously, sovereignty comes at a price. Is it worth
this price?
Attention is given to sovereignty in almost all chap­
ters of this book. We talk about food sovereignty,
information sovereignty, energy sovereignty and
sovereignty of creative industries. By analysing
­
African experience, we have tried to understand
what sovereignty can consist of, how to achieve
it and, just as importantly, how to measure it. This
Handbook does not answer the question “How do
you know when sovereignty has been achieved?”,
but rather starts a discussion on this issue.
Russia is not the focus of this Handbook. Although we
are proud of our country’s role in the liberation of Africa
in the 1960s and 1970s, and of the traditions of friend­
ship that have grown since then, this work does not ar­
tificially prioritise Russia and its interests in Africa. This
book is about Africa, its prospects, and challenges.
We would be delighted if the Handbook, to which our
friends from Algeria, Egypt, Ethiopia, Kenya, Nigeria,
Senegal, South Africa, Tanzania, Zimbabwe have also
contributed as its critical reviewers, proves useful
and stimulates the further debate.
7
Measuring
Africa’s
Wealth
and
Money
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
What is the real value
of African money?
One of the main factors holding back Africa’s de­
velopment is a lack of data and information, and
thus of knowledge relevant for decision-making.
The unknown leads to overestimation of risk, and
overestimation of risk leads to an inflated cost of
capital. As a result, the cost of financing a busi­
ness in Africa can be several times higher than in
a developing country outside the continent - not
to mention rates in the US or Europe. There is also
‘cheap’ money in Africa - international funds, banks
and several countries offer low-cost financing to
certain projects and sectors, providing them an ad­
ditional, non-market competitive advantage driven
by non-African interests and external agenda.
Africa is not a single capital market. Almost every
country suffers from the capital drain, at the same
time the most of them rely on external funding for
balancing their budgets. Nevertheless, the individual
capital markets in Africa share many common fea­
tures, and investors often regard Africa or its sub-­
regions as destinations which are best looked at to­
gether. So, there are funds focused on investments
in the continent. In addition, the role of Pan-African
institutions is steadily growing, with AfDB, Afrex­
imbank, the African Union and
UNECA among them.
One of such common features
on the continent is the depend­
ence of budgets and economies
on external borrowing and trade. Taxes on domestic
transactions have played a lesser role. However, the
banking sector is growing dynamically, and in many
countries, banks play a key role in development ac­
ting as intermediaries for external capital markets.
Below we examine these and a number of other
phenomena that shape the financial dimension of
1 UNCTAD. A world of debt report 2024. URL: https://unctad.org/publication/world-of-debt
2 Afreximbank. State of Play of Debt Burden in Africa in 2024. URL: https://www.afreximbank.com/reports/state-of-play-of-debt-burden-in-africa-2024-debt-dynamics-and-
mounting-vulnerability/
risks and prospects for projects in Africa.
Income from the foreign trade and borrowings both
are highly volatile and tend to dry up during crises
due to the undiversified resource-based export
structures and predominance of an external debt
over domestic. Better comprehension of existing
vulnerabilities could help governments, businesses
to implement workable strategies and policies, and
navigate among country-specific risks.
Our study examines the evolution of African debt
throughout the 21st century and its distribution
across the continent. The debt is reviewed in con­
junction with issues regarding trade: trade balances,
export diversification and national currencies. The
research quantifies the existing debt burden and
sheds light on the problem of credit rating agen­
cies, finally offering directions for future research
to enable an unbiased country classification.
African debt: what has
changed?1
As horrific as it may sound, the rest of developing
countries experienced 2.5 times faster debt expan­
sion during the same period.
After a series of defaults in the 1980s and 1990s,
­
African countries embarked on a path of debt de­
celeration, reducing the debt-to-GDP ratio from
65% in 2000 to 39.3% in 2008.2
This trend was main­
ly supported by full-scale debt relief programmes
of multilateral financial institutions. In 1996, the
IMF launched the Heavily Indebted Poor Countries
Measuring Africa’s wealth and money
Since the beginning of the 21st century
African public debt has quadrupled and reached
USD 1.8 trillion in 20221
8
Measuring
Africa’s
Wealth
and
Money Africa 2025: Prospects and Challenges
HSE University Center for African Studies
­
initiative (HIPC) which was targeted at low-income
countries with unmanageable levels of debt. Since
then, 31 African countries have
graduated from HIPC and re­
ceived full debt forgiveness,
reaching USD 70 billion. In
2005, HIPC was supplemented by the ­
Multilateral
Debt Relief Initiative (MDRI), which guaranteed
debt relief on the claims of the IMF, World Bank and
African Development Bank for 29 African states at
the cost of more than USD 30 billion.
Though HIPC and MDRI were effective in no­
minal
terms, their impact on the long-term debt sustainabil­
ity may be contradictory. To enter both programmes,
a state needed to commit itself to structural reforms
(more political than economic), thereby delegating
decision-making to G8 (now G7) countries. Also,
since the IMF offered a bailout, more and more
countries started to account for the future prospect
of similar debt relief, applying riskier debt manage­
ment practices.
Then came the global financial crisis of 2008 when
the modern history of African debt began. In res­
ponse to weakening economic activity, the Fed
and the ECB lowered interest rates which resul­
ted in yield decrease on developed markets and
triggered a search for higher returns elsewhere.
Being less involved in global finance and thus
less affected by the crisis, Africa had demonstra­
ted an average annual GDP growth rate of 5.3%
during 2000-2008 and offered a substantial risk
premium, which was not perceived as that risky
anymore after the collapse of what seemed to be
solid western banks.
Since 2008, the African debt-to-GDP ratio has
sharply increased, reaching
69% in 2023; yet the expan­
sion was asymmetrical in re­
gard to external and internal
obligations. In the early 2010s,
most sovereigns did not have
capacity or credibility to ac­
3 Federal Reserve Bank. Nominal Emerging Market Economies U.S. Dollar Index. URL: https://fred.stlouisfed.org/series/DTWEXEMEGS
4 Afreximbank. State of Play of Debt Burden in Africa in 2024. URL: https://www.afreximbank.com/reports/state-of-play-of-debt-burden-in-africa-2024-debt-dynamics-and-
mounting-vulnerability/
commodate capital in their own bond markets.
Little has changed since then.
By 2022 the domestic debt has reached a no­
table
level in five countries: Egypt (USD 258 billion),
South Africa (USD 116 billion), Nigeria (USD 83
billion), Algeria (USD 95 billion), and Morocco
(USD 30 billion).
Unlike internal debt which depends mostly on the
national economy’s performance and can be ‘print­
ed’ during times of hardship, external debt relies
heavily on global macroeconomic conditions and
has to be paid back in hard currency. The large
share of external debt along with the overexposure
of many African countries to commodity prices and
a limited capacity to deal with disasters and crises
are a volatile combination as was seen during the
2014 commodity price plunge, global pandemic in
2020 and crisis of 2022.
However, the African debt-to-GDP ratio has soared
not only due to the rise of the debt itself. It can be
attributed also to a slowdown in economic growth
(3.2% on average in 2010-2022) and currency de­
preciation (35% devaluation relative to USD since
2014 for emerging economies3
) as the debt is
mostly external.
While comparison to GDP exposes the increase of
the debt level as the main trend, it fails to reveal the
magnitude of the change. Debt is very heteroge­
neous as it comes on different terms from different
sources: other governments, multinational financial
institutions or private banks.4
The private sector has become the main source
of African debt, shifting from 25% in 2000
to 54% in 2023, leaving 27% to multilateral
creditors such as the IMF or World Bank and less
than 19% to bilateral loans from other countries4
In 2023, two-thirds of the total African debt
or USD 1.2 trillion was external
9
Measuring
Africa’s
Wealth
and
Money
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Among the top lenders are private bondholders
(i.e. eurobond market participants from all over the
world), Chinese (USD 24 billion) and British (USD
14 billion) investors. Although this is indicative of
improved investment attractiveness, it poses a
number of challenges for African countries.
Firstly, private debt is more expensive than bilateral
or multilateral, meaning higher interest rates, lower
grace periods and less space for restructuring. The
UNCTAD report entitled A World of Debt 2024
shows that in 2020-2024 the borrowing costs of
African countries were ten times higher than in de­
veloped economies, 44% higher than in the LATAM
region and 85% higher than in Asia and Oceania,
even though the share of private debt in Africa is
lower than average for developing countries.5
Secondly, flows of private debt are more volatile
and tend to reverse in times of crisis as foreign in­
vestors’ main concern is short to middle-term profit
but not long-term and also not the abstract financial
stability of a certain country. In 2022, developing
countries experienced a net
outflow of USD 49 billion on ex­
ternal public debt, among them
were 21 African countries – five
more than in 2021 and 11 more
than in 2019.6
Thirdly, in case of default on private debt it may take
longer to restructure it with a greater number of
counterparties, who are not always willing to coope­
rate. At least 15 African countries have become tar­
gets of ‘vulture funds’ that specialise in purchasing
distressed debt on the secondary market at a sub­
stantial discount and trying to recover the premium,
usually through litigation and delays of the overall
restructuring process.7
For example, in 2007 a vul­
ture fund received USD 15.5 million from Zambia
after buying a debt of USD 3.2 million, meaning that
the fund’s return was 484%.8
After a series of legal
patches the activity of vulture funds in ­
Africa has
5 UNCTAD. A world of debt report 2024. URL: https://unctad.org/publication/world-of-debt
6 Ibid.
7 African Development Bank Group. Vulture Funds in the Sovereign Debt Context. URL: https://www.afdb.org/en/topics-and-sectors/initiatives-partnerships/african-legal-
support-facility/vulture-funds-in-the-sovereign-debt-context
8 BBC. Zambia pays ‘vulture fund’ $15m. URL: http://news.bbc.co.uk/2/hi/business/6589287.stm
diminished; however, a new wave of defaults may
attract more sophisticated parties seeking to profit
from distressed debt.
It should also be considered that a large proportion
of lenders labelled ‘private’ are in fact government
affiliated. This is particularly true of lending from
the Middle East and China.
Africa’s external debt
The debt landscape is not homogenous across ­Africa.
Two-thirds of the external debt is concentrated in
ten countries: South Africa (USD 172 billion), Egypt
(USD 163 billion), Nigeria, Morocco, Mozambique,
Angola, Kenya, Tunisia, Côte d’Ivoire, and Ghana.
Almost all these countries are within the Top 10 in
terms of GDP, with only Tunisia and Mozambique
standing out. As local financial markets grow and be­
come more interconnected, debt distress in one of
these heavyweights may trigger a wave of defaults
across the continent.
Eurobonds are issued in foreign currency outside the
country of origin and have several benefits: they do
not entail any policy changes; they are liquid relative
to other types of debt, and they can be repurchased
or bought back on the secondary market. However,
issuing countries rely heavily on the global interest
rates and their own credit rating as most eurobonds
are paid off by issuing new portions of debt. Nowa­
days, both global and African interest rates remain
high due to the tight monetary policy adopted by
developed countries in the post-Covid era, currency
depreciation and climate shocks. The frequency and
magnitude of these shocks for Africa is increasing
An issue with African external obligations
is the ‘wall of debt’ – portions of eurobonds
that were actively issued last decade and mature
mainly in 2024-26
10
Measuring
Africa’s
Wealth
and
Money Africa 2025: Prospects and Challenges
HSE University Center for African Studies
faster than anywhere else on Earth, and many count­
ries are trying to address the problem by issuing cli­
mate-related catastrophe bonds.
In 2024, there are USD 10.3 billion in eurobonds
maturing, a sharp increase from USD 3 billion in
2023. Some countries have already re-entered the
eurobond market in 2024 to refinance maturing
obligations: Côte d’Ivoire issued USD 2.6 billion in
January and Kenya raised USD 1.5 billion in Febru­
ary. Large portion of maturing debt is still held by
Egypt (USD 3.3 billion), South Africa (USD 1.5 bil­
lion), Morocco (USD 1 billion) and Ethiopia (USD
1 billion). South Africa and Morocco are not likely
to face challenges paying off their debt, but Egypt
may need new lines of credit including one with the
IMF, while Ethiopia might end up in default by the
end of 2024.9
In 2025 African countries will face USD 10.2 billion
in maturing eurobonds, with USD 3 billion being
held by Egypt, USD 2 billion by South Africa, USD 1
billion by Tunisia, USD 864 million by Angola, USD
750 million by Namibia, USD 700 million by Gabon
and USD 500 million by Nigeria.
Luckily, as inflationary expectations are decreas­
ing worldwide, the Fed and ECB are starting to cut
interest rates gradually which will lead to cheaper
debt. However, defaults in countries with the most
vulnerable debt level are very likely to occur in the
next two-three years.
Market sentiment is useful to define the probability
of default on a debt. In 2023, the yield on Ethiopian
eurobonds maturing in December 2024 increased
by 16 percentage points and reached an asto­
nishingly high 50.5% – i.e. eurobonds were sold for
half of their face value.10
Ghana’s bonds maturing
in 2026 had an even greater yield — 54.4%, an in­
crease by 8.2 percentage points from 2022. ­
Ethiopia
and Ghana are the main candidates to default in
2024 and 2026 respectively, adding a new portion
of arrears to the exis­
ting debt in default and further
9 Gregory Smith. Africa’s eurobond wall revisited. URL: https://www.linkedin.com/pulse/africas-eurobond-wall-revisited-gregory-smith/
10 Cytonn. Sub-Saharan Africa (SSA) Eurobonds Performance in 2023. URL: https://cytonn.com/topicals/sub-saharan-africa-ssa-4
11 World bank. International Debt Report 2023. URL: https://openknowledge.worldbank.org/entities/publication/02225002-395f-464a-8e13-2acfca05e8f0
12 Boston University. Chinese Loans to Africa Database. URL: https://www.bu.edu/gdp/chinese-loans-to-africa-database/
limiting their ability to borrow on the international
market. At the same time, both countries can find
ways to limit the scale of the debt crisis through their
political leverage. For example, Ethiopia’s debt ser­
vice costs are low relative to the size of its debt, and
restructuring options can be found with new BRICS
partners or competing sources of financing.
China remains a major bilateral lender to Africa with
over USD 90 billion in active debt commitments
(fourfold increase from 2012), constituting 11% of
the total external debt.11
Chinese loans to Africa
started to grow from USD 100 million in 2000 and
reached its peak in 2016 (USD 28.8 billion). Since
then, the trend has reversed – lending dropped to
just USD 1 billion in 2022.12
From a cumulative USD 180 billion, 80% was at­
tributed to infrastructure projects such as power
plants, roads and railroads, port facilities and cell
networks implemented by the supply of goods and
services from China. Technically the money often
doesn’t leave China, only the financial liabilities be­
ing recorded for the African states.
China has often used resource-backed lending in
countries such as Angola, Democratic Republic of
Congo, Guinea and Ghana, pursuing also the goal
of securitisation its strategic imports from these
countries.
In 2024, the top debtors to China were Angola
(USD 21 billion), Ethiopia (USD 7 billion), Kenya
(USD 7 billion), Zambia (USD 6 billion) and Egypt
(USD 5 billion), some of them in default or being
on the edge of debt distress. Yet, it remains unclear
whether Chinese loans have deteriorated the debt
profiles of African countries or China was just more
willing to accept greater risks.
However, in 2023 China demonstrated renewed in­
terest in Africa with USD 4.5 billion in loans, mainly
in finance and infrastructure. USD 1.3 billion was
provided to Egypt as a line of credit, with the same
11
Measuring
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Africa 2025: Prospects and Challenges
HSE University Center for African Studies
amount being spent on facilitating trade with Africa.
Nigeria received USD 1 billion to construct the Ka­
duna-Kano section of the Lagos-Kano railway, more
than USD 250 million was offered to Madagascar,
Uganda and Angola on energy and telecommunica­
tion projects. What seemed to be a Chinese retreat
from Africa could be strategic realignment before
reevaluating risks and entering new markets.
Main defaulters
In 2023, African debt in default totalled USD 130 bil­
lion, 13% lower than in 2022 but still 30% more than
2020. Four countries account for 90% of the defaulted
debt: Ghana (USD 44 billion), Sudan (USD 43 billion),
Zimbabwe (USD 16 billion) and Zambia (USD 14 bil­
lion)13
. Significant stocks of debt in arrears are also held
by Mozambique, Libya, ­
Tanzania, and Ethiopia.
13 Afreximbank. State of Play of Debt Burden in Africa in 2024. URL: https://www.afreximbank.com/reports/state-of-play-of-debt-burden-in-africa-2024-debt-dynamics-and-
mounting-vulnerability/
14 Al-Monitor. Western creditors suspend debt relief to Sudan over coup as country’s economy sinks. URL: https://www.al-monitor.com/originals/2022/06/western-creditors-
suspend-debt-relief-sudan-over-coup-countrys-economy-sinks
Sudan owes most of its debt to Paris Club countries
(23%), Saudi Arabia (13%), Kuwait (7%), China
(6%) and the IMF (8%). In 2021, Sudan entered the
HIPC initiative and was planning to restructure 90%
of its USD 55 billion in debt. However, in 2022 IMF
suspended the programme after the military coup
and removal of the transitional government.14
Ghana’s 60% of debt in arrears is attributed to eu­
robonds which complicates the restructuring as it
involves many private lenders and non-Paris Club
countries. After defaulting on a debt of USD 30 billion
in 2022, Ghana entered the G20 Common Frame­
work in January 2023, which helped to facilitate the
restructuring process with China and India. In June
2024, Ghana stated that it had reached an agree­
ment on USD 13 billion of eurobonds with private
lenders; yet the remaining debt remains high. With
the current yield on eurobonds maturing in 2026,
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Ghana will not be able to roll over the debt and default
is most likely to occur without massive support from
the external lenders.
Zimbabwe’s debt in default is mostly owed to bilat­
eral creditors (67%), in particular to China. Chinese
lending is opaque relative to other bilateral creditors
to the level that the fact of technical default may not
be disclosed. Little visible progress has been made to
restructure Zimbabwe’s debt: in January 2023, the US
left the restructuring programme15
“due to lack of pro­
gress on democratic reforms, alleged voter fraud and
political violence targeted at opposition parties”16
.
In 2023, Zambia reached an agreement with cred­
itors including China to restructure USD 6.3 billion
of debt and is planning to complete its restructuring
programme in 2025.
Quantifying the debt burden
Debt-to-GDP ratios above 100% are common among
developed economies with well-capitalised markets,
diversified sources of credit and hard domestic cur­
rency. Usually, for developing countries debt greater
than GDP is a crisis that has already occurred.
In 2023, only three states had public debt level
above GDP: Cabo Verde (113%), Sudan (256%)
and Zambia (110%) with Sudan and Zambia being
among top defaulters. 11 countries fell in range bet­
ween 75 and 100% and 22 sovereigns resulted in
50-75% debt-to-GDP bracket.17
Overall, 19 out of 51
countries with available data demonstrated debt-to-
GDP ratios above 70%.18
However, in 2023, only 22
countries experienced debt-to-GDP ratio increase.
In theory, external debt had to be paid in foreign cur­
rency earned mainly through trade. Thus, another
dimension of debt sustainability can be obtained by
comparing external debt with exports and primary
15 The US does not have a great presence in Zimbabwe’s bilateral debt, however, their influence on the overall restructuring progress should not be underestimated since a
large share of banks and credit rating agencies are located in the US.
16 VOA Zimbabwe. United States Suspends Role in Zimbabwe’s Debt Restructuring Program Citing Electoral Fraud. URL: https://www.voazimbabwe.com/a/united-states-
suspends-role-in-zimbabwe-s-debt-restructuring-program-citing-electoral-fraud/7463023.html
17 Afreximbank. State of Play of Debt Burden in Africa in 2024. URL: https://www.afreximbank.com/reports/state-of-play-of-debt-burden-in-africa-2024-debt-dynamics-and-
mounting-vulnerability/
18 International Monetary Fund. The Debt Sustainability Framework for Low-Income Countries. URL: https://www.imf.org/external/pubs/ft/dsa/lic.htm
19 Calculated by the authors on the basis of World Bank and ITC Trade Map data using the formula: , where s is the country of interest, d – other countries, i – sector
of interest, x – the commodity export flow, X – the total export flow of country s.
income (profits from investments in other countries
and residents’ remittances from abroad). In 2022,
15 countries surpassed the 240% debt-to-exports
threshold, and 9 more sovereigns breached the
‘medium’ target of 180%.
In the long term, greater importance for debt sus­
tainability of developing export-oriented African
economies attached to export diversification, since
fluctuation of individual commodity prices are com­
mon and may question economic growth for years,
which is the case with, for example, oil-rich Angola.
The diversification of the exports is a target recog­
nised by many governments, yet there is a lack of
measurable indicators to follow the achievements.
If the export is grouped by main categories, the
sectoral Hirschmann index may be used to meas­
ure the distribution of a country’s exports across
diffe­
rent sectors of the economy.19
The index was
calculated by for 54 African countries for the year
2022 based on the data taken from the two-digit
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level of the Harmonised System and grouped by
categories by expert assessments.
The index ranges from 0 to 1, with higher values in­
dicating that exports are more concentrated in fewer
sectors. Conventionally, we can assume that values
between 0 and 0.25 represent a ‘very high’ level of
export diversification, values between 0.25 and 0.5
represent a ‘high’ level, values between 0.5 and 0.75
represent a ‘low’ level, and values between 0.75 and
1 represent a ‘very low’ level of export diversification.
In this regard, the most vulnerable countries are
those with high debt-to-exports ratio and very
low export diversification, namely Guinea Bissau,
Sao Tome and Principe, and Ethiopia
The cost of servicing debts also matters in this regard,
although it is more difficult to account due to lack of
data. Nevertheless, what is more important in the long
run, that debt can stimulate the development of new
industries and export diversification (which is needed
almost everywhere in Africa). If this does not happen,
and debt accumulates without diversification effects,
the economy is likely to approach a crisis.
Very low export diversification and above medi­
um threshold debt-to-exports ratio are observed
for Cabo Verde, in turn above
strong threshold debt-to-exports
and low export diversification
can be seen for Mozambique,
Niger, Central African Republic,
­
Rwanda, Malawi and Burundi.
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In case commodity prices plummet or international
trade stops, which was the case during pandemic,
currency inflow dries up and governments appeal to
central banks for currency reserves to finance ex­
ternal debt. From now on, time is ticking as reserves
are getting thin (15-20% decrease of reserves in
month-of-imports ratio from 2019 and 50% from
2007) and more investors are betting on national
currency depreciation (10% since 2019 for devel­
oping countries). In 2022, precariously low levels
of reserves relative to external debt had Zimbabwe
(4.3%), Mozambique (4.5%), Chad (5.9%), Ethiopia
(10%), Zambia (10.3%) and Ghana (11.6%).20
Abstract debt level directly affects the social
sphere. In theory, countries invest borrowed money
in lucrative projects and use their proceeds to pay
off debts while both national income and standard
of living improve.21
In Africa, however, debt
service accounts for 16% more
expenditures per capita than
education and 79% more than
health, which often leads to the
opposite of an improved standard
of living21
In 2024, payments on external debt are expected
to take more than 23% of government revenues
in 14 countries.22
A particularly dramatic share of
revenues is spent on debt service in Angola (60%),
Zambia (43.5%), Egypt (39%) and Djibouti (38%).
Internal lending between African countries is con­
ducted mainly through the African Development
Bank. Borrowing from government to government
is vastly underdeveloped and is carried out in fo­
reign currency, mainly US dollars. Private lending
via establishing branches of national banks abroad
is untraceable and often depends on the policy of
foreign investors since they represent a significant
share of ownership of African banks.
20 World Bank
21 A world of debt 2024: A growing burden to global prosperity
22 Debt data portal. URL: https://data.debtjustice.org.uk/
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The exceptions prove the rule, with some politically
driven deals: Libya has offered loans to Chad (USD
277 million), Angola to Sao Tome and Principe
(USD 18 million), Guinea (USD 15 million), Guinea
Bissau (USD 5 million); Côte d’Ivoire to Burkina Faso
(USD 100 million).
Rating agencies and African
premium
International credit rating agencies (CRA) still play
a vital role in accessing credit risk. Major rating
agencies like SP, Moody’s and Fitch have limited
coverage with only 30 African countries included.
However, rating agencies are not only observers:
in fact, they determine the cost of borrowing, and
it is their decision which may exacerbate the debt
burden. Recent studies question credibility of the
CRA towards Africa: according to the UNDP.23
African countries have lost USD 74.5 billion
because of biased credit ratings23
Researchers from UNDP have found that African
countries have lower credit ratings on average than
non-African states with the same level of GDP per
capita. For instance, Tunisia has a 2.5 times lower
rating than Philippines, Egypt has a 1.8x lower ra­
ting
than Indonesia, Mauritius has a 30% lower rating
than Chile. Advocates of CRA associate the dispa­
rity with underdevelopment of political institutions
in African states, which sometimes may be difficult
to capture statistically. In turn, their opponents
remind about the country of origin of all widely
accepted ratings (the US) and the resulting over­
use of western-centric financial power.24
In 2022
Moody’s purchased a controlling stake in leading
African CRA Global Credit Rating, further consol­
idating its leadership on the continent.25
23 UNDP. Reducing the cost of finance in Africa. https://www.undp.org/sites/g/files/zskgke326/files/2023-04/Full%20report%20-%20Reducing%20Cost%20Finance%20
Africa%20Report%20-%20April%202023.pdf
24 Reuters. How Africa’s ‘ticket’ to prosperity fueled a debt bomb. URL: https://www.reuters.com/investigations/how-africas-ticket-prosperity-fueled-debt-bomb-2024-08-01/
25 The conversation. Moody’s has bought a leading African rating agency: why it’s bad news. URL: https://theconversation.com/moodys-has-bought-a-leading-african-rating-
agency-why-its-bad-news-176827
26 William Gbohoui, Rasmané Ouedraogo, Yirbehogre Modeste Some. Sub-Saharan Africa’s Risk Perception Premium: In the Search of Missing Factors. URL: https://www.imf.
org/en/Publications/WP/Issues/2023/06/23/Sub-Saharan-Africas-Risk-Perception-Premium-In-the-Search-of-Missing-Factors-534885
27 Note that Dagong Global Credit Rating is a Chinese state-owned credit rating agency with headquarters in Beijing, while Global Credit Rating also known as GCR Ratings has
become affiliate of Moody’s with offices in Mauritius, South Africa, Nigeria, Kenya and Senegal.
Another important problem lying in the same
dimension is risk perception of Africa among
foreign investors. The existence of an “African
premium” – i.e. higher borrowing cost solely
because of the geographical affiliation with
Africa – is a highly controversial issue. While
according to traditional models it may seem ir­
rational, the lack of transparency and structural
challenges as was mentioned previously could
explain elevated yields.26
From a behavioural
perspective, there are several interpretations:
ambiguity aversion based on the lack of rel­
evant information about most of the African
states and their economies, the presence of
foreign bias as a result of the greater distance
between Africa and its main investors’ coun­
tries of origin or, finally, simple overestimation
of probabilities of shocking events such as wars
and natural disasters.
Taking into account the role
that CRA played in the glo­
bal
financial crisis of 2008, their
opinion may be far from objec­
tive as their main incentive remains their own
profit. Several initiatives among African coun­
tries were announced as alternatives in the field
of credit ranking like Sovereign Africa Ratings
(SAR) or African Credit Rating Agency. How­
ever, SAR has published reports only for Ghana,
South Africa and Kenya. Until 2019, the Chinese
Dagong Global Credit Rating27
published ratings
of 16 African countries. They were significantly
different from western agencies’ estimations and
favoured borrowers and trade partners of China.
In 2019 Dagong was nationalised after a series of
corruption stories and stopped updating African
ratings. In any event, the insightful supervision
and suitable methodology matter more for debt
sustainability than the final rating.
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External debt country
classification
Any linear rating of countries takes into account
many heterogeneous factors with different weights.
If it claims to be unbiased, it is likely to be manipu­
lated. A linear rating can only be correct in relation
to the interests of a single actor who orders this rat­
ing - for their own decision-making or for influen­
cing markets through publications. But some com­
ponents are unbiased and worth considering, so
that everyone can make their own rating weighing
these components their own way.
Indicators reviewed in this chapter (sectoral
Hirschmann index, debt-to-GDP, debt-to-ex­
port, reserves-to-debt, debt-to-service and ser­
vice-to-revenues ratios) might be summarised
and adjusted to reflect heterogeneity caused by
restructuring practices as well as country’s debt
repayment discipline.
Four countries are considered solvent under most
scenarios, namely Algeria, Botswana, Mauritius and
Morocco. Their strong debt indicators and impec­
cable repayment history guarantee future perfor­
mance on the external debt. 19 more countries are
solvent under normal conditions – i.e. if no abrupt
hikes in global interest rates or highly unexpected
domestic shocks like civil war appear.
15 countries are sensitive to adverse trade shocks
equivalent to pandemic or severe currency depre­
ciation as their debt greatly exceeds their export
revenues which are often poorly diversified and
backed by small amounts of foreign currency re­
serves.
Ten countries have significant risk of debt distress
even under current conditions. Either their expan­
sionary debt dynamic causes concern, future debt
repayments, poor fiscal performance or political un­
certainty.
Finally, 4 countries are in default on most of their
external debt. They participate in restructuring pro­
grammes and are mainly excluded from the interna­
tional capital market.
This external debt classification requires further re­
search, adjustment and validation, including the use of
tools based on artificial intelligence. Such research is
highly recommended as this preliminary assessment re­
veals that there are significant discrepancies between
unbiased calculations and publicly available ratings.
With some exceptions, fast-growing Eastern African
economies demonstrate less sustainable debt le­
vels in comparison with slower-developing Western
African countries. Three explanations can be drawn
to attention:
Monetary. Western African countries use the CFA
franc, which is pegged to the euro, thus alleviating
currency and inflationary risks and resulting in a sus­
tainable debt profile. However, the usage of natio­
nal currencies in Eastern Africa may have a positive
impact on overall growth since countries are free to
conduct independent monetary policy.
Geopolitical. Eastern Africa gravitates towards mar­
ket-oriented China and cultivates corresponding
values such as competition and pursuit of revenue,
while Western Africa is more attached to the Paris
Club countries, promoting transparency but giving
the best offers to the most loyal governments with
a lot of loans being politically driven.
Reciprocal. Key trading partners of Eastern African
countries are rapidly developing Asian economies
willing to allocate capital to cover future demand.
Overall positive expectations backed by strong de­
mographics and economic indicators fuel the debt
expansion process.
The domestic debt of Africa
Most African countries have traditionally relied on
external debt in the form of long-term, concession­
al financing from multilateral and bilateral lenders
or non-concessional private financing. In an effort
to diversify their financing sources and reduce the
risk of external debt vulnerability, they have turned
to domestic debt markets in recent decades. Al­
though, the amount of external financing continues
to exceed that of domestic funding.
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Domestic debt refers to the portion of a country’s
total debt that is owed to creditors within its own
borders. Domestic debt can therefore be described
as debt which is issued in the sovereign’s local cur­
rency, or debt which is governed by the domestic
sovereign laws. It can also be defined as debt which
is held by residents of the issuing sovereign.
Significant share of the domestic debt is held by the
entities borrowing themselves from abroad. Most of
the domestic debt issued by low-incomes sub-Sa­
haran African countries is held by commercial banks
which, in turn, often have foreign shareholders. In
2022, the size of domestic debt
in Egypt was estimated at 72%
of GDP, while in Zambia it was
40% of GDP and in Zimbabwe it
was 12% of GDP.
The structure of domestic debt also differs. In
­
Benin, government bonds account for 91% of the
domestic debt, in Senegal it is 67% and in Zimba­
bwe it is 30%. Government bonds and eurobonds
account for a significant portion of Egypt’s domestic
debt. In Rwanda, they make up 50% of the total, in
Mauritania 68%, and in Nigeria 79%. In Mali, they
account for an even larger percentage – 92%.
The detailed structure of the holders of domestic
debt is rarely disclosed. For example, in Kenya, 43%
of the debt is owed to commercial banks, 33% - to
pension funds, while 7% to insurance companies, and
4% is held by the Central Bank28
. The main buyers
of Tanzanian government bonds are pension funds,
commercial banks and the Bank of Tanzania. Together,
these three financial institutions account for almost
80% of the total volume of loans on the financial mar­
ket. Approximately 29% of this volume is accounted
for by commercial banks and pension funds, with the
Bank of Tanzania accounting for 22%29
.
Domestic debt has several advantages, especial­
ly for African countries. First of all, most of the
28 REPUBLIC OF KENYA THE NATIONAL TREASURY AND PLANNING. Annual Public Debt Management Report For Financial Year 2022/2023. URL: https://www.treasury.go.ke/
wp-content/uploads/2024/01/Annual-Public-Debt-Report-2022-2023-Sept-2023.pdf
29 World Bank. 20th Tanzania Economic Update. URL: https://documents.worldbank.org/en/publication/documents-reports/documentdetail/099031124044543127/p179610
1f356d10fa1b47215b969e1205b2
30 UN. World Economic Situation and Prospects: April 2024 Briefing, No. 180. URL: https://www.un.org/development/desa/dpad/publication/world-economic-situation-and-
prospects-april-2024-briefing-no-180/
domestic debt in Africa is denominated in local
currencies, which means that it is shielded from
exchange rate fluctuations and currency mis­
matches. In addition, issuing debt in domestic cur­
rency gives central banks and governments the
flexibility to use monetary policy tools for domes­
tic debt management. For decades, businesses
and households have preferred to invest money
abroad, and capital flight remains a critical issue
for most African economies, co-existing with ex­
tensive external borrowing. Investing in domestic
debt is a good alternative, especially if interme­
diated by strong local banks.
The reason is that authorities have more options
for dealing with domestic debt, such as inflating
it away, rather than resorting to outright default.
In the event of a debt default, domestic debt is
usually easier to restructure, as it is subject to do­
mestic court jurisdiction. A case study conducted
by the IMF on debt restructurings between 1988
and 2020 concluded that domestic debt restruc­
turing took considerably less time to complete
compared to external debt restructuring, largely
due to a greater sovereign control of the terms
and laws governing domestic debt30
. Moreover, by
restructuring domestic debt, countries can avoid
the potential reputational costs associated with
external debt restructurings and, in some cases,
maintain access to international financing.
Well-developed domestic public debt markets
offer local investors opportunities to invest in go­
vernment securities, providing a two-fold advan­
tage. First and foremost, domestic investors have
the opportunity to participate in the economy and
receive a reasonable return on their investments,
given the relatively low risk associated with go­
vernment securities.
Domestic debt defaults are less common than
external debt defaults
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Levels of development in local capital markets
differ31
– from more than 100% of GDP in Egypt,
­
Morocco, Mauritius and South Africa to below 40%
in Cameroon, DR Congo, Ethiopia, Madagascar and
Uganda32
: in the more developed economies, gov­
ernments have more opportunities to raise funds
domestically.
Secondly, by attracting financing from the domestic
market, governments provide residents an alterna­
tive for capital outflows. Some countries combine
borrowings with the measures to reduce capital
outflow exposure. For example, Zambia, which has a
relatively higher level of non-residents participating
in the domestic debt market (above 20%), has en­
acted measures to limit non-residents’ participation
in the government bonds primary market to 5%.
Nevertheless, domestic debt can have several long-
term implications that can negatively impact the
economy of a country. One of the main disadvan­
tages of domestic debt is that it can lead to signifi­
cant crowding out effects for the domestic private
sector. This is because when the government is a
major borrower, the credit available to the private
sector from banking and non-banking financial in­
stitutions can decrease.
Another challenge is the maturity structure of do­
mestic debt instruments, as many governments are
unable to issue long-term instruments at reasonable
interest rates. In 2022, in Zambia and Kenya short-
and medium-term securities comprised 78.5% and
78% of the domestic debt portfolio ­
respectively.
The proportion was even higher in Ghana, where
short- and medium-term securities accounted for
approximately 90%. This short-term debt structure
increases the risk of rollover, where governments
continuously borrow to pay off maturing debts.
In leading economies like Egypt, Ethiopia, and
­
Nigeria the financial sector is partly publicly
owned. Consequently, the authorities may at­
tempt to maintain the debt at a manageable level
31 The size of the financial system can be determined by various indicators, such as the total assets of the banking sector, market capitalisation of banks, credit facilities,
insurance, and investments. Other indicators include the financial transactions of capital markets, the ratio of private credit to GDP, and the percentage of adults who have
formal bank accounts. Additionally, the stability of financial institutions is also a factor in determining the size of the system.
32 SP Global. African Domestic Debt: Reassessing Vulnerabilities Amid Higher-For-Longer Interest Rates. URL: https://www.spglobal.com/research/articles/231101-african-
domestic-debt-reassessing-vulnerabilities-amid-higher-for-longer-interest-rates-12900489
through various financial measures. However, the
side effects can include crowding out lending
to the private sector with long-term detrimental
effects on economic performance and competi­
tiveness.
In some countries, the high burdens of domestic
debt service place a heavy strain on government
finances, leading to further reductions in spend­
ing that could be allocated to investments in cru­
cial sectors. For example, in Kenya, Mozambique,
­
Tanzania, Uganda or Zambia domestic debt service
cost was higher than external debt service, despite
domestic debt stock being lower than external debt
stock. In 2023, the cost of servicing domestic debt
in Uganda was 2.8% of GDP, while external debt
was only 0.9%.
Debt service payments in selected
economies in Africa, 2022
Source: prepared by the HSE Center for African Studies and
Intexpertise based on IMF and UN DESA data.
Kenya
Percentage
of total debt
Debt percentage
of GDP
0 0
2
4
6
8
10
10
20
30
40
50
60
70
80
Mozambique Tanzania Uganda Zambia
Domestic debt service as a percentage of GDP (RHS)
External debt as a percentage of total debt (LHS)
Domestic debt stock as a percentage of total debt (LHS)
External debt dervice as a percentage of GDP (RHS)
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Since 2020, two African countries (Ghana and
­
Mozambique) have defaulted on domestic obliga­
tions, while five (Angola, Ethiopia, Kenya, Uganda,
and Nigeria) have engaged in non-commercial
debt exchanges.
Africa’s trade: a terrible
scarcity or a huge opportunity
Africa relies heavily on international trade, and this
reliance has increased over the past decades. Trade
serves as a source of foreign exchange, which is
needed to import the capital goods required by lo­
cal producers. Additionally, it has the potential to
enhance productivity and to contribute to job crea­
tion and economic growth. In 2000, Africa’s total
trade was around USD 500 billion. By 2023, it had
grown to over USD 1.3 trillion.
33 Calculated by the authors on the basis of World Bank and ITC Trade Map data using the formula: , where d – country under study, s – is the set of all other
countries, X – total bilateral exports of country d, M –total bilateral imports of country d, GDP – gross domestic product of country d.
The trade dependence index33
has increased signifi­
cantly in all regions of the world, including Africa,
over the past three decades. The trade dependence
index demonstrates the importance of trade for a
particular country and also characterises the degree
of openness of the economy, which involves both,
risks and opportunities. Africa’s average trade ratio
has increased from 45% in 1991-2000 to 59% be­
tween 2020 and 2023. However, there is a wide vari­
ation in index ratios among economies, ranging from
8% in Sudan to Djibouti and Lesotho with their ratios
of 264% and 125%, respectively, in 2023.
For 25 countries the trade dependence index is still
below 50% level, for 22 it ranges from 50% to 100%.
In Djibouti, Lesotho, Libya, The Gambia and Namibia
the index exceeded 100% in 2023. While Djibouti,
Lesotho and the Gambia are re-exporting exten­
sively to the neighbouring countries, Namibia and
Ghana’s debt default (external and domestic) and the subsequent restructuring has put the spot­
light on domestic debt in Africa. Domestic debt grew from 22% of GDP in 2015 to approximately
40% of GDP in 2021 mainly because of government borrowing to finance the energy sector and
to bail out the finance sector following the 2018–2019 financial crisis.
At the time of default in December 2022, domestic debt stood at 46% of GDP. Some of the factors
contributing to the default included an inflated import bill due to effects of the Ukrainian crisis,
drastic depreciation of the Ghanian cedi and increased cost of debt service. At the same time,
external shocks triggered significant capital outflows, which diminished access to international fi­
nancial markets. Moreover, foreign exchange reserves dwindled to 2.7 months of import cover at
end-December 2022, down from 4.3 months at end-December 2021.
In December 2022, the Ghanian government initiated a domestic debt exchange programme, aimed
at restoring sound public finance management and debt sustainability. Domestic bondholders were
offered an option to exchange their holdings with a fresh issuance of bonds with longer average
maturities and lower coupon rates. New bonds were issued at a coupon rate between 0% and 10%.
Before the exchange, interest rates for two-six years notes ranged between 21.5% and 29.85%. Al­
though the programme managed to lower interest rates on government securities and lengthen their
maturities, analysis by the country’s financial sector regulators showed that it adversely affected the
solvency of some banks and insurance companies. The government formed the Ghana Financial Sta­
bility Fund to minimise impacts of the restructuring process to the financial sector and to avoid risks
of a potential financial crisis. The restructuring also took a relatively short time, with the domestic
debt exchange programme concluded in 2023. Inflation declined from 54% in December 2022 to
23% in February 2024. The economy also grew at an average of 3% in 2023.
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Libya are both the exporters of natural ­
resources
with relatively small populations.
However, the increased role of international trade
in African economies was accompanied by growing
trade deficits in many countries on the continent.
The increasing trade deficits pose challenges for
job creation and poverty reduction efforts especial­
ly when the deficits are caused by rising imports of
consumer goods that can be produced by domestic
industries. The trade deficit often co-exists with the
current account deficit, which in turn may increase
debt burden. Growing current account deficits often
presage disruptive economic trends such as sudden
stops in capital flows, severe decreases in credit and
spending and sharp economic slowdowns, which
generate high unemployment and poverty.
A trade deficit is sustainable as long as there are
sufficient funds to finance it. In last decades African
countries had probably better access to interna­
tional finance than ever. However, with growing in­
terest rates and slowing growth, the continent faces
risks of much more complicated access to finance
which will make financing of the deficits increasing­
ly challenging.
In 2023, the overall external trade deficit of ­
Africa
amounted to USD 84.8 billion. Although some
countries experience a high surplus in their trade
balance, the large deficit recorded by most negates
these surpluses, resulting in a deficit trade balance
for the continent. In 2023, the sum of the trade
deficits was USD 169.5 billion.
Only 15 out of 54 countries on the continent re­
corded a trade surplus, their total was 84.9 billion.
The top five countries with the largest trade sur­
pluses in 2023 were Angola (USD 25.8 billion),
­
Algeria (USD 17.9 billion), Libya (USD 12.7 billion),
Gabon (USD 8.5 billion) and Equatorial Guinea
(USD 4.4 billion). All these countries are oil and
natural gas exporters.
On the other hand, the five largest countries
in terms of trade deficit were Egypt, Morocco,
­
Ethiopia, Kenya and Tanzania. Collectively, these
five countries recorded the total trade deficit of
USD 102.8 billion. Among the deficit countries,
there has been a deterioration in the trade deficits
over the time. Between 2013 and 2023, the trade
deficit in Morocco increased by 26%, in Ethiopia by
21%, in Senegal by 75% in Uganda by 44% and in
Niger by 124%.
100 000
80 000
60 000
40 000
20 000
120 000
10 000 30 000 50 000 70 000 90 000 110 000 10 000
8 000
6 000
4 000
2 000
0
10 000
8 000
6 000
4 000
2 000
Trade dependence index for African countries, 2023
Source: prepared by the HSE Center for African Studies and
Intexpertise based on ITC Trade Map data.
Import, mln dollars
Export, mln dollars
58%
South Africa
62%
Zimbabwe
33%
Sao Tome
and Principe
80%
Morocco
52%
Equatorial Guinea
95%
Tunisia
40%
Algeria
246%
Djibouti
Trade Dependence Index, % 10% 250%
22
Measuring
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and
Money Africa 2025: Prospects and Challenges
HSE University Center for African Studies
In per capita terms, three countries had significant
surpluses: Gabon (USD 3,469 per person), ­
Equatorial
Guinea (USD 3,469 per person) and Libya (USD
3,469 per person). In 2023, Nigeria’s per capita
trade surplus was USD 0.3. The island countries had
the highest trade deficit per capita, with Seychelles,
­
Mauritius and Cabo Verde topping the list.
Exports and imports of most countries are highly
volatile as they depend on commodities. So, the
accumulated trade balances of the individual coun­
tries would provide a clearer picture of their role in
international trade.
Africa’s cumulative trade deficit over the period
from 2014 to 2023 amounts to USD 839 billion
Over this ten-year period, Angola has been a sig­
nificant leader with a trade surplus of USD 234.3
billion. By a wide margin, Libya (USD 83 billion),
­
Nigeria (USD 81 billion), South Africa (USD 62 bil­
lion), Equatorial Guinea (USD 50 billion), Djibouti
(USD 48 billion), and Gabon (USD 46 billion) were
34 The index is compiled by the authors. It is calculated according to the formula: export+import/ (export-import) for a 10-year period.
the next on the list of African countries with a trade
surplus. Most of the countries that have a trade sur­
plus are resource-rich (Angola, Libya, Equatorial Guin­
ea, Gabon, Nigeria, etc.) or serve as the logistics hubs
for neighbouring countries (Djibouti, Ghana). In total,
only 16 countries on the continent were identified
with a long-term positive trade balance.
However, the number of countries with persistent
trade deficits is considerably higher. Egypt ac­
counts for almost half of Africa’s total trade imbal­
ance, which amounts to USD 455 billion. Morocco
(USD 217 billion), Ethiopia (USD 127 billion), Kenya
(USD 112 billion), Tunisia (USD 64 billion), Tanzania
(USD 55 billion), Sudan (USD 44 billion), Senegal
(USD 42 billion) and Uganda (USD 41 billion) have
also become leaders in the cumulative trade deficit.
A number of African countries have recorded
relatively low trade deficits, up to USD 5 billion:
­
Guinea-Bissau (USD 0.8 billion), Democratic
­
Republic of the Congo (USD 1.1 billion), Sao Tome
and Principe (USD 1.5 billion), ­Comoros (USD 2.3
billion), ­
Central African Republic (USD 4 billion)
and Botswana (USD 4.7 billion). But if 1.1 billion
in 10 years seems to be close to nothing for DRC,
1.5 billion for São Tomé is huge.
The most balanced trade34
over a ten-year peri­
od is recorded for Nigeria (0.08), Côte d’Ivoire
(0.05), Zambia, South Africa, Eswatini and Ghana
(with 0.3 for each country), as well as Algeria
(-0.02), Botswana (-0.03), and DRC (-0.04). Guin­
ea, ­
Angola, and Chad have a tendency towards a
large surplus in their accumulated trade balance.
In contrast, Gambia, Cabo Verde,
Sao Tome and Principe, Liberia,
Somalia and the Comoros tend
toward a deficit in their trade ba­
lances.
Persistent and increasing trade deficits are ex­
plained differently from country to country. Chro­
nic trade deficits can be evidence that domestic
producers cannot compete with imports and/or
their competitors in the global markets.
Africa's trade balance per capita, 2023
Source: prepared by the HSE Center for African Studies and
Intexpertise based on ITC Trade Map data.
0-0,25
0,25-0,5
 0,5
– +
0,5-1  1
0–0,5
0
23
Measuring
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Wealth
and
Money
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Trade deficit in some cases results from a country
investing in physical capital (through imports of in­
termediate goods) and productive capacity, which
has the potential of boosting employment and re­
ducing poverty, provided the investments are ef­
fective and allocated to job-creating activities35
.
The top ten importers of capital goods in Africa in
2023 were: South Africa, Egypt, Morocco, ­
Nigeria,
Algeria, the DRC, Angola, Tunisia, Ethiopia and
­
Tanzania. Of these countries, one half experienced
a trade deficit in 2023.
Although Africa’s share of manufacturing value add­
ed to GDP is expanding, Africa’s market share in
manufacturing exports lags far behind the global av­
erage, accounting for roughly 1.3% of world exports.
This gap in exports is largely responsible for the wid­
ening trade deficit. While the end of the commodity
super cycle in 2014-2016 highlighted the cost of ex­
ternal imbalances, the lockdowns triggered by Cov­
id-19 underscored the risk of depending excessively
on imports for manufactured products. The above
mentioned sectoral Hirschmann index fits well to
measure the level of diversity in African exports.
In 2023, a group of 13 countries on the continent
recorded a relatively high level of export diversi­
fication. This includes both major players in trade,
such as Egypt (0.34), Morocco and South Africa
(0.38 each), Tunisia (0.39) and Senegal (0.41), as
well as transit hubs like Djibouti (0.36), Mauritius
and Togo (0.43 each) alongside Uganda, Kenya
(0.46 each) and Zimbabwe (0.49) having shown
impressive performance in implementing their ex­
port diversification strategies.
In 2023, a total of 21 African countries recorded
a low level of export diversification. The index in
this group ranged from 0.50 in Tanzania, 0.55 in
Ghana and Rwanda, and to 0.7 in the DRC to 0.73
in ­
Guinea-Bissau. In 2023, 19 countries recorded
the lowest levels of export diversification. This
group included countries such as Central African
Republic (0.77), Burkina Faso (0.79), Botswana
and Mali (0.8 each), Republic of Congo (0.83),
35 UNCTAD. Trade and Current Account Balance in Sub-Saharan Africa: Stylised Facts and Implications for Poverty. URL: https://unctad.org/system/files/official-document/
webaldc2016d2_en.pdf
Ethiopia (0.86), Algeria (0.93), Angola (0.94),
Libya and Eritrea (0.97 each).
The exports of these countries mainly consist of
minerals such as oil, gas and gold, as well as agri­
cultural crops like coffee. Among primary commod­
ities, exports are concentrated in products with
relatively low levels of value-added or processing,
which further limits the low potential for employ­
ment typical of commodity outputs. Consequently,
the fluctuations in global commodity prices can se­
verely impact their trade balance.
If we take the average value of the sectoral
Hirschmann index over ten years and the trade bal­
ance index, we will get the following picture.
Firstly, a group of oil and gas exporting countries
with a low level of export concentration and a high
trade surplus can be clearly distinguished. A rela­
tive trade surplus above 1.05 (Côte d’Ivoire level)
can only be found in countries with an export con­
centration of 0.7 or higher. The high level of export
Source: prepared by the HSE University Center for African Studies
and Intexpertise based on ITC Trade Map data.
Sectoral Hirschmann index of African
countries, 2023
levels of export
diversification 0,75–1
0,5–0,75
0,25–0,5
High level
Low level
The lowest
0,97
0,93
0,67
0,80
0,79
0,63
0,79 0,83
0,53
0,56
0,34
0,59
0,94
0,46
0,86
0,46
0,50
0,70
0,77
0,94
0,51 0,80
0,49
0,68
0,68
0,43
0,38
24
Measuring
Africa’s
Wealth
and
Money Africa 2025: Prospects and Challenges
HSE University Center for African Studies
concentration also leads to a significant capital out­
flow, as there are less export-oriented promising in­
dustries to invest in. This group includes, inter alia,
Angola, Libya and Equatorial Guinea.
The second group includes Ghana, South Africa,
DRC and Côte d’Ivoire. These are exporting count­
ries with relatively well-developed industries and
a high degree of diversification, as well as a trade
surplus. However, Ghana was in default due to eco­
nomic policy distortions and government waste.
The third group includes small economies, such as
Liberia, Central African Republic, the Comoros and
Somalia. These countries are vulnerable due to high
trade deficits and lack of export diversification. As
a result, they are at risk and need to either reduce
their trade deficits or diversify their exports in order
to ensure their economic stability.
The fourth group also includes countries that are al­
most exclusively dependent on exports of raw materials.
­
Botswana, Algeria, Mali and Burkina Faso spend a signifi­
cant amount of money on imports. Therefore, their gov­
ernments may need to carefully monitor their imports, as
they should focus on investments aimed at import sub­
stitution or the development of new export industries.
The larger economies like Egypt, Kenya, Tanzania
and Morocco have relatively diverse exports and
experience a relative trade deficit.
It is also worth considering how African countries
cover their trade deficits.
Source: prepared by the HSE Center for African Studies and
Intexpertise based on ITC Trade Map data.
The Trade
balance
0.4 0.6 0.8 1
Sectoral
Hirschmann
Circle size —
External debt to GDP
The trade balance index and the sectoral Hirschmann index value over a ten-year period from 2014 to 2023 are used.
The index ranges from 0 to 1, with higher values indicating that exports are more concentrated in fewer sectors.
ZA
CD
CI GH SZ
TN
MA
ZW
NA
MG
MR
CM
MZ
SL
TZ SD
UG
EG SN
TG
MU
RW
BJ
BI
GM CV
SC
LS
MW
NE
SO
CF
KM
ST
ET
LR
GW
ML
BF
ZM
CG
GA
TD
AO
SS
GQ
DZ
DJ
GN
BW
KE
Trade balance index and sectoral Hirschmann index
of African countries
0.7
0.5
0.3
0.1
-0.1
-0.3
-0.5
-0.7
-0.9
-1.1
0
25
Measuring
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Wealth
and
Money
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Unilateral transfers (both current and capital)
have been the main source of external finance in
­
Africa for decades. Their weight increased during
the 2000s from 2.6% of GDP in the 1990s to 4.4%
in 2013 – driven by the strong rise of workers’ re­
mittances and capital transfers that more than com­
pensated for the decline in current transfers in the
form of aid, donations and official assistance.
In 2022, remittances accounted for an average
of 7.6% of GDP in Western Africa, 6.8% in Eastern
­
Africa, 4.4% in Northern Africa, 3.7% in Southern
­
Africa and 1.4% in Central Africa36
. In 2022, the
World Bank remittance inflow data reported that
Egypt is the largest recipient market (USD 32 bil­
lion), followed by Nigeria (USD 21 billion) and
Morocco (USD 11 billion). These three markets
account for 65% of all remittances to African coun­
tries. Most in the top 12 in terms of remittances in
2022 have chronic trade deficits, with the excep­
tion of Nigeria and Ghana.37
In 2023, the total amount of remittances sent
by migrants to and within Africa was almost
USD 95 billion37
The high reliance of most African countries on uni­
lateral transfers reflects their increasing dependence
on external sources. It is clear that for some countries
remittances are vitally important to their economies.
This particularly applies to Gambia (27% of GDP in
2022), Somalia (23%), ­Comoros (22%), Lesotho
(20%), Cabo Verde (16%) and Guinea-Bissau (11%).
Although these transfers represent a substantial
source of external finance that can be an important
tool for poverty alleviation, they also entail significant
costs. The strong reliance on income generated from
external sources increases the
economic vulnerability of reci­
pient countries and exposes them
to the economic cycle of the
source countries.
36 RemitSCOPE. Africa. URL: https://gfrid.org/wp-content/uploads/2023/06/RemitSCOPE_Africa_preliminary_release.pdf
37 IFAD. Improving the management of remittances and their use for development impact in Africa. URL: https://www.ifad.org/en/prime-africa#:~:text=Remittances%20
sent%20by%20migrant%20workers,quarter%20is%20invested%20or%20saved
38 Demekas et. al., 2005, p. 209.
39 UN. 2024 World investment report. URL: https://unctad.org/system/files/official-document/wir2024_en.pdf
Beside unilateral transfers, Foreign Direct Investment
(FDI) is also one of the main sources of external fi­
nance for Sub-Saharan Africa. FDI is often seen as
the preferred and safer alternative
source of private foreign capital for
developing countries because of
its ‘non-debt’ character. In addition,
as FDI inflows do not involve the
direct payment of principal and in­
terest charges, they are a preferred method of financ­
ing deficits, especially in developing countries, where
these deficits can be large and sustained38
.
Since 2000, FDI flows replaced “other investments”
(mainly foreign loans) as the main source of external
finance other than unilateral transfers. Net FDI flows
more than doubled their share to GDP from 0.9% in
the 1990s to 2% in 2013, while net flows of foreign
loans registered a drastic fall, reaching high negative
values as a consequence of the debt relief initiatives.39
Source: prepared by the HSE Center for African Studies and
Intexpertise based on World Bank data.
The importance of remittances index
Index scale
Not
important
100
0
Very
important
43/100
average score
Africa
In 2021, there was an all-time high inflow of FDI
into Africa, reaching USD 82 billion, but this
decreased to USD 53 billion by 202339
26
Measuring
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Wealth
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Money Africa 2025: Prospects and Challenges
HSE University Center for African Studies
In 2023, almost 50% of all foreign direct investment
flows to Africa were directed towards Northern and
Western Africa. Investments in the East accounted
for 21.3% of the overall volume, with the South
receiving 17.3%, and the Central receiving 11.2%.
In 2023, the accumulated amount of foreign direct
investment into Africa reached USD 1.04 trillion.
The leaders are Egypt, South Africa, Nigeria and
Morocco.
Although it is true that FDI does not involve the di­
rect repayment of capital and interest, foreign di­
rect investors do not invest without the expectation
of profit and the eventual repatriation or relocation
of the investment. Actually, the return on FDI is the
highest compared to that of other external sources
of financing as the rates of profit of foreign firms
largely exceed the rate of interest on foreign loans
or the rate of profit related to portfolio investments.
However, for many projects with foreign invest­
ment, there are also shareholder loans and trans­
fer pricing to avoid taxes. The actual price of raw
materials is underestimated, and a country’s budget
does not receive the taxes that should be paid. In­
vestors earn on access to cheaper, unmarketable
raw materials so formal returns on investment are
no longer as important to them. In addition, inves­
tors lend to their companies at commercial rates, as
debt repayment is easier than income from capital.
It is difficult to assess the impact of transfer pri­
cing
and undervaluation of exports on the balance of
payments in African countries, but this can reach
tens of billions of dollars per year.
The diversity of Africa is in its
currencies
The currency and exchange rate play an important
role in assessing the economic stability of develop­
ing countries.
-	 The Moroccan dirham is classified as having a
pegged exchange rate within horizontal bands,
which since 2020 has been pegged to the euro
and the US dollar in a ratio of 60% and 40%, re­
spectively (basket of currencies).
-	 The Botswana pula is classified as having craw­
ling pegs (in terms of a soft peg) with a bucket of
the special drawing rights (SDR) and the South
African rand.
Source: prepared by the HSE Center for African Studies
and Intexpertise based on UNCTAD data.
Foreign direct investment
in Africa, 2023
Inflow of foreign direct investment, USD million
The volume of
accumulated foreign direct
investment, mln dollars
 0
–
500-1000
+
0–500
0
Algeria
36 860
Tunisia
40 817
Morocco
69 297
Republic
of Congo
34 653
Egypt
158 689
Ethiopia
38 544
Mozambique
57 281
South Africa
124 025
Democratic
Republic
of Congo
32 629
Ghana
47 360
Nigeria
73 375
 3000
1-2000 2-3000
27
Measuring
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Wealth
and
Money
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
-	The soft pegged exchange rates of five coun­
tries (Malawi, Mozambique, Nigeria, Sudan and
Tanzania) are categorised as peg stabilised ar­
rangements.
-	The crawl-like arrangements category includes
12 African countries (Algeria, Kenya, Mauritius,
Tunisia, Rwanda, etc.).
-	The conventional peg is the largest category, in­
cluding 21 countries. Of these, 17 have curren­
cies pegged to the euro: the Central African CFA
franc and the West African CFA franc. Three
countries are pegged to the South African rand,
including Lesotho, Namibia and Eswatini. One
country’s currency, Nakfa (Eritrea), is pegged to
the US dollar.
The floating exchange rate is used by seven count­
ries: Angola, Egypt, Zambia, Madagascar, ­
Seychelles,
the Republic of South Africa and Uganda. The ­
Somali
shilling’s exchange rate is free floating.
The exchange rates of four countries (South Su­
dan, Zimbabwe, Liberia, and Sierra Leone) are cate­
gorised as “other managed arrangements”.
Also, based on IMF data, African countries can be
classified according to the main principles of their
monetary policies. There are four of them: ex­
change rate anchor, monetary aggregate target,
inflation-targeting framework, and other.
Exchange rate anchor means that the monetary
authority buys or sells foreign exchange to main­
tain the exchange rate at its predetermined level
or within a range. The exchange rate thus serves
as the nominal anchor or intermediate target of
monetary policy. This type includes the WAEMU
and CEMAC countries, along with Lesotho, Eswatini,
Namibia and Botswana.
Monetary aggregate target is the measure when the
monetary authority uses its instruments to achieve a
target growth rate for a monetary aggregate, such as
28
Measuring
Africa’s
Wealth
and
Money Africa 2025: Prospects and Challenges
HSE University Center for African Studies
reserve money, M1, or M2, and the targeted aggre­
gate becomes the nominal anchor or intermediate
target of monetary policy. This monetary policy frame­
work is implemented by 13 counties, including ­
Nigeria,
Algeria, Zimbabwe, Angola, Ethiopia, Rwanda, etc.
Inflation-targeting framework involves the pub­
lic announcement of numerical targets for in­
flation, with an institutional commitment by the
monetary authority to achieve these targets, ty­
pically over a medium-term horizon. Additional
key features normally include increased commu­
nication with the public and the markets about
the plans and objectives of monetary policymak­
ers and increased accountability of the central
bank for achieving its inflation objectives. This
type includes Kenya, Seychelles, Ghana, Uganda
and South Africa.
The other monetary policy framework ­category
means that the country has no explicitly stated
nominal anchor, but rather monitors various indica­
tors in conducting monetary policy. This category
is also used when no relevant information on the
country is available. This group includes Malawi,
Mozambique, Sudan, Tunisia, etc.
Many African countries have substantial
external debt, often denominated in foreign
currencies like the US dollar or the euro
This can make debt servicing more vulnerable to
exchange rate fluctuations. Fluctuations in the
exchange rate can significantly impact the debt
servicing costs. For example, if the local currency
depreciates against the currency in which the debt
is denominated, the cost of servicing and repaying
that debt increases in local currency terms. This can
strain the country’s financial resources and balance
of payments. However, countries with a fixed ex­
change rate regime or a currency peg might face
challenges if they have high levels of external debt.
Maintaining the peg can be costly, especially if the
country faces a balance of payments crisis or needs
to defend its currency.
40 Bloomberg. Understanding Nigeria’s Currency Slump, and What Happens Next. URL: https://www.bloomberg.com/news/articles/2024-07-30/why-nigeria-s-naira-currency-
ngn-usd-slumped-and-why-it-matters
Since 2022, a number of African currencies have re­
corded significant depreciation against the US dollar.
Currency depreciation leads to an increase in foreign
currency-denominated external debt. For example,
Nigeria’s external debt in 2023 increased by 100.1%
over a year because of the depreciation of the nation­
al currency — the exchange rate of the Nigerian naira
fell by 70% against the dollar40
. In Kenya for instance,
as of December 2023, external debt – 67% of which
was dollar denominated – increased by 1.3 billion
dollars owing in part to depreciation of the Kenyan
shilling. Also, approximately 98% of Ghana’s external
debt stock growth in 2023 was a result of the Ghanian
cedi’s depreciation against the dollar.
The CFA franc is pegged to the euro, which has two
consequences for the respective national debt. Given
that external debt and international trade are both de­
nominated in the US dollar, a depreciation of the euro
relative to the dollar leads to an automatic increase in
the value of the external debt of the countries that use
the franc. On the other hand, an appreciation of the
euro also leads to a decrease in external debt, but this
can have harmful effects, such as a loss of competitive­
ness and market share for products being exported
from these countries. In addition, this stability attribut­
ed to the franc does not necessarily
reflect the reality of the economies
that use it.
Thus, we see that the pegging to
the euro has apparently saved the
countries in the CFA franc zone from high levels of
debt (as in East Africa). However, these countries are
experiencing slower economic growth.
Nowadays, an increasing number of African coun­
tries are turning to gold to hedge against global po­
litical risks and protect themselves against currency
losses. Several countries are trying to increase their
foreign currency reserves. For instance, Nigeria
has launched a plan to buy gold domestically to
boost its reserves. Tanzania has announced a plan
to spend USD 400 million on six tonnes of gold.
The central bank of Uganda has announced a pro­
gramme to buy gold directly from local artisanal miners.
29
Measuring
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and
Money
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
However, in some countries, there is a discussion
about tying the national currency to gold. For ex­
ample, the Vice President of Ghana, Mahamudu
Bawumia, has said that if he is elected president in
the upcoming December election, he plans to in­
troduce a new exchange rate system that will link
the Ghanaian cedi to gold.
However, for gold-backed currencies to function ef­
fectively, African countries need to have sufficient
reserves in order to maintain the stability and longev­
ity of these currencies. In addition, linking a country’s
currency to gold can make its economy vulnerable
to fluctuations in the price of the precious metal.41
41 Bloomberg. All About ZiG, Zimbabwe’s Latest Shot at a Stable Currency. URL: https://www.bloomberg.com/news/articles/2024-08-08/zimbabwe-s-new-zig-currency-how-
does-it-work-and-can-it-last
42 GSMA. The Mobile Economy Sub-Saharan Africa. URL: https://www.gsma.com/solutions-and-impact/connectivity-for-good/mobile-economy/wp-content/
uploads/2023/10/20231017-GSMA-Mobile-Economy-Sub-Saharan-Africa-report.pdf
Africa’s digital currency
The digitalisation of financial services in Africa and
their transfer to mobile platforms is a natural step
towards expanding public access to financial servic­
es. This is particularly important in a region where
less than half of the population over the age of 15
has a bank account.
African countries account for 66% of the global vol­
ume of money transfers through the electronic mo­
bile payment systems. In 2022, more than 50% of
new accounts worldwide were opened by users from
Sub-Saharan Africa42
. In 2023, there were 835 million
In 2024, the Reserve Bank of Zimbabwe launched ZIG – a new currency backed by gold, as it seeks
to tackle high inflation and stabilise the country’s long-floundering economy. The Zimbabwean dollar
lost almost 100% of its value against the US dollar in 2023.
ZiG (literally Zimbabwean Gold) started trading on 8 April 2024, at an exchange rate of 13.56 ZiG to
the dollar. All Zimbabwean dollar account holders had their balances converted to ZiG. The change
also affected stock prices on the Zimbabwe Stock Exchange, as it rebased 56 of its listed securities.
In order to comply with international standards, the Reserve Bank of Zimbabwe began the process of
changing the currency code from ZWL to ZWG (also Zimbabwe Gold).
The Reserve Bank of Zimbabwe claimed that the new currency would be fully backed by USD 100
million in cash and 2,522 kilograms of gold worth USD 185 million. Meanwhile, the central bank added
that it would also adopt a tight monetary policy, linking money supply growth to growth in gold and
foreign exchange reserves.
On 30 April, new banknotes were released, and the Reserve Bank of Zimbabwe launched a publicity
campaign to raise awareness about the new currency. In order to stimulate demand, Zimbabwe made
it compulsory for companies to pay at least half of their quarterly taxes using the new currency. Cer­
tain taxes can only be paid in ZiG.
However, in practice, ZiG is still a rare occurrence, as public confidence in the new currency has not
yet been fully established. Zimbabweans continue to prefer using US dollars for transactions, and
most consumer goods are still priced in dollars. Although there are no major obstacles to paying for
goods with the new currency or receiving change in ZiG at the Central Bank’s official exchange rate.
The authorities say that dollar-denominated transactions have declined to around 70% from 85%
when it was introduced41
.
30
Measuring
Africa’s
Wealth
and
Money Africa 2025: Prospects and Challenges
HSE University Center for African Studies
registered mobile money accounts in Sub-Saharan
Africa and USD 912 billion in transactions made.
The adoption of mobile communication and wire­
less internet has opened up a plethora of oppor­
tunities for the development of payment services,
money transfers, peer-to-peer lending and mi­
cro-insurance. Global payment giants such as Visa,
Mastercard and American Express are planning to
expand their presence into this niche market. Afri­
can operators such as MTN (South Africa) are suc­
cessfully competing with these global players.4344
43 M-PESA. URL: https://www.m-pesa.africa
44 FinAccess. 2019 Finaccess Household Survey. URL: https://www.centralbank.go.ke/uploads/financial_inclusion/2050404730_FinAccess%202019%20Household%20
Survey-%20Jun.%2014%20Version.pdf
However, mobile payments do have some se­
rious drawbacks. Reliability and security issues
contribute to the challenges businesses face
in Africa when converting to mobile banking.
While many mobile payment platforms available
in East Africa rely on SMS, it remains the least
secure messaging option. While mobile techno­
logy is definitely more prevalent in Africa than it
once was, it can still be a challenge for people
in more rural areas to gain access to a mobile
phone, thus enabling them to participate in mo­
bile payments.
M-Pesa
One of the most successful examples of introducing e-finance technologies in Africa is the M-Pesa.
This mobile phone-based money transfer and payment service was launched in Kenya in 2007
by Vodafone and Safaricom. After 14 months since the launch of the service, its user base had grown
to 2.7 million. Two years later, it reached seven million, which is about 40% of the adult ­
population.
In 2014, it had grown to 19 million users.
The app provides payment services for subscribers of mobile operators in Kenya, Tanzania, Demo­
cratic
Republic of Congo, Egypt, Ethiopia, Ghana, Lesotho and Mozambique43
. More than 60 million M-Pesa
customers conduct transactions worth over USD 314 billion annually. Outside of Africa, M-Pesa has also
been used in countries such as Afghanistan (until 2022) and Romania. In Afghanistan, the service has
been used to pay the salaries of police officers and social workers.
In Kenya, the percentage of the population with access to financial services increased to 83% in
2019, while the percentage of people completely excluded from these services decreased from 41%
to 11%44
. Out of the 26 million people in Kenya who own cell phones, 22 million use M-Pesa, which
represents almost every adult Kenyan.
In 2021, Nigeria became the first African country to issue its own digital currency, eNaira. The ex­
change rate of the digital naira is linked to that of the regular naira and its circulation is controlled by
the Central Bank. By 2023, the number of transactions increased by 63% and reached 22 billion naira
(approximately USD 48 million) due to the currency crisis that occurred earlier this year.
However, eNaira faces several challenges that need to be addressed before it can be widely adopted
in the country. Some of these challenges include the lack of necessary technological infrastructure,
the need for additional training for financial institution employees who will manage the system, con­
cerns about data privacy, the current electricity crisis and fears of potential financial crimes.
31
Measuring
Africa’s
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and
Money
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
In the long term, the growth of mobile money settle­
ments preserves the dependence of economies and
budgets on foreign trade. Mobile money is depos­
ited in the accounts of operators (mostly foreign).
Transaction fees are taxed - but not the transactions
themselves, which are usually treated as private
transfers. As a result, governments are still unable
to develop a sustainable tax base that could form
the basis of their financial sovereignty. The ultimate
beneficiaries of mobile money platforms are banks
and telecom operators, both foreign, while govern­
ments remain dependent on foreign trade and credit.
Is there anything to know
about Africa’s foreign
exchange reserves?
Foreign exchange reserves are an essential part
of a country’s policy toolkit regardless of the type
of exchange rate and national currency, serving
as a buffer against economic shocks and comple­
menting monetary policy to maintain price and fi­
nancial stability. In recent years, changes in foreign
exchange reserves in African countries have been
driven by policy responses to fluctuations in export
revenues, transfers, and capital flows. For example,
the decline in oil prices in 2014 led to a 33% re­
duction in the foreign exchange reserves of oil-ex­
porting countries as authorities resisted pressure to
devalue their currencies. Political instability is also
a significant factor, especially in lower-income na­
tions. This can lead to uncertainty and volatility in
foreign exchange markets, impacting reserves.
As for 2021, Libya with USD 81 billion had the
highest nominal foreign exchange reserves among
African countries, followed by South Africa (USD
50 billion), Algeria (USD 46 billion), Nigeria, Egypt,
Morocco, and Angola45
.
In a vast majority of African countries, the total
amount of foreign exchange reserves has increased
over the period from 2019 to 2024. In dollar terms,
Algeria’s foreign exchange reserves have increased
to USD 64.4 billion at the beginning of 2024.
45 Statista. Foreign exchange reserves in Africa as of 2021, by country. URL: https://www.statista.com/statistics/1351876/foreign-exchange-reserves-in-africa-by-country/
According to the Central Bank of Egypt, the coun­
try’s international reserves increased to USD 41.1
billion in April 2024. The growth of reserves was also
noted in the Republic of Congo, Guinea, Kenya, the
Seychelles, the Republic of South Africa, and Zambia.
However, in some countries, there has been a no­
ticeable trend of a decrease in the nominal value
of foreign exchange reserves. Foreign exchange
Dynamics of foreign exchange reserves
change in selected African countries
Source: prepared by the HSE Center for African Studies and
Intexpertise based on Trading Economics data.
2021 2024
Algeria 44.3
64.4
Angola 15.4
14.7
Botswana 5.4 4.6
Republic of Congo 0.7
Seychelles 0.5
6.0
Egypt 40.1
46.5
Ghana 8.8
6.6
Guinea 1.5
1.7
Kenya 12.9
15.7
Mauritius 7.8
8.0
Mozambique
Uganda 3.6
3.7
3.5 (ZM)
Nigeria 34.4
60.8
0.7 (SL)
South
Africa 54.8
62.2
3.2 (UG)
Zambia 1.2
32
Measuring
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and
Money Africa 2025: Prospects and Challenges
HSE University Center for African Studies
reserves are now frequently being drawn down as
central banks endeavour to fight currency depreci­
ation while households withdraw reserves from the
formal financial system. For example, in Botswana,
reserves decreased from USD 5.4 billion in 2021
to USD 4.3 billion in 2024, in Ghana reserves de­
creased from USD 11 billion in 2021 to USD 6.6 bil­
lion in 2024. Countries with significant reductions
in foreign exchange reserves also include Angola,
Nigeria and Uganda.
In general, foreign exchange reserves form an in­
tegral part of a country’s self-insurance, especially
in low-income countries where the government
often provides insurance against foreign currency
shortages. These reserves provide several ben­
efits, including a buffer to finance necessary im­
ports or repay foreign exchange debt in case of
unavailabi­
lity or extreme expense of foreign ex­
change fun­
ding. Additionally, foreign exchange re­
serves allow for policy flexibility to maintain price
and financial stability during large exchange rate
fluctuations.
Having sufficient foreign exchange reserves to co­
ver imports for several months is a top priority.
The largest number of reserves to cover imports
for 14 months was recorded in Algeria
Comoros had reserves that could cover imports for
about seven months, Cabo Verde for six months,
Morocco and South Africa for five months. The
shortest import coverage period was observed
in Zimbabwe (0.7 months), followed by Djibouti
(1.4 months), Eswatini (1.9), Mozambique (2.1)
and Sao Tome and Principe (2.6 months).
The fall in the import cover ratio was widespread
during 2022-2023 because of rising global food
and energy prices and, as a result, rising inflationary
pressures. Countries with the most significant de­
cline during 2022 and early 2023 included Angola,
Gambia, Mauritius, Mozambique, Kenya, Ghana and
46 SP Global. Sub-Saharan African currencies will be more vulnerable to exchange rate pressures in 2023. URL: https://www.spglobal.com/marketintelligence/en/mi/
research-analysis/-subsaharan-african-currencies-will-be-more-vulnerable-to-exch.html
Nigeria46
. However, in 2024, there was a gradual re­
covery in the volume of foreign exchange reserves
for these countries.
While foreign exchange reserves offer crucial be­
nefits, holding them comes at a cost for the econ­
omy. From the perspective of the consolidated
public sector balance sheet, accumulating reserves
amounts to issuing debt to invest in foreign curren­
cy assets. From an accounting perspective, foreign
exchange reserves are typically held on the central
bank’s balance sheet in African countries, so these
costs are borne – above all – by the central bank.
The financial cost of foreign exchange reserves
depends on the difference between the return
earned on reserve assets and the interest paid on
the corresponding liabilities.
In simpler terms, to place the amount in advance
in international reserves, countries need to with­
draw this amount from their national economy and
transfer it to the EU and the USA for safekeeping.
This accumulation of reserves has a downside, as
count­
ries may refuse to honour their loan obliga­
tions, as has happened with Libya. The Libyan In­
vestment Authority (LIA), set up under Muammar
Gaddafi in 2006 to manage the
country’s oil wealth, has been un­
der a United Nations asset freeze
since the 2011 riot that toppled
Gaddafi. This means that in order
for Africa’s largest sovereign wealth fund to make
new investments, or even move cash from negative
interest rate accounts, the LIA needs UN Securi­
ty Council sign-off. In 2020, the LIA said that the
freeze had cost it some USD 4.1 billion in potential
equity returns. Libyan assets are effectively confis­
cated and cannot be considered sovereign assets.
It is very rare for central banks in African countries to
discloseinformationaboutwhichcurrenciestheirre­
serves are held in, where these reserves are located
and in what share. Non-disclosure helps to prevent
speculative attacks on national currencies as preca­
riously low reserves may trigger further withdrawals.
33
Measuring
Africa’s
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and
Money
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
African reserves are typically held in major inter­
national currencies such as the US dollar, the euro
and the British pound.
Some information about reserves is available from
the South African Reserve Bank. According to the
bank’s report for January 2024, the Republic of
South Africa’s total reserves in dollar terms amount
to USD 61 billion. This includes USD 46.7 billion in
foreign exchange reserves, which consist of foreign
currency deposits and other assets, USD 8.2 billion
in gold reserves and USD 6.2 billion dollars in hol­
dings with special drawing rights.
Against the backdrop of a general lack of transparen­
cy regarding the foreign exchange reserves of ­
African
countries, also the Central Bank of Egypt stands out.
The regulator publishes annual financial reports on
Egypt’s external position, including detailed informa­
tion on foreign exchange reserves. According to the
bank’s report for the end of 2023, Egypt’s net inter­
national reserves amount to USD 35.2 billion. This in­
cludes USD 27 billion in foreign exchange reserves,
USD 8.4 billion in gold reserves and USD 36 million in
holdings with special drawing rights.
Overall, Africa’s foreign exchange reserves are cru­
cial for managing economic stability and growth, but
their effectiveness can be impacted by global eco­
nomic conditions and internal economic policies.
Some African countries may use their reserves to
service foreign debt or secure additional borrowing.
The Libyan example clearly shows that it is not the
size of sovereign reserves that guarantees sove­
reignty. Much more important is where and in what
form these reserves are held. One of the most relia­
ble forms of reserves is gold - if stored in the count­
ry itself. An expensive but worth considering alter-
native is to invest in reserves of exchange-traded
commodities, on the import of which the country
is critically dependent. Of course, these reserves
cannot be considered as foreign exchange re­
serves, as their international liquidity will be limited.
However, for the macroeconomic stability of many
countries with foreign trade deficits, in terms of
ensuring their financial sovereignty, as well as their
food and energy sovereignty, the investments in
such reserves should be recognised as a necessary
and important measure.
African money –
dynamic space for research
Thus, African debt has increased not only in ab­
solute terms but also relative to GDP. Secondly,
it remains mostly external and concentrated in
ten countries, which are essentially the largest
economies. External debt has become more pri­
vate, which increases the cost of borrowing and
may complicate future restructurings. In turn, the
domestic debt market is underdeveloped, even
though it is easier to pay off than external obli­
gations. China, which had significantly decreased
lending to Africa, is starting to return in the region;
however, the pattern is unclear so far. The analysis
of African trade reveals a prevalence of trade defi­
cits and low export diversification for most coun­
tries, which generates additional pressure on pub­
lic debt. Overall, 14 countries are already troub­
led
with their debt levels and 15 more countries are
prone to have debt problems if the global condi­
tions worsen.
There are questions that require further investiga­
tion and research. Does Africa need its own credit
rating agency, and what approach should be used
to evaluate national creditworthiness of African
states? What is the relation between trade im­
balances, financial flows and economic growth? Is
there any political backing of decisions on external
debt? How do currency regimes affect debt sus­
tainability and availability? Where are foreign ex­
change reserves of African countries stored and
who benefits from them?
And, finally, can financial sustainability be achieved
without financial sovereignty, and how can the lat­
ter be structured, measured, and achieved?
34
Food
for
Africa:
from
food
security
to
food
sovereignty Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Is there a food crisis in Africa
now?
Food issues, deficits, hunger and famines seem
to come hand in hand with Africa along the way.
However, many international organisations tend to
showcase that the food situation in Africa is now
getting even worse. At first
glance, such claims seem cor­
rect – according to FAO clas­
sification in 202347
, the num­
ber of undernourished people
in Africa has increased by more than 100 million
(to 298 million) compared to 2005. The number
47 FAO. The State of Food Security and Nutrition in the World 2024. URL: https://openknowledge.fao.org/server/api/core/bitstreams/06e0ef30-24e0-4c37-887a-
8caf5a641616/content
of undernourished over the world has decreased,
except for in Africa where this number has in­
creased. However, in relative terms, the number of
undernourished in Africa has been hovering bet­
ween 15-20% of the population for the past 20
years, and the number of ’non-undernourished’
people in Africa is also increasing every year.
Those advocating a pessimistic view on the food sit­
uation in Africa turn to big data and look at the food
situation on a continental scale. However, behind the
big numbers and the isolated – albeit disturbing –
cases of Nigeria and DR Congo (which together ac­
counted for almost half of the increase in the number
of undernourished people in Africa), success stories
do exist. For example, the number of undernourished
decreased in Senegal, Cameroon, Côte d’Ivoire and
­Ethiopia (in both absolute and rela­
tive terms), as did
the share of undernourished people in Mali, Rwanda
and Tanzania. At the same time, the productivity of
African agriculture is growing – in 2003, it amounted
to USD 138 billion, while in 2022 reached USD 327
billion (in current USD).
Indeed, while population growth, coupled with in­
effective agricultural policies and Africa’s depen­
dence on imports of certain basic food commodi­
ties, has meant that the number of undernourished
may be rising in quantity (including as a result of
population growth), it is staying the same in relative
terms. Moreover, the increase in the number of
undernourished in Africa did not start in 2022 af­
ter the crisis in Ukraine or even in 2020 with the
­
COVID-19 pandemic. Indeed, the last time the
number of undernourished fell year-on-year in
­
Africa was in 2009, and it has been rising ever since.
Food for Africa: from food security
to food sovereignty
The number of undernourished in Africa has been
hovering between 15-20% of the population
for the past 20 years
35
Food
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Africa:
from
food
security
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food
sovereignty
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Not only is the number of undernourished peo­
ple in Africa increasing, but so is the number of
articles on food security – in both academia and
the media. The topic has become ’trendy’, thus
impacting interpretations and increasing securiti­
sation.
The problem of hunger is often reduced to climate
change. For instance, in the SIPRI report dedicated
to the issue of food insecurity in Africa, ’climate’ is
mentioned 93 times, while ’fertilisers’ or ’reserves’
are totally absent48
. That said, the impact of cli­
mate change has not yet been fully studied and as­
sessed, which means that its regional impacts may
differ – i.e. improvements in one region and crises
in another. One study, published in 2015, found
that rainfall in Sahel had increased by 10% in the
preceding decades and that it could be due to
climate change49
. This caused Lake Chad to fill
up with rainfall – in October 2020 the first peak
of 700 cm (October 2) and a second peak of
711 cm (October 15), above the recorded peaks
in the last decade, were reached on the lake. The
rainfall helped farming in several areas; however,
there ensued an overflow of major rivers, which
in turn led to flooding and significant losses and
internally displaced persons in the region50
.
Food situation in Africa is not deteriorating,
but rather is not improving fast enough
So far, neither ’external shocks’, which occur regu­
larly in the world, nor climate change, nor even in­
ternal conflicts have been able to radically worsen
the food situation in Africa. All this suggests that
the food situation in Africa is not deteriorating, but
rather is not improving fast enough. The extensive
model of growth – through increased imports on
the one hand and the area of land involved in agri­
culture on the other (since 2000, Africa’s agricul­
tural area has increased by 100 million hectares,
almost as much as from 1964 to 2000) – will con­
tinue to maintain the ’food status quo’ in ­
Africa,
unable to keep pace with population growth.
48 SIPRI. Food insecurity in Africa: drivers and solutions. URL: https://www.sipri.org/sites/default/files/2023-01/2301_sipri_rpp_food_insecurity_in_africa_1.pdf
49 Carbon Brief. Factcheck: Is climate change ‘helping Africa’? URL: https://www.carbonbrief.org/factcheck-is-climate-change-helping-africa/
50 HumAngle. 2022 Rainy Season Has Increased The Volume Of Lake Chad – Report. URL: https://humanglemedia.com/the-2022-rainy-season-has-increased-the-volume-of-
lake-chad-report/
New approaches are needed to
the discussion of food issues in
Africa.
Agricultural potential of Africa remains mainly under­
exploited, while agriculture in Africa is characterised
by low technical capacity and mechanisation (lack of
agricultural machinery) and productivity level with ir­
rigation systems (average level of irrigation is 1.5-3%
of agricultural lands per country; Morocco has 5.9%)
and fertilisers are being a rare sight (average ferti­
liser consumption in Sub-Saharan Africa is estimated
at 17 kg of nutrients per hectare of cropland com­
pared to a world average of 135 kg/ha).
Developing nations becoming self-reliant and es­
tablishing sustainable food systems is a rare case
36
Food
for
Africa:
from
food
security
to
food
sovereignty Africa 2025: Prospects and Challenges
HSE University Center for African Studies
that requires a combination of factors, measures
and tools. India and Russia are recent examples
one could cite of countries becoming not only
self-reliant, but also food exporting nations. Most
African countries have a potential for similar suc­
cess stories, but are yet to harness it. Indeed, food
access is one of the key issues that will determine
the long-term development of ­
African nations,
which influences the dynamics of outbound migra­
tion, urbanisation and FDI inflow.
The notion of food security is the primary one
used through the world today to discuss food re­
lated issues. In 1996, the Rome Declaration of the
Food and Agriculture Organisation of the United
Nations (FAO) defined food security as “when all
people, at all times, have physical and economic
access to sufficient, safe and nutritious food to
meet their dietary needs and food preferences
for an active and healthy life”51
. Since then, this
perception has become mainstream. However,
this interpretation reduces food security primarily
to issues of access and provision, thereby stres­
sing the importance of uninterrupted food supply.
That said, purchasing from established producers
51 The Food and Agriculture Organization of the United Nations (FAO). Rome Declaration on World Food Security. URL: https://www.fao.org/4/w3613e/w3613e00.htm
52 Sviridov V., Andreeva T. Russian Fertilizers as an Element of Strengthening Africa’s Food Sovereignty. URL: https://africajournal.ru/wp-content/uploads/2024/07/Sviridov-
Russian-Fertilizers.pdf
is always cheaper in the short-term than inves­
ting in
local production and infrastructure, “giving the fish
without teaching how to catch it”. Under this um­
brella, global suppliers are actively invol­
ving them­
selves in the securitisation of food value chains,
establishing surplus food stocks on their territo­
ry and purchasing agricultural land in develo­
ping
countries52
.
Food sovereignty as an alternative approach
may be suggested. Food sovereignty is not the
alternative but is the next level of food security.
The very wording highlights the role of the local,
national and regional actors, focusing on local
agricultural production, developing and sharpe­
ning the tools for state support and interventions
(subsidies, protection measures, logistical and in­
frastructure projects, etc.), establishing its own
strategy for developing the food system. The
desired model can be network-centric, which
will allow a more dynamic response to food cri­
ses – e.g. through the formation of food reserve
systems on the side of importers rather than ex­
porters. At the same time, network-centricity
should be maintained not only at global level,
37
Food
for
Africa:
from
food
security
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food
sovereignty
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
but also at intra-country level - it is necessary to
create conditions and infrastructure (primarily
transportation) for the equal distribution of food
products throughout the country to prevent the
overconcentration of the food stocks within the
metropolitan areas surrounded by wastelands.
However, transition to food sovereignty, which
in extreme form proposes food autarky is still
unachievable due not only to the globalisation
of food markets, but also climate and other
natural conditions that make the production of
some food staples in Africa impossible. Instead,
collective food sovereignty solutions may be­
come an option corresponding with the notion
of self-reliance developed by prominent African
philosophers and leaders Kwame Nkrumah53
and
Leopold Senghor54
. That said, no system can
develop in a vacuum, and external contacts are
required to enable technology and knowledge
53 Nkrumah K. Africa must unite. Melbourne: Hassell Street Press, 2021.
54 Senghor L.S. Négritude et civilisation de l’Universel (Liberte tome 3). Paris: Seuil, 1977.
transfer, logistics solutions and critical supplies
like fertilisers.
Almost all African countries today are depen­
dent on food imports to varying degrees. In most
regions, the share of food imports in the GDP
structure does not exceed 1%. However, there
are exceptions, such as Eswatini (with food im­
ports amounting to 12% of GDP), Côte d’Ivoire
(food imports amount to 8.5% of GDP) and
­
Mauritania (6%), as well as a number of count­
ries whose share of food imports in GDP is 2–4%
(Cabo Verde, Malawi, Ghana, Mozambique and
Zimbabwe).
Import elimination or reduction cannot be an
end in itself. It should be about import restruc­
turing – assessing the feasibility of maintaining
imports of certain food categories at the pre­
vious level (e.g. wheat), replacing their part in
the diet with food crops grown inside Africa;
more active involvement of states in the forma­
tion of consumer habits and preferences, diet;
partial localisation of the production of certain
food categories. The answer to solving Africa’s
excessive food import dependency, while seem­
ingly paradoxical, is to increase imports, but of
higher value-added goods – not finished goods,
but first semi-finished products, then fertilisers,
seeds, vaccines, raw materials and industrial pro­
cessing equipment.
Network-centricity implies much more active co­
operation between the countries of the region
than is currently the case. So far, the main con­
tribution to food cooperation has been made by
smugglers or middlemen who supply food across
borders, often illegally, and by nomadic herders.
There is a need for more active co­
operation on
food issues at the level of regional economic
communities or at least a sustained dialogue
between countries on major commodity cate­
gories. A shift towards regional or country-wide
specialisation could be one aspect of the tran­
sition.
38
Food
for
Africa:
from
food
security
to
food
sovereignty Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Population growth and hunger:
demography matters.
But not as one would think?
Africa’s population is currently approaching 1.5 bil­
lion. By 2050, this number is expected to reach
2.5 billion, and by 2100 – 4 billion55
.
It is worth noting that Africa is still a relative­
ly sparsely populated continent. With an area
of 30 million square kilometres, the population
density is about 44 people per square kilometre.
By this indicator Africa is behind not only Asia
(104 people per sq. km), but also Europe (73
people per sq. km.)56
. Excluding the Sahara and
Kalahari deserts, as well as a number of uninha­
bitable areas (about 11 million square kilomet­
res in total), Africa will still remain in third place
among the parts of the world with a population
density of 66 people per square kilometre. If the
population grows to 2.5-3 billion, its density in
the habitable part of the continent will still be
three times lower than, for example, that of India
today.
Many expert papers and reports on Africa start with
theses that population growth would challenge re­
gional stability and contribute to food crises, out­
bound migration and political turmoil. Africa’s de­
mographic transition has been later in coming than
in other regions; it is in the early stages of transition,
causing the population to grow rapidly. That is per­
ceived as a threat and has led to attempts to control
the process.
In 1992, a report Beyond the Limits57
published by
the Club of Rome – one of the most influential be­
hind-the-scenes non-profit organisations, notorious
for its struggle with overpopulation – was released.
It warned about the threat of overpopulation and
has strongly influenced how conflicts in Africa are
viewed by the world. One example given to demon­
strate the danger of overpopulation in the views of
the Club of Rome and numerous Western publica­
55 UNICEF. Generation 2030. Africa 2.0. URL: https://data.unicef.org/resources/generation-2030-africa-2-0/
56 World Bank. Population density (people per sq. km of land area). URL: https://data.worldbank.org/indicator/EN.POP.DNST
57 Meadows D., and Randers J. Beyond the limits: confronting global collapse, envisioning a sustainable future. Vermont: Chelsea Green Publishing, 1992.
58 Prunier G. The Rwanda Crisis: History of a Genocide (2nd ed.). Kampala: Fountain Publishers Limited, 1999.
tions was the genocide that devastated Rwanda in
1994. The case of Rwanda was presented as a pre­
cursor of similar catastrophes in bigger “overpopu­
lated” countries58
.
Publications of leading international organisations
systematically built in the public consciousness the
connection of population growth with crises and hun­
ger. Among the signature papers are Demographic
Change in Sub-Saharan Africa (1993), Briefing Note
Population and Development in Africa (prepared by
the Organisation of African Unity (OAU) and the
UN Economic Commission for Africa (UNECA) in
39
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1994), Harnessing the Demographic Dividend for
Africa’s Socio-Economic Development (prepared
by AU in 2012), Synthesis Report on the Demo­
graphic Dividend in Africa (by African Institute for
Development Policy and UNFPA, 2015), UNECA’s
Demographic Profile of African countries (2016)
and more. The ideas developed in these works cre­
ate a negative image of population growth, while
suffering from ambiguities and
lacunas, igno­
ring possible posi­
tive population growth impacts
on the food situation.
However, the bread riots and general destabilisa­
tion of Africa engendered by population growth
has never happened and the prospects of such are
quite low. In contrast to the pessimistic view of the
correlation between population growth and access
to food, an alternative positive vision can be con­
sidered.
Population growth makes agriculture more profi­
table: the number of consumers increases, as does
the number of workers. In this way, both consump­
tion and production growth can and should be
combined with investments in fertilisers, irrigation
systems and resource allocation, leading to multi­
plicative effects. Rising urbanisation together with
59 World Bank Blogs. Can rapid population growth be good for economic development? URL: https://blogs.worldbank.org/en/africacan/can-rapid-population-growth-be-good-
for-economic-development?page=1
the population leads to a gradual change in con­
sumer habits, the emergence of supermarkets, the
development of the bulk purchasing segment and,
consequently, the consolidation of farms (it is eas­
ier for large chains to work with a limited number
of suppliers with similar standards) and, finally, an
increase in their technical equipment and produc­
tivity.
Therefore, it is worth considering a positive
option: the larger a population is, the easier
it is to feed. A growing population would lead
to a more evenly distributed population, brid­
ging the gaps (i.e. unpopulated areas) between
’food hubs’, increasing not only the size of the
workforce and arable land, but also develop­
ment of infrastructure59
. Low popu­
lation density
results in low-quality infrastructure (inclu­
ding
roads), and food is not brought into remote ar­
eas due to insufficient demand and high trans­
portation costs.
To initiate the discussion about the positive im­
pact of population growth on food availability, the
correlation between undernourishment rates and
population growth was studied.
The larger a population is, the easier it is to feed
Thirty years have passed since the Rwanda genocide. Following a significant population decrease –
from seven million people in the late 1980s to five million by the end of 1994 – by now, the
population of Rwanda has surged to 14 million. Rwanda remains the most densely populated
in continental Africa and is also one of the leaders in terms of economic growth. In terms of
population density in Africa, Rwanda is surpassed only by Mauritius – which could well be the most
prosperous country on the African continent. In Rwanda itself, economic growth is evident. In the
past 30 years, crop production has increased more than sixfold, both due to increased agricultural
productivity and fertilisers intake growth, as well as because of new land included in agricultural
turnover. Development of agriculture was combined with other infrastructure investments: the
length of paved roads has doubled to 1,200 km and the capacity of power plants has increased
sevenfold to 230 MW. The growth of the Rwandan economy is not just a result of the balanced
development of infrastructure but is also due to the consistent development of the tertiary sector
of the economy.
40
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food
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food
sovereignty Africa 2025: Prospects and Challenges
HSE University Center for African Studies
41
Food
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food
sovereignty
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
For the study, the sample was taken both from
count­
ries suffering from acute food crises and
countries with a stable economic and political si­
tuation. This sample made it possible to assess the
magnitude of the trend and the hidden factors af­
fecting the correlation. Overall, the statistics show
that demographic growth may work in favour of
food systems, but food access still remains ex­
tremely sensitive to changes in the political and
economic environment.
In the long term from 2004 to 2024, with popu­
lation growth in many African countries, under-
nourishment among the population is decrea­
sing. Even in those countries where the share of
undernourished is rising, the
rate of increase, with a few
exceptions, does not appear
to be catastrophic. However,
the correlation of population growth with hun­
ger reduction is still very sensitive to changes
in the political and economic environment. In
some countries this has occurred as a result of
civil wars or unrest that have led to disruptions
in the food system, primarily in terms of food de­
livery, while in others the situation has worsened
as a result of overdependence on external sup­
plies of basic food commodities. However, such
spikes are often short-term and levelled off in
the long run.
Strategy of eliminating hunger through the birth
rate control is not an option
Thus, the expected growth of Africa’s population
to 3 billion people in the coming decades is likely
to contribute to food deficit reduction through
market growth, infrastructure development and
agricultural production60
. However, population
growth is both the challenge and the opportunity.
What does seem obvious is that a strategy of
eliminating hunger through the birth rate control
is not an option. Instead, it is worth producing
working strategies of development based on the
realistic and positive assumptions of population
60 RT. Maslov A. The myth of overpopulation: More people in Africa are the solution, not the problem. URL: https://www.rt.com/africa/591953-africa-population-growth-west-
worried/
growth. It is also necessary that the per capita
food availability not fall with population growth.
The basic conditions for these demands increase
in domestic production and redistribute food,
hence intensifying agriculture by supplying ferti­
lisers and improving infrastructure for supplies to
remote areas. There seems to be no other actors
but the governments to produce these workable
strategies and implement them.
If destructive factors prevail (such as lack of
infrastructure investments and fertilisers, de­
pendence on import, etc.), a demographic
surge may have the opposite effect (rising un­
employment, excessive urbanisation, environ­
mental problems). That is why the food crises
in Africa need to be addressed in a comprehen­
sive manner, given that the demographic factor
is ambivalent. Technically it is almost impossi­
ble to eliminate the other factors and calculate
correlation between demographic growth and
undernourishment. Nevertheless, it is worth
further research, based on the particular case
studies as it is clearly seen that population
growth generally does not lead to food situa­
tion deterioration.
What does matter is the popu­
lation and supply balance be­
tween cities and food producing
agricultural areas. Cities are growing faster than
the population itself. Malnutrition drives people
to the cities, there food distribution works better
to prove the concept ‘the more people the more
food available’, but the fertility rate is higher in the
rural areas leading to food crises there.
If destructive factors prevail, a demographic
surge may have the opposite effect
42
Food
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food
sovereignty Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Main trends in agriculture
1. New diet trends
Per capita kilocalorie consumption61
per day varies
across Africa: with a global median consumption
of 0.61 (in an index where the highest indicator
is assigned a value of 1) in 2022, some countries
performed strongly, such as Algeria (0.83) and
Morocco (0.78). In Sahel and Western Africa, per­
ceived by many as food crises prone, the indicator
is average at 0.61 in Mali, 0.54 in Burkina Faso and
0.53 in Senegal62
; South Africa’s kilocalorie con­
sumption is around the same level at 0.58. The
deficit in kilocalorie intake is registered in Central
and Southern Africa: 0.4 in Angola, 0.38 in ­
Zambia,
and 0.23 in Zimbabwe. By comparison, the US fig­
ure in the index above is 1, China’s is 0.77, and
Europe’s average is 0.8 to 0.9.
These indicators, first of all, allow us to draw
conclusions about the diet. In some countries, a
low-calorie diet is common due to the prevalence
of vegetables, fruits, sometimes poultry or fish,
and the lack of dairy and meat products.
Overall, it is not only about food availability,
but what is available as well
In recent years, there has been a shift from a
low-calorie diet to a new high-fat, high-sugar diet,
which brings certain risks63
. With rapid urbanisa­
tion, higher incomes and female employment op­
portunities, the demand for convenience foods is
growing rapidly and supply chains are undergo­
ing a transformation, with production shifting to
low-cost processed foods. Consumption of pro­
cessed and ultra-processed foods is increasing
not only in urban but also in rural Africa due to,
among other things, the mechanisation of agricul­
tural production, increased income from non-farm
61 World Bank. Kilocalories per person per day (highest score=1). URL: https://prosperitydata360.worldbank.org/en/indicator/IDEA+GSOD+v_23_03
62 One of the reasons why calorie intake in the Sahel zone is higher than in Sub-Saharan Africa may be the abundance of dates in the diet. The caloric value of dates is about
25 calories per fruit (about 274 kcal per 100 grams of product), which with the production volumes (e.g. Niger - 16.6 thousand tons in 2020, Chad - 21.2 thousand tons in
2020) makes dates an important source of calories for local population.
63 Global Food Research Program. Ultra-processed products make up nearly half of low-income South African adults’ diets. URL: https://www.globalfoodresearchprogram.org/
ultra-processed-products-make-up-nearly-half-of-low-income-south-african-adults-diets/
64 FAOSTAT. Food Balances (2010-). URL: https://www.fao.org/faostat/en/#data/FBS
employment and the associated
increase in the opportunity cost
of time. Many processed foods are high in sugar,
salt, saturated fats and/or preservatives and, thus,
contribute to overweight and non-communicable
diseases such as diabetes, cardiovascular disease
and cancer. At the moment, Africa has not seen a
surge in fat consumption, and it would be prema­
ture to claim a shift to an unhealthy dietary pat­
tern, but the risk in the form of a slow but steady
increase in sugar consumption remains: thus, total
African consumption of sugar (raw equivalent) in
2010 was 13.9 million tonnes, in 17.9 million tonnes
in 2016 and 19.8 million tonnes in 202264
.
43
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Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Grains
Africa has the potential to become a major pro­
ducer of cereal crops: for 2022, the area plan­
ted with maize is 41.8 million hectares with
a ­
production of 92.9 million tonnes. For 2022,
16.5 million hectares have been allocated to
65 USDA. International Production Assessment Division. URL: https://ipad.fas.usda.gov/Default.aspx
66 Andrae G., Bjorn B. The Wheat Trap: Bread and Underdevelopment in Nigeria. London: Zed Books, 1986. 192 p.
67 FAOSTAT. Crops and livestock products. URL: https://www.fao.org/faostat/en/#data/QCL
rice (production of 39.9 million tonnes) and 29
million hectares to sorghum with a yield of 29.6
million tonnes65
. However, due to a lack of ferti­
lisers, field yields are not sufficient to meet the
growing needs of the population. Africa spends
up to USD 80 billion annually on food imports,
and up to USD 30 billion of this is wheat.6667
Nigeria is a textbook example of the
“wheat trap” (after the title of a 1985
book by Swedish researchers Gunilla
Andrae and Björn Beckman, The Wheat
Trap: Bread and Underdevelopment in
Nigeria)67
. Since colonial times wheat
(poorly suited to the country’s climatic
conditions) has been replacing traditional
crops in the African diet. The process
intensified with gaining independence
and the influx of petrodollars, which
created a westernised class of urban
dwellers, consumers of wheat products.
They in turn created a demand for wheat
imports, which is extremely difficult
to replace with local production. The
most consumed cereal crop in Nigeria
is maize, accounting for almost 40%
of consumption in quantity terms, rice
and sorghum have roughly equal shares
of 22% and wheat only 15%. Wheat
is the only cereal in Nigeria for which
imports are the main source of supply.
2.5 times between 2000-2020, rice
consumption increased 2.5 times,
maize consumption increased 2 times,
and sorghum consumption is stagnant67
.
Urbanisation and the gradual globalisation
of food behaviour standards together
with population growth is leading to a
gradual increase in the consumption and
importation of wheat.
44
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food
sovereignty Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Wheat is not a traditional crop for most African
countries, and compared to other regions, Africa
ranks last among consumers of
bakery and confectionery pro­
ducts. Nevertheless, imports of
this particular crop account for
a significant portion of African
government and consumer expenditures. The rea­
son lies in the artificial increase in demand as part
of the “wheat trap”.
The way out for African countries may be to con­
sistently support more domestically adapted crops
like sorghum, cassava, etc. Such measures could
include imposing obligations on flour producers to
replace a share of wheat flour with sorghum, intro­
ducing more pest and climate-resistant varieties
and seeds.
The way to African food sovereignty seems
to be in reducing dependence on wheat
in general, not only on wheat imports
Protein intake: dairy, fish, meat
and poultry
The average protein intake in Africa has decreased
over the last 10 years and stands at 65-66 g per
person per day, which is 20 g less than the world
average.
The majority of protein consumed in Africa is
low-quality plant proteins, with them constituing
77% of the intake (37% in the EU). African count­
ries consume plant proteins almost as much as the
world average (50 g), but with animal proteins like
fish, meat, eggs, dairy products their consumption
is 2-3 times less. With the spread
of fast food – noodles and other
snacks – the share of low-quali­
ty proteins will probably increase
even more.
Although overall protein intake is not significantly
below the recommended and required amounts,
the problem lies in its composition
45
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Consumption specifics limit the continent-whole
approach. Here, even a country-by-country ap­
proach is not sufficient, given the significant dif­
ferences in traditional diets in different regions
of the same country – for example, in the count­
ries of Western Africa coastal populations depend
primarily on fish, while those in the northern re­
gions depend primarily on dairy products and
beef. Moreover, the share of animal protein intake
is still so small and fluid that a single reform in one
country may have an impact on continent-wide
statistics.
Dairy products remain the main source of animal
protein in Africa, but this is primarily at the ex­
pense of Northern Africa, where milk powder has a
significant market share, and Eastern Africa, name­
ly Kenya, where the government has consistently
supported local producers and the dairy industry
occupies an important position in the economy
(4.5% of GDP).68
The low consumption of milk and dairy products
is due to low production levels, lack of canning
technology (for products on the domestic mar­
ket) and the high prevalence of lactose into­
68 Kenya News Agency. Dairy, Mango Farmers To Access Subsidies Via E-Card. URL: https://www.kenyanews.go.ke/dairy-mango-farmers-to-access-subsidies-via-e-card/
69 FAOSTAT. Food Balances (2010-). URL: https://www.fao.org/faostat/en/#data/FBS
lerance among the African population. Overall,
dairy farming remains primarily subsistence, es­
pecially for countries with a significant share of
nomadic population: Mali, Niger, South Sudan,
Ethiopia. Improving the efficiency of the dairy
industry in such countries is not only an issue of
food sovereignty and balanced diet, but also of
security in its broader sense. Government sup­
port to the dairy industry, creation of additional
jobs and infrastructure will help to improve life
conditions of herdsmen, consequently, con­
tributing to the resolution of the centuries-old
farmer-herder conflict.
Meat is generally less consumed in Africa com­
pared to other regions (about 20 kg of all meat
species per person per year in 2021 against 43 kg
per person globally and 67 kg per person in Eu­
rope69
) due to its high price and additional produc­
tion costs in the pastoral sector, as well as the lack
of infrastructure (industrial slaughterhouses). The
variation in meat and poultry consumption in Africa
is very wide, ranging from an average of 5.4 kg per
person per year in Ethiopia to 60 kg per person per
year in South Africa, with an average of 20 kg per
person per year in Africa. Chicken is the main meat
The Kenyan dairy industry is among the top in Africa and is the leading in Eastern Africa.
This case demonstrates the potential of the government interventions and investments in
food sovereignty. The dairy is contributing 4.5%, 14% and 44% to the national, agriculture
and livestock sub-sectors GDP, respectively. In 2023 total milk production in the sector is
estimated to be 4.6 billion litres (for comparison, about 2.9 million litres in 2000), and the
consumption of dairy products remains high (about 98 kg /capita/year in milk equivalent).
Such an increase was possible due to high demand for processed milk and milk products due
to a growing urban middle class and ongoing investments in value added products including
long-life milk and milk powder. A chain of production has been established - milk collection
from small farms is centralised in so-called ‘milk bars’, from where milk is either delivered
for processing or sold to consumers in raw form. A big role in establishing value-added
production is played by the government, that supports the industry through set of regulatory
measures and incentives. There are also support measures from the regional governments -
for example, in Murang’a the county government established a subsidy programme in early
2023 - milk producers are receiving 7 shillings (USD 0,054) per delivered litre of milk via
e-card68
.
46
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sovereignty Africa 2025: Prospects and Challenges
HSE University Center for African Studies
for the vast majority of Africans, accounting for
around 30% of annual meat consumption. In gene­
ral, it is chicken that has accounted for most of the
growth in meat and protein consumption in Africa.
However, this consumer boom is largely driven by
imports - African countries spend more than USD 2
billion a year on poultry imports.
Urbanisation and low efficiency of domestic
production in Africa, including feed shortages,
will remain the key drivers of chicken
consumption and import growth
Consumption is expected to increase as the de­
mand for chicken in Africa rises, with a projected
market volume of 11 million tonnes by the end of
203070
.
70 African Union Development Agency. Digitalising The Poultry Industry In Africa. URL: https://www.nepad.org/blog/digitalising-poultry-industry-africa
71 FAOSTAT. Food Balances (2010-). URL: https://www.fao.org/faostat/en/#data/FBS
72 FAO. The State of World Fisheries and Aquaculture 2018. URL: https://openknowledge.fao.org/server/api/core/bitstreams/6fb91ab9-6cb2-4d43-8a34-a680f65e82bd/
content
73 FAOSTAT. Food Balances (2010-). URL: https://www.fao.org/faostat/en/#data/FBS
74 IDH. Fish farming for African food security and job creation. URL: https://www.idhsustainabletrade.com/news/increasing-food-security-through-local-fish-production-and-
market-growth-in-africa/
Because of pork’s limited potential as a source of
protein, engendered by climate and religious ta­
boos, what meat African cities will eat - chicken (lo­
cal or imported), beef, lamb, fish or goat meat and
in what proportions - depends on decisions with
little time to make. Global consumption standards
make the key role of chicken almost inevitable, but
whether it comes from Africa or abroad depends on
whether African governments can take measures to
support the industry, introduce more efficient and
crossbred types of poultry, support higher input re­
quirements (housing/shelter, commercial diet, and
strict disease/vaccination programmes) associated
with the more genetically efficient breeds. Other­
ways, chicken may become the new “wheat trap”
for Africa.
Despite the fact that Africa provides approx­
imately 10% of global fish catch71
and 10% of
global fishermen are Africans72
, fish consump­
tion is almost 2 times less than world average (9
kg per capita vs 20 kg73
). According to IDH, the
African continent has been experiencing a sea­
food deficit since 2001 and this deficit has been
growing by 13% every year74
. This is primarily due
to the low level of knowledge of African aquatic
resources, lack of skilled labor and infrastructure
(storage, processing, delivery to consumers). The
most pressing issue is aquaculture: fishing is hap­
hazard, extensive and often left to foreign com­
panies. At the same time, due to
the low efficiency of the fishing
industry in Africa, imports of fish
and seafood are increasing. Fish
imports have increased fivefold
in 20 years and almost reached
USD 5 billion by 2023. It is the
development of aquaculture and improvement
of technological equipment of the industry that
will guarantee the growth of fish consumption in
Africa.
47
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Africa 2025: Prospects and Challenges
HSE University Center for African Studies
2. Shift away from subsistence
farming
With urbanisation, there has been a shift away from
subsistence farming and, more widely, from eating
locally grown food. Land is increasingly given to
technical (cotton, rubber) and export crops, while
food is increasingly imported: wheat, rice, corn.
There is a decline in the food base in the wild, as
well as in fauna, amidst popula­
tion growth, hunting and insur­
gency.75
75 The Citizen. Tanapa revenue soars by 94 percent as tourism rebounds. URL: https://www.thecitizen.co.tz/tanzania/news/national/tanapa-revenue-soars-by-94-percent-as-
tourism-rebounds-4564600
As a consequence, there is a decrease in opportu­
nities for extensive growth (arable land, pastures),
an increase in demand for intensive farming me­
thods introduction. One of the main methods of
increasing the quality and quantity of yield is the
application of fertilisers.
Fertilisers market in Africa:
towards agricultural intensification
Land dilemma exists as well, as alternative to agriculture options arise for land use. For instance, in
Tanzania in the period from 2022–2023, the territory of national parks amounted to 99.3 thousand
hectares, the revenue from these territories for this period amounted to USD 123.9 million75
,
the average revenue amounted to USD 12.5 thousand/ha. While the approximate income from
agriculture does not exceed USD 1 thousand per ha.
Fertilisers will be the main trendsetter for African
agriculture development in the forthcoming decades
48
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As of 2022, agricultural fertiliser use in Sub-Saha­
ran Africa is 17 kg/ha76
of active ingredients (com­
pared to APAC at 300 kg/ha), with some countries
like Uganda, Guinea, Republic of Congo, Niger and
CAR using less than 5 kg/ha. Following the mee­
ting of African Ministers of Agriculture in 2006 in
Abuja (Nigeria), a modest goal was set to increase
the average volume of fertiliser use from 8 kg/ha
to 50 kg/ha, which is still yet to be achieved in most
countries. According to the calculations of the
United Nations Development Programme (UNDP),
achieving the goal of increasing the use of ferti­
lisers could triple food production in Africa in the
near future, as well as reduce malnutrition by almost
5%77
. Fertiliser consumption in Africa is 7.5 million
tonnes of active ingredients, and most of it is im­
ported nitrogen, potash and phosphate fertilisers.
Fertilisers have already contributed to food sove­
reignty of several African countries. Among them
is Ethiopia, which has arranged an increase in pro­
duction due to the introduction of new wheat vari­
eties and an increase in the use of fertilisers.
African market share of imported fertilisers (6%
of global value) and exported (12%) is relatively
76 Malpass D. A transformed fertilizer market is needed in response to the food crisis in Africa. URL: https://blogs.worldbank.org/en/voices/transformed-fertilizer-market-
needed-response-food-crisis-africa
77 UNDP. Towards Food Security and Sovereignty in Africa. URL: https://www.undp.org/facs/publications/towards-food-security-and-sovereignty-africa
78 Africa Fertilizer Map. URL: https://www.africafertilizermap.com/
79 Sviridov V., Andreeva T. Russian Fertilizers as an Element of Strengthening Africa’s Food Sovereignty. URL: https://africajournal.ru/wp-content/uploads/2024/07/Sviridov-
Russian-Fertilizers.pdf
80 IFASTAT. URL: https://www.ifastat.org/
81 FAOSTAT. Food Balances (2010-). URL: https://www.fao.org/faostat/en/#data/FBS
82 FAOSTAT. Crops and livestock products. URL: https://www.fao.org/faostat/en/#data/QCL
high, whereas indicators of several countries (Mo­
rocco, Algeria, Egypt) are in position to increase
significantly this decade.
According to the Africa Fertilizer Map, the major fer­
tiliser producers on the African continent – Morocco,
Algeria, Nigeria, South Africa and Libya – manufacture
fertiliser not only for their own consumption but also
for export, including intra-regional exports78
. Africa
is endowed with the resources for fertiliser produc­
tion. According to the USGS, up to 80% of the world’s
phosphate reserves are concentrated in Africa. Afri­
ca annually produces around 250 bcm of natural gas
(about 1 thousand cubic metres of gas is needed to
produce 1 tonne of ammonia fertiliser). That proves
the potential for wider regional cooperation in fertil­
isers production79
.
South Africa, Ethiopia, Zambia, Djibouti, Tanzania
and Zambia are the region’s leading fertiliser buy­
ers (the combined share of these five countries is
20% of total African imports)80
. At the same time,
Morocco, South Africa, Egypt, Nigeria are among
the five leaders exporting to other countries of the
region: they account for 16.1% of external African
exports and 76.8% of intra-regional exports.8182
Ethiopia imports up to one million tonnes of wheat annually (500,000 tonnes in the first half of
2023 and 400,000 tonnes in the first half of 2024) with an average annual consumption of 6 million
tonnes for 2019-202081
.
Increase in yields – the “wheat revolution” as some media refer to the phenomenon – has been
made possible by the nation-wide introduction of heat-tolerant wheat varieties combined with
increased mechanisaton, irrigation and fertiliser application. For instance, nitrogen fertiliser input
increased from 240,000 tonnes in 2014 to 426,000 tonnes in 2022 (from 14 kg/ha to 23 kg/ha),
contributing to wheat yield increasing from 2.5 tonnes/ha to 3 tonnes/ha. All measures combined
led to an increase in wheat production from 4 million MT to 5.6 million MT in 2023/2482
.
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However, intra-regional fertiliser consumption and
distribution remain low. The main reasons include
low qualification of farmers and specialists involved
in the agricultural sector, dependence on subsidies,
shortage of foreign currency and the general lack
of government support for the sector.
It is the government that should be the main
player in the emerging fertiliser markets
Given the small size of farms and their lack of working
capital and knowledge of soil conditions, it is the govern­
ment that should be the main player in the emerging
fertiliser markets. Examples of separate states show
that the set of these measures is limited, but allows to
achieve significant results even in the short term.
However, the main reason remains the benefit for
large African producers of targeting external mar­
kets. Countries with unstable economic and poli­
tical environment, as well as countries amidst acute
food crisis, cannot pay for sufficient volumes of fer­
tilisers at market price, which directs export flows to
other regions rather than inland.
83 Africa Fertilizer Map. URL: https://www.africafertilizermap.com/#Interactive
Another critical reason for low consumption and
intraregional exports is the poor state of logistics.
For example, the main railroads and transport
trade corridors on the continent pass through
coastal countries, international ports and major
railway stations, almost completely ignoring the
inland countries (most affect­
ed by the food crisis).
The de facto ‘exclusivity ’ of some
routesincreasesthepriceoffertilisershipments.Ac­
cording to Africa Fertilizer Map’s 2021 calculations,
the transportation cost per tonne of fertiliser from
Dakar to Bamako averaged USD 54 (1,115 km),
from Beira to Lusaka USD 85 (1,055 km), from Dur­
ban to Harare USD 115 (1,680 km) and from Dar
es Salaam to Lusaka USD 100 (1,940 km)83
. Mean­
while, the major railroads and transport corridors
affect intra-continental countries tangentially. This
increases the cost of transportation at the expense
of conveyance within the country itself (from the
transport hub to the periphery) and adds the risk
of a transport blockade if relations between states
deteriorate.
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84
84 Federal Customs Service of the Russian Federation. URL: https://customs.gov.ru/statistics
Russia, as the second largest producer of mineral fertilisers in the world, plays a significant role
in fertiliser exports to Africa. In value terms, their exports have grown almost 32-fold over the
past 18 years, reaching USD 511 million in 202184
; in volume terms, exports have increased from
770,000 tonnes in 2018 to 1.6 million tonnes by 2022. Thus, Russia’s share in the African fertiliser
market has reached about 12%. For comparison, Russia’s share in the supply of hydrocarbons to
Africa is 3%, and 32% for wheat.
At the same time, the share of Russian exporters is still significantly inferior to the volume of supplies
from leading international companies. Thus, the Moroccan company OCP supplies about 2 million
tonnes of phosphate fertilisers to Africa annually, and the Norwegian company Yara supplies about
1 million tonnes (mainly urea, but also complex fertilisers).
Uralchem Group case: trade flows and humanitarian supplies
Several large Russian companies, including PhosAgro, EuroChem, Uralchem and others, currently
cooperate with African countries. An interesting example is the cooperation between African countries
and Uralchem Group.
Uralchem Group’s efforts to gain a foothold in the Nigerian potash fertiliser market culminated in the
signing of a contract between Uralkali, part of Uralchem Group, and the Nigeria Sovereign Investment
Authority (NSIA) in 2019. As a result of the contract, Uralkali remained the sole supplier of potash
fertilisers to Nigeria from 2019 to 2021. In financial terms, such supplies amounted to USD 47 million in
2020 and USD 41 million in 2021.
In 2022, more than 260,000 tonnes of fertilisers belonging to Uralchem Group were blocked in Riga,
Ghent and other EU ports. Uralchem Group volunteered to use such blocked tonnages for gratuitous
deliveries to African countries: in March 2023, 20,000 tonnes of fertilisers were delivered to Malawi,
then 34,000 tonnes went to Kenya in May 2023, another 34,000 tonnes went to Nigeria in February
2024, and 23,000 more tonnes were shipped to Zimbabwe in March 2024. In total, this initiative has
resulted in more than 111,000 tonnes of supplies (and counting), which were made in cooperation
with the United Nations.
In fact, the humanitarian shipments of Uralchem Group to African countries made in late 2022 and
early2023pavedthewayforawiderengagementingratuitousdeliveriesofagriculturalcommodities
from Russia to Africa, with other suppliers stepping in. An example of such development was the
initiative on gratuitous deliveries of 25 to 50 thousand tonnes of grain to Burkina Faso, Zimbabwe,
Mali, Somalia, Central African Republic and Eritrea, which was announced during the Russia-Africa
summit in 2023.
Previously, Russian food aid to Africa was mostly limited to monetary contributions to intermediary
organisations, such as the WFP, FAO, the International Committee of the Red Cross and other
international bodies, which then provided targeted support.
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8586
85 Nigeria Sovereign Investment Authority. Presidential Fertiliser Initiative (PFI). URL: https://nsia.com.ng/portfolio/presidential-fertilizer-initiative-pfi/
86 Federal Republic of Nigeria Official Gazette. The National Quality Fertiliser Control Act. URL: https://nesgroup.org/farmgain/documents/Official%20Gazzettee%20of%20
NATIONAL%20FERTILIZER%20QUALITY%20CONTROL%20ACT,%202019.pdf
Nigeria provides an example of the use of a range of government support measures for the
development of the sector. Fertiliser consumption trends are positive, but reflect the general
picture for Africa (less than 20 kg/ha). Nigeria’s former president Muhammadu Buhari (2015-2023)
made the fertiliser programme a priority and several steps have been taken at state level in this
regard:
1. Establishing a legal framework for the development of the national fertiliser market segment.
– Presidential Fertiliser Initiative (2016), the objectives of which were, among others, to
rehabilitate local idle infrastructure and encourage domestic production (blending) of
fertilisers85
.
– The National Quality Fertiliser Control Act (2019) to prevent substandard or counterfeit
products from entering the market86
. One of the requirements of the act is for companies
operating in Nigeria to register and obtain certificates of registration and marketing authorisation
fromtherelevantagency.Tothisend,anelectronicplatform,TheNationalFertiliserManagement
Platform, has been operationalised. The first certificates were issued in 2022.
2. Support for local producers of fertilisers and agricultural products.
– Non-tariff measures. Import bans on urea and NPK were introduced in 2016 and 2018,
respectively.
– Subsidies. Subsidies to increase the amount of fertiliser per hectare of cultivated land under
various schemes and programmes (including the Federal Market Stabilisation Programme, the
2010 Fertiliser Voucher Programme, and the Growth Enhancement Support Scheme) have
been used in Nigeria since 1977. However, after 2015, due to declining government revenue as
a result of falling oil prices and the government’s high debt obligations to agro-dealers, subsidies
were not used. In 2022, the subsidy system was partially brought back; in 2023, several state
governments in Nigeria announced the introduction of a 50% subsidy on fertiliser purchases.
3. Direct purchase by the government
Nigeria is using contracting for the supply of raw materials for local blending in Nigeria is done
through government procurement: in 2019, a contract was signed with Uralkali (a Russian
company, part of Uralchem Group), for the direct supply of potash component for NPK
fertilisers.
4. Introduction of a Soil Doctor programme to test soils and determine the level of fertiliser
requirement, with parallel training of specialists and opening of laboratories.
Despite the positive trend in fertiliser use, Nigeria remains dependent on external fertilisers,
the supply of which can be drastically reduced in times of crisis, leading to higher prices and
a reduction in already established local production. The only way for Nigeria to achieve food
sufficiency via increased fertiliser application is to harness its vast natural gas resources for
nitrogen fertiliser production.
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The logistics of fertiliser distribution is also important:
small farms, those who primarily need fertilisers, find
it difficult to buy large batches of fertilisers coming to
ports. At the same time, it is unprofitable for sup­
pliers
to divide batches of fertilisers into small portions.
Thus, investments are needed in a mechanism for re­
distributing and packaging imported fertilisers on the
territory of ports or in the vicinity of them.
Africa’s food sovereignty through fertiliser supply
should be complemented by educational and
research initiatives
These include additional courses, lecture series, in­
ternships for farmers and government officials.8788
87 FAO. Using Soil Maps to Promote Efficient Use of Fertilizers Learning from the Ethiopian Experience. URL: https://www.fao.org/3/cb9452en/cb9452en.pdf
88 AfricaFertilizer. Ethiopia Fertilizer Dashboard. URL: https://viz.africafertilizer.org/#/ethiopia/wpContentPage/country-overview-8
89 Global Hunger Index. URL: https://www.globalhungerindex.org/
3. Subsidies and subventions
Many African countries, such as Algeria, Egypt
and others provide government subsidies on food
products, especially wheat and bread as a staple
(baguettes and loaves of white bread).
Subsidies are an important tool to fight hunger, which
is evident when comparing with
the Global Hunger Index indicators89
.
Thus, in Algeria and Senegal, where
subsidised products fully cover
the national average bread con­
sumption, the level of malnutrition among the popu­
lation has been gradually decreasing since 2000
An USD 11 million soil fertility mapping project (launched in 2012) was completed in Ethiopia in 201987
.
The maps, which contain soil characteristics and soil nutrient levels, have helped create recommendations
for a more balanced use of fertilisers and new mineral mixtures, instead of using one type for all soil types.
In this regard, Ethiopia has abandoned some fertilisers that did not suit the soil type in terms of nutrient
composition (in particular DAP was completely replaced by NPS and its varieties in 2015)88
.
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HSE University Center for African Studies
and fluctuations in world grain prices have not
had a strong impact on the indicator. In Moroc­
co and Tunisia, where subsidised bread meets
about half of the demand, malnutrition rates
remain at the same level with slight fluctua­
tions (Morocco) or slightly decreasing (Tunisia).
This underlines the strong influence of internatio­
nal conditions on regional bread markets that are
not subsidised by the state.
Nevertheless, bread subsidies are also a change-­
sensitive instrument and cannot function in iso-
lation from other factors. For example, in Egypt,
where subsidised bread covers more than half of the
demand, the malnutrition rate has increased. This
process is linked to Egypt’s dependence on wheat
imports as well as the country’s crisis phenomena -
food prices inflation rose by 60% between 2013
and 2023, along with foreign debt and the dollar’s
exchange rate to the national currency90
.
High government subsidies on bread and flour
stimulate consumption but limit private sector
growth
90 International Institute for Strategic Studies. Egypt’s economic crisis and uneasy position in the Middle East. URL: https://www.iiss.org/publications/strategic-comments/2023/
egypts-economic-crisis-and-uneasy-position-in-the-middle-east/
Farmers and enterprises involved in bread pro­
duction (flour mills, bakeries) find it unprofita­
ble to work below or at par with the market price.
Subsidies are beneficial in the short term (instant
access to food for all segments of the population)
but can cause irreparable damage to the economy
in the long term. For example, the impoverishment
and ruin of bakeries operating at a loss leads to
less competition in the market, monopolisation of
the sphere, and deterioration of product quality.
Finally, all this leads to distortions in the distribution
of resources in the economy and, thus, social ine­
quality, which the subsidy system is originally aimed
to combat.
To increase the efficiency of subsidies for bread
and food in general, the most of the subsidy re­
gimes requires more flexibility with policies ex­
clusive for each individual country. Such a flexible
system should consider the level of self-sufficiency
and grain imports; the percen­
tage of the population below the
poverty threshold and the popu­
lation receiving minimum wages;
the level of logistical connection
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between the centre and the periphery and other
indirect factors.
For instance, in Algeria, according to Algerian re­
searcher Bouchafaa Bahia, as of 2018, about 52% of
the population on average risks poverty and needs
subsidised products, but 48% of the population may
not need subsidies91
. Qualitative analysis of existing
risks and resources for the introduction of subsidies
can improve the situation of all participants in the
economic life of the state.
The dependence of many African countries on im­
ports and the resulting fluctuations in world product
prices remains a major challenge to a flexible
subsidy system. Thus, rising prices for imported
wheat will inevitably lead to an increase in pric­
es for baked products, even subsidised ones.
To miti­
gate risks, it is very important to ensure a
long-term transition to own raw material resourc­
es. An option for countries that cannot achieve
self-sufficiency may be the development of res­
ervation systems.
4. Food reservation systems
Food availability remains one of the main rea­
sons behind most African food crises, which
is provoked in the first place by the shortage
of food not in the country as a whole, but by its
uneven distribution between regions. In Afri­
ca, there has already been experience in es­
tablishing reservation models at national level.
For example, Ethiopia has a reserve system (run by
the Ethiopian Food Security Reserve Authority (EFS­
RA), established by the Council of Ministers; re­
named the Strategic Food Reserve Agency (SFRA),
but in fact it currently has no food reserve policy92
and faces the inability to solve food crises in regions
affected by political turmoil – e.g. Tigray. Issues re­
lated to the food reserve system are addressed only
in related strategies such as the National Policy and
91 Bahia B. Subsidizing Bread In Algeria? Yes, But... // Revue d’économie et de statistique appliquée. 2018. Vol. 15, №1. Рр. 83 – 89.
92 Mulugeta, M. Food Reserve System in Ethiopia: Assessment of the Current Implementation Technicalities and Policy Recommendations. URL: https://jsd-africa.com/Jsda/
Vol17No5-Fall15A/PDF/Food%20Reserve%20System%20in%20Ethiopia.Messay%20Mulugeta.pdf
93 Ethiopia Ministry of Agriculture. Disaster Risk Management. Strategic Programme and Investment Framework. URL: https://www.preventionweb.net/media/97384/downloa
d?startDownload=20240930; Ethiopia Ministry of Finance and Economic Development. Growth and Transformation Plan I. URL: https://www.greenpolicyplatform.org/sites/
default/files/downloads/policy-database//ETHIOPIA%29%20Growth%20and%20Transformation%20Plan%20I%2C%20Vol%20I.%20%282010%2C11-2014%2C15%29.pdf
Strategy on Disaster Risk Management, Plan for
Accelerated and Sustained Development to End
Poverty (PASDEP) and Growth and Transformation
Plans (GTP 1 and GTP 2)93
.
Thus, countries face difficulties in establishing na­
tional reserve systems – in fact, there is no surplus
to set aside as a reserve. A collective reserve sys­
tem could help to relieve the pressure on national
systems.
5. Water withdrawal dilemma
The state of water balance in Africa is an im­
portant factor for forecasting economic growth,
overcoming the problem of hunger, and progress
on sustainable development goals. According
to the joint study by WHO and UNICEF, only in
8 countries of Africa (Botswana, Gabon, Djibouti,
Egypt, Malawi, Namibia, Tunisia, South Africa) the
level of access to water sources of acceptable
quality exceeds 90%. The worst situation with
access to water is in Angola, DR Congo, Mozam­
bique, Equatorial Guinea, Chad and Madagascar
(less than 55%).
Access to drinking water is becoming a separate prob­
lem. According to Aquastat, per capita availability of
freshwater is reducing across the continent; in Ango­
la, Botswana and Zambia, where per capita access to
freshwater was above the world average in 2002, by
2021 the rates have fallen below the world average.
In some countries of the continent – Gabon, Mali,
Mozambique – total renewable water resources per
ca­
pita have almost halved in 20 years. One of the
main problems is water loss during water withdrawal.
On ave­
rage on the continent, between 80 and 95%
of water withdrawals are from agriculture, with losses
through evaporation or return to rivers and ground­
water aquifers ranging from 40% (in developed coun­
tries) to 80% (in developing and least developed
countries) due to inefficient water systems.
55
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Africa 2025: Prospects and Challenges
HSE University Center for African Studies
For Africa, international water basins are the
norm: there are 63 in total, covering almost two-
thirds (64%) of the African continent. The largest
basins are the Congo, Nile, Niger and Zambezi
rivers. The most complex basin in terms of com­
bining the scale of water challenges and political
disagreements today is the Nile. The population
of the basin, which is shared by 11 countries, has
quadrupled in half a century (from 143 million in
1971 to 564 million in 2021) and continues to
grow.
The first step to increase adaptability
to water challenges is solutions at the basin
management level
This is not only information exchange based on ge­
ographic informations systems, AI and monitoring
technologies, but also harmonisation and coordi­
nation of water withdrawal, mutual support mecha­
nisms, energy grid integration, joint food reserves.
Without such coordination, the struggle for water
quality and sanitation often makes no sense at all or
multiplies costs.
One of the ways to solve the problem of access
to drinking water in Africa is the construction of
desalination plants. Algeria is the regional leader,
with 11 desalination plants already in operation,
while 10 such plants are operating in South Africa.
In 2021, the Egyptian government has announced
plans to invest USD 8.5 billion by 2050 to build
47 seawater desalination plants,
and Morocco has begun con­
struction of the continent’s larg­
est desalination plant powered
by renewable energy – the first
phase is expected to be completed by the end of
2026 with a capacity of 200 million cbm per year,
which will increase to 300 million cbm per year by
2030. However, not all countries in the region can
afford to build infrastructure – desalination and
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the use of hard-to-reach water resources require
significant investments in the construction of
plants and facilities, but also in ensuring their unin­
terrupted power supply, which, given the chronic
shortage of electricity, complicates efforts to en­
sure access to drinking water.
The structural transformation of African
economies will inevitably raise the issue of new
water withdrawal dilemmas
Only a few countries can afford to divert water to
cities, energy or industry without improving irri­
gation efficiency. Africa’s economic boom cannot
happen without investment in water conservation,
desalination for coastal megacities, and improved
water use efficiency, which starts with better moni­
toring and reduced losses. These measures may be
supported via increasing agricultural productivity
and intensifying trade in water-intensive food and
goods. A modern solution to the water problem
could be the development of a new multi-com­
ponent system of water use, including not only in­
frastructure but also rationalisation of water use –
policies to improve water efficiency and the use of
non-conventional sources.
New food sovereignty systems
As this chapter and the analysis of most statisti­
cal indicators show, the food situation in Africa
is not worsening with population growth, and the
measures taken are just enough for a “conser­
vation scenario” – there is neither improvement
nor deterioration. However, population growth
gives Africa an opportunity – growing consum­
er markets, and thus attractiveness to foreign
investors. How African governments and busi­
nesses are able to capitalise on this growth will
determine the food situation in the long term.
Local content should become an
integral part of international trade
in food products
For Africa, the issue of food sovereignty is broken
down into two circuits – external and internal. On
the external side, it is necessary to gradually reduce
dependence on the external environment, such as
global price fluctuations, political will of exporters,
development agenda imposed from outside. If im­
port substitution is impossible (e.g. with wheat),
African governments need to take a more proac­
tive stance and exert more pressure on suppliers.
The logic of other sectors can
be applied to food as well – local
content should become an inte­
gral part of international trade in
food products, meaning techno­
logy and knowledge sharing, food stocks creation
on the territory of importers, etc. Such an approach
is logical, given that the food situation in the world
is indivisible. Issues in the importing country today
mean problems for the exporting tomorrow – and
vice versa.
Another important issue is nutrition design and in­
volvementinshapingeatingandconsumptionhabits.
Urbanisation is bringing about significant changes in
eating behavior and the problem of access to food is
widely recognised, but the responses to these chal­
lenges must be conscious and long-term. It is not just
about the quantity of calories and protein, but also
the quality of them. Food aid, for example, should
57
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Africa 2025: Prospects and Challenges
HSE University Center for African Studies
not become a way to inculcate certain non-African
consumption habits, and urbanisation should not
become a driver of increased consumption of low-
quality protein.
The dispersal of the state support resource is also
obvious. For each country a strategic food com-
modities list may be developed, consisting of a
food basket to ensure a healthy diet that can be ful­
ly produced within the country. These same com­
modities should be the focus of government sup­
port in terms of creating a full cycle of production:
from feed, seeds and vaccines, to industrial equip­
ment and processing and packaging facilities. Full
self-sufficiency is impossible, but it is achievable in
basic categories.
In terms of the domestic market, it is necessary to
take measures to increase agricultural productivity,
through transition to intensive farming, use of qua­
lity fertilsers, which increase the quality and yields
of agricultural products, improve soil fertility, aqua­
culture, and industrial livestock breeding. Increa­
sing imports of fertilisers and technical equipment
of farms in general is crucial here. Given the small
size of farms, the role of the government is of key
importance – it should be the main customer of soil
quality research and mapping programmes, whole­
sale purchaser of fertilisers for further distribution
among farms.
The answer to solving Africa’s excessive food im­
port dependency, while seemingly paradoxical, is to
increase imports, but of the means of production.
International assistance in this regard may be fo­
cused on facilitating this import and maintaining
favourable conditions for its expansion.
The case of Egypt demonstrates that even severe arable land deficit may be leveraged by the
investments in infrastructure. One should mention the long-standing policy of desert proclamation: in
1950, Ahmed Hussein, the minister of Social Affairs, suggested a plan labelled the Five Feddan Scheme
aiming at distributing desert lands to farmers for reclamation. In 2023, the Minister of Agriculture and
Land Reclamation, El Sayed El Qusair, announced the addition of over 1.47 million ha of agricultural land
since 2013.
Apart from that, there are several ongoing projects to expand greenhouses and increase efficiency
of water withdrawal. According to the report by the Ministry of Planning and Economic Development,
in 2023 the Egyptian government increased investments in the agriculture and irrigation sector to
USD 3.77 billion, which is 71% higher than in previous year. Abovementioned measures are designed
for a long-term perspective, but the results are visible now: Egypt has already managed to achieve
self-sufficiency in vegetables and fruits, rice, fish and sugar, while in 2023 exports of fresh agricultural
products exceeded 7 million tonnes in physical terms.
58
African
resources
to
African
markets:
making
energy
and
mining
work
for
Africa Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Role of energy in African
economy
Estimates of the loss African economies suffer from
energy deficits, ranging from 2% to 4% of continental
GDP annually, have become mainstream, but do we
understand these energy deficits correctly? Why, for
example, is the economy of DR Congo, where elec­
tricity generation per capita has remained unchanged
at 130 kwh annually for the last 20 years, is growing at
an impressive rate of 5-6% of GDP per year? Why has
Africa’s economic growth not been matched by a pro­
portionate increase in electricity generation?
This is because much – if not most – of the African
energy generation is in the shadows. By focusing re­
search on the grid segment of generation, govern­
ments and international organisations are ignoring
the booming market of small-scale diesel generators.
We estimate that about 10 GW of diesel generators
capacity is imported into Africa every year – this is al­
most as much as the grid installed capacity increase.
Despite the seemingly simple and promising nature
of this solution (1 GW of diesel generators costs USD
100-300 million, which is much cheaper than building
a power plant of the same capacity), this trend itself is
a consequence of systematic errors and imbalances in
energy policy and threatens to have dire consequences.
Firstly, 1 GW of diesel generation is actually much
less than 1 GW of gas-fired power plants or hydroe­
lectric power plants (HPP), which is explained by the
low capacity utilisation of diesel generators – 10-
15% compared to 40% for natural gas and 30% for
HPP. Secondly, such diesel generators will be insuf­
94 World Bank Group. Nigeria to Keep the Lights on and Power its Economy. URL: https://www.worldbank.org/en/news/press-release/2020/06/23/nigeria-to-keep-the-lights-
on-and-power-its-economy
95 SA News. No load shedding on Election Day. URL: https://www.sanews.gov.za/south-africa/no-load-shedding-election-day
96 Reuters. Ghana electricity supplier briefly disconnects parliament over debt. URL: https://www.bbc.com/news/av/world-africa-68451286
ficient for industrialisation of the economy and im­
port substitution, as industry requires a stable source
of energy. Thirdly, the diesel generation market itself
remains beyond the control of African governments.
This chapter is devoted to the main constraints that
have led to structural imbalances in African energy
markets, while these theses should lay the ground­
work for future discussions on how these challen­
ges can be overcome.
What is African in African
energy?
The issues of energy sovereignty, electrification,
blackouts, oil and gas, and commodities extraction
always come quickly to mind during discussions on
Africa’s economic development prospects: Nigeria
loses USD 28 billion a year or 2% of GDP due to en­
ergy shortages94
, South Africa promises no load
shedding on presidential election days95
, Ghana’s
parliament plunges into darkness right during the
session due to debts to electricity supplier96
, vio­
lent clashes over discussions to remove fuel sub­
sidies or impose additional fuel fees have become
commonplace in African political life.
On the one hand, energy resources (crude oil, natu­
ral gas, coal, uranium) for some countries remain
the sole source of export earnings feeding foreign
exchange reserves and debt repayments. On the
other hand, the prospects for economic develop­
ment of most states in the region will be defined by
the ability of governments to guarantee access to
affordable electricity for the population and indus­
try. Their ability to do so will determine whether the
African resources to African markets:
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demographic transition will bring
about an economic boom or lead
to Africa having the largest share
of people living without access
to electricity. Without affordable
electricity, fertilisers and cement
(produced using natural gas), irrigation systems that
depend on dams and HPP, and without oil refineries,
African economies will not be able to achieve sus­
tainable growth.
‘Energy security’ is a complex notion relating to the
position of a state in the global energy markets. The
term started being used in the 1970s and 1980s du­
ring energy crises and embargoes and initially referred
to importing countries and implied guaranteed stable
supplies that were not subject to political shocks and
excessive price fluctuations – i.e. security of supply.
However, for exporting countries, security of demand
seems to be more relevant – i.e. long-term guarantees
of demand for supplies at stable prices.
It means draining its mineral resources for the good
of other regions and economies. Furthermore, the
African countries which depend on imports do not
benefit from the security of supply logic. Indeed, they
are the first to suffer during crises, since they lack the
financial capabilities to compete with buyers from Eu­
rope and Asia and infrastructure to build up reserves.
Energy regionalisation seems to be more promising
for Africa, meaning that suppliers should pay more
attention to their domestic markets and neigh­
bouring countries without relying on global de­
mand, and vice versa – buyers should look for
energy sources, which are more expensive but closer
to them, without relying on international markets.
Main Africa's trading partners in energy commodities, 2023
Source: prepared by the HSE Center for African Studies based on ITC TradeMap and UNCTAD data.
6
35+1
EU: +
108 32
7+1
11+7
14+9
6
6+2
1
4
4
4
3+2
2+2
2+1
6
16
4
5
13
32
1
Exports to Africa
Import from Africa
1
108
Data in USD bln
220+30
For energy-deficient Europe and Asia security
of supply logic seems suitable, while for energy-
rich Africa this means exposure to outer shocks
and crises
60
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This would reduce dependence on external eco­
nomic aid, strengthen collective regional efforts
and establish regional markets.97
In fact, the desired model of ­­
sub-regionalism,
is at odds with the current model of globalisation97
,
in which African resources are not used
for the development of the region, but are used
outside of it
It is illustrated, for example, by the position of African
countries in most global value chains98
.
To put it bluntly, maintaining the logic of global en­
ergy security for Africa implies, for example, conti­
nued dependence on imports of energy amounting
to USD 120 billion per year, imports of petroche­
micals, most technologies, equipment, knowledge,
concepts and ideas, as well as dependence on the
global commodity markets. This is the cost of defi­
ning the country’s economic growth in terms of the
‘commodity booms’ rather than sound economic
policies, not to mention the need to sell oil at USD
10-20 per barrel99
in years of crisis due to the lack
of oil storage facilities.
The previous chapters have already shown that ex­
cessive import dependence is one of the leading
destabilising factors in the macroeconomic situa­
tion of most countries in the region, and energy
resources play a key role in this.
At the same time, African countries are endowed
with energy resources: for example, up to 9% of
the world’s proven natural gas reserves, 8% of the
world’s crude oil reserves and 60% of the world’s
solar resources are concentrated in Africa. In this
regard, the problem of electricity and energy
shortages in Africa is not attributable to an objec­
tive deficit, but primarily to improper distribution
and management as well as a lack of relevant
infrastructure.
97 Mensah J. Neoliberalism and globalization in Africa: contestations from the embattled continent. New York-: Palgrave Macmillan, 2008.
98 OECD. Regional value chains in Africa for better global integration. URL: https://www.oecd.org/coronavirus/en/data-insights/regional-value-chains-in-africa-for-better-
global-integration
99 Bloomberg. Nigeria’s Banner Oil Hits $12, Millions of Barrels Remain Unsold. URL: https://www.bloomberg.com/news/articles/2020-04-17/nigeria-s-banner-oil-hits-12-
millions-of-barrels-remain-unsold
One is used to African countries playing an impor­
tant role in global energy markets as suppliers of
crude oil, natural gas and uranium, but the question
who really plays this role remains
often overlooked. In fact, it is
hard to say that African countries
themselves, their governments
and companies are actively in­
volved in shaping global markets.
After all, it is not just the control
over resources but also over the
channels of their delivery to the final consumer that
allows exporting countries to effectively use the
‘energy factor’ for their political purposes and eco­
nomic development.
Historically, Africa has been a region dominated by
various non-state actors who have shaped the busi­
ness environment and determined the development
of entire industries, states and regions.
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Most export infrastructure in Africa is beyond the
control of African governments. One of the few ex­
ceptions is Algeria, where there is a state monopoly
on natural gas exports, and the state-owned oil and
gas company Sonatrach owns and operates most
of the export infrastructure and determines the
geography of sales. Another example can be seen
in South African coal mining, which is dominated
by local businesses.
In most other African countries,
however, the role of the state in
resource production, process­
ing and then export is minimal.
This is due to a whole complex
of factors: budgetary and tech­
nological deficit, which does not allow the states
to independently engage in exploration, production
and export of commodities; construction of export
infrastructure; the legacy of the colonial era, which
laid long-term strategic foundations for the develop­
ment of energy industries and export specialisations;
the dominant position of a limited number of mul­
tinationals in African energy markets. Thus, in most
cases, African countries serve merely as a source
of raw materials.
African countries are represented on the world
markets by a very limited pool of multinationals,
mainly Western
For example, with oil and gas those are Shell, BP,
TotalEnergies, Chevron and ExxonMobil, Vitol,
Glencore and Trafigura, and a number of other
companies that dominate smaller markets like
Perenco in Cameroon and Gabon and Marathon
Oil in Equatorial Guinea.
Every market or international regime can be di­
vided into ‘rule-makers’, who shape the agenda,
and into ‘rule-takers’, who obey. In terms of this
hierarchy on the energy markets, African coun­
tries are the rule-takers. The only component
of influence they have so far is mineral reserves,
while the main infrastructure (including tanker
100 Eskom. Integrated Report for the Year Ended 31 March 2023. URL: https://www.eskom.co.za/wp-content/uploads/2023/10/Eskom_integrated_report_2023.pdf
fleets, terminals, pipelines, etc.) is under the con­
trol of Western multinationals, and the basic prin­
ciples, norms, rules, procedures and strategies are
set without the involvement of African countries.
Moreover, even projects within Africa aimed at de­
veloping regional energy markets and integration
depend on the interests of extra-regional players
who control the financing and technological sup­
port for such initiatives.
It means understanding what reserves and assets are
available, who owns them, how they are being deve­
loped, how they interact with each other and with the
environment and what their technical condition is.
In the meantime, excessive consolidation of the en­
ergy sector under state control in terms of owner-
ship and management leads to long-term negative
consequences. In South Africa, the state-owned Es­
kom owns facilities that generate more than 90%100
of the country’s electricity, and
until recently the company con­
trolled all the country’s transmis­
sion lines. Lack of competition,
non-payments by consumers and
aging energy infrastructure have
caused a crisis in the energy sector. However, pri­
vate African businesses, with few exceptions, do
not yet have the necessary technical competencies
and free funds to ensure stable operation of power
systems.
Partial privatisation of ‘GenCos’ (i.e. generation com­
panies) in Nigeria is an important example: Nigerian
companies took loans to buy out state-owned enter­
prises. Faced with non-payment for electricity, na­
tural gas shortages and outdated transmission lines,
they are suffering losses and cannot repay the loans,
let alone reinvest money in infrastructure develop­
ment.
For African countries, the issue of control
over their own energy and power is still pressing.
Here we mean control – above all – in terms
of norms, strategies and regulations
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1 0 1
101 RT. Can Africa seize control of its own energy? URL: https://www.rt.com/africa/601547-sovereignty-africa-energy-bank/
At an extraordinary meeting of the Council of Ministers of the African Petroleum Producers
Organization (APPO) in early July, it was decided that the headquarters of the new Africa Energy
Bank (AEB) will be located in Nigeria. The founding documents and the AEB charter were signed in
early June by Afreximbank and the Africa Petroleum Producers’ Organization (APPO). The same two
organisations spearheaded the project to establish the AEB, became its founders and committed
themselves to provide a large portion of the initial capital. It is assumed that the bank’s capital will
initially amount to USD 5 billion. USD 1.5 billion will be provided by Afreximbank and APPO, another
USD 1.5 billion will be contributed by the bank’s member countries (the minimum contribution is set
at USD 83 million, so the founders are counting on about 15-17 countries to join the bank) and
another USD 2 billion will be provided by external investors. There is no definite information yet as
to which countries will join the membership circle, but Nigeria and Ghana have already contributed
funds and, in addition to Algeria, Benin and Nigeria, countries like Angola, Egypt, Côte d’Ivoire, Libya,
South Africa, and others are interested in becoming members. The AEB’s main task is to reduce
and overcome Africa’s dependence on external forces. By developing intra-African cooperation
and diversifying contacts with non-regional players, it aims to solve the problem of underfunding
or, rather, the dependence on external financing and, accordingly, an externally imposed energy
and climate agenda. The establishment of the AEB is an important development for Africa and an
attempt to strengthen energy sovereignty, but the main work lies ahead and finding money is the
main problem. First of all, USD 5 billion is not enough to solve the problem of energy poverty
in Africa, where 600 million people still do not have access to electricity. Secondly, the USD
2 billion (or 40% of the capital) that the bank plans to obtain from external investors is a ‘black box’
and potentially the project’s biggest risk. The experience of other Pan-African financial institutions
(such as the African Development Bank) shows that the shareholders are likely to be Western
countries and Bretton Woods institutions (the IMF and the World Bank) that will form alliances,
and as a result, their voice may become decisive at shareholder meetings, so they will get the
opportunity to determine the bank’s policy. As a result, the AEB may end up financing export-
oriented projects like Mozambique LNG or EACOP, ruining the prospects for the development of
the domestic markets.
Finally, the main players in the African energy sector (with only a few exceptions) are still Western
and Chinese companies. They invest in projects and manage them and supply the necessary
equipment and technologies, which means that any project will still depend on the position of non-
regional players. All these risks are surmountable and, through further work, additional capitalisation,
and greater sovereignty, the bank will be able to achieve its ambitious goals.
The establishment of the AEB indicates an important trend: African countries want to independently
determine the development of their energy markets and move away from being subject to external
control. The establishment of an independent infrastructure is a key step in this direction, but it must
be complemented by other measures, including: developing an adequate energy strategy (at all
levels, from the local to the continental); establishing project-evaluation criteria (in terms of the
contribution to the energy sovereignty of Africa and not the export of energy resources from Africa);
developing regulatory, technical, and environmental supervision tools; strengthening the legislative
framework; and supporting African energy companies and knowledge sharing programmes101
.
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HSE University Center for African Studies
However, national and trans-African busines­
ses are growing stronger in Africa. Large private
holdings are being established, and regional fi­
nancial institutions and banks are becoming more
robust. Their role in financing energy projects
is also growing, and they are ready to finance,
among other things, projects targeted at the
development of domestic markets. The number
and weight of African companies in the continen­
tal energy market along the entire length of the
value chain is growing every year – for example,
Sasol, PetroSA, Oando, Axxela are successfully
operating in the production and transportation
of hydrocarbons; Dangote is in oil refining, ce­
ment and fertiliser production; Arab Contractors
and El Sewedy are in engineering, procurement
and construction (EPC) of power plants.
Common framework is being formed as well, AFREC
and NEPAD have been joined by public and private
initiatives: ACTING, LNG2AFRICA. The number
of Pan-African energy conferences and exhibitions
(Africa Oil Week, Africa Energy Week), publica­
tions (Africa Oil and Gas Journal, Petroleum Africa),
etc. is growing.
Do we understand true African
installed capacity?
Per capita electricity generation in Africa remains
extremely low. With the world average per ca­
pita electricity generation at 3,664 kwh, in Africa
it is around 600 kwh, but in the majority of sub-­
Saharan states it is around 100-200 kwh102
. This
ratio is explained by the lack of adequate statistics
on electricity generation by diesel generators. With
all the limitations of such comparisons, the example
of Bangladesh, a country similar in economic size
and population to Nigeria, but where grid electricity
generation is almost three times higher than in Nigeria
(100 TWh vs 37 TWh), may be illustrative. It is ob­
vious that actual electricity generation in Nigeria,
as in most other countries, is actually several times
more than what is reflected in the statistics of na­
tional governments and international agencies.
102 Ember. Electricity Data Explorer. URL: https://ember-climate.org/data/data-tools/data-explorer/
That said, the actual installed capacity in most Afri­
can countries remains unknown.
The statistics on grid generation in Algeria, Egypt
and probably South Africa, is more accurate as
it is more reliable.
In reality, the power systems of most African countries
rely on small diesel generators (below 1 MW), which
power most rural households, businesses, cafes,
hospitals, airports, hotels and also serve as backup
power in cities during grid power outages. In this con­
text, the situation in South Africa with load-shedding
or in Ghana with dumsor does not seem to be as ca­
tastrophic as the media tend to show it – during these
outages, cities are not plunged into darkness, but turn
on diesel generators.
In 2022, according to our estimate based on ITC and
UNCTAD data, African countries imported about
200,000generatorswithcapacityupto75kW,20,000
of 75 to 375 kW and 5,000 of more than 375 kW.
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On this basis, about 10 GW of diesel generators
capacity is imported into Africa annually
However, their installed capacity utilisation factor
is much lower than that of grid power plants since
they operate with a lower load 2-3 hours per day,
meaning their output is much lower than it could be.
Nevertheless, it is the estimation of the number of
generators, their installed capacity and utilisation
that is the key to a correct undestanding of the un­
accounted installed capacity and therefore of the
and potential demand.
Key importers of generators are Nigeria (USD 1.3 bn
and 14 GW over five years), Egypt (USD 0.6 bn
and 5.1 GW), Libya (USD 0.4 bn and 1.6 GW),
Algeria (USD 0.3 bn and 0.4 GW), Sudan (USD
0.3 bn and 1.1 GW) – together accounting for 44%
of the market. Key suppliers of generators over five
years are China (USD 10 bn), USA (USD 3.9 bn),
UK (USD 3.7 bn).
103 Energy Institute. Statistical Review of World Energy. URL: https://www.energyinst.org/statistical-review
However, analysing the grid seg­
ment of power generation is im­
portant in terms of understanding
the long-term development prospects of individual
countries. Clearly, imports of diesel generators – ex­
pensive and dependent on diesel fuel – are a sure in­
dicator that energy policy is not yet leading to positive
change and will be replaced by grid power plants.
Gridlock?
In general, grid electricity generation in Africa is
not growing as fast as population or GDP – the
growth rate per annum for 2013-2023 was only
1.9%, which is slightly higher than in the CIS
(1.4%)103
, but much lower than in the Middle East
(3.8%) and Asia (4.5%). In 2023, a record 902.9
TWh was generated, or 3% of the world total (ap­
proximately the same amount is generated by
power plants in Japan alone).
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So far, electricity generation is still very uneven­
ly distributed, with seven countries cumulatively
contributing more than 70% of continental ge­
neration. As of 2023, those are South Africa (25%),
Egypt (22%), Algeria (10%), Morocco (5%), Nigeria
(5%), Libya (3%) and Ghana (2%) – collectively to­
talling 650 TWh.
The structure of electricity con­
sumption is still dominated by
industry (40%), but almost half
of industrial consumption is ac­
counted for by one country –
South Africa. On a continental scale, industrialisa­
tion is not expected to grow rapidly, and industry is
unlikely to be a driver of energy consumption on a
continental scale. Energy consumption growth will
be driven by households: this is guaranteed by pop­
ulation growth and the gradual phase-out of bio­
mass as the main source of primary energy.
Another driver of growth in electricity and energy
consumption in general may be the development
of the agriculture and the food and beverages in­
dustries. For example, food production enterprises
in Algeria accounted for 10% of electricity, gas and
oil products consumption by industry in 2021.
Another major factor of demand growth will be ur­
banisation and development of urban utilities, as well
as processes related to freshwater solutions: its ex­
traction, desalination, purification, delivery to the
population in cities and to fields (irrigation). The sup­
ply of energy to desert and arid areas is necessary
to overcome the consequences of climate change,
droughts. In the future, this area will become one of
the main drivers of energy consumption, as demon­
strated by the experience of Algeria, Libya (Great
River project).
The total installed capacity of Africa’s grid electricity
sector as of 2022 can be estimated at 248 GW104
,
with gas accounting for 116 GW (47%), coal 53
GW (21%), hydropower 37 GW (15%), solar 12 GW
(5%), wind 9 GW (3%), nuclear 1.9 GW (0.8%)
and geothermal and biogas plants less than 1% of
104 Ember. Electricity Data Explorer. URL: https://ember-climate.org/data/data-tools/data-explorer/
the total. In Sub-Saharan Africa, the lack of grid
infrastructure has led to the widespread use of diesel
generators and the proliferation of isolated power sys­
tems / generation facilities. With the establishment of
grid infrastructure and transmission lines, gas-to-pow­
er and renewables are developing most rapidly.
Northern Africa is dominated by gas-to-power,
Western Africa by oil, Central and Eastern Africa
by hydropower and Southern Africa by coal.
Northern Africa is the only region where the prob­
lem of access to electricity can be considered
solved. Even in Libya, despite political turmoil,
the energy sector has been relatively stable. In
all countries of the region, with the exception of
Morocco, at least 90% of electricity is generated
by natural gas. Morocco does not have significant
gas reserves, so the country relies on a combina­
tion of coal and renewables. However, it is also
looking to increase the share of gas through LNG
imports.
In Sahel, the grid electricity deficit is the most
pressing: there is no significant hydropotential or
petroleum resources, so the countries of the re­
gion depend on imports of diesel and fuel oil to
supply their few power plants. Even Nigeria, where
most grid-connected power plants are gas-fired,
actively imports diesel for off-grid generators due
to frequent blackouts caused by interruptions in
gas supply to power plants and outdated trans­
mission lines. Among Western African countries,
Ghana and Côte d’Ivoire have the most balanced
energy policy. Over the past decade, they have
taken a place among the leaders of electrification
on the continent, started exporting electricity to
neighbouring countries and kept electricity pri­
ces
for end consumers at approximately the same
level.
At the moment, Africa has several energy zones
defined by predominant energy source that
largely coincide with the established division of
the continent into sub-regions
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The topic of Africa’s energy sovereignty is often limited to access to electricity, the development
of electricity grid infrastructure and the supply of fuel for transportation. Households are left out
of the discussion. Despite the seemingly small market in terms of volume, energy consumption by
African households is growing annually. Moreover, households occupy key positions in the structure
of energy consumption in all African countries, with their share ranging from 20-30% in countries with
developed industry (Algeria, Morocco) to 90% in small, predominantly agrarian countries.
Along with the gradual increase in the quality of life, changes in consumer habits and urbanisation, the
structure of energy consumption by households is gradually changing. Modern and more environmentally
friendly fuels are replacing ‘traditional‘ fuels. Methane, propane, butane, electricity are gradually replacing
firewood, kindling and household garbage as a source of heat and energy. The specifics of Africa set
a certain framework for the further process of providing access to energy for households. First, because
of the warm climate, the usual mid-latitude solutions, often associated with heating infrastructure, are
not suitable. Second, the lack of gas transmission infrastructure makes it almost impossible to gasify
households with natural gas (methane). Third, the shortage of generating capacity and the state of the
midstream infrastructure do not allow grid electricity to be considered as a reliable source of energy.
All these factors are long-term, and their influence will be decisive over the next 20-30 years.
LPG: Tanzania Case
In Tanzania, households account for about 66% of final energy consumption, with biomass continuing
to dominate – in the 2019/20 fiscal year, firewood, grass and garbage accounted for 64% of Tanzania’s
cooking energy consumption, charcoal for 26%, liquefied petroleum gas (LPG) for 5% and electricity
for 3%. Against this backdrop, the consumption of LPG is growing in most African countries, including
Tanzania. LPG imports to Tanzania are growing at an average annual rate of 16%. Back in the 2016/17
fiscal year, imports (no LPG is produced in Tanzania) amounted to 107,000 tonnes, in 2020/21 – already
217,000 tonnes, in 2021/22 – 252,000 tonnes, in 2022/23 – 293,000 tonnes. For consumers, LPG in
a cylinder in Dar es Salaam costs about USD 2.3 per kilogramme.
LPG will continue to displace kerosene, firewood, garbage and dung as fuel in the domestic sector.
It is important to take into account that LPG consumption in Tanzania is slightly lower than imports:
due to re-export of LPG from Tanzania to other countries in the region (e.g. Zambia) – in 2022,
of the 250,000 tonnes of LPG imported into Tanzania, 90,000 tonnes were exported. The key
obstacle to increasing consumption of this environmentally friendly and safer domestic fuel remains
the lack of infrastructure: receiving terminals, storage facilities and delivery vehicles. However, the
overall trend is positive: in June 2024, Oryx in Zanzibar launched the first LPG terminal on the island,
Mangapwani, and a new LPG storage facility in Tanga was built in 2023.
TheTanzanianauthoritiesaimtostrengthenTanzania’spositionnotonlyintheregionalbutalsointheglobal
LPG market. In December 2023, President Samia Suluhu Hassan’s Africa Women Clean Cooking Support
Program (AWCCSP) initiative was presented at the COP 28 Climate Summit in Dubai to attract funding
for projects to improve African households’ access to cleaner energy and move away from wood and
garbage. In May 2024, Clean Cooking Summit was held in Paris, co-chaired by the President of Tanzania,
the Prime Minister of Norway, the President of the African Development Bank and the Executive Director
of the IEA. Also in May, the Tanzanian government published the National Clean Cooking Strategy for
the period 2024-2034. LPG plays a key role in this strategy. For instance, it envisions construction and
expansion of LPG storage facilities in all regions of the country; support for localisation of LPG equipment
production in Tanzania; subsidisation of clean cooking projects; amendments to the sectoral legislation.
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The countries of Central and Eastern Africa are
located by the basins of the continent’s largest
rivers – Zambezi, Congo, Nile, Ruvuma – and
thus largely rely on HPP in the long term. They
also include Angola (inland areas rich in ri­
vers)
and Namibia, where the only HPP on the Kunene
River (bordering Angola) has so far become the
main source of electricity in the country. Some
Eastern African countries – most notably Tanza­
nia – are effectively supplementing hydropower
generation with gas-fired generation.
The dominance of coal in Southern Africa is due
to the fact (apart from thermal coal reserves)
that the coal-based power sector of South Afri­
ca and other SADC countries dates back to co­
lonial times and the dependence of the econo­
mies on energy-intensive mining industry, as
well as South Africa’s long political and econo­
mic autarky and limited access to hydrocarbons
(due to sanctions). South Africa, Botswana and
Zimbabwe, have not rebuilt their power systems
since then.
However, where Western and Eastern Africa
has substantial gas reserves that could even­
tually replace obsolete diesel generation and
Central Africa has significant hydropower po­
tential, Southern Africa has neither. The back­
bone of the region’s power sector is outdat­
ed coal-fired generation. It will not be possible
to meet the growing demand and replace the
decommissioned coal-fired generation only
through renewable energy sources. The pillar
of the region’s economy – mining – is energy-
intensive and requires an uninterrupted power
supply. The solution could be the use of Mozam­
bican gas in South Africa and Zimbabwe, but in­
vestors are protecting its main reserves for LNG
supplies to China and India.
The prospects are linked to the growth of gas
and renewables, but each of Africa’s power belts
will retain its own characteristics
Thus, in North Africa, gas will remain the basis of
the energy sector in the long term, complemented
by renewables. Algeria, Egypt and Libya have their
own sources of natural gas sufficient to cover the
needs of domestic markets.
Morocco and Tunisia are also dependent on natu­
ral gas in their energy consumption, but their own
production is insufficient and they are forced to
import it. These countries should expect accele­
rated development of renewable generation, as
well as LNG import projects to diversify their na­
tural gas sources. The renewable energy sector in
all these countries has, at the same time, certain
limits to growth due to seasonal factors, lack of
significant hydroresources, etc. In this regard, Mo­
rocco, for example, complements renewables by
building coal-fired power plants.
In Western Africa, gas-to-power is projected to
develop, primarily in Ghana and Côte d’Ivoire.
The currently prevailing oil in most countries of
the region will be replaced by natural gas and
renewables, with their respective shares deter­
mined by geographical location, as well as polit­
ical and economic conditions. For example, the
Republic of Guinea, with its altitude differences
and rivers, has good prospects for the construc­
tion of HPP, while Senegal and Mauritania are
most likely to rely on their own offshore natural
gas reserves.
In Central and Eastern Africa, hydropower will
retain its leading position, with renewables and
natural gas serving as reserve or peaking capa­
cities.
Coal-fired power in Southern Africa is likely to be
gradually replaced by natural gas and renewables,
the proportions depending on market conditions
Eastern Africa has comparable reserves to those
of Western and Northern Africa,
but they are still incomparably
less utilised and are still intended
more for export. For land-locked
regions and countries, as well
as island states, a significant in­
crease in renewables is expected, but also with
the option of importing LNG.
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Access problem
As mentioned above, access to grid electricity for
households and businesses remains a key challenge
in Sub-Saharan Africa. Universal (over 99% popu­
lation) access to electricity is still achieved only in
Northern African countries and some island states
(Seychelles, Mauritius).
The past decade (2013-22) has seen significant
progress towards the electricity access target. The
number of people with access to electricity in­
creased by 200 million. However, the rate of elec­
trification growth is uneven – half of the new con­
nections came from six countries (Ethiopia, Nigeria,
Egypt, Kenya, Tanzania and Uganda).
Growth in access to electricity
in most countries has been
absorbed by population growth
Only 15 countries were able to electrify faster than
the population was growing – excluding Northern
Africa and island countries, only six: Kenya, Ghana,
Rwanda, Eswatini, South Sudan and Botswana.
In a number of countries, however, the growth in ac­
cess to electricity is not able to cover the growing
population, including Nigeria, where the number of
new connections during the decade amounted to
about 20 million and population growth to 42 million,
and the DR Congo, with 7 million and 27 million,
respectively.
Kenya is the absolute leader in Sub-Saharan
Africa in terms of electrification rates
There access to electricity increased from 40%
to 76% over the decade, with 12 million new con­
nections (population growth of 9 million). Ethiopia,
Ghana, Rwanda and Côte d’Ivoire are also electri­
fying at high rates. In all these countries, electrifi­
cation has been driven by consistent state policies:
governments have either invested in capacity (Ethi­
opia), or provided very favourable regimes for pri­
vate investors (Ghana, Kenya) or both (Rwanda).
And it was state investment in the energy sector
that became one of the drivers of faster GDP growth
in these countries, not vice versa. It is worth noting
that there is not a single ‘oil‘ economy (except for
sparsely populated Gabon) among the leading SSA
countries in terms of electrification rates.
The UN Sustainable Development Goal (SDG)
No. 7 is to achieve universal access to electrici­
ty by 2030. The estimated investment required to
achieve this goal is USD 33 billion per year. Most
of African countries will not be able to meet the
target by this date. Projections based on the ratio
of electricity consumption to per
capita GDP, population density
and level of urbanisation yield
515 million people without access
to electricity in 2030. Kenya, Ghana and possibly
Rwanda have the best prospects for success. South
Africa’s strong performance may be undermined
by economic stagnation and a general structural
crisis in the energy sector. The biggest concerns
are the pace of electrification in Sahel, CAR and
DR Congo. The problem of energy supply in the
interior of Africa requires significant investments –
with some places requiring gas pipelines, others
transmission lines and others autonomous genera­
tion and gasification.
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What is hampering growth
of domestic markets in Africa?
The problem of electricity and energy deficit in
Africa is primarily an access problem, which is
caused by a complex of factors:
export-driven decision-making,
when exports to global markets
are prioritised over domestic
consumption; transport and in­
frastructure deficit; non-compli­
ance with standards; regulations
and legal requirements; and ill-conceived policies
on subsidies, tariffs and taxation. All of this, on the
one hand, causes a shortage of resources and, on
the other hand, a high price for the end consumer
or unavailability of goods.
Many African countries still have laws in force that
encourage the export of raw materials and energy
resources, even if they are not sufficiently supplied
to the domestic market. Often such post-colonial
legislative frameworks are formed with the direct
participation of multinationals, which artificially limit
the access of African resources to domestic markets
in order to secure those resources for their own
production chains outside Africa. For example, in
Nigeria the same Shell supplies gas to the export
terminal at a price two times lower than the domes­
tic market price105
.
The practice of multinationals influencing the legis­
lation of African countries and directly lobbying
their interests to the detriment of local communi­
ties and the environment has persisted and flou­
rished. Tender procedures in some countries re­
main non-transparent, and licences are extended for
long periods of time without allowing other compa­
nies to participate. Those countries that have tak­
en the path of prioritising domestic markets, deve­
loping their own industry and supplying affordable
electricity to the population are subject to external
pressure. A prime example is Algeria, a country that
has successfully solved the problems of energy ac­
cess, including by restricting natural gas exports.
105 Thus, according to NNPC, the price of gas supplied by SPDC (a joint venture with Shell participation) to the Nigeria LNG plant in May 2021 was USD 1.3 per MMBTU. At the
same time, the price for the same volume for power plants in the domestic market was USD 2.5 (reduced to USD 2.18 since July 2021), and for commercial consumers - USD 3.
In Algeria, the state-owned oil and gas company
Sonatrach buys almost all natural gas output from
operating companies, then prioritises supplying it to
the domestic market at a subsidised price before
finally exporting the surplus.
The problem of imperfect legislation and regulatory
framework should not be solved with the help of
fo­
reign corporations, especially interested in impor­
ting commodities. The arguments of foreign con­
sultants (who may pursue their own hidden agen­
da) should be carefully checked and compared with
solutions that work in countries that have already
faced and solved similar problems. The lack of laws
in Africa is compounded by the failure to enforce
those that do exist. It is still often more cost-effec­
tive to violate regulations: fines for violations are less
than the cost of compliance. Another facet of the
same problem is the lack of tools to monitor com­
pliance: bylaws, regulations, authorised institutions,
personnel and technical means.
For African countries, an approach that combines
empowering local communities with the neces­
sary tools and power for environmental monito­
ring and making infrastructure operators fully liable
for environmental damage that occurs because of
normal or abnormal operations or any damage to
the infrastructure they operate, regardless of the
cause, may be recommended. Even damage from
illegal taps and resulting spills of oil and oil products
should also be compensated by pipeline operators,
as they are ultimately responsible for the integrity
of the infrastructure and are obliged to take care
of it. Thus, regulators will then be better able to
fulfil their functions: to correlate community signals
with operators’ reports on infrastructure condition
and objective remote monitoring data. Operators,
on the other hand, should provide regulators with
The problem of imperfect legislation
and regulatory framework should not be solved
with the help of foreign corporations, especially
interested in importing commodities
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timely and accurate information
on technical parameters of in­
frastructure performance, prob­
lems and accidents, and should
be held liable for failure to provide such informa­
tion, commensurate with possible damage.
In the 60 years of independence of most African
countries, no continental – or even sub-regional –
energy markets have emerged. In some cases,
No continental – or even sub-regional – energy
markets have emerged
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pairs or triplets of countries have been formed,
connected by common infrastructure, but even
here it is difficult to talk about a market in its full-
fledged sense. Usually, it is two or three centres
of gas or oil consumption, connected by a single
pipeline. For now, regional markets with a com­
mon system of pricing, distribution, storage and
reservation are still absent, and the prerequisites
for their emergence do not exist. The concept
of regional power pools, which are proclaimed at
the level of each regional economic community,
is at the most advanced stage. For some count­
ries, electricity imports within such pools form
the basis of the national energy system, but even
in this case it is difficult to talk about complex
market relations that would allow the formation
of a single electricity price market or even a joint
dispatch centre. There are still two or three
high-voltage power lines connecting neighbour­
ing states.
The prospects of African energy markets
and their investment appeal – at least
in the medium term – may be linked
to the sub-regional cooperation
As long as individual countries cannot be consi­
dered as promising investment destinations due
to their low population density, low degree of in­
dustrialisation, insufficient consumption of natural
gas and underdeveloped power grids, investors
will be able to justify the economic feasibility of
projects through plans to re-export gas, oil prod­
ucts, LPG, electricity, diesel fuel, etc. to the re­
gional market.
One positive example is the emerging sub-regional
markets for petroleum products, and a mar­
ker of
this are such ‘statistical anomalies’ in trade statistics
as Senegal, Tanzania, Togo, Kenya, Mozambique.
These countries import two and sometimes three
times more oil products than they consume just
for re-export to neighbouring countries in the region.
Regional companies and traders (incidentally,
owned by local investors) are formed for these
needs and invest in infrastructure for import, stor­
age, transshipment and distribution.
New energy transition – new
prospects and challenges
Climate change and the energy transition occurring
simultaneously will determine how African countries
will cope with energy shortages. The transition to
renewable energies is the second energy transition
that African countries are experiencing as modern
and independent states. The first energy transition
of this kind occurred in the 1940s-60s, led to a signif­
icant increase in the share of hydrocarbons in primary
consumption and coincided with the decolonisation
process. The changes now underway in global de­
mand for energy, semiconductors and critical mine­
rals, although still relatively volatile, demonstrate the
role that Africa will play in the global energy transi­
tion and the reshaping of the world economy in the
21st century. As the oil and gas industry shows, the
norms and rules, ownership structure of the main as­
sets, and the control of reserves are difficult to revise
in a fundamental way.
The oil and gas industries of Al­
geria, Angola and Nigeria, despite
civil wars, changes in foreign and
domestic policy, are developing
according to the rules that were
established shortly before, during and immediately
after decolonisation. That influence on legislation,
strategies and decision-making leaders allows for­
eign corporations to maintain their influence de­
spite any political changes. Thus, the norm once es­
tablished becomes rigid, a situation happening not
only with oil and gas, but also with gold, platinum,
uranium, etc. However, in Algeria, those norms were
born in the struggle against colonial pressure, while
in Nigeria they were formed by British citizens.
The competition between the United States and
China in Africa is becoming fiercer by the year –
e.g. in the struggle for access to the transportation
and logistics infrastructure linking southeastern
Congo to the ocean ports. This great power com­
petition gives African countries the opportunity to
use this for the benefit of their economic develop­
ment, a right to decide and to tighten regulatory
and environmental measures, as well as control over
the activities of foreign investors.
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HSE University Center for African Studies
The main marker of the US interest in Africa’s critical minerals remains support for the
development of the so-called Lobito Corridor. The Lobito Corridor is the name for a group
of projects aimed at developing transport infrastructure in Angola, DR Congo and Zambia to
provide them with access to the Atlantic coast of Africa. The transport infrastructure (including
the Benguela railway line from Tenke in DR Congo to Lobito in Angola with a total length of
1866 km, gauge – 1067 mm) connecting the southeastern regions of DR Congo (Katanga)
with Atlantic coast was built during colonial times – in the early 20th century. At that time,
some of its sections were used to export uranium, tin and copper from the Belgian Congo
through the Atlantic ports.
Civil wars in DR Congo and Angola in the second half of the 20th century led to the destruction
of the railroad and its fragmentation. Sections of the railroad were reconstructed in the 1990s
and 2000s, but were operated separately. In July 2022, the Angolan government announced the
results of the tender for the concession of the Angolan railroad section Lobito-Luao (1344 km) for
30 years. The winning bid was made by the Lobito Atlantic Railway consortium (in which Singaporean
trader Trafigura and Portuguese construction company Mota-Engil own 49.5% each, and Belgian
rail infrastructure operator Vecturis owns 1%), which beat the bid of a Chinese consortium (CTIC,
Sinotrans and CR20). In July 2023, a ceremony was held to hand over the railroad to the consortium’s
management.
In February 2024, the first contracts for transportation of cargoes by rail were signed.
Trafigura received the right to transport 450 thousand tonnes per year from 2025, and the
consortium of Canadian mining company Ivanhoe Mines and Chinese Zijin Mining, which is
implementing a copper mining project in the DR Congo (Kamoa-Kakula) received the right
for transportation in the range of 120-240 thousand tonnes per year from 2025 (10 thousand
tonnes in 2024).
In parallel, in December 2023, AGL (a division of Swiss shipping company MSC) received
in concession the port of Lobito under the obligation to invest in its development at least USD
100 million. The project to develop the Lobito Corridor enjoys the support of Western countries.
At the G7 summit in 2023, the US president J. Biden announced his intention to support the project
as part of the global initiative Partnership for Global Infrastructure and Investment (PGI). In October
2023, the governments of the United States, Angola, DR Congo, Zambia, the European Union
Commission and the African Finance Corporation (AFC) signed a memorandum of understanding
to cooperate in the development of the Lobito Corridor. In February 2024, the US state-owned
DFC Corporation approved a USD 250 million loan to AFC for the Lobito Corridor project to build
a rail line that would connect Zambia and a section of the Benguela railroad in Angola. The loan
must be approved by the US Congress.
The Lobito Corridor project is apparently aimed at creating an alternative logistics route for the
export of minerals from Zambia and southeastern Congo as opposed to the ‘eastbound’ route.
As of May 2024, most of the ore from Katanga and the Copperbelt is trucked eastward and further
exported through the port of Dar es Salaam to China. In recent years, the PRC has also been actively
investing in the development of railway infrastructure in Tanzania and Zambia to optimise ore exports.
In September 2024, the PRC announced its intention to finance the TAZARA railroad connecting
Zambia to the Tanzanian port of Dar es Salaam.
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African businesses are getting stronger,
engaging not only in retail trade but also
in large-scale investment projects across Africa
African countries are now much more independent
politically and have already formed relatively stable
institutions, nationally oriented political and busi­
ness elites, as well as strong state-owned companies.
Also, at long last, private African businesses are get­
ting stronger, engaging not only in retail trade but
also in large-scale investment projects across Africa
(Oando, ARM, Dangote). The growth of domestic
resources allows Africa to count on better negotia­
ting positions with external players and, consequent­
ly, greater dividends from its natural wealth.
106 In terms of critical minerals one can speak about ‘Scramble for African Attention’, not about ‘Scramble for Africa’.
Moreover, while Africa’s share
in the world’s oil and gas reserves
is 8-10%, which can be replaced by
hydrocarbons from other regions of
the world, of its reserves of a number of strategic mine­
rals necessary for the energy transition, such as plati­
num, palladium, cobalt, copper, titanium, graphite, REM,
are irreplaceable and provide about half of the world’s
production and world reserves, which, of course, will
affect the interest of foreign investors in the African
resource base and lead not to the Scramble for Africa,
but rather for its attention106
.
Data control in its broadest sense becomes key
in this context.
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The lack of information, knowledge and data
on Africa’s natural reserves and ecosystems
is another key risk preventing African countries
from gaining energy sovereignty
The term ‘resource curse’ is often applied to Africa,
but it can be complemented by another curse, namely
‘the curse of non-existent resources’. There have been
dozens of conflicts based on speculation about the al­
leged availability of resources or their scarcity, when in
fact it turns out that either these resources have not
been proven to exist, or they do not exist at all, or they
are so scarce that only one small paramilitary group can
enrich itself on them.
Speculation about the alleged presence of hydrocar­
bon reserves in Lake Malawi continues to contribute
to tensions between Tanzania and Malawi, the myth of
uranium reserves in the Central African Republic leads
to ongoing conflict, speculations about declining wa­
ter levels in the Nile nearly led to interstate conflict
between Egypt and Ethiopia. It is not only the lack of
information about resources, the political factor, mili­
tary prestige, the interests of certain groups inclined to
justify their actions by the presence of these or those
resources play their role, but the lack of knowledge,
geological information and even autonomy of African
governments in analysing and interpreting geological
information remains one of the most pressing issues.
Not all countries still have legal requirements to pro­
vide the host country with geological exploration re­
sults, so foreign investors do not file their survey re­
sults with the host government, but ‘take’ them with
them and then resell them to third parties. Thereaf­
ter, the state gradually loses control over its own re­
sources, as it does not understand the real condition
of reserves and cannot take them into account when
developing a general economic strategy.
The lack of data on domestic markets, real demand
and consumption, as noted above, leads to stagnation
of domestic markets
Companies interested in investing in domestic
markets are faced with non-transparency, lack of
information or deliberate mani­
pulation by intermediaries and
are forced to rely on information
provided by Western consultants.
The most important problem re­
mains the unreliability of measurements of climate
indicators, such as precipitation levels, water levels
in reservoirs, groundwater levels and their quality, cli­
mate zone boundaries, etc., which allows stakehold­
ers – from governments to international non-gov­
ernmental organisations – to freely speculate on
baseline indicators to justify their own interpretations
of climate change and recommendations within their
own agenda.
From the African perspective, the industrialised
countries bear the main responsibility for catastroph­
ic climate change. However, Africa needs more tools
to justify and defend this position – with the ultimate
goal of receiving fair compensation in material and
monetary form or in the form of other concessions
from their former colonisers, China or the United
States. Africa’s response can be based on the estab­
lishment of its own network of measurements and
observations of global climate change. Simply put,
the climate agenda is owned by those who have rele­
vant, reliable and, no less importantly, legitimate (i.e.
recognised by international partners) information on
the dynamics of indicators.
The great potential in this regard is clearly related to
digital solutions. The spread of unmanned aerial vehi­
cle technologies, the cheapening of data centre tech­
nologies, sattelite survey and, finally, maturing African
national companies will allow African states to form
integrated systems for managing their own natural re­
sources and then integrated georgraphic information
systems that can be used to monitor the state of soils
and forests, water levels in rivers, fire danger, climate
shocks, soil erosion and desertifi­
cation dynamics. Such information
systems can be both sectoral and
country-wide, but they will make
it possible to better understand
the structure of domestic markets,
forecast the dynamics of their development, and offer
more promising projects to foreign investors.
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New stage of African
digitalisation
The digitalisation of African countries has entered
into a new stage where governments tend to adopt
a more proactive approach and
aim to gain more control over the
sector. For now, efforts have been
concentrated on data govern­
ance and localisation; with data
becoming a commodity and Af­
rica generating a vast amount of
this strategic asset, governments
are aiming to control and leverage the resource.
33 countries have already enacted personal data
protection regulations. Some of them, like Senegal
and Rwanda, require data to be stored locally. Fur­
thermore, in 2023 the African Union Convention on
Cyber Security and Personal Data Protection entered
into force, 9 years after its adoption. The year 2024
was marked by the release of the “Common African
Position on the Application of International Law to the
Use of Information and Communication Technologies
in Cyberspace” communiqué.
In 2016, the Network of Afri­
can Data Protection Authorities
(NADPA-RAPDP) was estab­
lished in Ouagadougou to pro­
vide a platform for exchange
and cooperation between member authorities and
represent the interests of African countries in the
global arena. It now comprises data protection au­
thorities from 18 African countries107
. In May 2024,
107 Angola, Benin, Burkina Faso, Chad, Cabo Verde, Gabon, Ghana, Côte-d’Ivoire, Kenya, Mali, Mauritius, Morocco, Niger, Nigeria, São Tomé and Príncipe, Senegal, South Africa,
Tunisia, Uganda, Eswatini, Mauritania, Zambia, Zimbabwe.
108 Now Eliud Owalo serves as the Deputy Chief of Staff in the Executive Office of the President of Kenya (Performance and Delivery Management).
109 Network of African Data Protection Authorities (NADPA/RAPDP). Annual General Meeting and Conference NADPA-RAPDP. 2024. URL: https://www.rapdp.org/en/node/213
110 Sometimes, digital sovereignty and data sovereignty are even used interchangeably (e.g. one American law article states: “By “digital sovereignty” (or “data sovereignty”),
I [the author] mean the state’s policy or set of policies toward ensuring national sovereignty online.”). (Source: Woods, Andrew Keane, ‘Digital Sovereignty + Artificial
Intelligence’, in Anupam Chander, and Haochen Sun (eds), Data Sovereignty: From the Digital Silk Road to the Return of the State (New York, 2023; online edn, Oxford
Academic, 14 Dec. 2023), https://doi.org/10.1093/oso/9780197582794.003.0006, accessed 23 Oct. 2024.) There is also an understanding of digital sovereignty in relation
to cyberoperations on the territory of a foreign state with two approaches: “pure sovereignty” and “relative sovereignty”. (Source: OpinioJuris. The African Union (Rightly)
Endorses Pure Sovereignty in Cyberspace. URL: https://opiniojuris.org/2024/02/05/the-african-union-rightly-endorses-pure-sovereignty-in-cyberspace/)
at the network’s annual general meeting, Eliud Ow­
alo, at the time the Cabinet Secretary at the Min­
istry of Information, Communications and Digital
Economy of Kenya108
, called for digital sovereignty
and data governance in Africa109
.
Information and communication technologies (ICTs)
are widely considered as an enabler for addressing
core socio-economic challenges in a resource-con­
strained environment, allowing developing nations to
build self-reliance in the long run, thus giving rise to
the need to ensure not just the regulation but also the
sovereign development of the sector.
Digital sovereignty is often reduced to the locali­
sation of data and the development of data infra­
structure or government control over the sector110
.
This suggests independence at every stage of the
process including strategising, regulation, design,
operation, management and human resources
development.
African quest for digital
sovereignty
Given the critical importance of ICT in overcoming
major socio-economic challenges and fostering
self-reliance, there is a need to ensure not only
regulation but also sovereign development
of the sector
Digital sovereignty implies sovereign
decision-making about the development of ICTs
in a country based on sovereign expertise
and driven by national interests
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As a result, digitalisation, along with a promise of
a brighter future, brings new ways and reasons for
external influence, also known as “digital colonial­
ism”. It also brings new excuses, or rather old ones
under new wrapping. Under the international assis­
tance programmes and the motto of “bridging the
digital divide”, external actors and transnational cor­
porations build ICT infrastructure and digital solu­
tions, develop strategies and laws, train Africans, all
in order to lay the groundwork for expanding their
own presence and revenues in the region, as well as
accessing valuable data to train AI models and influ­
ence the decision-making. They also use loopholes
in the data protection and competition laws to gain
advantage in the African markets.
International development
assistance
The untapped potential of African digital markets
with the ever-growing population, ICT infrastruc­
ture and low competition has been attracting all
sorts of international actors launching the “Scram­
ble for Africa of the XXI century”111
, which includes
multinational corporations, development assis­
tance, foreign companies going international, with
them all pursuing their own objectives – both polit­
ical and economic.
In 2024, the World Bank estimated that USD 86
billion in investments is needed to ensure internet
connection on the continent112
. Such an assess­
ment is a part of the effort to justify the need for
and importance of foreign investment in the sector.
As for African countries, digitalisation is seen not
as an end in itself but as an opportunity to address
major socio-economic problems, more and more
ICT initiatives are labelled as “development coop­
eration”.
111 Danielle Coleman, Digital Colonialism: The 21st Century Scramble for Africa through the Extraction and Control of User Data and the Limitations of Data Protection Laws, 24
MICH. J. RACE  L. 417 (2019). Available at: https://repository.law.umich.edu/mjrl/vol24/iss2/6
112 Resilient. Digital Africa. Mobilizing $86 billion to connect the entire Africa. 2024. URL: https://resilient.digital-africa.co/en/blog/2024/05/02/mobilizing-86-billion-to-
connect-the-entire-africa/
113 Global Economic Governance Programme. URL: https://www.geg.ox.ac.uk/content/marc-andre-loko-dans-sa-strategie-numerique-le-benin-est-dans-une-logique-de
114 Inclusive Development International. Following the money. International contracting. URL: https://www.followingthemoney.org/international-contracting/
115 Moussa, Antoun, and Robert Schware. “Informatics in Africa: Lessons from World Bank Experience.” World Development 20, no. 12 (1992): 1737–52. doi:10.1016/0305-
750X(92)90088-D.
African countries tend to approach the choice of
partners pragmatically, without political prejudices,
and strive to diversify partnership networks. In his
interview to the Global Economic Governance
Programme, the Director General of the Informa­
tion and Digital Systems Agency (ASIN) of Benin
Marc-André Loko highlighted: “In its digital strategy,
Benin seeks to diversify its network of best-in-class
partners” 113
. The same approach is followed by
most other governments.
However, external financing and assistance often go
hand in hand with aid conditions and terms. For in­
stance, Chinese institutions often tie the provision of
financing to hiring a Chinese contractor114
. Similarly,
the World Bank’s lending also comes with numerous
conditions including hiring a contractor from a short
list. Thus, external financing limits African govern­
ments’ independence in decision-making.
In 1989, the continent accounted for over one-
third of all ICT-related lending by the World Bank
with a focus on infrastructure projects, and in 1990
over 90% of its projects in Africa contained a sig­
nificant ICT component115
. Multinational computer
vendors (such as IBM France, Groupe Bull, ICL) en­
tered the market by providing equipment to gov­
ernments pursuing digitalisation. At the time, 19%
of the ICT-related lending by the World Bank was
in the sector of agriculture and rural development
(mainly for finance and accounting, information
management, management of information systems,
office technology, statistics).
Modern initiatives draw on this initial experience, its
failures and successes. One of the main challenges
lies in the gap between reality and strategy: many
initiatives failed because of unrealistic and imprac­
tical goals set and a lack of preliminary analysis.
Donors tended to underestimate the funding and
time required for assistance projects.
78
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Cases of international assistance in developing e-strategies for Africa
Country Project
Cameroon In 2011, the National Agency for Information and Communication Technology (l’Agence Nationale des
Technologies de l’Information et de la Communication, ANTIC) presented a draft of its e-government strategy,
EGOV.CM developed in collaboration with the United Nations University (UNU)116
.
Comoros The first national digital strategy was adopted by the Council of Ministers in 2019 – Digital Comoros 2028
(Comores Numérique 2028). The World Bank assists in the implementation of the initiative117
.
Gabon The Gabon Numerique 2025 was developed with financial support and consultation from the African
Development Bank (AfDB).
The Gambia In September 2022, the AU-EU D4D Hub sent a technical assistance mission led by the e-Governance
Academy and Estonia’s ICT cluster118
(ITL) at the request of Gambia’s Ministry of Communications and Digital
Economy. The mission is to assess the country’s digital readiness and assist in developing a digital economy
strategy119
.
Republic
of Guinea
In 2015, the Ministry of Post, Telecommunications and the Digital Economy of the Republic of Guinea
adopted the 2016-2020 programme which was aimed at the elaboration of a strategy for the development of
telecommunications and the digital economy as an independent sector. This document was developed with
material support from the West African Regional Communication Infrastructure Programme (WARCIP) of the
World Bank120
.
Republic
of Guinea
The digital road map document, aimed to provide a digital strategy for the government of the Republic of
Guinea, was drafted in 2020 by the League of Arab States121
.
Namibia The Namibian e-governance policy of 2005 was preceded by a study of international practices and
consultations with an Indian company – one of the international centres of excellence created by the
Confederation of Indian Industry122
– which also provided a feasibility report on e-governance in Namibia in
June 2004 with recommendations on further e-governance development in the country.
Senegal In November 2022, the Senegalese government requested technical assistance from the D4D Hub to study
the prospects of EU support for Senegal’s digital strategy – Stratégie Sénégal Numérique 2025. The research
was led by Expertise France in partnership with Enabel, LuxDev and GIZ123
. The development of the strategy
was supported by the African Development Bank.
Tanzania In December 2022, the e-Governance Academy (eGA) and the Estonian Association of Information
Technology and Telecommunications (ITL) within the AU-EU D4D Hub started a technical assistance mission
with the aim of assisting the Tanzanian ICT Commission (ICTC) and the Ministry of ICT in analysing existing
challenges and strengths, potential of the Tanzania’s ICT sector and developing a new three-year roadmap
for boosting digital transformation in the country124
.
Zanzibar
(Tanzania)
The Danish International Development Agency (DANIDA) provided technical and financial support to assess
the Zanzibar digital health sector and develop the Digital Health Strategy 2020/21-2024/25. The USAID,
PATH and D-Tree International also supported the development of the strategy.
Tunisia The e-Governance Academy125
experts advised the Tunisian Ministry of Communication and the National Agency
of Electronic Certification (“Tuntrust”) by providing a policy note on developing e-IDs in the country126
. The project
was funded by the European Bank for Reconstruction and Development.
116 United Nations University. UNU assists in developing national e-Governance strategy for Cameroon. URL: https://unu.edu/news/news/unu-assists-in-developing-national-
e-governance-strategy-for-cameroon.html
117 ANADEN. Comores Numérique 2028. URL : https://www.anaden.org/uploads/media/5e3969272d9f8/strat-comores-numerique-v2-3-compresse.pdf
118 A union of Estonian ICT companies aiming to export their solutions.
119 D4D Hub. AU-EU D4D Hub supports digital transformation in Rwanda and the Gambia. 2022. URL: https://d4dhub.eu/news/rwanda-gambia
120 Ministry of Posts, Telecommunications and The Digital Economy of Guinea. Document de Politique et de Stratégies Nationales de Développement des Technologies de
l’Information et de la Communication de la République de Guinée. URL: https://smartafrica.org/IMG/pdf/srategie_tic_finale_v.6_28_juillet_2016.pdf
121 Guinea Digital Roadmap. URL: https://www.arab-digital-economy.org/2020/12.pdf
122 Confederation of Indian Industry. Centres of Excellence. URL: https://www.cii.in/Centres_of_Excellence.aspx
123 D4D Hub. Le D4D Hub UA-UE renforce la coopération numérique de la Team Europe avec le Sénégal. 2022. URL: https://d4dhub.eu/news/le-d4d-hub-ua-ue-renforce-la-
coop%C3%A9ration-num%C3%A9rique-de-la-team-europe-avec-le-s%C3%A9n%C3%A9gal
124 D4D Hub. A new digital transformation roadmap for Tanzania. 2023. URL: https://d4dhub.eu/news/a-new-digital-transformation-roadmap-for-tanzania
125 A non-profit organisation established in 2002 by the Government of Estonia in collaboration with the Open Society Institute (OSI) and the United Nations Development
Programme (UNDP). It derives from Estonian experience.
126 e-Governance Academy. Supporting the e-Identity processes in Tunisia. 2022. URL: https://ega.ee/project/supporting-the-e-identity-processes-in-tunisia/
79
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Assistance programmes are instrumental
as a soft power tool to increase external
influence in African countries by promoting
solutions and technologies that are beneficial
to the initiators
They provide conditions for the development
and implementation of laws, regulations, policies
and practices in the countries, which, through
management demand and requirements, contrib­
ute to the development of their political and eco­
nomic relations with a donor.
The result is the channels of
access to the markets. There­
fore, such programmes are in­
creasingly being implemented
by individual countries and the
corporate sector.
This brings to light an imbalance between the sup­
ply and demand of development assistance in the
ICT sphere: the supply is often driven by interests
of international actors rather than by the demand
of African countries.
Assistance projects tend to set ambitious,
yet unrealistic goals in line with the donor’s
strategies strategies, often without
proper assessment and ignoring the needs
of the recipient, which leads to fragmentation
of efforts and waste of resources
Another aspect to consider is international cooper­
ation in developing e-strategies and policies for Af­
rican countries. External actors provide assistance
at the preliminary stages – i.e. assessing the digital
sector of a country, challenges and perspectives,
suggesting best practices – and participate di­
rectly in developing the strategies. The Namibian
e-governance policy of 2005 was preceded by a
study of international practices and consultations
with an Indian company – one of the international
127 Confederation of Indian Industry. Centres of Excellence. URL: https://www.cii.in/Centres_of_Excellence.aspx
128 The World Bank. Ghana’s eTransform Project Trains Tomorrow’s Leaders. 2021. URL: https://www.worldbank.org/en/news/feature/2021/11/17/ghana-s-etransform-project-
trains-tomorrow-s-leaders
129 World Bank. Results Brief. Digital Transformation Drives Development in Africa. 2024. URL: https://www.worldbank.org/en/results/2024/01/18/digital-transformation-drives-
development-in-afe-afw-africa
“centres of excellence” created
by the Confederation of Indian
Industry127
– which also provid­
ed a feasibility report on e-gov­
ernance in Namibia in June 2004
with recommendations on further
e-governance development in
the country. Likewise, the AU Digital Transformation
Strategy was developed with the assistance of mul­
tiple international organisations including the UN
Economic Commission for Africa, Smart Africa, ITU
and the World Bank.
World Bank
The World Bank was among the pioneers in
assisting African countries with digitalisation.
The organisation has launched numerous dig­
italisation programmes tai­
lored for particular countries
like the Digital Cabo Verde
project (approved in 2021),
Sierra Leone Digital Trans­
formation Project (approved
in 2022), eTransform Ghana
Project (approved in 2013)128
.
Over the last decade, its in­
vestment in digitalisation projects on the con­
tinent reached USD 2.8 billion129
. The projects
are financed mainly by the International Devel­
opment Association (IDA) which is funded by
contributions from the governments of mem­
ber countries. Each country’s share defines its
voting power in IDA: the larger the share, the
greater the influence on the organisation’s
strategy, priorities and funding decisions. The
United States, the United Kingdom, Japan,
Assistance at the stage of assessment
and strategic planning grants external actors
the opportunity to influence directions of further
development of the sector and tailor it in line
with their own interests
80
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HSE University Center for African Studies
France and Saudi Arabia make up the top five
countries by voting power130 131
.132
Between 1992 and 2024 the World Bank
implemented in Africa more than 600 projects
with a significant ICT component, total ICT
investment exceeded USD 15.5 billion132
130 World Bank. Public documents. International Development Association. Voting Power of Member Countries (As of September 30, 2024). URL: https://thedocs.worldbank.
org/en/doc/0d24f6d754f61643639df76dac97fda3-0330032021/original/IDACountryVotingTable.pdf
131 Noteworthy, the United States is also the only World Bank shareholder with a veto power, in particular, over structural changes in the institution. However, having 15.49%
share in the IBRD, the US de facto has a veto power over its decisions, whilst the IBRD Board of Directors selects the President of the World Bank. As a result, the President
has always been a US citizen. Furthermore, Catherine Gwin, who worked in operations evaluation department for corporate evaluation and methods as a lead evaluation
officer (2001-2006) and for an independent evaluation group for corporate evaluation and methods as a lead evaluation officer (2006-2007), stated: “Decisions are,
however, often worked out between the United States and Bank management before they ever get to the board, or among members of the board before they get to a vote”.
(Source: Kapur, Devesh, Lewis, John P., Webb, Richard. 1997. The World Bank, Its First Half Century, volume 2, p. 244. URL: https://documents1.worldbank.org/curated/
pt/405561468331913038/pdf/578750PUB0v20W10Box353775B01PUBLIC1.pdf)
132 Authors’ calculations based on the World Bank Digital Governance Projects database (October 2022) and projects information. URL: https://projects.worldbank.org/en/
projects-operations/projects-list?os=0
Top five recipients in terms of investment are Ni­
geria, Kenya, Ethiopia, DR Congo, Egypt. Algeria,
Eritrea, Sao Tome and Principe,
Eswatini, Guinea and Zimbabwe
accounted for the least lending
by the World Bank.
81
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HSE University Center for African Studies
The top five recipients in terms of amount are Nige­
ria, Ghana, Ethiopia, DR Congo and Uganda, where­
as Algeria, Eritrea, Sao Tome and Principe, Eswatini
and Zimbabwe accounted for the least number the
World Bank’s projects with ICT component.
In assessing the degree of each country’s inde­
pendence in ICT development, not only interna­
tional participation should be taken into account
but also the share of the ICT sector in the GDP.
A specific area of cooperation for the World Bank
is digital governance, or GovTech. The World Bank
Digital Governance Projects database133
set in
2015 (last updated in October 2022) contains a
total of 1,450 projects with ICT or e-governance
components financed by the organisation world­
wide since 1992. Africa – both Sub-Saharan and
Northern – accounts for 505 projects (or 35% of
all projects) and USD 13.8 billion in investments
(42%). It is noteworthy that not all of the projects
initially included ICT components and sometimes
the need for digitalisation was determined in the
process of implementation (e.g. in the case of the
Reforma da Administração Financeira do Estado
(RAFE) in Cabo Verde).
133 The World Bank. Digital Governance Projects Database. URL: https://datacatalog.worldbank.org/search/dataset/0038056/Digital-Governance-Projects-Database
World Bank projects in Africa with ICT
component (1992-2024)
Source: prepared by the HSE Center for African studies based
on the World Bank projects information and Digital Governance
Projects database (October 2022).
Estimated ICT
investmentof WB,
mln$
low high
Number of projects with
ICT component
82
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HSE University Center for African Studies
China
At the Eighth Ministerial Conference of the Fo­
rum on China-Africa Cooperation (FOCAC) held
in November 2021, China unveiled a programme
dedicated to digital development in Africa, ac­
cording to which China plans to implement “10
projects in the field of digital economy for Africa
by 2035, create centres of Sino-African coopera­
tion in the field of digital innovation and support
the development of Sino-African joint laboratories,
partner institutes and bases of cooperation in the
field of scientific and technical innovations”134
.
The same year, the Dakar Action Plan (2022-2024),
containing points dedicated to the digital economy,
the exchange of scientific and technical knowledge
and experience in the field of public services, was
adopted135
. In the document, China once again
promises to implement “10 projects in the field of
digital economy for Africa”, support the construc­
tion of digital infrastructure in Africa and continue
digital dialogue via FOCAC and China-Africa Inter­
net Development and Cooperation Forum.
In the Dakar Plan, China declares its readiness to
enhance communication and exchanges with gov­
ernments of African countries and organisations
like “Smart Africa” to boost the innovative devel­
opment of digital technology in Africa and Chi­
na-Africa digital cooperation. The two sides will
enhance cooperation and promote coordination on
personnel training, internet connectivity and the
construction of innovation centres, among others.
Both above-mentioned documents support the ex­
pansion of cooperation within the Digital Silk Road
(DSR) framework. For parties
participating in the initiative,
China offers digital products and
services at competitive prices,
investments in their ICT infra­
134 The State Council of China. China-Africa ties to spur digital field. 2021. URL: http://english.www.gov.cn/news/internationalexchanges/202112/03/content_
WS61a96889c6d0df57f98e5f5a.html
135 China International Development Cooperation Agency. Forum on China-Africa Cooperation – Dakar Action Plan (2022-2024). URL: http://www.cidca.gov.cn/2021-
12/02/c_1211471277.htm
136 China-Africa Joint Efforts to Build a «Digital Africa» and the Way Forward. URL: http://www.xyfzqk.org/UploadFile/Issue/202111080001/2022/6//20220610094501WU_FILE_0.pdf
https://www.cfr.org/sites/default/files/pdf/Chinas%20Digital%20Silk%20Road%20and%20Africas%20Technological%20Future_FINAL.pdf
137 The Economic Times. China reportedly investing $ 8.43 bn in Africa as part of Digital Silk Road initiative. 2021. URL: https://economictimes.indiatimes.com/news/
international/world-news/china-reportedly-investing-8-43-bn-in-africa-as-part-of-digital-silk-road-initiative/articleshow/87039334.cms
structure, joint technology projects and research
programmes. In return, China receives a reduction in
technological dependence on the West, new mar­
kets for its high-tech companies and the dissemina­
tion of Chinese normative and technological stand­
ards, including cyber sovereignty, respect for which
is included in the list of fifteen general principles of
the Digital Silk Road initiative.
16 countries have officially joined the initiative by
signing a memorandum of understanding. More
than 40 states, individual companies and organi­
sations participate in the initiative without signing
a memorandum. The exact list of countries is un­
known. Among the 140 countries that have pre­
sumably signed a memorandum of understanding
with China on joining the Belt and Road, 52 are
African countries (40 of them are Sub-Saharan)
with all of them also being potential participants
in the DSR136
.
According to the data provided by The Economic
Times, for 2021, China’s total investment in Africa’s
digital infrastructure under the DSR is estimated
at USD 8.43 billion137
. As part of this strategy, the
Chinese government is recommending its tech gi­
ants – Huawei, ZTE and Cloudwalk – to enter into
mobile telephony, social media and e-commerce
applications in Africa. The initiative’s projects, in­
formation about which is available online, include
the joint development of a plan for the inclusive
development of e-commerce between China and
Africa, the introduction of a technology-driven
“platform for hundreds of stores and thousands of
products” in Africa, the holding of an online shop­
ping festival in Africa and the promotion of e-com­
merce activities in the tourism sector.
Initiatives managed by state-owned companies
play a crucial role in China’s assistance initiatives.
Main actors include Huawei and ZTE
83
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1 3 8 1 3 9
Huawei is the most active Chinese state-owned
company in Africa and according to data collected
by the Center for Strategic and International Studies
(CSIS)140
, Huawei had already concluded 23 e-gov­
ernment deals in Africa by 2021. The main area of
workisthecreationofcloudservicesfordatastorage,
138 China-Africa Innovation Cooperation Centre. Official website. URL: http://www.caicc.net.cn/
139 The China-Africa Internet Development and Cooperation Forum was held. 2021. URL: https://www.gov.cn/xinwen/2021-08/25/content_5633126.htm
140 Center for Strategic and International Studies is recognised as undesirable organisation in the Russian Federation by the decision of the Russian Prosecutor General’s Office.
141 Seetao. The Belt and Road Initiative has shifted from infrastructure construction to digital information construction. 2023. URL: https://www.seetao.com/details/213555.html
142 Further Africa. China plans digital dominance in Africa via Digital Silk Road. 2021. URL: https://furtherafrica.com/2021/12/30/china-plans-digital-dominance-in-africa-via-digital-silk-road/
143 Reuters. Senegal aims for digital sovereign. 2021. URL: https://www.reuters.com/article/senegal-datacenter-idINL5N2O44D3
with Africa accounting for the largest number of
the company’s transactions (36%). A few public­
ly disclosed examples, information are presented
below. Projects funded by Huawei are classified
as “assistance”, although they are commercial
entities.141142143
Government initiatives:
China-African Innovation Coopera-
tion Center (中非创新合作中心)138
.
Created in 2018 in accordance with
the results of above-mentioned Chi­
na Africa Cooperation Forum and
the Beijing action plan (2019-2021).
It carries out technology transfer
and cooperation in the field of in­
novation and entrepreneurship and
supports the exchange of innovative
achievements between Chinese
and African youth.
China-Africa Internet Development
and Cooperation Forum (中非互联
网发展与合作论坛)139
.Theforumwas
held only once in 2021 but with the
prospect of further meetings and co­
operation. It was hosted by the State
Internet Information Office of China
and now is positioned as a platform for
discussions and promotion of Chinese
legal and ideological standards, includ­
ing the promotion of the “Sino-African
Initiative to Build a Community of
a Shared Future in Cyberspace”.
Senegal
National Data Centre of Senegal (塞内加尔国家数据中心)141
Established in 2021, the national data centre is financed with a loan by the Export-Import Bank of
China (Exim) and supported by equipment and technologies from Huawei. The centre is involved
in data storage, digitalisation of public services, technology transfer and personnel training. The
cost of the project is estimated at USD 79 million142
. The data centre will tap into global networks
through an undersea cable as well as Senegal’s 6,000-km fibre optic network. At the launch of the
centre, President Macky Sall said that the government would migrate all state data and platforms
to the data centre. State-owned businesses such as Senelec, the national electricity company, will
also move their data to the centre in tandem with government agencies. The centre will serve both
the public and private sectors and offer cheaper infrastructure to Senegal’s growing community of
tech startups than entrepreneurs will find abroad143
.
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144145146147148
144 Huawei. Cape Verde Goes Digital. URL: https://www.huawei.com/en/huaweitech/publication/winwin/31/bringing-the-digital-world-to-cape-verde-archipelago
145 Sky Scraper City. Dar es Salaam Kijitonyama $94M National Data Center| U/C. 2015. URL: https://www.skyscrapercity.com/threads/dar-es-salaam-kijitonyama-94m-national-
data-center-u-c.1829633/
146 Huawei. Safaricom and Huawei are building the world’s first E2E 400G backbone network. 2019. URL: https://www.huawei.com/cn/news/2019/2/safaricom-end-to-end-
400g-backbone-network
147 CAAC News. Drone development in Africa: on the field of hope. 2022. URL: http://www.caacnews.com.cn/1/10/202207/t20220708_1348523.html
148 Huawei. National Center for Telemedicine: Making medical care more timely and warmer. 2020. URL: https://www.huawei.com/cn/huaweitech/publication/winwin/36/telemedicine-case
Cabo Verde
National data centre of Cabo Verde
As part of the eGovernment project, Huawei built a national data centre for Cabo Verde. Internal
office networks and videoconferencing systems for the government, schools and hospitals were
also set up. The collaboration between the Cabo Verde Ministry of Education and Huawei made it
possible to establish the WebLab integrated ICT training system to foster ICT talent development
in the country and encourage the exchange and advancement of social information144
.
Tanzania
In 2015, the USD 94 million investment in constructing a government data centre was announced.
Huawei Tanzania provided advisory support to the project which was completed in 2016. The data
centre is managed by Tanzania Telecommunication Company Limited (TTCL)145
.
Kenya
Huawei and Safaricom cooperation project for the operation of public security platforms for police surveil­
lance in Nairobi and Mombasa, as well as for the training of ICT specialists and civil servants was launched in
2019 and is still in operation146
. The agreement with Huawei is renewable every five years. As a result, a large
number of training sessions on artificial intelligence, cybersecurity and emerging technologies were con­
ducted. Moreover, boosted by Huawei’s Kenya deal, Safaricom launched its 5G network in October 2022, a
first in the region. Since then, the service provider has commissioned over 200 5G sites across 11 counties
including Nairobi, Mombasa, Kisumu, Kisii, Kakamega, Nakuru, Kiambu, Machakos, Kajiado, Vihiga and Siaya.
Morocco, Kenya, Rwanda
Cooperation projects of the country’s branch ministries with Chinese state-owned companies
DJI and Huawei during the COVID-19 period.
With the approval of the ministries, DJI provided these countries with the opportunity to use
commercial drones to ensure the security of local administrations, including curfews, spraying of
disinfectants and public announcements in cities147
. Huawei supplied diagnostic systems based
on cloud computing and artificial intelligence, as well as communication platforms for hospitals148
.
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149150151152
149 SCMP. China promotes ‘digital silk road’ as solution to Africa’s data needs. 2021. URL: https://www.scmp.com/news/china/diplomacy/article/3160525/china-promotes-
digital-silk-road-solution-africas-data-needs
150 SCMP. African nations continue to put trust in Huawei for data management. 2021. URL: https://www.scmp.com/news/china/diplomacy/article/3138917/african-nations-
continue-put-trust-huawei-data-management
151 China Arabcf. Huawei organizes the first Seeds of the Future Alumni Conference for Northern Africa in Tunisia. URL: http://www.chinaarabcf.org/zagx/gjydyl/202206/
t20220623_10708524.htm
152 Investir au Cameroun. Télécommunications : le Cameroun se dote d’un réseau sécurisé à plus de 77 milliards de FCFA. 2022. URL: https://www.investiraucameroun.com/
gestion-publique/1407-18197-telecommunications-le-cameroun-se-dote-d-un-reseau-securise-a-plus-de-77-milliards-de-fcfa
Kenya, South Africa, Zambia, Zimbabwe, Tanzania, Togo, Mali, Madagascar,
Mozambique
Huawei’s projects to build cloud data storage, including government data149
According to a database compiled by the Center for Strategic and International Studies Recon­
necting Asia Project, Huawei has either completed or is currently building multimillion dollar data
centres and cloud services in several African countries. This is part of the company’s strategy to
widen its reach in Africa – it is currently working on 25 projects across Africa. Most of the financing
comes from Exim and China Development Bank (Huawei is a big beneficiary of credit from the
China Development Bank)150
.
Mozambique, Tunisia, Senegal, Cameroon, Libya, Cape Verde, Malawi,
Zambia, etc.
Huawei’s project “Seeds for the Future”151
The youth empowerment programme founded by Chinese tech giant Huawei was launched in
2008. It is involved in the training and subsequent employment of relevant personnel and the hold­
ing of thematic events. In 2020, to maintain programme continuity during the pandemic, the pro­
gramme moved online for the first time to deliver a wider range of online educational resources for
more talented young students, while maintaining face-to-face activities and events. For example,
Huawei “Seeds for the Future” successfully trained over 600 students across Africa in 2021. The
project created a global network of top talent from developing countries and provided a number
of participants with international internships as an opportunity to get a closer look into technolo­
gy, such as exhibition hall visits, factory explorations and other enterprise insights in China. This
programme will allow the company to continue to double its efforts in bridging the digital gaps and
spreading its technological standards.
Cameroon
The National Emergency Telecommunications Network (RNTU) project was launched in 2022 in collab­
oration with Chinese ZTE. The project allows for the government teams to manage emergencies confi­
dentially and securely without having to go through a public network. It also includes the e-police system,
a centralised platform for managing security operations. The main services offered are: the management
of police information, criminal information, registers of criminal cases and wanted persons152
.
86
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Read more about international
assistance in digitalisation
of┤African countries in the
handbook by the HSE University
Center for African Studies
E-Governance in Africa 2024:
Challenges and Opportunities
For African countries digital sovereignty lies
not in complete withdrawal of foreign aid
but in embracing a multifaceted approach
to international development assistance,
recognising the importance of diversifying
partners and sources of aid
This includes partnering with nations outside of the list
of traditional Western aid donors, such as those in Asia
and the Middle East. Furthermore, at the current stage
of digitalisation African countries may turn to each oth­
er and their South peers for experience, knowledge
and expertise. More and more, African countries are
tending to turn to peer-to-peer knowledge sharing in
searchforsuitablesolutions.Often,theprocessismod­
erated and supervised by international organisations or
other countries153
. However, there is an emerging trend
towards intra-African initiatives.154155
153 For instance, the World Bank also established a South-South Exchange Program in the frameworks of the ID4D initiative for peer-to-peer knowledge exchange. Under the
Program, in 2018, the delegations of Côte d’Ivoire and Guinea visited Peru to find out from the staff of the Peruan identification agency about the process of implementing
the national ID system.
154 The New Times Rwanda. Eswatini borrows Rwanda’s best practices in e-Governance. URL: https://www.newtimes.co.rw/article/12120/news/africa/eswatini-borrows-
rwandas-best-practices-in-e-governance
155 Burundi Eco. A quand la carte d’identité biométrique ? 2023. URL: https://burundi-eco.com/a-quand-la-carte-didentite-biometrique/
156 Kwet, Michael, Digital Colonialism: US Empire and the New Imperialism in the Global South (August 15, 2018). For final version, see: Race  Class Volume 60, No. 4 (April
2019) ; DOI: 10.1177/0306396818823172
International assistance projects should also be
chosen based on the national strategy and inter­
ests to avoid waste of resources and fragmenta­
tion of efforts. Special attention is to be paid to
studying local peculiarities and adapting knowl­
edge and solutions of the donor to the local con­
ditions, including local experts in the transfer pro­
cess in order to develop national
expertise.
Role of international
corporations
International corporations pres­
ent in the African markets invest
in building ICT infrastructure and digital solutions,
training, all in order to lay the groundwork for ex­
panding presence and revenues in the region, as
well as accessing valuable data to train AI models.
Even in South Africa, a Yale University scholar ar­
gues156
, digital ecosystems are dominated by for­
eign, notably US, entities, which endows them with
unprecedented power over key sectors, whether
politics, culture or the economy.
In November 2023, Eswatini signed a memorandum of understanding with Rwanda with the aim
of leveraging Rwanda’s expertise in developing national e-procurement and financial management
information systems154
.
In May 2023, technicians from the Burundian Ministry in charge of community development visited
Cameroon and Benin with the aim of experience exchange in the process of introducing biometric
identity cards155
.
In 2023, the Korean International Cooperation Agency (KOICA) organised a knowledge sharing
programme between Rwanda and Nigeria (held in Kigali) for the Nigerian Government Service
Portal (GSP) team to learn about Rwanda’s digitalisation journey through study visits and discus­
sions related to policies, strategies, and programmes implemented by the country.
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Apart from revenues, companies gain access
to data and human resources
For instance, Samasource, a US AI data training
company, employs 2,000 Kenyans and Ugandans to
process data for companies including Google and
Microsoft157
.
Leila Janah, the founder and CEO of Sama-
source, a US AI data training company:
“If you use a mobile phone or laptop’s facial
recognition features, drive a car or shop online,
there’s a good chance that a person in East
Africa helped train the algorithm that makes
your technology work.”
Corporations launch numerous pan-African con­
ferences, hackathons and digital skills programs
to train and select ICT specialists from African
countries. Only Google has more than 150 ac­
tive Google Developer Groups and 100 Devel­
oper Student Clubs in Africa. The final prize
often includes visits or internships in these com­
panies which actually leads to brain drain on the
continent.
Corporations under the motto of “bridging
digital divide” and a label “corporate social
responsibility” lay the groundwork for expanding
their own presence and revenues in the region
For instance, Meta158
backs the development of the
2Africa sea cable. Another example is collabora­
tion between the Ministry of Digital Development
of Madagascar and Orange Madagascar in 2018
to launch the ICT Buses (TIC Bus) project: buses
equipped with computers, internet connection and
generators travelled to remote areas of Madagas­
car in order to educate residents about new tech­
nologies159
.
157 LinkedIn. Leila Janah. How East Africa trains AI. URL: https://www.linkedin.com/pulse/how-east-africa-trains-ai-leila-janah
158 Meta is recognised as an extremist organisation in the Russian Federation by the decision of Tverskoy District Court of 21.03.2022 (Case № 33-21933/2022).
159 Call Center Madagascar. Des TIC Bus Pour Le Développement Numérique De Madagascar. 2018. URL: https://www.callcentermadagascar.com/tic-developpement-
numerique-madagascar/
160 Foreign Policy Magazine. Is Big Tech Setting Africa Back? URL: https://foreignpolicy.com/2020/11/11/is-big-tech-setting-africa-back/
International corporations are
also the dominant operators of
the telecommunications sector in
African countries. 75% of the telecommunications
market in Africa is controlled by international corpo­
rations including MTN, Vodacom, Airtel, Orange, e
(ex-Etisalat), with them collectively accounting for
85% of all mobile subscribers on the continent. Na­
tional or African operators are dominant in ­
Namibia
(99%, MTC Namibia and Telecom Namibia), Cabo
Verde (100%, Cabo Verde Telecom under the brand
Alou and Unitel T+, Angola), Ethiopia (94%, Ethio
Telecom), Algeria (73%, Mobilis and Djezzy).
This articulates the need for modifying antitrust regu­
lations in line with the changing market rules. Antitrust
regulations for the ICT sector have not found wide rec­
ognition on the continent yet. However, the importance
of data in the modern economy can allow tech giants to
exert influence up to the point of “data colonialism”160
,
indirectly regulating even non-digital markets, some­
times resorting to internet-for-all initiatives as a cover.
Digital markets have their specific features that may lead
to increased concentration of the market, pre-emption
of emerging markets, while complicating antitrust regu­
lations.Theseinclude:networkeffects,scaleandscope
advantages, multi-sided platform
structure, ecosystem economy, re­
liance on data, zero-price business
models, interoperability, switching
costs and multi-homing, consumer
behavioural biases (e.g. default bias
and saliency bias, “nested” deci­
sion-making, status quo bias) and tipping.
Contrary to common competition laws which focus
on regulating the marketing of products, antitrust
regulation in the digital market concerns the prod-
uct itself (such as product design) and the compa-
ny’s business model. The authorities may therefore
demand to redesign the product (service) or adjust
a business model to make it comply with the law.
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The modernisation of competition legislation requires
comprehensive approaches that would include non-
price dimensions in defining market power and dom­
inance and in assessing mergers. For instance, the
ability to collect or generate and process big data
volumes should be considered among the criteria of
significant market power. Whilst assessing mergers,
consequences unrelated to price should be taken into
account, as mergers can affect incentives for innova­
tion, quality of service, performance, etc.
Examples of anti-competitive practices in the dig­
ital markets include self-preferencing, refusal of
data collection or data sharing, killer acquisition and
exploiting consumer behavioural biases. In South
Africa’s practice, as analysed by the World Bank’s
International Bank for Reconstruction and Devel­
opment (IBRD), predatory pricing and exclusivity
agreements were most common when it came to
abuse of market dominance161
.
As a case in point, the competition authority of South
Africa expressed concern in July 2022 that Google’s
paid search results – without being clearly labelled as
advertising – were increasing the costs for platform
customers and benefiting the tech giant. The prefer­
ential placement of Google’s own specialised search
units is an example of unfair competition.
In 2022, five African countries – Egypt, Kenya, Ni­
geria, Mauritius and South Africa – held a meeting
to discuss cooperation in regulating competition
in the digital markets of the continent162
. In a joint
statement, heads of the na­
tional competition authorities
affirmed that digital markets
present “considerable challenges for competition
law enforcement and policy in terms of the unique
competition issues that arise”.
161 World Bank. Antitrust and Digital Platforms: An analysis of global patterns and approaches by competition authorities. URL: https://documents1.worldbank.org/curated/
en/893381632736476155/pdf/Antitrust-and-Digital-Platforms-An-Analysis-of-Global-Patterns-and-Approaches-by-Competition-Authorities.pdf
162 Cliffe Dekker Hofmeyr. Collaboration by African competition regulators with respect to the regulation of digital markets in Africa. URL: https://www.cliffedekkerhofmeyr.com/en/news/
publications/2022/Practice/Competition/competition-law-alert-Collaboration-by-African-competition-regulators-with-respect-to-the-regulation-of-digital-markets-in-Africa.html
163 African Union. The Digital Transformation Strategy For Africa (2020-2030). URL: https://au.int/sites/default/files/documents/38507-doc-dts-english.pdf
164 The Guardian. 70% of govt agencies host data abroad despite $220m local infrastructure. URL: https://guardian.ng/technology/70-of-govt-agencies-host-data-abroad-
despite-220m-local-infrastructure/
165 Africa Data Centres Association. State of the African Data Centre Market 2021. URL: http://africadca.org/wp-content/uploads/2021/12/ADCA-Annual-Report-2022_
Final-1.pdf?succes=1686795969
166 Innovation Origins. Marseille Is Among One Of The World’s Leading Data Hubs, But Growing At The Seams URL:https://innovationorigins.com/en/marseille-is-among-one-
of-the-worlds-leading-data-hubs-but-growing-at-the-seams/
167 Digital Reality (main page). URL: https://www.digitalrealty.com/
To date, the African continent has seen several at­
temptsofsettinganti-monopolyregulationsfortheICT
actors. In 2018, the governments of Uganda, Zambia
and Benin tried imposing taxes on social media. At that
time, supporting local ICT projects was among the an­
nounced goals. In Uganda, a USH 200 tax was imposed
on the use of 58 over-the-top (OTT) services (includ­
ingFacebook, Twitter, WhatsApp)aswell asa 1%tax on
e-money transfers. However, this resulted in a decrease
in social media usage, a trend coupled with a 74% slide
inrevenuesof companiesthatreliedonsocial media for
business. Therefore, a balanced approach is needed
to maximise societal benefits without reversing the
natural trends in the industries.
Data sovereignty
Cloud technologies have become essential for en­
hancing digitalisation and delivering public services.
In recent years, the corporate sector and govern­
ments across Africa have started moving their data
into the cloud. However, these clouds are mostly
run by the foreign providers, whose data centres
are located overseas.
As stated in the Digital Transformation Strategy
for Africa 2020-2030163
, plenty of IT content con­
sumed in Africa comes from outside. For instance,
in 2021 it was revealed164
that 70% of Nigerian gov­
ernment agencies host their data abroad. As spec­
ified by the Oxford Business Group and the Africa
Data Centres Association165
.
Marseille is the main gateway166
for offshoring the
data. The data is transferred to Marseille-based Dig­
ital Realty’s167
data centres via 16 undersea cables.
Allegedly 80% of the African data is stored abroad
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Offshore hosting compromises the confidentiality,
integrity and availability of the data and entails
a variety of risks
Offshoring also has a negative impact on the op­
erational performance level, which embraces the
quality, dependability, speed, flexibility and cost
factors.
Hence, the total costs of offshoring comprise the
evaluation cost (the due diligence, contracting,
etc. usually involves legal fees), cultural cost168
(estimated to add from 3% to 27% to the total
cost), transition cost, internal workforce cost and
contract management cost (estimated to add an
additional 6% to 10% to the total cost).
When the data is hosted abroad, the submarine
cables and satellite links transport data between
users and data centres located overseas through
the complex routes. Given that the African con­
tinent’s infrastructure at all stages of the value
chain is often underdeveloped or outdated, it re­
mains a challenge to keep the information prop­
erly secured during the transit. Poorly developed
local cloud infrastructure also multiplies the ex­
penses.
According to a report by Google169
, existing un­
derwater cables are outdated and rely on older
technology, while many countries lack redundan­
cy. Edge locations (Telcos, IXPs, ISPs) on the con­
tinent are yet to be fully developed. As specified
by the African IXP Association170
, there are 52
active IXPs located in 47 cities in 36 countries.
Middle mile infrastructure is still underdevel­
oped, despite the estimated growth (72%) be­
tween 2015 and 2020. Internet access networks
do not provide universal access, as 25% of the
168 Includes cultural, language, organisational and work environment differences in the process of offshoring as well as experience differences.
169 Africa Practice. Equiano Subsea Cable: Regional Economic Impact Assessment. URL: https://africapractice.com/wp-content/uploads/2021/10/Equiano-Regional-Economic-
Impact-Assessment-6-October-2021.pdf
170 The African IXP Association. List of active Internet exchange points in Africa. URL: https://www.af-ix.net/ixps-list
171 Africa Data Centres Association. State of the African Data Centre Market 2021. URL: http://africadca.org/wp-content/uploads/2021/12/ADCA-Annual-Report-2022_
Final-1.pdf?succes=1686795969
172 African Infrastructure Investment Managers. Africa’s data centre growth opportunity. URL: https://aiimafrica.com/media/media-centre/africas-data-centre-growth-
opportunity/
173 Market Spotlight. Africa’s Key Data Centre Markets. URL: http://africadca.org/wp-content/uploads/2023/07/Title_Africas-Key-Data-Centre-Markets.
pdf?succes=1694286277
population does not live within
the footprint of mobile broad­
band networks. Therefore, con­
tent has to travel further to end
users, which increases cost of
access and latency.
The African continent also lacks infrastructure
such as data centres. All the critical equipment
and applications are housed in the data centres.
Africa accounts for less than 2% of the global data
centre capacity.
According to the Africa Data Centers Associa­
tion (ADCA) 2021 report171
, the continent has
140,000 square metres of data centre space
shared among about 100 data centres. It is no­
ticeable that the distribution of these facilities
is uneven, given that South Africa accounts for
more than two-thirds of the continent’s capacity.
As stated in the report, 10% of the existing DC
capacity serves nearly half of Sub-Saharan Afri­
ca’s economic output and broadband connec­
tions. The AIIM (African Infrastructure Invest­
ment Managers)172
estimated that as of 2023,
there is 250 MW of installed data centre capac­
ity across Africa. Thus, there is a need to rely on
data centres in Southern Africa or outside the
continent.
As stated in the ADCA 2023 report173
, South Af-
rica, Nigeria, Egypt, Morocco and Kenya are the
main hubs of the African data centre market. Ac­
cording to the report, South Africa comprises 165
MW of live capacity. The figures for Nigeria and
Kenya are 21 MW and 15 MW respectively. Live
capacity in both Morocco and Egypt comprise 13
MW. For instance, the IT capacity per million resi­
dents in Nigeria stands at 0.60 MW, compared to
47.21 MW in the United Kingdom.
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The majority of cloud services in Africa are operated
and controlled by foreign entities. Microsoft,
Google, Amazon, IBM and Huawei are among
the continent’s main cloud services providers
For instance, Microsoft is present174
in Egypt, Morocco,
Kenya, Nigeria and South Africa. According to
the Africa Interconnection 2021 Report175
, Micro­
soft’s cloud business revenues within the continent
come 75% from South Africa and 25% from the rest
of Sub-Saharan Africa.
Google operates in Africa through Digicloud Africa176
,
the distributor of all Google Cloud products. The
174 Cloud Skill Challenge. Azure CDN Coverage by Metro. URL: https://learn.microsoft.com/en-us/azure/cdn/cdn-pop-locations
175 HubSpot. Africa Interconnection Report. URL: https://f.hubspotusercontent00.net/hubfs/3076203/Africa%20Interconnection%20Report%202021.pdf
176 Dig Cloud Africa. Google’s reseller enablement partner in Africa. URl: https://www.digicloud.africa/
177 TOP 10 VPN Digital Rights Research Grant. China’s Surveillance State: A Global Project. URL: https://www.top10vpn.com/assets/2021/07/Chinas-Surveillance-State.pdf
178 Huawei Cloud. Where Can I Access HUAWEI CLOUD International Website Services?. URL: https://support.huaweicloud.com/intl/en-us/intl_faq/en-us_
topic_0115884694.html
179 University of Passau. The Importance Of Data Localisation In Cybercrime Investigations. URL: https://www.digital.uni-passau.de/fileadmin/user_upload/Musoni_M__The_
Importance_of_Data_Localisation_in_Cybercrime_Investigations.pdf
180 University of Passau. The Importance Of Data Localisation In Cybercrime Investigations. URL: https://www.digital.uni-passau.de/fileadmin/user_upload/Musoni_M__The_
Importance_of_Data_Localisation_in_Cybercrime_Investigations.pdf
distribution service is operational in 39 African
countries.
According to the China Surveillance State: A Glob­
al Project177
2021 report, Huawei middleboxes (the
devices that forward data and have an ability to
read and manipulate data) are located in 18 African
countries. Huawei Cloud services are available178
in
at least 22 African countries.
As highlighted in the Importance of Data Localisa­
tion in Cybercrime Investigations179
report.
Technology companies have
a monopoly on data, which allows
them to determine their level
of involvement in how the data
are used
As a consequence, the government’s power and
autonomy over the data is diminishing.
Poorly developed local cloud infrastructure results in
the lack of employment opportunities for local spe­
cialists, as well as in a shortage in
training on maintenance of sensi­
tive data for local employees. Thus,
data localisation is crucial concern­
ing the development of domestic
capacity in the digital sector.
The legal basis of data protection and localisation re­
garding sovereignty is critical. The lack of robust data
localisation laws raises concerns on data security. Ac­
cordingtotheImportanceofDataLocalisationinCyber­
crime Investigations180
report, a foreign state where the
data is hosted may have a stronger jurisdictional basis
over the cloud data. Hence, the hosting state can po­
tentially exercise unilateral access to data if there are
no legislative measures concerning data localisation.
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Data localisation is important in terms of ensuring data
privacy, protection and cybersecurity. Furthermore,
data localisation requirements are adopted in order
to support local law enforcement by ensuring that
local authorities have access to
the data needed to investigate
crimes and oversee activities in
such sectors as telecommuni­
cation, banking and insurance
to mitigate geopolitical risk and
financial sanctions and to facili­
tate economic development, in­
cluding job creation through fostering the local data
processing industry.
According to the UNCTAD, as of 2024, 33 African
countries (61%) have enacted or embraced certain
forms of regulation with the aim of protecting per­
181 UNCTAD. Data Protection and Privacy Legislation Worldwide URL: https://unctad.org/page/data-protection-and-privacy-legislation-worldwide
182 European Commission. Policy and Regulation Initiative for Digital Africa (PRIDA). URL: https://international-partnerships.ec.europa.eu/policies/programming/programmes/
policy-and-regulation-initiative-digital-africa-prida_en
183 Smart Africa (main page). URL: https://smartafrica.org/
sonal data181
. Namibia, Eswatini, Malawi and Ethiopia
have enacted draft legislation. Libya, Sudan, Eritrea,
Central African Republic, Burundi, Guinea-Bissau,
Sierra Leone and Liberia lack relevant legislation.
Regional (UNECA, African Union) and subregion­
al organisations contribute to the development of
data protection legislation. Legislative tools such
as the 2008 East African Community Framework
for Cyber Laws, the 2010 Supplementary Act on
Personal Data Protection of the Economic Com­
munity of West African States (ECOWAS) and the
2013 Southern African Development Communi­
ty model law have been developed. The African
Union developed the first pan-African framework
with the African Union Convention on Cyber
Security and Personal Data Protection (Malabo
Convention) in 2014, which entered into force in
June 2023.
Among other initiatives aimed at improving data pol­
icy on the continent are the Policy and Regulation
Initiative for Digital Africa (PRIDA)182
and Smart
Africa183
. Being a joint initiative of the African Union,
the European Union and the International Telecom­
munication Union (ITU), PRIDA has the objective
of creating a harmonised and enabling regulatory
framework for the use of ICT. Smart Africa supports
the creation of a harmonised framework for data
protection legislation in Africa through the Smart
Africa Data Protection Working Group, which aims
at mapping legal frameworks, implementing guide­
lines for Smart Africa Member States and making
recommendations on enhancing harmonisation and
collaboration mechanisms between Data Protection
Authorities (DPAs).
As of 2024, the majority of data protection
laws of African countries (52%) only prohibit
or impose regulations on cross-border data transfer.
Nigeria, Rwanda and Zambia require data to be
hosted within the country’s borders
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184185186
184 Human Rights Watch. Egypt: Data of Tens of Thousands of Students Compromised. URL: https://www.hrw.org/news/2023/04/19/egypt-data-tens-thousands-students-
compromised
185 Internet Society. The Benefits of Local Content Hosting: A Case Study. URL: https://www.internetsociety.org/wp-content/uploads/2017/08/ISOC_LocalContentRwanda_
report_20170505.pdf
186 RICTA (main page). URL: https://www.ricta.org.rw/
Egypt
In 2023, the Human Rights Watch (HRW) revealed184
that vast amounts of children’s personal data
were exposed by the Government of Egypt and the private British company Academic Assessment
Ltd. The sensitive data included over 72,000 records of children’s names, dates of birth, gender,
home addresses, email addresses, phone numbers, schools that they attend, grade level, personal
profile photos and copies of their passport or national ID.
The data contained over 350,000 files and included information on children who applied to take
the Egyptian Scholastic Test (EST) between September 2020 and December 2022. In March 2022,
the ownership of the exam was changed from the Government of Egypt to a UK company. Accord­
ing to the HRW, it is unclear exactly when and how the government sold or transferred ownership
of the EST and its students’ data to Academic Assessment.
The unprotected data was hosted on Amazon Web Services, Amazon’s cloud storage services. The
data remained accessible until it was taken down on 15 March 2023, after Human Rights Watch’s
notification on the child data privacy violation. The data was left unprotected on the web for at
least eight months.
Egypt’s 2020 data protection law recognises that children’s data are entitled to special protections,
but does not specify them. The Egyptian data protection authority is soon to be founded to ensure
compliance with the law.
Rwanda
According to the Internet Society 2017 report185
, in 2016 the Rwanda ICT Association186
conduct­
ed the year-long ‘Rwanda Content Hosting’ pilot project of transferring the websites stored abroad
to local hosting.
As stated in the report, over half of all .rw and .co.rw websites were hosted in the US due to the low
monthly hosting cost. According to the study, the servers for the pilot project were set up by RICTA
through a sponsorship by BSC Ltd. in the Telecom House, a key hub for telecommunications in Rwanda.
Three Rwandan web hosting providers (the names are not specified) participated in the pilot. Each one
was provided with server capacity in the form of three virtual private servers (VPS), which were used
to migrate a selection of websites previously hosted in the US (and in some cases Europe) to Rwanda.
The outcome of the project is defined by the accelerated speed of the websites when accessed
from the host country, which results in greater visitor engagement, an increase in the number of
page views and returns to the website and longer time spent on the website.
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Hosting of government
websites of African countries
In order to assess the actual status of website local­
isation on the African continent, a study was con­
ducted focusing on the hosting of African govern­
ment websites. This research involved analysing the
geographical locations of the servers hosting these
websites, examining the proportion of sites hosted
within Africa compared to those hosted outside of
Africa. The government websites were chosen as
fundamental for digital sovereignty of the nations
and indicating governments’ approach toward it.
Overall, 55% of the studied websites were hosted
locally, illustrating an increased local capacity of Afri­
can countries and a trend toward digital sovereignty.
Hosting of government websites of African countries
Source: prepared by the HSE Center for African Studies.
22
27
32
37
31
Website of the government
Website of the ministry of ICT
Website of the revenue authority
(or its services)
Website of the ministry
of education (or its services)
Website of the central bank
Initial study by the HSE Center for African Studies
Overall, 55% of studied government
websites were hosted inside the country.
Share of government websites hosted inside the country
1 2 3 4 5
0
Number of studied websites hosted locally
US France Canada Germany United
Kingdom
Netherlands
35
20
14 12
5 5
Main host countries
The study examined the most common sites available for the
majority of the countries and were chosen considering the
following factors:
The website of the government is the fundamental website for
e-governance and is indicative of the government’s approach toward
digital sovereignty.
The website of the ministry of ICT is indicative of the responsible
ministry's policy in the field of digital sovereignty.
The website and services of the revenue authority transmit sensitive
financial information and show the approach to its localisation and
protection.
The website and services of the ministry of education represent the
digital sovereignty policy for G2C services and citizens’ information.
The website of the central bank expands the sample as banks are often
considered to lead in digitalisation and shows the bank’s approach
toward digital sovereignty.
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Connectivity
Another aspect to be considered is dependence on
few submarine cable systems making African countries
vulnerable to Internet outages due to natural disasters,
cable cuts or, potentially, international sabotage.187
Overall, more than 90% of world internet traffic
is transmitted via submarine cables187
To date, Africa is connected to 71 submarine ca­
bles (out of 529 globally), active or planned, most
of them leading to Europe. 17 African countries are
connected to 1 or 2 submarine cables which puts
187 CCDCOE. Strategic importance of, and dependence on, undersea cables. 2019. URL: https://www.ccdcoe.org/uploads/2019/11/Undersea-cables-Final-NOV-2019.pdf
them in a dependent position. Countries aim to
establish more resilient cable designs, expand ter­
restrial fibre, diversify communication paths in or­
der to ensure reliable Internet connection on the
continent and limit reliance on vulnerable subma­
rine cable systems. Nigeria, Kenya, Cameroon with
6 cables, South Africa and Dji­
bouti with 11 and Egypt with 15
cables are among the leaders on
the continent. Regionalising fibre
networks and expanding terrestrial fibre is especial­
ly crucial for land-locked countries. For instance,
Uganda has connected its network to those of Kenya,
Tanzania, Rwanda and DR Congo.
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188189
188 Developing Telecoms. Internet down due to subsea cable damage in Africa. 2024. URL: https://developingtelecoms.com/telecom-technology/optical-fixed-
networks/16421-connectivity-down-due-to-subsea-cable-damage-in-africa-2.html
189 Internet Society. 2024 East Africa Submarine Cable Outage Report. 2024. URL: https://www.internetsociety.org/resources/doc/2024/2024-east-africa-submarine-cable-
outage-report/
Due to a dragging anchor three
submarine cables in the Red Sea
were damaged: the Seacom/Tata
cable, the Asia Africa Europe-1
(AAE-1), and the Europe India
Gateway (EIG), affecting Tanza­
nia, Kenya, Uganda and Mozam­
bique. It was possible to reroute
traffic through international ca­
bles in Djibouti.
Due to an undersea canyon ava­
lanche the outage happened in
West Africa188
affecting 13 coun­
triesincludingCôte-d’Ivoire,Liberia,
Burkina Faso, Mali, Guinea, South
Africa, Nigeria, etc. Four cable
systems were damaged – WACS,
MainOne, South Atlantic 3 and
ACE. Operators used cross-border
terrestrial fibre networks to reroute
traffic to the Equiano cable which
was not affected by the avalanche.
EASSY and SEACOM, the subma­
rine cables connecting South Africa
and Kenya, were disrupted, leading
to an internet outage across East
Africa. The cables were repaired
three weeks after the disruption.
These outages are reported to
have severely affected the banking
sector, mobile phone operations,
money transfer services and stock
exchange markets in Mozambique,
Malawi, Kenya and Tanzania189
.
February 2024 March 2024 May 2024
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Digitalisation of languages
Africa is a space of vast cultural and linguistic di­
versity. As of 2024, it accounts for 30% of the
world’s languages190
. While the population of
Northern Africa predominantly speaks Arabic
(with a number of regional exceptions), the ma­
jority of countries of Sub-Saharan Africa do not
have a single dominating local language. Being
the second region in the world with such a mul­
tiplicity of languages after Asia, African linguistic
density exceeds that of Asia. The “population per
language” ratio stands at 646 thousand people
per language, compared to 2 million people per
language in Asia191
. African languages are domi­
nant in physical space; yet, they are scarcely ex­
hibited in the digital one.192
The digitalisation of African languages is a key step
towards ensuring that communities can fully harness
the benefits of the digital age while preserving their
linguistic and cultural heritage and can be consid­
ered as a cultural aspect of digital sovereignty.
190 The Ethnologue. What continents have the most indigenous languages? URL: https://www.ethnologue.com/insights/continents-most-indigenous-languages/
191 E-Governance in Africa 2024: Opportunities and Challenges. URL: https://e-governancehub.ru/read-book-e-governance-in-africa-2024-challenges-and-opportunities/
192 African Union. Agenda 2063. URL: https://au.int/en/agenda2063/overview
193 Meital K. and Jason M. (2022) Language and Coloniality: Non-Dominant Languages in the Digital Landscape. Pollicy. URL: https://pollicy.org/wp-content/uploads/2022/08/
Languages-Coloniality-Report.pdf
While more than 80% of the digital content is deliv­
ered in 10 languages, namely English, Chinese, Span­
ish, Arabic, Portuguese, Japanese, Russian, German,
French and Malaysian193
, non-dominant languages
become more vulnerable to the decline.
In line with Agenda 2063192
adopted by
the African Union, the governments of
the states aim to:
-	 “implement programmes for the pro­
duction of contents in national (indig­
enous) language and using national
languages as part of administrative
processes of the countries by 2025”;
-	 “harness the indigenous African lan­
guages in a practical manner”.
The Digital Transformation Strategy for Af­
rica 2020-2030 sets the goal of “promot­
ing the penetration and use of ICTs into lo­
cal communities using African languages”.
2,150
2,300
1,300
1,050 290
Languages by region
Africa Oceania
Asia
Source: prepared by the HSE Center for African
Studies based on the Ethnologue and UN data.
Americas Europe
Population by region,
billion speakers
1.4
Africa
4.7
Asia
1
Americas
0.75
Europe
0.45
Oceania
Indonesian
Share of internet users by language, %
20
Chinese
16
English
7
Spanish
5
Hindi
4
Arabic
3
Portuguese
3
3
French
2
Russian
37
Other
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22 out of over 2,000 languages spoken in Africa
are supported and promoted by large-scale
enterprises194
The use of African languages online is hindered by
social constraints. European languages maintain the
status of prestigious levels, while the majority of in­
digenous ones are often seen as means of informal
communication. The lack of informational and scien­
tific resources in local languages also spur the ex­
pansion of their use.194
The issue of indigenous languages’ web presence
is exacerbated by the scarcity of online resourc­
es needed to develop smart engines on language
and data processing. The process of language re­
search and analysis is predominantly supported by
local communities, small private companies and
academia.
With the increase in internet use, which has grown
from 38% in 2014 to 63% in 2021, the number of
users who are non-native English speakers has sig­
nificantly risen. The web penetration still covers less
than a half of the adult population of the African con­
tinent, standing at 40% and covering roughly 450
million users, compared to 614 million in Europe195
.
In 2024, 49.5% of websites implement English as a
main language of content delivery196
, whilst in 2022,
English along with French, Spanish and Portuguese
comprised less than one-third of languages spoken
by internet users. African languages, including Swa­
hili, Amharic, Oromo, Hausa and others, constituted
less than 0.1% of web content. Yet, in 2000 the av­
erage number of languages represented on global
company websites stood at 6 and increased more
than fivefold in 2022, amounting to 34197
.
194 Lionbridge. Embrace the Online Opportunity of African Languages. URL: https://www.lionbridge.com/content/dam/lionbridge/pages/blogs/translation-localization/
embrace-the-online-opportunity-of-african-languages/embrace-the-online-opportunity-of-african-languages-infographic-english.pdf
195 E-Governance in Africa 2024: Opportunities and Challenges. URL: https://e-governancehub.ru/read-book-e-governance-in-africa-2024-challenges-and-opportunities/
196 W3Techs. Usage statistics of content languages for websites. URL: https://w3techs.com/technologies/overview/content_language
197 Web Globalization Report Card 2022. The report assesses the availability of languages on 150 websites of global companies (e.g. Wikipedia, Toyota, eBay, Lenovo, etc.). URL:
https://www.bytelevel.com/reportcard2022/
198 Meital K. and Jason M. (2022) Language and Coloniality: Non-Dominant Languages in the Digital Landscape. Pollicy. URL: https://pollicy.org/wp-content/uploads/2022/08/
Languages-Coloniality-Report.pdf
199 Ibid.
200 Nekoto W. et al. Participatory Research for Low-resourced Machine Translation: A Case Study in African Languages. URL: https://arxiv.org/pdf/2010.02353
201 CSA Research. Africa: Localization’s Newest Frontier. 2022
Amharic and Somali are consid­
ered as digitally vital languages
with a similarly high level of use
for accessing Wikipedia and
producing social media content.
Online use of Tigrinya is predominantly support­
ed by the availability of automatic translation and
presence in search engine services. etc. Although
the majority of web content in Ethiopia is created in
local languages, English dominates in terms of con­
tent consumption198
.
In Tanzania, Swahili and English mixed use is com­
mon on social media. A pattern of regenerating
the content initially coming in English to Swahili
is also common. Online political activity is usual­
ly undertaken in Swahili and is viewed to be more
powerful. While Swahili is a national language and
a regional lingua franca, it is often considered to
be “non-academic”, while English is viewed as a
language of social mobility. In Uganda, most na­
tional media houses produce content in English
and Luganda. Swahili is an official language as well;
however, publications in this language are rather
uncommon199
.
As of 2020, Egyptian Arabic was a dominant Afri­
can-spoken language on Wikipedia, possessing
over 573 thousand texts. It was followed by Afri­
kaans and Swahili which comprised 91 thousand
(17.5 million speakers) and 59 thousand texts re­
spectively200
.
In 2022, English accounted for 151 million users
originating from Africa, being the most common
language, and followed by Arabic with 104 million
internauts. French was utilised by 84 million Afri­
cans. In comparison, the online use of Swahili and
Hausa did not exceed 30 million201
.
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Big tech is taking action on implementing Afri­
can languages. As of 2023, Google enabled au­
tomatic translation to 25 African languages202
,
and in 2024, the corporation added203
over 25
languages to its translation engine. Microsoft
enables the users to access the content in 10
202 Afrikaans, Amharic, Arabic, Bambara, Chichewa, Ewe, Hausa, Igbo, Kinyarwanda, Krio, Lingala, Luganda, Malagasy, Oromo, Sepedi, Sesotho, Shona, Somali, Swahili, Tigrinya,
Tsonga, Twi, Xhosa, Yoruba, Zulu
203 Connecting Africa. Google Translate adds 25+ African languages. URL: https://www.connectingafrica.com/author.asp?section_id=761doc_id=786935
204 Afrikaans, Amharic, Arabic, Malagasy, Somali, Swahili, Tigrinya, Tonga, Zulu
205 African Languages Lab. Facts  Figures. URL: https://www.africanlanguageslab.com/old-facts-figures
206 Shikali, Casper S., and Refuoe Mokhosi. «Enhancing African low-resource languages: Swahili data for language modelling.» Data in brief 31 (2020). URL: https://www.data-in-
brief.com/article/S2352-3409(20)30845-3/fulltext
languages which are widespread in Africa204
, and
Amazon offers six, namely Afrikaans, Amharic,
Arabic, Hausa, Somali and Swahili. A Chinese
public company Alibaba is the leader regard­
ing the number of introduced languages, which
amounts to 40205
.
Digitising a language
African languages are often viewed as “low re­
source”206
. Low-resource languages are languag­
es limited in terms of digital resources critical to
perform linguistic operations based on technol­
ogy use, such as machine learning and transla­
tion.
Natural language processing (NLP), which in­
cludes speech recognition, text classification,
natural-language understanding and natural-lan­
guage generation, faces a range of challeng­
es when put in the African linguistic landscape.
2,300 1,050 290
Asia
African languages are used by less than 0.1%
of the websites each.
Source: prepared by the HSE Center for African
Studies based on the Ethnologue and UN data.
Source: prepared by the HSE Center for African Studies based
on 22 Web Globalization Report and W3Tech data.
Americas Europe 0.75
Europe
0.45
Oceania
Indonesian
Share of internet users by language, %
Share of websites by language, %
53
English
5.4
Spanish
Swahili
Amharic
Somali
Zulu
0.014
0.0007
0.0004
0.00035
Afar
Malagasy
Bambara
Hausa
0.00025
0.00025
0.00022
0.00015
Share of websites in African languages
4.6
Russian
4.6
German
4.3
French
4.1
Japanese
3
Portuguese
2.2
Italian
2.1
Turkish
16.7
Other
20
Chinese
16
English
7
Spanish
5
Hindi
4
Arabic
3
Portuguese
3
3
French
2
Russian
37
Other
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Among them are lack of resources (predomi­
nantly digital and crucial for
language processing), low dis-
coverability (existing research
and datasets on languages are
often unavailable for wide au­
dience, requiring special aca­
demic permission), scarcity
of publicly-available bench-
marks, low reproducibility caused by poor re­
search output exchange and societal issues (in­
digenous languages are rarely seen to become a
primary communication axis)207
.
Nevertheless, implementation of the technology
is exacerbated by a range of obstacles. There are
several methods on technology use: cross-lin-
gual transfer makes it possible to transmit mod­
els trained on high-resource to low-resource lan­
guages; however, the inclusion of languages to
this methodology derives from the availability of
monolingual data. Furthermore, since the bench­
mark tasks are sourced from English, some draw­
backs exist.
Multilingual approaches were designed in order to
train the same models for many languages at once
and enabled to train models on translation between
English and the 10 most high-resource African
languages. The language resources were derived
from private data and public TED talks. Hence, the
models preliminary developed on high-resource
languages could be inapplicable by virtue of tech­
nological limitations, linguistic differences and lack
of qualified personnel, as well as data amounts and
quality208
.
Furthermore, the lack of language datasets and low
levels of use in the digital space exacerbate the is­
sue of misinformation. Detection machine-learning
mechanisms are often unavailable due to inability to
train the engine209
.
207 Masakhane. URL: https://www.masakhane.io/
208 Nekoto W. et al. Participatory Research for Low-resourced Machine Translation: A Case Study in African Languages. URL: https://arxiv.org/pdf/2010.02353
209 Meital K. and Jason M. (2022) Language and Coloniality: Non-Dominant Languages in the Digital Landscape. Pollicy. URL: https://pollicy.org/wp-content/uploads/2022/08/
Languages-Coloniality-Report.pdf
210 Ibid.
211 Siminyu K. et al. Consultative engagement of stakeholders toward a roadmap for African language technologies. Patterns, Volume 4, Issue 8. URL: https://www.cell.com/
patterns/fulltext/S2666-3899(23)00189-7?_returnURL=https%3A%2F%2Fptop.only.wip.la%3A443%2Fhttps%2Flinkinghub.elsevier.com%2Fretrieve%2Fpii%2FS2666389923001897%3Fshowall%3Dtrue
Stakeholder engagement
In order to overcome the challenges of web lan­
guage resource scarcity, a “participatory approach”
is being undertaken in order to conduct the research
and perform NLP and MT operations.210
The key contributors to the creation and devel­
opment of machine translation technologies are
content creators (journalists, copywriters, creative
writers), language practitioners (translators, tran­
scribers, linguists), curators (content selectors),
language technologists (software engineers, NLP
practitioners) and evaluators (machine translation
model analysts). Stakeholders involved in educa­
tion, legal, public relations (PR), customer service,
media, government, health, commerce, and market
research are considered to be the direct users of
African NLP technologies, while the general public
absorbing the output of the NLP in media and liter­
ature is viewed as indirect users of the technology.
The groups which are unlikely to benefit from NLP
are low-income, disabled or living outside the inter­
net penetration zone211
.
Localisation
Localisation, which stands for the adaptation of
user interfaces and digital information to the local
types of communication, culture and standards, is
inevitable in order to adjust science and technol­
ogy within the diverse societies and cultures. The
process of localisation is bound to the use of lan­
guage. In practical application, it implies software
and content adaptation and an enterprise activity,
African languages are predominantly being
digitalised by local and academic communities,
encompassing Africans either residing in African
countries or those in diaspora, as well as linguists
and academics210
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whilst linguistic information is an integral part of
such a process212
.
The main pillars of localisation are: equipping sys­
tem deployment at local level in order to advance
documents production and multilingual web con­
tent delivery; content production and translation;
and adaptation of user interface to devices. Among
the crucial factors are the availability of a standard­
ised orthography and local data, usefulness of local­
ised software marketing, and the user community
engagement, which implies literacy and computer
literacy213
.
The majority of languages originating from Sub-­
Saharan Africa are written with an extended Latin
script, while some languages of the Sahel zone,
Northern Africa and the Horn of Africa214
use
non-Latin scripts. This brings a number of challeng­
es on user interface adaptation, as the majority of
website templates are originally designed for Latin
scripted languages.
A notable example of localisation is the adapta­
tion of operating systems and software to local
context. For instance, standard Microsoft Office
software is available215
in more than 100 languag­
es, with three of them (Afrikaans, Amharic and
Arabic) being widespread in Africa. In addition, an
additional software MS Language Accessory Pack
can be downloaded in Wolof, Zulu, Igbo, Yoruba,
Kinyarwanda, isiXhosa, Sesotho, Swahili, Setswana
and Hausa216
.
Product localisation and adaptation to the local con­
text entails significant gains to eGDP (the share of
GDP that is generated by e-commerce), as indicated
by online consumer behaviour217
.
212 African Languages in a Digital Age.
213 Ibid.
214 E.g. Arabic, Amharic, Tamazight, Nko script, etc.
215 Microsoft. What languages is Office available in? URL: https://support.microsoft.com/en-us/office/what-languages-is-office-available-in-26d30382-9fba-45dd-bf55-
02ab03e2a7ec
216 Microsoft. Language Accessory Pack для Microsoft 365. URL: https://support.microsoft.com/ru-ru/office/language-accessory-pack-%D0%B4%D0%BB%D1%8F-microsoft-
365-82ee1236-0f9a-45ee-9c72-05b026ee809f?redirectSourcePath=%252fen-US%252farticle%252fOffice-Language-Interface-Pack-LIP-downloads-D63007C2-E8AE-
41FD-8BFB-FCE2857010E1
217 Google. IFC. E-Conomy Africa 2020. URL: https://www.ifc.org/content/dam/ifc/doc/mgrt/e-conomy-africa-2020.pdf
218 The countries selected are: Algeria, Angola, Benin, Comoros, Democratic Republic of Congo, Ghana, Egypt, Ethiopia, Kenya, Nigeria, Morocco, Rwanda, Tanzania, Tunisia,
South Africa. The spheres selected are: e-taxes and finance, business, tourism, public procurement, education, healthcare, legislation, and a platform that is supposed to
serve as a one-stop shop.
Case study.
Languages in e-governance in Africa
During the initial study of representation of African
languages on official websites of public entities, web­
sites of 15 African countries were covered, including
four North African countries and 11 Sub-­
Saharan
countries. More than 10 websites of selected do­
mains were studied for each country218
, with the total
coverage amounting to 182 websites. The availability
of translation not only in any other language, but es­
pecially indigenous African languages was examined
along with the methods of translation.
The results show that only 41.5% of the websites
provide translation in at least one language (76/183)
whilst 58.5% do not have any translation (107/183).
At the same time, the regional distribution suggests
that North African governmental websites are almost
twice as likely to have translations, as compared to
e-services of Sub-Saharan countries. Overall, find­
ings of the digital linguistic landscape study show
that French-Arabic and French-English pairings were
the most prevalent.
However, in North Africa, websites usually allow
translation in European languages, mainly French
despite the fact that French is not the official lan­
guage of any country in Northern Africa. Indigenous
languages are available only on some Moroccan
platforms, whereas in Sub-Saharan Africa the per­
centage is much higher and more than two-thirds of
government websites with translations available of­
fer translation into indigenous languages (Table 1).
That said, it is noteworthy that only three out of 11
Sub-Saharan countries account for 76% of websites
with translation in indigenous languages – Tanzania,
Ethiopia and Rwanda.
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The most represented languages include Swahili
(Tanzania, to a lesser extent Kenya), Amharic
(Ethiopia), Kinyarwanda (Rwanda), and Tamazight
(Morocco), whilst Somali, Afrikaans, Yoruba, Hausa,
Lingala, and Malagasy are much less popular.
Government portals in English-speaking countries
rarely offer translation (only some 16% of the stud­
ied websites or a total of 10 out of 64) with Tanzania
and Rwanda being exceptions to this rule. In Tanza­
nia, nine websites in English have a Swahili translation
(45%, and there are also websites only in Swahili),
whilst there are only three in Kenya (20%) and one
in Nigeria (less than 10%). In Rwanda, four websites
provide a Kinyarwanda translation (25%).
The countries with French and Portuguese speak­
ing populations showed a similar pattern and on av­
erage are more likely to have translation than Eng­
lish-speaking countries; even so, the rate remains low
(35% or 14/40 websites219
).
As for the spheres, government websites for tourists
predictably more often have translations, usually in
English and sometimes in other European languages
or Arabic. Tanzanian, Rwandan, Kenyan and Ethiopian
portals also have translations in African languages –
Swahili, Kinyarwanda, Swahili and Amharic respective­
ly. Following close behind in terms of the availability of
translations are government websites aimed at inte­
gration of services (i.e. “one-stop shop portals”).
Indicatively, services in the educational sector are
the least likely to have translation, especially in indig­
enous languages – only five out of 15 websites ex­
amined provide translation. Yet, some of them (e.g.
website of the South African National Department of
Basic Education) have educational content such as
workbooks in native African languages.
Though about one-half of websites of legislative
bodies have translations available, PDF files of the
documents published on the websites do not tend to
have translations available in indigenous languages,
which also could serve as a constraint for achieving
universal legal literacy on the continent.
219 Without counting North African countries.
It is worth highlighting that the stage of e-govern­
ment development does not significantly influence
the linguistic landscape of services offered and does
not guarantee multilingualism in the digital sphere.
Existing studies of e-government routinely fail to
account for this factor as a means of promoting
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the use of digital public services and facilitating citi­
zens’ access to them and do not consider multilin­
gual provision as a way to promote social inclusion.
For instance, despite being the continental leader
according to the UN e-government Development
Survey of 2022220
, South Africa does not provide cit­
izens with multilingual digital public service: of 11 ex­
amined websites, only two have a translation. The
South African one-stop shop platform for e-servic­
es221
allows a Google-powered translation in 133 lan­
guages, including the country’s 11 official languages.
The website of the South African government222
pro­
vides a translation in 11 official languages; however,
it is not available on the home page, but rather only
on pages with a service description. Moreover, the
services are delivered predominantly in English.
Whilst the same characteristic can be applied to Ghana
and Kenya, which ranked in the UN E-Government
Development ranking 7th and 10th on the continent
respectively, the countries with the most translations
available in indigenous African languages – Tanzania
and Ethiopia – were ranked 26th and 43rd by the UN.
By contrast, Tunisia, Morocco, Egypt, and Algeria are
among the top 10 of e-government development in Af­
rica, and the countries’ governmental websites system­
atically provide translations in Arabic, French or English.
220 UN E-Government Knowledgebase. URL: https://publicadministration.un.org/egovkb/data-center
221 South African e-Services Portal. Official website. URL: https://www.eservices.gov.za/
222 South African Government. Services for residents. Official website. URL: https://www.gov.za/services/services-residents
223 Arab Republic of Egypt. Ministry of Finance. Official website. URL: https://mof.gov.eg/en
224 Ethiopian E-Services Portal. Official website. URL: https://www.eservices.gov.et/
Regarding the methods, an automatic translation
powered by Google is the most commonly used;
however, since it does not translate pictures, graphs,
etc., mixed methods of translation are used on some
websites (e.g. website of the Egyptian Ministry of Fi­
nance223
).
Among the noted peculiarities of the digital linguis­
tic landscape of African government websites are
some technical issues with the functionality of the
translations, which have not been fixed over the
years and therefore can be perceived as an integral
feature of the landscape. For instance, even though
some websites offer the translation, it does not
function properly and not all the content is trans­
lated, resulting in information being provided in a
mixture of two languages on the pages (Ethiopian
E-Services Portal224
).
Another interesting feature applies mostly to North­
ern African countries. For instance, despite offering
a translation in French or Arabic, most Algerian and
some other Northern African websites do not have a
button to toggle between the languages. Instead, the
language can be changed via the link to the page.
Based on the initial results of the study, local initia­
tives can be suggested as a means to boost the use
of African languages in digital governance.
Picture 1.
Source: Egyptian Ministry of Finance
105
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225226
225 Ethiopian E-Services Portal. Official website. URL: https://www.eservices.gov.et/
226 Tanzania e-Government Authority. Official website. URL: https://www.ega.go.tz/
Source: Ethiopian E-Services Portal225
Source: Tanzania E-Government Authority website226
106
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Forging sovereign digital future
The pursuit of digital sovereignty in Africa
is a░multifaceted endeavour that cannot be reduced
to mere control over data and infrastructure
While these elements are undoubtedly critical, a
holistic approach must incorporate various dimen­
sions, including the diversification of foreign aid
sources, the mitigation of technological depend­
ency, and the assurance of reliable infrastructure.
As Africa navigates its digital future, it must also
prepare for potential disruptions by developing
alternative solutions that ensure continuity and
resilience.
Central to achieving digital sovereignty is the
development of human capital.
Digital sovereignty cannot be
realised without a robust pool
of expertise and decision-makers
who are equipped to address the
unique challenges of the conti­
nent. This includes fostering homegrown talent capa­
ble of innovating and leading within the tech sphere.
Moreover, the current stage of digitalisation pre­
sents an invaluable opportunity for African nations
to collaborate and learn from one another. By shar­
ing experiences and best practices, countries can
accelerate their digital agenda while fortifying the
continent’s collective sovereignty.
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The main challenges
of education in Africa
During the 37th African Union Summit held in Addis
Ababa in January 2024, the countries of the con­
tinent, at the proposal of AU Chairperson Moussa
Faki Mahamat, chose “Educate and Skill Africa for
the 21st Century” as the key theme for 2024.227 228
Some of the most important goals set for 2025 and
announced at the summit were to reduce the out-
of-school rate to 11% for primary schools and to
achieve a 46% reading proficiency rate by the end
of primary school. African Union countries commit­
ted to training 79% of teachers at the pre-primary
level and 85% at the primary level.
These promising targets are generally achie­
vable for African countries, as they have already
made notable efforts in the 21st century to im­
plement education programmes and address the
challenges facing education, showing marked
and sustained growth in key indicators. Howev­
er, even today the situation requires attention of
those responsible for developing education poli­
cy on the continent.
According to UNESCO, the current primary school
enrolment rate in Africa averages over 80%, with
the continent experiencing one of the largest in­
creases in primary school enrolment in the world
over the last few decades (up 18 percentage points
since 2000).229 230
227 Theme of The Year 2024: “Educate and Skill Africa for the 21st Century” URL: https://au.int/en/theme/2024/educate-african-fit-21st-century
228 In previous years, the themes of the year for African Union have not been education-related, in 2021 – “The AU Year of the Arts, Culture And Heritage: Levers for
Building the Africa We Want”, in 2022 – “Strengthening Resilience in Nutrition and Food Security on the African Continent“, and in 2023 – “Acceleration of the AfCFTA
implementation”.
229 UNESCO Institute for Statistics URL: https://data.uis.unesco.org/
230 Musau Z. Africa grapples with huge disparities in education URL: https://www.un.org/africarenewal/magazine/december-2017-march-2018/africa-grapples-huge-disparities-
education
231 UNESCO. Out-of-school numbers are growing in Sub-Saharan Africa URL: https://www.unesco.org/gem-report/en/2022-out-school
232 UNESCO Institute for Statistics URL: https://data.uis.unesco.org/
More children in Africa are now
in school than ever before230
The proportion of children of lower secondary
school age who are out of school has fallen from
43% to 33% over the past two decades, while for
upper secondary school children it has fallen from
63% to 53%.
In Africa, the rate of out-of-school children fell
from 35% in 2000 to 18% in 2020, but Sub-­Saharan
Africa still has the lowest enrolment rates in the
world. In 2022, about 100 million primary and sec­
ondary school-age children in ­
Africa were out of
school, representing 40.5% of the global total.231
Only 41% of pupils who start school complete
their primary education and 23% complete se­
condary education.
This is because in many parts of the continent, es­
pecially in fragile and conflict-prone regions, social
barriers remain, keeping many children out of school
and preventing them (especially girls) from getting an
education and becoming active members of society.
Equality of opportunity remains an important chal­
lenge. According to the UNESCO Institute for
­
Statistics, some 9 million girls are not receiving any
education (compared to 6 million boys).232
Gender
inequality starts early, with 23% of girls already
out of primary school compared to 19% of boys.
By adolescence, these proportions increase to 36%
for girls and 32% for boys.
Education is power:
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This is underscored by the huge gaps in educatio­
nal performance between the richest and poorest
segments of the population in Africa. In Sub-Saha­
ran Africa, only 13% of children from the poorest
households complete secondary school, compared
to 66% of children from the richest households.
African countries still lack qualified teachers. Ac­
cording to UNICEF 2020 data, the average ratio of
qualified teachers per country in Sub-Saharan Afri­
ca was 89% at the primary level and only 80% at the
secondary level. Experts estimate that 15 million
new teachers will be needed to meet the demand
for schooling in Africa by 2030.233
At the same time, the problem remains complex. With­
out solving the issues of security, infrastructure deve­
lopment, development of road links, investments in
connectivity,andtheneedtoimprovethequalityoflife,
it is impossible to fully solve the problem of education.
In this context, urbanisation is playing a pivotal role
in the African continent, influencing not only eco­
nomic development, but also education. Urbani­
sation has led to increased learning opportunities
233 2022 Global Multidimensional Poverty Index URL: https://hdr.undp.org/content/2022-global-multidimensional-poverty-index-mpi#/indicies/MPI
234 van Maarseveen, R. (2021). Urbanization and educational attainment: evidence from Africa. Available at SSRN 3836097.
235 Bold, T., Filmer, D., Martin, G., Molina, E., Stacy, B., Rockmore, C., ...  Wane, W. (2017). Enrollment without learning: Teacher effort, knowledge, and skill in primary schools in
Africa. Journal of Economic Perspectives, 31(4), 185-204.
236 Digital Skills in Sub-Saharan Africa Spotlight on Ghana URL: https://www.ifc.org/content/dam/ifc/doc/mgrt/digital-skills-final-web-5-7-19.pdf
237 The Future of Jobs and Skills in Africa URL: https://www3.weforum.org/docs/WEF_EGW_FOJ_Africa.pdf
238 UNESCO Institute for Statistics URL: https://data.uis.unesco.org/
for African youth by providing easier access to
schools.234
Moreover, according to researches, liv­
ing in an urban environment improves literacy rates
by 4-5%, emphasising that longer schooling leads
to better learning outcomes also.235
But still low levels of attainment mean that children
in Africa are less prepared for future work than their
counterparts in the rest of the world. The labour
market mismatch could become even more serious
in the near future, as according to the World Bank,
more than 230 million jobs in Sub-Saharan Africa
are expected to require digital skills by 2030.236
In addition, one of the most important challenges
for education in Africa is its inefficiency and inability
of graduates to take up jobs in the labour market.
The World Economic Forum estimates that at the
current level of educational development, only 52%
of the continent’s working-age population will be
able to complete secondary education by 2030.237
According to the latest data from the UNESCO,
the literacy rate among young people (aged 15-24)
in Sub-Saharan Africa averages about 77%, which is
the lowest in the world.238
According to the UNESCO Institute for Statistics, the largest numbers of primary school-age
children out of school in 2020-2021 were in Ethiopia (3.8 million, 22% of all children of this age in
the country), Niger (1.8 million, 41%), Tanzania (1.8 million, 15%), South Africa (0.92 million, 12%),
Burkina Faso (0.88 million, 25%), Senegal (0.8 million, 27%), Chad (0.6 million, 22%).
The largest number of secondary school-age children out of school in 2020-2021 was in Niger
(3 million, 78% of all children of this age in the country), Cameroon (2.3 million, 56%), Côte
d’Ivoire (1.9 million, 46%), Burkina Faso (1.9 million, 55%), Chad (1.8 million, 66%), Mozambique
(1.7 million, 44%), Guinea (1.3 million, 62%), Benin (0.9 million, 47%).
According to the UNDP education index, which is a part of the Multidimensional Poverty Index
for October 2022,233
Niger, Mali, Chad, Burkina Faso, South Sudan, Djibouti and Sudan are among
those lagging behind in terms of the quality of education. Leading states on the continent include
Mauritius, South Africa, Seychelles, Egypt, Tunisia.
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This is explained by the persistence of poor infra­
structure, social, economic and cultural factors that
significantly reduce not only the number of students
but also their ability to effectively study. In gene­
ral, African countries with the exception of Algeria,
Egypt, Ghana, Kenya, South Africa and the sparsely
populated island states face similar problems.
Given that school education is considered the most
important factor in shaping the rest of a person’s
life, the situation in Africa remains extremely chal­
lenging. Improving the quality and accessibility of
education will determine Africa’s participation in
the process of restructuring the global division of
labour that has already begun.
According to expert estimates, by 2030, China
could lose 85-100 million jobs in labour-intensive
industrial sectors by 2030, and a significant propor­
tion of these jobs could be shifted to Africa.239
The current demographic patterns also present an
opportunity for countries of the continent to leve­
rage soon, as this high proportion of young popula­
tion will not last forever. While
60% of Africa’s population was
under the age of 25 in 2020, by
2050 around 50% of Africans
will belong to this age group.
239 Jobs lost, jobs gained: What the future of work will mean for jobs, skills, and wages URL: https://www.mckinsey.com/featured-insights/future-of-work/jobs-lost-jobs-gained-
what-the-future-of-work-will-mean-for-jobs-skills-and-wages
240 TRANSFORMING EDUCATION IN AFRICA URL: https://www.unicef.org/media/106691/file/Transforming%20Education%20in%20Africa.pdf
241 Kirui, O. (2019). The complementarity of education and use of productive inputs among smallholder farmers in Africa. ZEF-Discussion Papers on Development Policy, (277).
242 A paradigm shift in Farmer Field Schools methodology in Eastern Africa URL: https://www.fao.org/news/countries-good-practices/article/en/c/1382854/
UNICEF estimates that by 2050, the number of peo­
ple under 18 in Africa will reach 1 billion, representing
40% of all children and adolescents in the world.240
However, in order to harness this potential, quality
education and job creation for young people must
be ensured so that they can successfully adapt to
the labour market and contribute to the Africaan
economy.241242
On the one hand, the growing population makes
Africa attractive as a potential destination for a
number of industries, but imbalances, including
in education, can lead to the opposite effect: not
industries will be attracted to the growing and
educated population within Africa, but educated
­
Africans will be attracted to other regions to work
for these industries.
Migration and education
Moreover, the complex nature of the problem of
education is not merely a question of access.
Perhaps even more important is the provision
of opportunities for students and graduates
to further apply their knowledge in practice
In this situation, possible points of growth are people for growing sectors of the economy who
will be able to apply their knowledge effectively for the benefit of their countries. For example,
technical education and training in agriculture is one of the key factors for effective economic and
social development in African countries.
Studies confirm that educational programmes for retraining farmers, how to efficiently use technological
innovations such as adapted crop seeds, fertilisers, irrigation technologies, have a positive impact on
productivity and propensity to innovate.241
In particular, the FAO implements farmer field schools in
Africa, which are institutionalised in the national policies and extension systems of Kenya, Ethiopia,
Uganda with the participation of local universities.242
Such programmes require both training existing
workers and placing greater emphasis on agricultural training programmes at partner institutions.
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This is why the ‘brain drain’, where educated African
youth leave their countries in search of jobs that
match their skill set, is still a major problem.
African migrants play an increasing role in the econ­
omies and politics of Europe. Demographic decline,
aging populations and a shrinking number of young
people are reducing the number of workers in
­
European economies (expected to fall by 44 million
by 2050). This reduction is expected to be replaced
by, inter alia, African migrants.243
The Centre for Glob­
al ­
Development predicts that around 24.5 million mi­
grants will add to Europe’s working-age population
between 2015 and 2050, of which more than 7 million
will be from Africa.244
It is through this framework that European coun­
tries’ investments in education programmes in Africa
should be perceived. Supporting school and univer­
sity education becomes an opportunity for them to
‘offshore‘ personnel training for their own econo­
mies. As European populations age and the cost of
labour rises, it is worth waiting for this co­
operation
to grow further. For example, since 2021, the Talent
Partnerships initiative is being implemented, which
aims to provide financial support to stimulate “mu­
tually beneficial” international mobility based on
matching labour market needs and skills between
the EU and partner countries.
EU Commissioner for Home Affairs Ilva Johansson
said in June 2021: “We need legal migration: the
working age population in Europe is shrinking and
many key sectors are facing skills shortages, such as
health and agriculture. Talent Partnerships will help
match the skills of candidates for jobs in Europe
with the needs of the labour market”.245
Pilot projects on legal migration funded by the
European Commission and the Migration Partner­
ship Fund (MPF) have been running since 2016.
243 Kenny C., Yang G. Can Africa Help Europe Avoid Its Looming Aging Crisis? URL: https://www.cgdev.org/publication/can-africa-help-europe-avoid-looming-aging-crisis
244 Kenny C. Good News: Africa Needs More Jobs While Europe Needs More Workers URL: https://www.cgdev.org/blog/good-news-africa-needs-more-jobs-while-europe-
needs-more-workers
245 Talent Partnerships: Commission launches new initiative to address EU skills shortages and improve migration cooperation with partner countries URL: https://ec.europa.eu/
commission/presscorner/detail/en/ip_21_2921
246 Africa and Europe Facts and Figures on African Migrations URL: https://mo.ibrahim.foundation/our-research/data-stories/aef-african-migrations
247 Africa and Europe Facts and Figures on African Migrations URL: https://www.friendsofeurope.org/wp/wp-content/uploads/2022/01/AEF_Summit_African-Migrations.pdf
248 Scaling Fences URL: https://www.undp.org/publications/scaling-fences
The MPF has channeled EUR 30 million to more than
40 projects in 15 EU member states and 12 partner
countries (mainly Northern Africa). In this model,
the migration destination country agrees to provide
technology and funding to train potential migrants in
targeted skills in the country of origin before they
move and receives workers with the skills they need
to integrate and contribute to the economy.
While the programme’s organisers claim that the
country of origin can receive support to train the
population and increase human capital, the nature
of the programme itself targeted at participants who
are motivated to emigrate, so it is unlikely that many
of its participants will stay in their home country.
At the same time, migration may also be bene­
ficial to African countries, as even workers who
leave the country often provide a major boost to
the eco­
nomy of the sending country by remitting
a significant portion of their foreign earnings back
home (15 to 20%), which becomes a crucial fac­
tor in the foreign exchange of African countries.246
Overall, this is a ‘human capital dilemma’: every
dollar transferred from Europe or the Middle East
means more systemic losses for the country in the
long run - shortages of skilled labour, changes in
­
demographics, culture, etc. In any case, migration
policies on the part of African governments need
to be calibrated more carefully.
This is even more relevant considering that the ma­
jority of migrants leaving Africa are economically
active, hardworking and ambitious.
Thus, about 80% of African migrants are in search of
better economic prospects; moreover, only 7.2% of
­
AfricanmigrantsinEUcountriesarerefugees.247
A2019
study by the United Nations Development Programme
reports that African migrants are often more educated
than their peers who stayed in their home countries.248
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Those who travelled to Europe had, on average, re­
ceived three more years of education compared to
their peers of the same age in the countries they left.
According to the Migration between Africa and Europe
(MAFE) study, Africans with higher education are more
likely to migrate to Europe.249
Some researchers (e.g. Dustmann C., Theodoro­
poulos N.) have noted that children of African
migrants are more successful in education than
their peers in the local population.250
However, it
is still noted that employment of African skilled
professionals is often below their skill level upon
arrival in Europe.251
African migrants were much more likely to be
in skilled employment if they had studied
in Europe rather than arriving after holding
a skilled occupation in Africa
At the same time, the gradual increase in the num­
ber of African descendants living permanently
in Europe has led to an increasing number of Afri­
can descendants, or their children, taking up high
positions in private companies and public institutions
in European countries. Children of African migrants
of the first generation who were able to get a quality
education in Europe and find a qualified job are suc­
cessful. For example, in the UK, the Nigerian com­
249 Final Report Summary - MAFE (Migration between Africa and Europe) URL: https://cordis.europa.eu/project/id/217206/reporting
250 Dustmann C., Theodoropoulos N. Ethnic minority immigrants and their children in Britain // Oxford Economic Papers, New Series. April, 2010. Vol. 62. №.2. P. 209-233.
251 Final Report Summary - MAFE (Migration between Africa and Europe) URL: https://cordis.europa.eu/project/id/217206/reporting
252 Карпов, Г. А. (2016). У Великобритании-африканское будущее? Азия и Африка сегодня, (1), 59-64.
253 Кузнецов, А. В. (2020). Экономическая деятельность выходцев из Африки в крупных странах ЕС: новые подходы. Контуры глобальных трансформаций: политика,
экономика, право, 13(1), 6-27.
munity is distinguished by a high level of education,
and as a consequence, there are many businessmen,
scientists and media workers with Nigerian roots in
the country.252
The number of African migrants is high in such are­
as as health care and construction. Thus, in France,
about one-half of migrant doctors came from
­Africa, mainly North Africa (the figure exceeded
7 thousand people). In Germany, Italy and the
UK every sixth migrant doctor is from Africa, but
if their number in the first two countries is about
2,000, in Great Britain it exceeds 15,000 doctors.253
Thus, it can be noted that some areas of the Euro­
pean labour market are becoming
increasingly influenced by African
descendants.
In an increasing number of Europe­
an countries, African descendants
are occupying important positions
at the political level, including in the cabinet of mi­
nisters, and this trend is likely to increase. According
to the authors’ analysis of European governments for
2024, African descendants are represented in the
cabinets of the UK, France and Belgium, as well as in
the parliaments of these countries. African descen­
dants are also present in the parliaments (at national
and regional levels) of Germany, Ireland, Italy, Portu­
gal, Finland, Sweden and Switzerland.
Illustrative cases include the Prime Minister of Wales (March 2024 to August 2024), Zambian-
born Humphrey Won ap David Gething (Welsh father, Zambian mother), who has held ministerial
positions in the cabinet since 2016. The parents of former British Prime Minister Rishi Sunak,
similarly migrated to the island from Eastern Africa where they were born. Farnce’s youngest prime
minister, Gabriel Attal, was born in France but has Tunisian ancestry through his grandfather.
BelgianForeignMinistersince2022,HadjaLahbibwasborntomigrantparentsfromAlgeria.Bundestag
MP Karamba Diaby, born and raised in Senegal, moved to Germany for education and stayed on,
becoming one of the first two African MPs in 2013, retaining the position today.
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The greater number of African descendants in
important public positions in the three countries
(the UK, France, Belgium) is not only due to a
long colonial history, but also to a lesser language
barrier that reduces the difficulty of assimilation
for Africans in these countries. This trend under­
scores the fact that people from Africa are pla­
ying an increasing role in the political life of Eu­
ropean countries, meaning that the opportunity
to play such a role in their home country was not
available to them for various reasons.
Higher education in Africa
However, the challenges faced by education in
Africa are not limited to primary and secondary
education. Higher education on the continent
also faces serious difficulties.
Adopted by the African Union in 2015 Africa ­
Agenda
2063 and the Continental Education Strategy for
Africa (CESA) 2016-2025 place higher education
and research at the centre of Africa’s growth and de­
velopment. This is particularly important in the con­
text of the 21st century, where science and tech­
nology are the foundation of a knowledge-based
economy.
Despite the growing number of African universities,
which increased from 784 in 2000 to 1,700 in 2021,
there is a serious shortage of places for all school
graduates. Between 2011 and 2021, university en­
rolment increased from 5% to 11% The number of
Africans in tertiary education is rising – the figure
has increased by more than 30% in the past de­
cade
to 16.1 million (14.1% of the tertiary-age popula­
tion, 121 million in 2020), outpacing the rate of
population growth (+18% over the same period).
However, this is still not enough.
Higher education enrolment
in Africa represents only 3%
of enrolments at all levels of
education on the continent
254 Sub-Saharan Africa: Tertiary Education URL: https://thedocs.worldbank.org/en/doc/908af3404023a2c31ef34853bba4fe60-0200022022/original/One-Africa-TE-and-
COVID-19-11102021.pdf
255 Маслов А. А. и др. Африка 2023. Возможности и риски. – 2023
and 4% of all students globally. In terms of the
number of students, the leading countries in
­
Africa are Egypt (2.4 million, 28% of the tertiary
age population), Nigeria (1.8 million, no data),
Algeria (1.6 million, 53%), South Africa (1.2 mil­
lion, 25%), Morocco (1.1 million, 39%) and Kenya
(0.6 million, 11%).254
In this context, Africa accounts for 9.2% of the
world’s universities, about 1% of the world’s RD
expenditure, 2.5% of the world’s researchers and
scientists, and 3.5% of academic publications
throughout the world.
The continent is characterised by a high concen­
tration of universities in a few countries with a de­
veloped academic tradition, which is illustrated by
Africa’s position in international university rankings,
in which Egypt and South Africa traditionally lead by
a significant margin.
For example, in the QS World University Rankings
2025, which compiles a list of the world’s top 1,500
universities, Africa is represented by 40 universities
(the year before there were 41, and in 2023 only
32): 15 from Egypt (two in the top 500), 11 from
South Africa (of which five in the top 500), four
from Tunisia, two from Nigeria, Kenya and Ghana,
as well as one each from Morocco, Sudan, Ethiopia
and Uganda.
This is also reflected in the issue of funding of
major universities. Our study reveals that South
­
African and Egyptian universities lead the list of the
most well-funded universities.255
Public universities
in Kenya, Nigeria, Uganda and Ghana are also on
the list of the most financially endowed universities.
More importantly, South African universities lead in
terms of spending per student, which compares fa­
vourably with other universities on the continent.
At the same time, even Africa’s largest
universities face funding challenges, pushing
them to actively seek external funding
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According to the World Bank, Sub-Saharan Africa
accounted for USD 3.8 billion in educational aid
(39% of all funds allocated to higher education)
from 2015 to 2020. There is a notable lack of
funding from within ­
Africa, apart from small sala­
ries secured by the government and fee-paying
students, there are still no visible initiatives from
foundations and philanthropists.
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Universities’ financial constraints are leading to in­
creased outward mobility from Africa. According
to UNESCO, Sub-Saharan Africa has the world’s
second highest outbound student mobility rate
(4.78), behind Central Asia (16.3), while the rate in
Northern Africa is close to the world average (2.7)
at 2.6.
Africa is one of the largest importers in the high­
er education market. The total number of African
students studying abroad in 2020, according to
­
UNESCO, is 624,000 (135,000 of which are in oth­
er African countries) or 10 % of the world total.
The value of higher education services for African
students studying outside the continent exceeded
USD 13 billion.
In total, the number of students studying abroad
more than doubled between 2000 and 2022.
The leading countries in admitting African stu­
dents outside the continent are France (138,000),
­
China (more than 80,000), the UK (68,000), Türkiye
(61,000), and the US (57,500); within Africa those
are South Africa (30,000), Morocco (20,000) and
Senegal (15,000).
256 Cloette N. Universities and Economic Development in Africa. URL: https://www.aau.org/wp-content/uploads/sites/9/2018/04/Universities-and-Economic-Development-in-Africa.pdf
At the turn of the century, calls for the improve­
ment of African universities and the need to link
higher education to development were increasing­
ly voiced internationally and at the African level. In
early 2000, UN Secretary-General Kofi Annan sta­
ted that “The university must become a primary tool
for Africa’s development in the new century”.256
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With knowledge playing an increasingly important
role in development, universities are seen as a cri­
tical link in national development as they are insti­
tutions that can provide an adequate foundation
for the emerging knowledge economy in Africa by
providing skills, competencies and knowledge that
are oriented towards direct application by public in­
stitutions and influencing policies.257
University-based centres of competence, techno­
logy transfer centres are increasingly being estab­
lished in Africa, and universities are developing and
commercialising software, technology and their
own expertise. Universities’ development efforts
also focus on helping to reduce poverty and health
problems, improve agricultural production and sup­
port business development, mainly through advis­
ing public institutions.
External influence
on education in Africa
A review of the current challenges facing educa­
tion in Africa reveals that lack of funding remains a
critical challenge, so the continent continues to rely
on external support for development programmes
and education financing.
While aid still accounts for about 5% of total edu­
cation spending in Africa, its importance cannot be
overestimated. According to the OECD, growth in
aid to education in Africa slowed in 2021 to USD
4.8 billion, the same as in 2020. The coronavirus
pandemic contributed to this, but in 2022 there was
a marked increase in aid to USD 5.7 billion.258
The majority of aid is concentrated in Sub-Saha­
ran Africa (83%), while Northern Africa has a less
significant share (17%). Regarding the distribu­
tion of funds among other regions in Sub-Saharan
Africa, Eastern Africa (35.5 % of all aid to ­
Africa),
Western Africa (32%), Central Africa (13%) and
Southern Africa (1.5%) receive the largest amount
of aid.
257 Cloete N., Bunting I., van Schalkwyk F. Research Universities in Africa. URL: https://library.oapen.org/handle/20.500.12657/27492
258 OECD Data Explorer URL: https://data-explorer.oecd.org/
The World Bank is the largest donor, averaging around
USD 1 billion annually, but in 2022 the amount reached
a record high of USD 1.9 billion, focusing entirely on
Sub-Saharan Africa. In 2022, Eastern Africa accounted
for 44.6% (USD 867 million), Western Africa 38.7%
(USD 752 million), Central Africa 16.4% (USD 319 mil­
lion) and Southern Africa only 0.3% (USD 5.8 million).
While traditional external influences on education
have centred on the financing of projects on the
ground as well as the infrastructure, in recent years
there has been increasing cooperation at institutional
level, including collaboration between universities and
university associations, the growing provision of edu­
cational scholarships, training, promotion and foreign
language teaching. If we assume that the main objec-
tive of aid is to secure the flow of migration and im-
prove its quality, the shift in priorities is well explained.
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European states
Western countries have long had the greatest in­
fluence on education in Africa, which can be ex­
plained by their historical ties and the European
role in establishing academic institutions in Africa.
When African countries gained independence,
they mainly adopted the education systems of the
former colonial powers.
The high level of European influence on education in
Africa remains relevant today. European states are still
the most popular destinations for African students.
According to the UNESCO Institute for Statistics,
more than 320,000 Africans are studying in European
countries in 2022, which corresponds to about 50% of
all African students studying abroad. The largest num­
ber of students study in France (138,000), the United
Kingdom (68,000) and Germany (41,000).
In addition to the World Bank and the US, the list
of the largest donors of foreign aid to education
in Africa includes France, Germany, the EU (as an
institution) and the UK. According to the OECD,
these actors account for about 75% of external aid
to education in Africa.
According to European Union data for the period
2014-2020, the EU has allocated more than EUR
1.5 billion to support education in Africa. This as­
sistance is not limited to basic education, but also
includes significant cooperation in higher educa­
tion, to which European countries pay particular at­
tention. Such funding for universities provides both
access to human resources and to sites for joint re­
search, which is also important for data collection.
According to reports from the European Union’s Eras­
mus+ academic exchange and mobility programme:
funding allocated under the programme for Sub-Saha­
ran Africa in 2021-2027 was EUR 570 million, compared
toonlyEUR120millionfrom2014to2020.Thefunding
for 2021-2027 will account for more than 25% of the
programme’s overall total, highlighting the continent’s
increasing importance. The aim of the programme is
to increase annual mobility between Europe and Africa
259 6th European Union - African Union Summit: A Joint Vision for 2030 URL: https://www.consilium.europa.eu/media/54412/final_declaration-en.pdf
from around 16,000 in 2021 to 105,000 by 2027. Gi­
ven
the interest of European countries in skilled labour, it
can be noted that the focus of aid in education remains
the selection of future migrants.
The importance of the educational sphere in coopera­
tion with the countries of the continent is emphasised
at the highest political level. Thus, at the end of the
summit of the European and African Unions in February
2022, a final declaration was adopted,259
which stressed
that higher education and research are areas of joint
action (where the long-term beneficiary is likely to re­
main the EU) within the framework of the Erasmus+
programme The declaration referred to the need to
promote vocational education and training in Africa.
An investment package was also announced to
support the implementation of the African Union
Agenda 2063, including education, with a focus on
enhancing student mobility and employability, im­
proving quality and increasing access to the digi­
tal and information economy. The EU has allocated
EUR 970 million for this purpose. Other notable in­
itiatives include the EU’s EUR 100 million allocation
for teacher training for Africa, as well as the Skills
and Vocational Education Training Initiative with
over EUR 500 million in funding.
The EU is also actively involved in other projects, notably
the Global Partnership for Education organised by the
WorldBank.In2021,aheadoftheG7summit,European
Commission President Ursula von der Leyen announced
that the EU will allocate EUR 700 million to support GPE
projects. In 2023, former Tanzanian President Jakaya Kik­
wete was appointed as the first African president of the
GPE Board of Directors, highlighting the continent’s im­
portance in the organisation’s activities.
EU countries are the GPE’s largest donors after the
UK (15%) and the US (8.2%): the European Com­
mission (12.33%), Norway (9%), the Netherlands
(8.3%), Denmark (6.8%), France (6.3%).
Africa is the largest recipient of financial support
from the GPE. Almost all countries in Africa (except
South Africa, Namibia, Botswana, Gambia, Gabon,
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Equatorial Guinea, and Libya) are partner count­
ries and recipients of GPE support. Ethiopia, DRC,
Uganda, Nigeria, Mozambique, Tanzania, Niger,
­
Somalia are among the largest recipients of part­
nership funding (USD 2.7 billion from 2003 to June
2024), receiving about 30% of all aid.260
Despite large amounts of aid, it often does not
reach desired results, keeping local levels of under­
education high.
Big African businesses have not yet realised the stra­
tegic importance of local universities as a potential
infrastructure for expert, human resources and GR
support for their business and therefore have limited in­
vestment in the universities’ development. Moreover, it
has been argued that, due to over-reliance on external
aid, many African governments are neither leading nor
fully committed to the reform process itself.261
This il­
lustrates that funding and external aid are no guarantee
of effectively overcoming the challenges facing educa­
tion in Africa.
European countries are also implementing projects
at bilateral level. France, for example, has been
implementing campus programmes in Africa since
2017, with two pilot projects launched in Senegal
and Côte d’Ivoire, offering programmes, often in
partnership with local universities, allowing students
to obtain a degree while continuing their studies in
Africa. French universities are increasing their col­
laboration with African universities and opening
branches in Africa, with École Centrale de Lyon es­
tablishing branches in Morocco and Mauritius.
Since 2021, France has been implementing the Part­
nerships with African Higher Education programme
through the French Development Agency (AFD).
The second phase of the programme runs from 2023
involving 14 higher education institutions from Africa
and 35 from France. Providing a network of partner
courses via the programme costs EUR 20 million.
Germany through the German Agency for Devel­
opment Cooperation and the German Academic
260 GPE Partner countries URL: https://www.globalpartnership.org/where-we-work/partner-countries
261 Woldegiorgis ET, Jonck P, Goujou A (2015) Regional HE reform initiatives in Africa: A comparative analysis with the BP. International Journal of HE 4(1): 224–253.
262 Developing equitable TNE partnerships: where to begin URL: https://www.universitiesuk.ac.uk/universities-uk-international/insights-and-publications/uuki-insights/
developing-equitable-tne-partnerships
Exchange Service (DAAD) promotes programmes for
higher education and supports centres of excellence.
For example, since 2012 DAAD, together with the
­
Alexander von Humboldt Foundation and with funding
from the Federal Ministry of Education and Research,
has been supporting the Next Einstein Initiative. ­
African
master’s students study applied mathematics at The
Africa Institute for Mathematical Sciences (AIMS)
centres in South Africa, Cameroon, Ghana, Rwanda,
Senegal, Tanzania and Ghana. Non-surprisingly, the
geo­
graphy of this initiative partly coincides with the ar­
chipelago of the former German colonies in Africa.
In July 2024, Germany with the World Bank, agreed
on a joint initiative to support education and skills
development in Sahel region through the centres
of excellence in the region.
The UK is implementing development programmes
through the DFID (Department for International De­
velopment), the British Council and UK Research
and Innovation both at primary education level and
also developing collaboration with the network of
universities in Africa.
For example, in 2023, the University of Nottingham
signed a relationship development agreement with
the Association of African Universities (AAU) to
support research, mobility and academic collabora­
tion between the parties. The British Council has
launched Innovation for African Universities (IAU),
a learning and collaboration platform that brings to­
gether UK and African universities to engage and
collaborate, creating centres of excellence with
one UK and one African university (specifically
Ghana, Kenya, Nigeria and South Africa).
The initiative to deliver UK Transnational Education
(TNE) through the formation of overseas campu­
ses and joint programmes with overseas universi­
ties is seen as an important part of the impact.262
In 2022, over 550,000 people were studying in UK
degree programme outside the UK. Similar oppor­
tunities are present in several countries in Africa,
such as Egypt, Nigeria, South Africa and Ghana.
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These initiatives also have a business component,
acting as an important revenue stream: presenting
migration opportunities and well-known brands in a
comfortable English-speaking environment, without
there necessarily being any guarantee of quality.
USA
In contrast to European countries, the United States
is much more focused on investment in supporting
primary and basic education.
The main actor in this process is the development
agency USAID, which in 2021-2023 provided nearly
USD 1 billion in foreign aid to Sub-Saharan Africa in
the field of education. This includes USD 240 million
in 2021, USD 255 million in 2022, USD 391 million in
2023 (and over USD 145 million as of July 2024).263
At the same time, there is less interaction at the high­
er education level. At the end of the US-Africa Lead­
ers Summit 2022 in December 2022 in Washington,
DC, the topic of education was not prioritised.
Among the most notable initiatives implemented
in recent years is the University Partnership Initi-
ative, mainly implemented with universities in South
Africa with the prospect of expanding to other
­
African countries. The US State Department-fund­
ed initiative is aimed at exchanges of scientists and
students between the parties. Since 2016, Michigan
State University has been implementing an initiative
called the Alliance for African Partnerships (AAP)
with ten leading African universities and a network of
African research institutes.
There are several campuses and joint programmes
of American universities operating in Africa. In par­
ticular, Carnegie Mellon University’s Rwanda cam­
pus, the first US university to offer master’s de­
grees on the continent, has been open since 2019.
In May 2024, the US entered into a framework coop­
eration agreement with the Kenyan government to
support university-industry partnerships to foster inno­
vation, research and job growth in STEM-related fields.
263 Foreign Assistance URL: https://www.foreignassistance.gov/
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China264265266
At the same time, it is not only Western countries
that are focusing on education to expand their in­
fluence. At the Forum on China-Africa Cooperation
(FOCAC) in 2012, it was made clear that greater
emphasis would be placed on education.
Back in 2010, China launched the China-Africa
University Cooperation Plan 20+20 partner-
ship, bringing together the interaction of 20 Chi­
nese universities with 20 African universities from
17 countries. This partnership was subsequently
expanded. In 2023, a new format was launched:
the China-Africa 100 University Cooperation
Program.
264 Young African Leaders Initiative URL: https://www.usaid.gov/yali
265 Nantulya P. China Escalates Its Political Party Training in Africa YRL: https://africacenter.org/spotlight/china-escalates-its-political-party-training-in-africa/
266 China’s Political Schools: Expanding Influence in Africa URL: https://www.riotimesonline.com/chinas-political-schools-expanding-influence-in-africa/
In August 2023, at the BRICS Summit in South
Africa, China launched the China-Africa Talent
Development Cooperation Plan, aimed at training
500 principals and highly qualified vocational col­
lege teachers each year, as well as 10,000 tech­
nicians with Chinese language and professional
skills and internships for African civil servants
in China.
China is rapidly expanding its network of Confucius
Institutes, offering language and cultural courses for
Africans. 66 Confucius Institutes have been estab­
lished in 46 African countries. The first was launched
in Nairobi, Kenya in 2004, and South Africa hosts
the most Confucius Institutes on the continent (7).
Although exact statistics are not available, many stu­
The Young African Leaders Initiative (YALI) is the most notable educational programme ­
imple­
men-
ted by the United States on the continent.264
This initiative was launched in 2010 under the Obama ad­
ministration. The programme includes the Mandela Washington Fellowship, a six-week training course in
the US. The programme provides leadership training courses for young people between the ages of 18
and 35. Since its launch, more than 28,000 people have participated in the programme. In 2023, 700
scholarships have been awarded. Participants receive online and face-to-face training and professional
development opportunities in business, civil society and public policy management, and governance.
The US has opened four regional centres in Ghana, Kenya, Senegal and South Africa, which are also
responsible for interaction with neighboring countries. Moreover, as of 2019, these centres have begun
to jointly coordinate and collaborate under YALI Africa, a body that brings the centres together and
serves as a central point for mobilising resources and ‘maintaining a unified vision and development.’
China also is implementing education and training programmes within the political sphere by building par­
ty schools in Africa: the Mwalimu Julius Nyerere Leadership School in Tanzania in February 2022 and the
renovation of the Herbert Chitepo School of Ideology in Zimbabwe for the ruling ZANU-PF party in 2023.
Burundi, Republic of Congo, Equatorial Guinea, Morocco, Uganda, Kenya have also expressed in­
terest for similar projects. In addition, in 2019, China launched the China-Africa Institute, which is
based in Addis Ababa and aimed at training African party and government leaders.265
China also runs training programmes for African parties and government officials, both in Africa and in
­
China.TheseprogrammesareaimedatpromotingtheChinesemodelofdevelopmentandstrengthening
friendly ties between states. China is expected to receive more than 50 such delegations over 2024.266
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dents who have received language training at the
institutes later continue their studies at universities
in China, becoming an important area of educational
cooperation.
New institutional forms are being established to
systematise cooperation between countries. At
the first Joint Conference of Confucius Institutes
in ­
Africa held in Kenya in May 2024, 16 Institutes
from 9 East African countries established the East
African Confucius Institute Alliance.
In this context, 16 countries in Africa have incor-
porated Chinese into their national education sys-
tems, and about 30 universities now offer degree
programmes specialising in Chinese.
African students have been studying in China since
the 1960s, but their numbers have increased in recent
years, reaching 80,000 in 2018. In 2018, the Chinese
government, as part of FOCAC, pledged to provide
50,000 scholarships for African students to pursue
higher education in China over the next three years.
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Japan
Japan is also in the race to influence and support
the education sector in Africa. According to the
OECD, Tokyo provides more than USD 196 million
in educational aid to Africa in 2022.
The Japan International Cooperation Agency
(JICA) has been implementing the School for All
programme to strengthen education in Africa since
2004. As of 2023, the project has been implemen­
ted in 53,000 schools in eight African countries
(Niger, Senegal, Mali, Burkina Faso, Côte d’Ivoire,
Madagascar, Djibouti and Ghana). A feature of
Japanese involvement was the use of outsourcing
practices: JICA worked with government agencies
to develop a tailored strategy for the local environ­
ment, providing advice and expertise rather than
doing everything itself.267
From June 2020, JICA is implementing the ­
AFRICA-
ai-JAPAN project, which aims to transform partner
institutions on the continent into leading regional
centres for science, technology and innovation.
The project is being implemented at the Jomo
Kenyatta University of Agriculture and Technology
(JKUAT) in Kenya and the Pan African University
Institute for Basic Science, Technology and Inno­
vation (PAUSTI), based at JKUAT. Projects are be­
ing implemented in applied areas important for the
continent’s development: agriculture, engineering
and ICTs.268
Türkiye
The influence of non-Western actors has been in­
creasing in Africa in recent years, with Türkiye being
one of the most active contributors. Ankara’s most
visible presence in Africa are the Turkish Maarif
Foundation schools. As of 2024, more than 17,500
students are in Turkish Maarif Foundation schools
in 26 African countries.269
267 School for All is a key part of Japan’s educational support of Africa URL: https://japanupclose.web-japan.org/policy/p20221014_1.html
268 Waruru M. Japan-backed science hub to involve 10 African universities URL: https://www.universityworldnews.com/post.php?story=20240331163854340
269 Turkey’s Maarif schools educate over 17,000 students in Africa URL: https://www.dailysabah.com/politics/diplomacy/turkeys-maarif-schools-educate-over-17000-students-
in-africa
270 Waruru M. Scholarships attracting African students to Turkey URL: https://thepienews.com/turkey-african-student-numbers-grow/
271 Интервью Посла России в Кении в преддверии Дня дипломатического работника агентству Россия Сегодня URL: https://www.mid.ru/ru/maps/ke/1426523/
The number of schools in Africa has increased
sharply in recent years, from 18 in 2016 to 125 in
2024. More than half of the schools (63) are locat­
ed in the ECOWAS region.
Maarif schools offer a curriculum with elements of
Turkish, including science, coding and IT ­
classes,
and classes on local culture. This strategy and af­
fordable price allows the foundation to compete
with other international schools in each country
where it operates. Maarif Foundation schools also
play a key role in attracting students to Turkish uni­
versities.
But the presence is not limited to schools. There
are 14 Turkish language centres of Emre Yunus
Institute, and the stated goal is to open another
11.
Ankara is increasingly offering scholarships for edu­
cation in Türkiye. According to the country’s foreign
minister, the number of African students studying at
colleges and universities in Türkiye rose to 61,000
in 2023 (of which more than 14,000 are scholarship
students).270
Russia
Russia is also regaining its educational influence in
Africa. In the days of the Soviet Union, Moscow was
actively involved in building educational infrastruc­
ture in Africa, establishing universities, schools and
colleges. In recent years, Russia has focused on in­
stitutional cooperation.
During the Soviet period, more than 70,000 spe­
cialists from African countries were trained. These
people returned to their countries and held impor­
tant positions in the economy and public service.
For example, according to the Russian Embassy in
Nairobi, in Kenya every tenth doctor was educated
in Russia (USSR).271
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Today, there are a large number of Africans stu­
dying in Russia, a number that has already exceed­
ed the Soviet level, and the number of scholar­
ships awarded is increasing. In 2023/2024, more
than 34,000 Africans studied in Russia and the
number of state scholarships totalled 4,700 (2,300
in the 2022/2023 academic year).
African students traditionally choose the follow­
ing programmes of study: medical (up to 30% of
Africans students in Russia medical specialties),
engineering and technology (about 20%), as well
as management, finance and economics, which
are specialisations with practical relevance to the
development of countries on the continent.
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Russian companies operating in Africa are involved
in supporting practical education for African stu­
dents with subsequent employment as a strategy
for the future (Rosatom, RUSAL in Guinea).
Having significantly increased its quantitative pre­
sence in the African market (more African students
now study in Russia than studied in the USSR),
Russia began to offer executive education courses
focusing on public administration.
The first notable example here – outside of defense
and security sectors – was the Winter e-Gover­
nance
Knowledge Sharing Week held in December 2023
in the HSE University with the support of the Russian
­
Ministry of Finance. More than 40 African senior civil
servants from 23 countries came to Moscow for train­
ing. The programme will be continued in 2024 and
2025.
Other Russian organisations have also started to
participate in similar initiatives. For example, the
Agency for Strategic Initiatives together with the
Russian Academy of National Economy and Public
Administration is developing a training programme
for African managerial personnel.
Other Russian universities are also implementing in­
itiatives in Africa. For example, In August 2021, the
Russian-African Network University (RAFU) con­
sortium was established, bringing together 12 ­
Russian
universities and research centres. The RAFU educa­
tional model works as a single pool of courses and dis­
ciplines available to consortium members in Russian,
English and French. In 2024, the number of Russian
RAFU member universities increased to 63 and the
number of African universities reached 31.
The oldest Russian technical university, St. Petersburg
Mining University, which is one of
the leaders in the number of ed­
ucated Africans in St. Petersburg
in July 2023 signed an agreement
with universities from nine Afri­
can countries to create a profes­
sional community of universities
Subsoil of Africa, developed for
the mineral complex and aimed
at improving the effectiveness of technical education
in these countries. In December 2023, branches of Ka-
zan Federal University and St. Petersburg State Uni-
versity started operating in the Egyptian capital Cairo.
Russian universities open their representative offi­
ces in African countries on the basis of local uni­
versities, which carry out preparatory work and pro­
vide opportunities for learning Russian language.
As of 2023, such centres have been opened and
are ope­
rating in Cameroon, Madagascar, Algeria,
Tunisia, Egypt, Uganda, Seychelles. There are plans
to open similar centres in South Africa, Zimbabwe,
Botswana, Namibia and Mali.
To sum up, we can note that Russian educational
initiatives in Africa are becoming more quality-ori­
ented, advanced and flexible.
Languages and the education
of the African leadership
Investing in higher education has long been one of
the best ways to influence and indirectly control deci­
sion-making at various levels. Africa has never been an
exception. Moreover, Africa has welcomed foreign in­
fluence through education, which has become a key
competitive tool for former metropolises and their rivals.
Metropoles invested in the education of the local
elites with the aim of shaping the ruling class of
­
Africans who would serve as a link between colo­
nial power and the local population.
The first generation of postcolonial leaders in Africa
also grew up with European education (e.g. Leopold
Sedar Senghor was educated in France, Patrice
Lumumba was educated as an évolué).
Nowadays the quality of education in Africa
is gradually increasing, African ‘forges of talent’
are being formed, so the share of leaders educated
in their own countries is steadily growing.
The ‘educational sovereignty’ may become a trend
for the next generations of political leaders
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Where have the African leaders of ­
today
been educated?
The conducted research involved all 54 countries on
the continent. Given the heterogeneity of cabinet
compositions, the following key ministerial portfolios
and government positions were selected for analysis:
presidents (kings), prime ministers, speakers of par­
liament (in the case of the bicameral system, speak­
ers of the lower houses were selected for accuracy),
foreign ministers, finance ministers, defense ministers,
interior ministers, energy ministers, higher education
ministers, health ministers, agriculture ministers, mi­
neral resources ministers, ICT ministers and chief jus­
tices of the Supreme Courts. 719 African statesmen in
cabinet and key government positions as of Septem­
ber 2024 made up the group we researched.
Primary information was collected on the country
of tertiary education (or other forms of education
if spending more than one year in the country) and
the languages spoken. Information was primarily
collected from official sources, including govern­
ment websites, official biographies, social media
profiles and their own interviews. Often, it was pos­
sible to find and confirm information in local media.
Finding information on proficiency in African lan­
guages proved more difficult, so they were taken
into account to a lesser extent in the analysis. In our
further assessments and interpretation of the data,
we will say that a certain language is spoken by “at
least X” statesmen, as there is a possibility that
other public figures may also speak the language,
about which there is no available information in the
public domain.
Key findings
English and French remain the dominant
languages spoken by government officials
and statesmen in Africa
This is easily explained by the official status of these
languages in most African countries. French is the of­
ficial language in 26 African countries, and in seven
is administrative or de facto official language, English
is the official language in 21 African countries. English
is spoken by at least 456 decision-makers considered
in the study (approximately 63%), while French is spo­
ken by at least 365 (approximately 50%).
This is followed by Arabic, spoken by at least 164
(22%) and it is the official language in 12 ­
African
countries. Portuguese is spoken by at least 67 (9%)
and is an official language in five African coun­
tries. At least 45 speak Swahili (6%), the official
language in three African countries. At least 27
speak ­
Spanish (3.7%) – the official language in one
­
African country, at least 22 – Amharic (3%) – the
official language in one country.
At least 19 speak Russian (2.6%)
and at least 18 speak German
(2.5%).
In terms of languages which are not official in the
country of origin, it is noteworthy that both English
and French remain the most widely learnt languag-
es among African statesmen, English is learnt as
a second or third language by at least 140 African
statesmen and French by at least 51 statesmen.
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This is followed by Russian with at least 19 of the
group, Arabic also learnt by at least 19 and German
is familiar for 18. Spanish has been learnt by at least
14 and at least eight have learnt Dutch as a second
foreign language. At least three of the group speak
Japanese, at least three speak Chinese and at least
2 speak Swedish.
The situation regarding the country of tertiary edu­
cation presents a broadly similar picture.
Of the 719 government ministers, heads of state,
jud­
ges and speakers of parliament covered in this
study, not less than 114 were educated at French
universities. In second place is the rest of Africa,
with at least 109 African statesmen having studied
in other African countries. Next is predictably the
United Kingdom, with 94 leaders having studied
there. Meanwhile, in third place among the coun­
tries are the USA, with 78 leaders educated in the
US universities. No fewer than 41 of them were
educated in Portugal, and if in the first three coun­
tries these are representatives of various states,
not always reflecting the colonial past, then in Por­
tugal are mainly educated representatives of Portu­
guese-speaking Cabo Verde, Angola, Guinea-Bis­
sau, Sao Tome and Principe.
The next most popular destination for education
was the first African country on the list, South ­Africa,
where 39 statesmen were educated (12 national,
and 27 from other states). This reflects the high level
of local higher education and universities from South
Africa also top the list of the most endowed univer­
sities in Africa. South Africa as an educational desti­
nation has gained the greatest popularity with neigh­
bouring countries: Mozambique, Namibia, ­
Eswatini,
Botswana, but also with Kenya and Tanzania.
No less than 21 received their higher education in
Cameroon, (12 from Cameroon, nine from other
countries) it is a popular destination with Franco­
phone leaders from Chad, Central African ­Republic,
the Republic of Congo. Kenya is similarly ­
popular,
with no fewer than 21 leaders (13 Kenyans, eight
from other countries) educated in Kenya, ­
ranging
from regional neighbours Uganda, Sudan and
­
Somalia, to Liberia and Malawi.
Ethiopia and Egypt, recorded the same score
of 21 leaders each. In the case of Ethiopia, the
number includes mostly Ethiopians (14), but also
representatives of neighbouring Eritrea (6), who
were educated when the countries were part of
the same state. In Egypt, on the other hand, the
geography is more diverse, with representatives
from Arab countries: Sudan, Mauritania, Libya and
Djibouti.
17 leaders studied in Uganda (13 national and four
from Rwanda and South Sudan); Morocco hosted
education of 15 leaders, eight of them from abroad,
mainly neighbors (Mauritania, Senegal, Comoros).
Russia (USSR) was also among the top ten most pop­
ular destinations, with 20 statesmen having been ed­
ucated there. Russia as a destination was popular with
leaders from Angola, Namibia, Mali, ­
Mozambique and
the Republic of Congo, countries that maintained a
trusting dialogue with the Soviet Union.
It is followed by Canada, where at least 18 states­
men from Africa (mainly from Francophone Guinea,
­
Gabon, Burkina Faso, Burundi) studied, Germany
with 13 (statesmen from different African regions),
Belgium with 12 (from Rwanda, DRC, Burkina Faso,
Burundi), Netherlands with 11 (from Egypt, Namib­
ia, Ghana), Spain with nine (mainly from Equatorial
Guinea).
Five leaders each studied in Malaysia, Italy and
Cuba (mainly representatives of Portuguese-spea­
king Angola, Sao Tome and Principe, Guinea-Bissau).
It is noteworthy that a relatively low representation
of the group studied were educated in Australia (4),
India (4), China (3), Japan (3). It can be assumed
that in the coming years, given the large num­
ber of scholarships provided by these countries,
peop­
le who studied there may become more rep­
resented.
In the following, we propose to examine the main
ministerial posts and government positions to iden­
tify where the leaders responsible for the most
­
important areas of state development in Africa have
been educated.
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In most African states, presidents (kings) rep­
resent full-fledged heads of state. Thus, most
­
African heads of state to date have received part
or all of their education outside their home coun­
tries (46 statesmen). A significant number of Af­
rican leaders (43%) were educated in the former
colonial powers, and the absolute minority strict­
ly in their home country (13%), while as many as
17 heads of state were educated in other ­
African
countries, which is also a significant indicator
(32%).
Among African heads of government (prime min­
isters) who studied abroad we can note the domi­
nant position of France (13), where representatives
of francophone and Portuguese-speaking count­
ries (Mozambique, Sao Tome and Principe) were
educated, and the fact that among the heads of
government only six (15%) were trained in other
African countries (South Africa, Togo, Cameroon,
Benin, Morocco).
The majority of security-linked ministers studied
in their home countries. 40% of them were edu­
cated strictly in their home countries. This may
be due to the fact that most of them come from
military backgrounds, which traditionally are more
likely to be trained in their home countries and
further received supplementary training abroad.
37 ministers of defence in Africa were educated in
their home country (at least partly), while only 16
African ministers of defence were educated strict­
ly outside their home countries. 38 African minis­
ters of the interior were educated in their home
countries (at least partly), while only 14 of them
strictly abroad.
The judicial systems of countries are also ­
mostly
headed by people who have been ­
domestically
edu­cated: 39 African chief justices (76%) were
educated in their home countries (at least partly),
while 12 of them studied only abroad (24%). The
same situation with the speakers of parliament in
African countries, where 33 statesmen were edu­
cated in their home countries (65%), while 18
(35%) were educated strictly abroad.
Interestingly, it is the finance and economics
sector in Africa that appears to be most influ-
enced by studying abroad (89%). The majority
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of finance ministers were educated abroad – 48
mi­
nisters, with only six of them (11%) being ed­
ucated only in their home country. This empha­
sises that most professionals
in this field had to seek more
opportunities for education
outside their home country.
Similar situation with African
foreign ministers, mostly edu­
cated outside their home countries – 38 minis­
ters, with 16 of them studying only in their home
country (29%).
Based on the data collected, it can be noted that
the vast majority of ministries and countries are
headed by highly educated professionals who have
received higher education both at home and abroad
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Only ten of the statesmen considered in the study
do not have tertiary education or the fact that
they have it is disputed; yet, these statesmen have
gained significant experience that they employ as
part of their public service.
While 472 of 719 leaders considered in the study
had obtained one of their degrees in their home
country, at least 223 of them had also studied
abroad. 249 of them received their education only
in their home country without studying abroad,
while 237 received their education only abroad.
Several major conclusions can be drawn from the
findings.
Firstly, at the level of African leaders and leading
African government ministers, the key roles are
played by people educated in the former metropo­
lises who speak English and French. This is also due
to the fact that current political elites are on aver­
age over 55 years old, but these trends may begin
to change in the coming years, given the rise of
non-Western states in Africa as well as intra-African
student mobility.
Secondly, a notable number of individuals in Afri­
can leadership received their education in other
African countries, which is also a notable factor in
education that will also increase in importance with
the further development of higher education in the
continent.
Thirdly, it can be noted that in many areas, there is a
notable importance of local education, which in one
way or the other was received by about 2/3 of the
group considered in the study.
Fourth, the higher the level of local education in a
country, the more often national leadership is edu­
cated in their own country without travelling abroad
(e.g. South Africa, Cameroon).
This emphasises the need for further investment and
development of higher education in African countries
in order to strengthen their own sovereignty and
create effective governance solutions
Who is going to teach next
generation of African leaders?
Education continues to be a significant challenge
and a space of opportunities for African states. The
future of the continent’s economic, political and
social development lies in successfully overcoming
the challenges facing Africa in education.
Transformations in the ICT sector offer new oppor­
tunities to address the challenges of education in
Africa. It is directly linked to solving the continent’s
infrastructure problems, developing digital tech­
nologies, increasing access to such services for the
local population and the growing number of African
youth.
Whatisrequirediscontinuedandsustainedinvestment
in infrastructure, support for initiatives aimed at building
the necessary competences, sus­
tainable formats of interaction and
ensuring the effective functioning
of local institutions, and the deve­
lopment of educational policies that
support these changes.
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At the same time, Africa’s growing and highly
promising higher education sector remains un­
derinvested, both by governments and local big
business. While most of South Africa’s leading
universities still exist in isolation from the rest
of Africa and are closely tied to the former met­
ropolises, the research shows that universities
in the rest of Africa remain vastly underfunded
even in terms of the purchasing power of the
population – most universities in other countries
(Nigeria, as an example) have a huge potential
for growth.
In the field of education at all levels, deeper
strategic planning is needed, including identify­
ing priority areas consistent with national strate­
gic goals. Such areas could include agriculture,
medicine, engineering and programming, STEM.
It is the mismatch between the level and quality
of education and the needs of the labour market
that leads to the outflow of the most promising
personnel outside Africa.
External involvement in supporting educational pro­
grammes within Africa also needs to be more care­
fully monitored to ensure that this deep integration
into the educational process does not become a
stimulus for brain drain, but only complements the
needs of African countries themselves.
African countries need to invest more in educational
sovereignty. Despite widespread international support,
most external actors are ultimately interested in obtai­
ning skilled workers for their own countries, which con­
tributes to ‘brain drain’ and increased migration from
Africa. The opportunities for African countries and en­
trepreneurs are growing and external assistance needs
to be managed, which can be an important part of edu­
cational sovereignty and have a positive impact on the
development of the entire continent.
Given the continued high level of external influ­
ence on key education processes in Africa, initia­
tives aimed at strengthening domestic African solu­
tions to emerging challenges should be supported.
131
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How do think tanks around
the globe perceive Africa?
We define a think tank as “an institute, corporation
or group organised for interdisciplinary research
with the objective of providing advice on a diverse
range of policy issues and products through the use
of specialised knowledge and the activation of net­
works”272
.
Think tanks serve as both objects of analysis and
important political actors in the system of inter­
national relations. On the one hand, think tanks
create narratives about Africa based on ideas that
dominate among political and economic elites. On
the other hand, an analysis of think tanks publica­
tions allows us to identify the main attitudes that
ruling elites, the private sector and NGOs, rely­
ing on the expertise of intellectuals, follow when
taking decisions interacting with African countries.
Thus, they simultaneously influence the political
processes.
This chapter relies on a qualitative analysis of ar-
ticles that were published by think tanks in 2024
and the second half of 2023 (although in some
cases the analysis period was somewhat extended
due to lack of information) and also mentioned the
word ‘Africa’ in the title or text. Our survey covered
more than 300 publications.
The sample was stratified by ‘global poles’. Thus,
we surveyed publications of think tanks registered
in the United States, Europe, China, India and
Russia. For each global pole, five think tanks were
selected. When forming the sample, we relied on
data from the Global Go To Think Tank Index Re-
port of the University of Pennsylvania, the latest
version of which was published in 2020273
. The in­
dex authors catalogued 11,175 think tanks around
272 Britannica. Think Tank. URL: https://www.britannica.com/topic/think-tank
273 James G. McGann. 2020 Global Go To Think Tank Index Report. URL: https://www.bruegel.org/sites/default/files/wp-content/uploads/2021/03/2020-Global-Go-To-Think-
Tank-Index-Report-Bruegel.pdf
the world. For each global pole, we selec­
ted the
top five think tanks based on their position in the
ranking.
Unfortunately, a couple of times we had to abandon
this strict scheme of sampling for methodological
reasons. Firstly, in some cases the top five included
think tanks that either focused on too specific mat­
ters (Urban Institute, USA) or did not cover Africa
in their publications during the period under review
(several think tanks from the top five for India). Se­
condly, due to technical limitations, we considered
publications only in English, Russian and French.
Vision of Africa in the mirror
of think tanks around the globe
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For this reason, we had to ex­
clude some of the top five
Chinese think tanks, since they
publish their materials only in
Chinese. Thirdly, the Russian
think tank market has undergone significant chan­
ges in recent years, so only in this case centres for
analysis were selected based on the authors’ ex­
pertise.
We have reflected the metanarratives inherent in
the think tanks of each of the poles on two-dimen­
sional spaces.
The discourse of risks is almost completely absent
in the publications of Chinese think tanks. They
perceive Africa as a space of opportunities which is
almost the same case with Russia, while India sticks
to a more balanced approach. At the same time, Eu­
rope and the US to a much greater extent tend to
view Africa as it is, without references to the rela­
tions between ‘global players’.
Europe, to a much greater extent than other
regions of the world, views Africa as a source
of risks. The US shares almost the same attitude
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China views Africa almost exclusively in a global
context
While Russia occupies a middle position and India
is located between them.
India, Europe and especially China are interested
in Africa as a promising partner for trade
and investment
The US sees Africa as a storehouse of natural re­
sources, and Russia is quite balanced in this issue,
striving for all forms of cooperation.
Moreover, Russia and China occupy the extreme
position in terms of ‘Africa receives – Africa gives’.
On this scale, the extent to which national think
tanks write about what the continent can give to the
outside world is reflected as well as to what extent
they are focused on what it can get from it. Experts
from Russia and China focus mainly only on ques­
tions about what they can give to Africa, keeping
silent about what they can receive in return. India
and, somewhat more clearly, the US, on the contrary,
mostly write about what Africa can offer to them and
other countries. Europe is located in the middle, but
somewhat gravitates towards ‘Africa receives’.
In terms of ‘cooperation-confrontation’ logic India
clearly assesses the continent as a room for coopera­
tion among all interested parties, Russians experts al­
mostalwayspursuethenarrativeofAfricaasaspacefor
the confrontation between foreign
powers, which may be explained by
the fact that right now this country
faces strong pressure from the US and Europe in terms
of economic and financial sanctions all around the
globe as well as attempts to prevent
governments of the developing
world from cooperation with it. The
US and, especially, China are also
closer to the confrontational pole.
Europe generally shares the views of Indian experts,
trying to push the decision-makers towards the reas­
sessment of its current policy on the continent.
It is also noteworthy that Russia writes about the
interests of Western countries in Africa more of­
ten than about BRICS countries interests in Africa.
China, on the contrary, pays somewhat more atten­
tion to BRICS, focusing mostly on the role of South
Africa in the club as well as prospects for the in­
clusion of some new African countries, while India
maintains a balanced position, and Europe and the
US are more interested in their own prospects.
Finally, there is a slight bias in all poles towards dis­
cussing Africa in economic rather than security
terms. For example, China almost does not touch
on security (at least in English-language materials).
In addition, Europe is much more likely than others to
talkabouthumanitarianissuesonthecontinent,andthe
US is also focused on this rather than the business pole.
Methodological note on think tanks interest in Africa
If the website’s built-in search engine allowed a time limit for searching, we entered the search
query and either counted the articles manually or copied the number representing the quantity of
target articles. Otherwise, the results were arranged chronologically and then counted manually.
However, the sheer number of articles mentioning Africa does not tell us anything about the ex­
tent of a think tank’s interest in the continent. To avoid this problem, three comparative categories
were added to the analysis: the number of articles mentioning the words ‘Europe’, ‘America’ and
‘Asia’. So, for each think tank, we came up with the four values, which were then converted into
percentages of the total number of articles mentioning any of the keywords. In addition to calculat­
ing the shares for each think tank, the average level of interest in Africa, Asia, America and Europe
across the five global poles was also calculated.
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Russia and India are much more balanced, although
they tend towards the ‘Africa and business’ extreme.
China overwhelmingly discusses only business.
Russia and Europe are slightly more biased
towards security than the others
In addition to meta-narratives, one may also assess
each think tank’s interest in Africa by counting the
number of articles mentioning the keyword ‘Africa’.
We did this for the period from August 2023 to Sep­
tember 2024: the raw numbers were later transformed
into the shares indicating the think tanks’ interest in
different world regions. Finally, the average interest
towards Africa for each global pole was calculated.
China’s interest in different geographic regions out­
side of Asia is almost perfectly balanced. The level
of interest of local think tanks in Africa is 19, roughly
the same for Europe (17.3) and the Americas (17.4).
For European think tanks, Africa is the second prio­
rity destination after the Europe itself: on average,
18.6 out of all articles mention Africa, followed
closely by Asia (16.1), while the interest in the
Americas is significantly lower (12.9).
The United States think tanks are writing relatively
rarely about their home region, the Americas (37). In­
terest in Europe is only 9 percentage points lower, at
27.8. Moreover, for US think tanks,
Asia is a higher priority than Africa:
21.1 interest points versus 14.1.
As our meta-narrative analysis suggested, Indian think
tanks show the strongest interest in Africa, at 20.2.
This is still lower than the think tanks’ interest in Europe
(23.2), but significantly higher than in America (15.9).
Russia shows the most interest in America (36), fol­
lowed by Europe (25.3), Asia (20.8) and Africa (17.9).
If we compare the interest in Africa across the global
poles, India will occupy the first place with an index
of 20.2, followed by China with 19. Europe shows
slightly less interest with a figure of 18.6, Russia is
quite close with 17.9. The US comes in last with
14.1. However, all the values for each of the global
poles are relatively close to each other. Therefore,
the main takeaway from this study may be that by
2024, all global players – without exception – have
realised the importance of studying Africa.
At the think tank level most involved in studying Africa in
the sample is the Dutch Clingednael Institute, closely
followed by the Center for China and Globalization,
and the Indian Gateway House. The top also includes
oneRussianthinktank,the Valdai Discussion Club,with
a score of 26.7. Notably, there is not a single American
think tank among the centres most interested in Africa.
However, almost all of them are located in the middle
of the ranking. Among the institutes least interested in
Africa, one can find the China Institute of Internation-
al Studies (CIIS), Indian Delhi Policy Group, Russia in
Global Affairs, Institute of International and Strategic
Studies of Peking University (IISS)andSpanishElcano
Royal Institute.
Calculating the average interest of think tanks in dif­
ferent regions around the world shows that Africa is of
interest to them overall at 17.96 points out of a possible
100, Europe at 28.3, America at 23.84 and, finally, Asia
at 29.9. Given that Africa’s current economic and politi­
cal role in the world is much lower, this interest can be
considered extremely high and linked to projections of
the continent’s growing role in world politics.
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China: business is business,
global game is global game
When analysing the image of Africa in the pub­
lications of Chinese think tanks, several features
inherent to the intellectual centres of this country
should be taken into account. Firstly, Chinese think
tanks are the most closely intertwined with the
state, so their opinion should be considered as a
reflection of the attitudes of the state apparatus or
one of the many influence groups within the CPC
(Communist Party of China). Secondly, analytical
groups rarely post English-language publications on
their websites, and those that are published should
be perceived primarily as a broadcast of China’s po­
sition for an international, rather
than domestic audience. This
may create some bias but does
not completely exclude the op­
portunity for analysis.
One of the most prominent narratives present
in the discourse of Chinese think tanks
is the constant comparison of the Chinese
and Western policies in Africa
Thus, it is argued that Chinese loans are more
beneficial for the countries of the continent, as
Chinese banks primarily focus on promoting the
comprehensive development of borrowing count­
ries (i.e. infrastructure development and industrial
growth). It is implied that Chinese investments lead
to increased productivity and, ultimately, finan­
cial returns. At the same time, Western banks and
governments are much more focused on financial
market conditions (i.e. credit ratings), making them
more susceptible to cycles in the global economy
and, thus, a less reliable source of financing274
. In
addition, the political conditionality of US energy
and economic programmes is emphasised275
, and
274 Xiaoyang Tang, Shuai Pan. Impact of market-based financing on Africa’s debt and development. URL: https://link.springer.com/article/10.1007/s42533-024-00164-7
275 Yu Hongyuan. The US is seeking to form an exclusive energy club based on its alliances and partnerships which will impact on the global transition. URL: https://www.siis.org.
cn/sp/15391.jhtml
276 Jin Liangxiang. U.S. Motives in the Red Sea Go Beyond Bringing Stability. URL: https://www.siis.org.cn/Commentary/15458.jhtml
277 Wang Yi. Self-Confidence and Self-Reliance, Openness and Inclusiveness, Fairness and Justice, and Win-Win Cooperation. URL: https://www.ciis.org.cn/gjwtyj/
ywqk/202404/t20240407_9217.html
278 Zhou Yuyuan. Does China’s oil-for-infrastructure lending model in Africa need a rethink? URL: https://www.siis.org.cn/Commentary/15613.jhtml
279 Zhao Minghao. The belt  road initiative and U.S.-China competition over the global South. URL: http://en.iiss.pku.edu.cn/info/1015/3591.htm
skepticism is expressed regarding the US ability to
resolve security problems in Africa – e.g. in the Red
Sea276
. It is acknowledged that the EU is actively re­
thinking its policy in Africa, but so far these efforts
are held back by the “Cold War mentality”277
.
It is important to note that criticism of Western ap­
proaches does not mean idealising Chinese policy
in Africa. For example, there is an open discussion
about the shortcomings of loans secured by Afri­
can natural resources, as fluctuations in commodity
prices can complicate loan repayments278
. Moreo­
ver, criticism of external efforts to ensure security
on the continent does not mean that China is trying
to offer its own approaches.
There is no doubt that for Chi­
nese think tanks, Africa is an arena
of geopolitical competition (but
not open confrontation). Ana­
lysts mainly talk about this in terms
of the Global South and the Glob-
al North. It is acknowledged that
the Global South, of which Africa is a key component,
is dissatisfied with the current world order and is
ready to make efforts to change it, while China is po­
sitioned as the clear leader for developing countries.
As for the role of the Global North in this process,
think tanks promote two competing narratives in this
regard. On the one hand, it is mentioned that the EU
and the US are trying to drive a wedge between the
countries of the Global South and compete with the
Belt and Road Initiative with their own investment
and economic programmes. On the other hand, it is
mentioned that “Africa is non-Western, but not an­
ti-Western”279
, which implies the coexisten­
ce and
even cooperation of various geopolitical poles on
The topic of China exporting security to Africa
is almost completely absent from the analysed
publications
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the continent. At the same time, Chinese think tanks
do not put much focus on the substantive prospects
of cooperation with Russia, the US or Europe. Russia
is mentioned only in the context of BRICS as one of
its core members.
To a much greater extent than all other
global poles, China is focused on cooperation
with African countries within the framework
of international institutions and agreements
Many analytical materials are devoted to the potential
expansion of BRICS and the role of the organisation
in the continent’s development. It is emphasised that
African countries and BRICS share a common histor­
ical experience, as well as the fact that this organisa­
tion can play an important role in strengthening the
continent’s voice in the interna­
tional arena280
.
The G7 is perceived as an asso­
ciation competing with BRICS
for influence in the Global South. In addition, at­
tention is paid to the G77 (China sees itself as
the leader of this group281
), as well as the African
Union. Chinese think tanks express hope that Chi­
na can benefit from the African Continental Free
Trade Area (AfCFTA) and also call for considering
the possibility of a China-Africa Continental Free
Trade Area, CAFTA282
.
Chinese intellectuals are quite transparent in de­
fining the country’s national interests on the con­
tinent: trade and sales of Chinese goods. Howev­
er, the situation with the Belt and Road Initiative
seems a little more ambiguous. Think tanks pay
great attention to describing the benefits that Af­
rica can gain from cooperation within the frame­
work of this initiative, but do not describe at all
how this programme will enrich China itself. In
addition, economic plans noticeably prevail over
descriptions of humanitarian projects, although
think tanks also write about sharing experiences
280 Haibin Niu. A Greater Voice for Developing Countries. URL: https://www.siis.org.cn/Commentary/15108.jhtml
281 Yuan Sha. G77+China to Play a Bigger Role in the Global South Agenda. URL: https://www.ciis.org.cn/english/COMMENTARIES/202309/t20230918_9072.html
282 Zhuo Li. Prospects for China–Africa continental free trade area (CAFTA). URL: https://link.springer.com/article/10.1007/s42533-023-00148-z
283 IFRI. After the Failure in the Sahel, Rethinking French Policy in Africa. URL: https://www.ifri.org/en/publications/briefings-de-lifri/after-failure-sahel-rethinking-french-policy-africa
in public administration, fighting poverty, and tal­
ent management.
Last but not least, Chinese think tanks are charac­
terised by their attention to the continent in the
context of world politics and the
interests of the great powers, but
events within the continent itself
seem to remain terra incognita
for analysts: it is difficult to find
publications that would describe
the internal politics, conflicts or
economic changes within a single African country.
It is highly likely that in the Chinese intellectual
context, materials of this kind are treated as im­
polite and colonial-looking. Therefore, Chinese
experts try to avoid the discussion of African do­
mestic affairs in public.
EU and UK: we failed,
but we will become better
In 2024, European think tanks were most focused
on rethinking Western policies in Africa, this process
has been going on in Europe since decolonisation
and seems to be never-ending. First of all, the trig­
ger for this new wave of interest towards rethinking
European approaches were recent developments in
the Sahel region.
The unexpectedness of this turnaround is empha­
sised, as is the inability of the EU and the United
States to quickly find common grounds with new
rulers of Sahel countries283
. France is recognised
as the main ‘loser’ in this context. Despite the
fact that the think tanks represent various count­
ries (Spain, Belgium, Great Britain, France, the
Nether­lands), most authors share the idea that
the era of unconditional dominance of the West
China prefers to present Africa in a ­
long-term
macro perspective, without going into
the details of current events
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on the continent is firmly in the past: “external ac-
tors – and in particular Western governments –
have consistently overestimated their ability to
influence and effect real change in the region and
have to become more modest in their objectives”284
.
This is complemented by a discussion about how the
number of international actors active in Africa, as
well as their interest in expanding their presence in
the region, has increased.
Some authors note that the developing countries
often view the EU as “self-serv­
ing, hypocritical and postcolo­
nial”285
. It is also acknowledged
that, in seeking to resolve con­
flicts on the continent, Western
governments have often made deals with elites
that have not benefited citizens. Typically, such ar­
guments end with calls for the recognition of grea­
ter African agency as well as for more flexible and
people-centered strategies for engagement on the
continent.
External actors operating in Africa are most
often described in terms of competition rather
than conflict
However, there are notable exceptions. Spanish
think tank Elcano notes that the Global South is a
battleground between the West on the one side
and China and Russia on the other, positioning
Spain as a possible vanguard of this clash286
. Anoth­
er intriguing implication of the Global South and
Global North division for European analysts is that
the two groups of countries have competing inter­
ests in the global economic system: the South’s
growth model is built on the sale of resources, while
the North is increasingly focused on the export
of technology. Finally, if the reference country for
China is the United States, then European think
284 Clingendael. Stabilisation and the Central Sahel. URL: https://www.clingendael.org/publication/stabilisation-and-central-sahel
285 ELCANO. Europe and the Global South. How to gain influence and credibility in a complex world. URL: https://www.realinstitutoelcano.org/en/analyses/europe-and-the-
global-south-how-to-gain-influence-and-credibility-in-a-complex-world/
286 ELCANO. Spearhead?: Spain, Europe and the battle for the global South. URL: https://www.realinstitutoelcano.org/en/policy-paper/spearhead-spain-europe-and-the-battle-
for-the-global-south/
287 Bruegel. While Africa’s economic relations with China are hyped, its relationship with the EU is more favourable. URL: https://www.bruegel.org/newsletter/while-africas-
economic-relations-china-are-hyped-its-relationship-eu-more-favourable
288 Bruegel. Global trends in countries’ perceptions of the Belt and Road Initiative. URL: https://www.bruegel.org/working-paper/global-trends-countries-perceptions-belt-and-
road-initiative
289 ELCANO. The geopolitics of the global energy demand shift. URL: https://www.realinstitutoelcano.org/en/analyses/the-geopolitics-of-the-global-energy-demand-shift/
tanks, in turn, are concerned about comparing Eu­
ropean policies with Chinese ones. A competitive
advantage for Europe is that trade with it is more
balanced and surplus for Africa, in addition, Europe
is still able to provide more direct investments on
the continent287
. Much attention is paid to the Belt
and Road Initiative. Experts urge a more sober look
at its prospects and learn to separate the promises
of Chinese from real actions. According to their as­
sessment, the image of the initiative in Africa is still
positive, but a trend of some decline is recorded288
.
It is considered both within Africa and beyond.
Thus, experts discuss Africa’s contribution to the
fight against climate change and note the exis­
tence of an almost insoluble conflict between
the goal of transition to renewable energy and
achieving universal electricity access. According
to them, since African countries
are primarily concerned with
ensuring energy security at any
cost, it would be too bold to
place hopes on them to limit the
use of fossil fuels in the short run289
. In addition,
much attention is paid to conflicts and tensions
in countries such as Ethiopia, Sudan, Libya, Mali
and Nigeria, which threaten both regional stabi­
lity and can lead to an increase in the influx of
refugees into the countries of the Global North.
The transfer of power under military control in
the Sahel countries is also perceived as an unam­
biguous threat.
Among all the global poles examined, Europe most
often discusses Africa in the context of humanitarian
issues. Think tanks analyse human trafficking on the
A significant place in the discourse of European
think tanks is occupied by the risks of collective
security
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continent, smuggling290
, drug addiction291
, food and
water security and gender equality292
. Consideration
is being given to which resources the EU already of­
fers to the continent and can provide in the future to
resolve these difficulties. Local government institu­
tions also attract the attention of think tanks.
As expected, formal democratic institutions such as
transparent and fair elections as well as indepen­
dent judiciary have a high importance for European
intellectuals. Perhaps, compared to the other poles,
Europe pays the most attention to monitoring the
continent’s election campaigns.
To sum up, European think tanks are concerned
about reshaping the African policies of European
countries and insist on the need to acknowledge
the mistakes of the past. Much attention is paid
to humanitarian issues, and the continent is often
being considered as a source of risks for itself and
the surrounding world. It is assumed that the work
on eliminating these risks is the responsibility of
mankind in general. China appears to be the main
competitor in the issue of economic policy, but
the standard assumption among think tanks is the
threat it poses to European interests may be ex­
aggerated.
India: cooperation matters
India is perhaps the only case in which intellectuals
are ready to admit that Africa not only needs foreign
assistance and experience, but is also capable
of bringing useful insights to external players
290 Clingendael. Niger’s Repeal of the 2015/36 Anti-Smuggling Law. URL: https://www.clingendael.org/publication/nigers-repeal-201536-anti-smuggling-law
291 Clingendael. Deadly drug Kush haunts West Africa. URL: https://www.clingendael.org/news/deadly-drug-kush-haunts-west-africa
292 Clingendael. Young South Sudanese Women as Community Change Agents. URL: https://www.clingendael.org/news/young-south-sudanese-women-community-change-agents
293 ORF. G7’s African pivot: Energy, migration, and beyond. URL: https://www.orfonline.org/expert-speak/g7-s-african-pivot-energy-migration-and-beyond
294 ORF. India-Africa education partnership holds the key to a prosperous future. URL: https://www.orfonline.org/expert-speak/india-africa-education-partnership-holds-the-
key-to-a-prosperous-future
295 CPR India. The Politics of Slums in the Global South: Urban Informality in Brazil, India, South Africa and Peru. URL: https://cprindia.org/books/the-politics-of-slums-in-the-
global-south-urban-informality-in-brazil-india-south-africa-and-peru/
296 Hindy Centre. Citizens and the State: Policing, Impunity, and the Rule of Law in India. URL: https://www.thehinducentre.com/incoming/citizens-and-the-state-policing-
impunity-and-the-rule-of-law-in-india/article67887312.ece
297 ORF. How does an expanded BRICS benefit India? URL: https://www.orfonline.org/expert-speak/how-does-an-expanded-brics-benefit-india
298 Gateway House. West must listen to emerging middle powers. URL: https://www.gatewayhouse.in/west-must-listen-to-emerging-middle-powers/
299 ORF. China’s conflict resolution mechanism in Africa: Mediation with Chinese characteristics. URL: https://www.orfonline.org/expert-speak/china-s-conflict-resolution-
mechanism-in-africa-mediation-with-chinese-characteristics
300 ORF. Shrinking Chinese demand, loan volumes weaken Africa’s growth prospects. URL: https://www.orfonline.org/expert-speak/shrinking-chinese-demand-loan-volumes-
weaken-africa-s-growth-prospects
Indian think tanks are the most ardent supporters
of non-aligned values and call for a balanced inter­
national policy for Africa. Analysts consider this a
true sign of sovereignty of the continent: “it is time
for African leaders to show their agency and avoid
taking sides”293
. Moreover, India is perhaps the
only case in which intellectuals are ready to admit
that Africa not only needs foreign assistance and
experience, but is also capable of bringing useful
insights to external players: “partnership between
India and Africa should be a two-way street”294
. For
think tanks, African experience in addressing the
issue of slum growth295
and ensuring the rule of
law (in the case of South Africa) is important296
.
India places a strong emphasis on cooperation
rather than confrontation. Experts say their coun­
try aims to move towards a multipolar but peaceful
world order, calling for BRICS, for example, to be
a platform for balanced dialogue rather than an
anti-Western bloc297
. There are also many analysts
who advocate fruitful cooperation between the
West and the Global South298
.
Despite the generally peaceful discourse, China’s
policy in Africa has left some authors openly irrita­
ted.
One analyst recalls Xi Jinping bragging about Bei­
jing’s “non-interference” in African affairs, and then
shows that this statement is far from the truth299
.
However, other publications that mention China
generally provide a balanced and neutral analysis
of economic developments on
the continent, primarily the Belt
and Road Initiative300
. The largely
neut­raltonedoesnotpreventIndi­
an experts from analysing current
conflicts that affect the continent.
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Thus, the ORF research center predicts an inevitable
clash of interests between the UAE and Saudi Ara-
bia in Africa301
, and the Delhi Policy Group analyses
the consequences of the Ukrainian crisis and prob­
lems with grain supplies for Russia’s image among
African countries302
. Moreover,
Indian think tanks are joining the
chorus of voices noting the fail­
ures of French and US policies
in Sahel, and the withdrawal of
some states from ECOWAS is
being called the “West African Brexit”303
.
Unlike China, which clearly claims to be the leader
of the Global South, India rather positions itself as
a lobbyist for the countries of the Global South. For
example, Indian analysts credit their country with
establishing the position of the African Union as
permanent member of the G20304
. The country is
said to be committed to the ideas of pluralism and
advocacy of the interests of the South at interna­
tional level, ready to defend peace, prosperity and
sustainability.
One of India’s key competitive advantages on the
continent appears to be its ability to supply cheap
medicines and share health expertise with African
countries. According to experts at the Delhi Policy
Group, the supply of millions of vaccine doses du­
ring the pandemic has allowed India to confirm its
status as a global power305
. Another point of pride
is the systems for measuring the competency of
healthcare providers that are now being used in 20
countries in Sub-Saharan Africa306
. However, huma­
nitarian projects remain much less important for In­
dia than the prospects for trade with African count­
ries, which are discussed much more often.
Indian think tanks rarely talk about the domes­
tic politics of African countries, but a notable ex­
301 ORF. UAE and Saudi Arabia’s agricultural diplomacy in Africa: Competition, cooperation and its strategic implications. URL: https://www.orfonline.org/expert-speak/uae-and-
saudi-arabia-s-agricultural-diplomacy-in-africa-competition-cooperation-and-its-strategic-implications
302 Delhi Policy Group. Global Horizons. URL: https://www.delhipolicygroup.org/publication/global-horizons/global-horizons-4945.html
303 ORF. The Alliance of Sahel States: A regional crisis in troubled West Africa. URL: https://www.orfonline.org/expert-speak/the-alliance-of-sahel-states-a-regional-crisis-in-
troubled-west-africa
304 Gateway House. India’s G20 Presidency: Furthering India-Africa Ties. URL: https://www.gatewayhouse.in/events/indias-g20-presidency-furthering-india-africa-ties/
305 Delhi Policy Group. East Asia Explorer. URL: https://www.delhipolicygroup.org/publication/east-asia-explorer/east-asia-explorer-4932.html
306 CPR India. Policy in Action- Health. URL: https://cprindia.org/policy-in-action-health/
307 Gateway House. South Africa goes to the polls. URL: https://www.gatewayhouse.in/south-africa-goes-polls/
308 Heritage. Africa in Focus: Shifting the Paradigm Together. URL: https://www.heritage.org/global-politics/report/africa-focus-shifting-the-paradigm-together
ception to this rule is South Africa, whose recent
elections have attracted much attention307
. Among
external players that do not claim the status of a
‘global power centre’, the actions of Italy and Japan
in Africa are mentioned.
From their point of view, the continent, whose
importance for international politics has grown
dramatically in recent years, should become a
platform for cooperation of all interested forces.
African countries themselves are being pushed
towards non-alignment and balancing between
various centres of power. These efforts can be
supported by India as a lobbyist for the interests
of the Global South and a link between them and
the West.
US: minerals, national security
and humanitarian aid
In the context of the upcoming presidential
elections, it is noteworthy how Africa is viewed by
Republican-leaning and Democratic-leaning US
think tanks. Experts from the conservative Herit-
age Foundation are convinced that the US should
reconsider its policy towards the continent: it
is argued that despite large-scale financial aid
to African countries, most of them remain poor
and demonstrate low rates of economic growth.
The authors of the Republican think tank sug­
gest focusing on trade and investment rather
than direct aid308
. In addition, in their view, the
United States should refuse to cooperate with
countries that do not support its foreign policy.
Indian think tanks are broadcasting
one of the more balanced views of Africa
of the present and future
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First of all, this concerns South Africa: “Pretoria sup­
ported Gaddafi, Castro and Mugabe; sold weapons
to al-Assad and Putin; is now forming alliances with
China, Iran, and Russia; and supports Hamas”309
.
Res­
ponsibility for the failure of US policy in Sahel
is placed on the administration
of Joseph Biden310
. Thus, if Don­
ald Trump wins the election, the
likelihood of the United States
reducing direct financial and
humanitarian aid to Africa, as
well as reconsidering long-term
alliances on the continent, in­
creases.
Democratic think tanks, citing
increased activity in Africa by China and Russia, are
discussing the possibilities of strengthening the po­
sition of NATO there. Although the importance of
the continent for the future of the alliance is not in
question, some experts urge caution in this regard:
it is acknowledged that for young Africans NATO is
associated with outdated colonial and post-colonial
systems. In general, US think tanks share the senti­
ments of their European colleagues regarding the
fact that residents of many African countries are
disappointed in ‘democracy’ and cooperation with
the West. It is noted that the real winners of formal
democratisation have often been the ruling elites,
and many citizens have not seen any of the widely
advertised benefits of democracy311
.
It is predicted that in the near future, the US go­
vernment will be faced with difficult trade-offs:
to adhere to its obligations to protect democracy,
which means refusing to cooperate with regimes
that have gained power non-electorally, or to ac­
commodate these regimes to a certain extent, main­
taining strategic and economic access to the conti­
nent, but violating the declared principles of foreign
policy312
. However, the same authors predict that
309 Heritage. Time to Cut U.S. Foreign Aid to South Africa. URL: https://www.heritage.org/global-politics/report/time-cut-us-foreign-aid-south-africa
310 Heritage. Niger Coup Raises Questions About U.S. Sahel Strategy. URL: https://www.heritage.org/defense/report/niger-coup-raises-questions-about-us-sahel-strategy
311 Brookings. How African governments can regain the trust of their citizens. URL: https://www.brookings.edu/articles/how-african-governments-can-regain-the-trust-of-their-citizens/
312 Brookings. Addressing and preventing coups in Africa: What the United States can do. URL: https://www.brookings.edu/articles/addressing-and-preventing-coups-in-africa-
what-the-united-states-can-do/
313 Brookings. Africa’s prosperity tied to investing in democracy. URL: https://www.brookings.edu/articles/africas-prosperity-tied-to-investing-in-democracy/
314 China Global South. Africa is at the Center of U.S.-China Competition for Critical Resources. URL: https://chinaglobalsouth.com/podcasts/africa-is-at-the-center-of-u-s-
china-competition-for-critical-resources Peterson Institute for International Economics (PIIE).
Who Are China’s Fellow Travelers in the International System? URL: https://www.piie.com/blogs/realtime-economics/2024/who-are-chinas-fellow-travelers-international-system
military governments or political leaders who violate
constitutional restrictions on holding office will most
likely also be unable to solve the structural problems
of their countries, which will open a new window of
opportunity for democratisation.313
The US discourse clearly expresses a narrative
about Africa as an arena of competition between
the United States and China314
and, to a much les­
ser extent, Russia. China is positioned as a potential
economic hegemon of the continent. The United
States do not differ from the think tanks of other
poles of power in recognising the subjectivity of
the Global South, as well as the fact that the new
multipolar geopolitical reality requires the forma­
tion of a new approach to this group of countries.
There is a call for a more restrained attitude towards
the fact that many developing countries refuse to
openly condemn Russia’s foreign policy. For exam­
ple, discussing nuclear weapons, experts agree that
the leaders of the Global South may be frightened
by nuclear weapons as such, and not by the count­
ries that possess them and could potentially use
them. In addition to Russia and China, considerable
attention is also being paid to other players, such
as Türkiye and Japan. Several publications focus on
the presence of the Gulf states, the UAE, Qatar
and Saudi Arabia on the continent. Experts claim
that Washington sees these countries as a natural
counterweight to Russia and China, but increased
Electoral democracy is still unambiguously
linked by the US think tanks to economic
growth. African countries are supposed
to prosper only by holding regular, transparent
elections, although the experts very rarely
try to substantively explain this connection
or simply neglect the necessity of doing so313
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tolerance for their activity could also weaken the
continent’s drive for democracy315
.
Beyond geopolitics and trade, analysts view US
national interests in Africa as mitigating securi­
ty risks, maintaining supply chains for minerals
and supporting the continent in resolving huma­
nitarian issues. It is telling that the issue of US
exports to Africa is virtually absent from public
analyses.
In the context of security threats, analysts may
mention the activity of non-state actors316
, inclu­
ding terrorists, piracy317
and the transfer of power
to non-legitimate politicians.318
Compared to other global poles the US are most
concerned about the extraction of critical
minerals in Africa318
This is justified by the shortage of critical mine­
rals for the production of semiconductors and re­
newable energy. For example, one text analyses
the prospects for cooperation with Madagascar,
Mozambique and Tanzania in the area of gra­
phite extraction. At the moment, China appears
to be far ahead in the global race to build supply
chains for cobalt, rare earth metals, lithium and
a number of other important metals and miner­
als, although mining companies from Europe and
US have a large presence in precious metals and
gemstones in many African countries. As for the
humanitarian dimension of US national interests
in Africa, it should be noted that issues of food
security319
and the development of local educa­
315 Time. Gulf Investment Boom in Africa. URL: https://time.com/6975593/gulf-investment-boom-afric
316 Brookings Institution. Nonstate Armed Actors in 2024: The Middle East and Africa. URL: https://www.brookings.edu/articles/nonstate-armed-actors-in-2024-the-middle-
east-and-africa
317 Peterson Institute for International Economics (PIIE). Beware Pirates: Challenges to Shipping Today. URL: https://www.piie.com/events/2024/beware-pirates-challenges-
shipping-today
318 Peterson Institute for International Economics (PIIE). Political Unrest in Africa Threatens Global Critical Mineral Supplies. URL: https://www.piie.com/research/piie-
charts/2023/political-unrest-africa-threatens-global-critical-mineral-supplies-and
319 Peterson Institute for International Economics (PIIE). Food Insecurity: What Can the World Trading System Do About It? URL: https://www.piie.com/publications/policy-
briefs/food-insecurity-what-can-world-trading-system-do-about-it
320 Brookings Institution. New Trends in Africa-Asia Economic Relations. URL: https://www.brookings.edu/articles/new-trends-in-africa-asia-economic-relations
321 Brookings Institution. Championing Green Energy in Africa: A Strategy for Quick Wins. URL: https://www.brookings.edu/articles/championing-green-energy-in-africa-a-
strategy-for-quick-wins
322 Brookings Institution. Should African Central Banks Pursue Digital Currencies? URL: https://www.brookings.edu/articles/should-african-central-banks-pursue-digital-
currencies
323 Brookings Institution. Subnational Democracy and Local Governance in Africa. URL: https://www.brookings.edu/articles/subnational-democracy-and-local-governance-in-africa
324 Brookings Institution. Subnational Democracy and Local Governance in Africa. URL: https://www.brookings.edu/articles/subnational-democracy-and-local-governance-in-africa
325 Brookings Institution. Promoting Gender Equality in Africa Through Gender-Responsive Procurement. URL: https://www.brookings.edu/articles/promoting-gender-equality-
in-africa-through-gender-responsive-procurement
tion systems320
occupy an important place in it.
Another distinctive feature of the intellec­
tual
debate about Africa in the United States is the
increased attention to energy security and cli­
mate change. Experts point out that African
countries are the most vulnerable to extreme
weather conditions and climate change, al­
though they are relatively little responsible for
these problems. Much attention is drawn to the
lack of stable access to energy in most African
countries. These difficulties are proposed to be
addressed through the development of hydro­
power, the exploitation of alternative energy
sources321
and a more equitable distribution of
financial assistance from the
United States.
Because of the high level of com­
petition for attention and resour­
ces between think tanks in the US, the perception
of Africa in this case is distinguished by the greatest
diversity of topics covered and views on the future
of Africa, which are difficult to distill into coherent
semantic blocks. Think tanks pay attention even to
such issues that are not directly related to US in­
terests as the use of digital currencies by African
banks322
, local self-governance323
, cybersecurity324
and gender equality325
.
Although the US, like Europe, acknowledges the
imperfection of many of its decisions regarding the
continent and the significant change in the balance
of power in the world, experts express hope that
their country will continue to work actively in Africa.
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From their point of view, the continental security
system, humanitarian projects, trade, infrastructure,
investment and energy of the continent are too
dependent on support from the US and indivisible
from this country, and Africa, in turn, is a source of
critical minerals and one of the future drivers of
global economic growth, which makes cooperation
with the West inevitable.
Russia: we are so back
According to Russian experts, many African states
have made important steps towards real sovereign­
ty and liberation from neo-colonial practices in re­
cent years326
. Russia appears to be an exporter of
sovereignty327
, supporting governments pursuing
independent policies. In addition to sovereign­
ty, Russia is willing to offer assistance in the fight
against terrorism328
on the continent. Because Rus­
sian military presence has increased most in Sahel
in recent years, this region of Africa is the most fre­
quently mentioned in articles.329
Russia’s advantage over other players on this
issue is justified by the fact that it does not
make political demands in exchange for aid,
as is often the case with Western countries329
Being able to rely on the thesis “Russia is the only
white power that has never colonised anyone in
Africa”330
, which is almost omnipresent in Africa (at
least in the 35+ years old generations), makes this
326 Valdai Club. В Африку бегом. URL: https://ru.valdaiclub.com/a/chairman-speech/v-afriku-begom/?sphrase_id=752363
327 Российский совет по международным делам (РСМД). Круглый стол РСМД и Института Африки РАН: информационно-культурный суверенитет стран Сахеля в условиях
глобализации. URL: https://russiancouncil.ru/news/kruglyy-stol-rsmd-i-instituta-afriki-ran-informatsionno-kulturnyy-suverenitet-stran-sakhelya-v-uslov/?sphrase_id=153513930
328 Российский совет по международным делам (РСМД). Блог И. Захарова: Информационная политика в Африке. URL: https://russiancouncil.ru/blogs/i-
zakharov/36491/?sphrase_id=153513930
329 Valdai Club. Благонадёжные партнёры. URL: https://ru.valdaiclub.com/events/posts/articles/blagonadyezhnye-partnyery/?sphrase_id=752363
330 Российский совет по международным делам (РСМД). Главная задача — вернуть народам Сахеля суверенитет. URL: https://russiancouncil.ru/analytics-and-comments/
columns/africa/glavnaya-zadacha-vernut-narodam-sakhelya-suverenitet/?sphrase_id=153513930
331 Российский совет по международным делам (РСМД). России необходимо укреплять финансовые и производственные позиции в Африке. URL: https://russiancouncil.ru/
analytics-and-comments/columns/africa/rossii-neobkhodimo-ukreplyat-finansovye-i-proizvodstvennye-pozitsii-v-afrike/?sphrase_id=153513930
332 Российский совет по международным делам (РСМД). Африка сейчас уже совсем другая, и мы многому можем у неё поучиться. URL: https://russiancouncil.ru/
analytics-and-comments/comments/afrika-seychas-uzhe-sovsem-drugaya-i-my-mnogomu-mozhem-u-neye-pouchitsya/?sphrase_id=153513930
333 Российский совет по международным делам (РСМД). Африканская экспансия бренда «Made in Russia» и роль РЭЦ. URL: https://russiancouncil.ru/analytics-and-
comments/columns/sandbox/afrikanskaya-ekspansiya-brenda-made-in-russia-i-rol-rets/?sphrase_id=153513930
334 Российский совет по международным делам (РСМД). Картина нарождающегося мира: глобальный юг. URL: https://russiancouncil.ru/analytics-and-comments/
comments/kartina-narozhdayushchegosya-mira-globalnyy-yug/?sphrase_id=153513930
335 Российский совет по международным делам (РСМД). Основные направления сотрудничества КНР со странами Северной Африки. URL: https://russiancouncil.ru/
analytics-and-comments/analytics/osnovnye-napravleniya-sotrudnichestva-knr-so-stranami-severnoy-afriki/?sphrase_id=153513930
336 Valdai Club. Африканская турбулентность. URL: https://ru.valdaiclub.com/events/posts/articles/afrikanskaya-turbulentnost/?sphrase_id=752363
Российский совет по международным делам (РСМД). Главная задача — вернуть народам Сахеля суверенитет. URL: https://russiancouncil.ru/analytics-and-comments/
columns/africa/glavnaya-zadacha-vernut-narodam-sakhelya-suverenitet/?sphrase_id=153513930
position seem winnable. Russian intellectuals agree
that cooperation with Africa should not be limited
to security issues: “Given the growing interest of
African countries in full-scale co-operation, Russia
needs to focus on strengthening not only its mili­
tary-political but also its financial-industrial posi­
tions”331
. This process is still at an early stage: it is
noted that only a very limited number of joint pro­
jects have been implemented between the 2019
and 2023 Russia-Africa summits332
. Nevertheless,
the presence of the “Made in Russia” brand on the
continent, as claimed by the experts, is slowly but
surely growing333
.
From a geopolitical point of view, think tanks are
trying to overcome some ambiguity arising from
numerous social, economic and cultural differ­
ences between Russia and African countries. Rus­
sia, on the one hand, is attributed to the ‘global
majority’ and the Global South, on the other, it is
the bearer of the ‘real’ (traditional in terms of last
couple of centuries) European values, which are
no longer characteristic of modern Europe334
. China
in this new geopolitical reality is
seen as a natural counterweight
used by African countries to gain
more autonomy from Europe
and the US335
. Western coun­
tries themselves, in turn, are
portrayed as desperately clinging
to their status as the continent’s dominant powers.
Some experts regard terrorist activity or protests as
Western-inspired actions to maintain influence336
.
As for Africa itself, the average point of view is that
145
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African countries can become powerful players
on the international stage by coordinating their
policies and profess values close to neo-Pan-­
Africanism337
.
In general, the Russian intellectual discussion about
Africa can be divided into two large fields. The au­
thors belonging to the first one
are emphasising global political
factors shaping African affairs.
Africa, like the whole world,
seems to them to be a large
arena of confrontation between
great powers. On the continent
itself, they discover zones of in-
fluence and determine the most influential regional
powers338
. Thanks to them, Russian think tanks write
almost more often about the actions of Western
countries in Africa than the European or US think
tanks themselves. Most publications of this kind are
devoted to France: experts note the failure of the
Françafrique policy339
, the replacement of France by
Russia in Sahel in security matters, and the personal
mistakes of Emmanuel Macron340
. Another topic of
experts from this field is neocolo­
nialism politics by
the EU and the USA. It is noteworthy that even this
category of experts does not imply that China and
Russia act as a single coordinated force. If these
countries are mentioned together, this happens al­
most exclusively in the context of cooperation on
African issues in BRICS. At the same time, Western
think tanks often list China and Russia with a comma,
as if they have common goals and a single policy on
the continent.
337 Valdai Club. Уроки второго саммита Россия-Африка. URL: https://ru.valdaiclub.com/a/highlights/uroki-vtorogo-sammita-rossiya-afrika/?sphrase_id=752363
338 ИМЭМО РАН. Regional Powers on the African Continent: Trends and Prospects. URL: https://www.imemo.ru/publications/periodical/meimo/archive/2024/4-t-68/africa-
today-and-tomorrow/regional-powers-on-the-african-continent-trends-and-prospects
339 Российский совет по международным делам (РСМД). Блог И. Захарова: Информационная политика в Африке. URL: https://russiancouncil.ru/blogs/i-
zakharov/36491/?sphrase_id=153513930
340 ИМЭМО РАН. Francophonie: New Approaches of Emmanuel Macron. URL: https://www.imemo.ru/publications/periodical/meimo/archive/2024/5-t-68/europe-new-
realities/francophonie-new-approaches-of-emmanuel-macron
ИМЭМО РАН. France: From Macron’s Revolution to Stagnation. URL: https://www.imemo.ru/news/events/text/france-from-macrons-revolution-to-stagnation
341 Российский совет по международным делам (РСМД). Африка на распутье: мировой рынок редкоземельных металлов переживает тектонические сдвиги.
URL: https://russiancouncil.ru/analytics-and-comments/analytics/afrika-na-raspute-mirovoy-rynok-redkozemelnykh-metallov-perezhivaet-tektonicheskie-sdvigi/?sphrase_
id=153513930
342 Valdai Club. Россия-Африка: энергетическое сотрудничество. URL: https://ru.valdaiclub.com/a/highlights/rossiya-afrika-energeticheskoe-sotrudnichestvo/?sphrase_id=752363
343 Valdai Club. К вопросу подготовки кадров высшей квалификации. URL: https://ru.valdaiclub.com/a/highlights/k-voprosu-podgotovki-kadrov-vysshey-
kvalifikatsii/?sphrase_id=752363
344 Global Affairs. ИТ-экспансия в Африку. URL: https://globalaffairs.ru/articles/it-ekspansiya-v-afriku
345 Российский совет по международным делам (РСМД). Снится ли им рокот космодрома: заметки о перспективах стран Африки в космосе. URL: https://russiancouncil.ru/
analytics-and-comments/analytics/snitsya-li-im-rokot-kosmodroma-zametki-o-perspektivakh-stran-afriki-v-kosmose/?sphrase_id=153513930
346 Valdai Club. Как Африке преодолеть зависимость. URL: https://ru.valdaiclub.com/a/highlights/kak-afrike-preodolet-zavisimost/?sphrase_id=752363
347 Global Affairs. Цифровизация в Африке. URL: https://globalaffairs.ru/articles/czifrovizacziya-v-afrike
348 E-Governance Hub. URL: https://e-governancehub.ru
Representatives of the second field focus not on
the grand chessboard, but on specific areas of co­
operation between Russia and Africa. Their texts
are quite technocratic and often lack any geopoli­
tical pathos. Like the US, Russian think tanks pay at­
tention to rare earth elements mined in Africa, also
noting China’s dominance in this area341
.
They can help solve the problem of energy deficit
on the continent342
. In addition, Russian think tanks
write much more about cooperation in the field of
education than representatives of other global poles,
suggesting that the number of African students in
Russian universities can be significantly increased343
.
Two other unique topics mentioned almost exclu­
sively by Russian experts are digital cooperation344
and development of the space industry345
. Digital­
isation of public administration and everyday life in
Africa is seen as one of the ways to overcome ine­
quality346
and ensure sovereignty by reducing de­
pendence on Western companies and countries347
.
The Center for African Studies at the Higher School
of Economics is doing a strategic project to share ex­
perience between Russia and Africa in this area348
.
While US think tanks are characterised by the
greatest diversity of topics discussed in the con­
Experts consider energy cooperation to be
a much more promising idea. They emphasise
Russia has unique competencies and is ready
to offer almost any services, from personnel
training to infrastructure construction
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text of Africa, Russian think tanks are distinguished
by the depth of their analysis of domestic political
issues on the continent, especially in the area of
security349
. When discussing the conflict in Libya350
or near the African Great Lakes351
analysts demon­
strate a very high level of awareness of the actors
opera­
ting in the region and their interests.
Overall, experts agree that Africa has become
one of the top priorities for Russian foreign policy
in recent years
349 ИМЭМО РАН. Islamist Terrorism in Africa in the 2010-2020s: Main Trends and Prospects. URL: https://www.imemo.ru/publications/periodical/meimo/archive/2024/4-t-68/
africa-today-and-tomorrow/islamist-terrorism-in-africa-in-the-20102020s-main-trends-and-prospects
350 Российский совет по международным делам (РСМД). Игра в бирюльки на ливийском поле (Часть 3). URL: https://russiancouncil.ru/analytics-and-comments/analytics/
igra-v-biryulki-na-liviyskom-pole-3/?sphrase_id=153513930
351 Российский совет по международным делам (РСМД). Ситуационный анализ РСМД и ИМИ МГИМО: Конфликт в районе Великих Африканских озёр — РВО и позиция
России. URL: https://russiancouncil.ru/news/situatsionnyy-analiz-rsmd-i-imi-mgimo-konflikt-v-rayone-velikikh-afrikanskikh-ozer-rvo-i-pozitsiya-r/?sphrase_id=153513930
352 Valdai Club. Россия из Африки никуда не уходила. URL: https://ru.valdaiclub.com/a/highlights/rossiya-iz-afriki-nikuda-ne-ukhodila/?sphrase_id=752363
353 Центр изучения Африки НИУ ВШЭ. Африка 2023: Возможности и риски. URL: https://we.hse.ru/irs/cas/africa2023
354 НИУ ВШЭ. Африка: перспективы развития и рекомендации для политики России. URL: https://globalaffairs.ru/wp-content/uploads/2021/11/doklad_afrika_
perspektivy-razvitiya.pdf
355 Valdai Club. Russia-Africa Cooperation: Outlook and Objectives. URL: https://valdaiclub.com/a/reports/russia-africa-cooperation-outlook-and-objectives/
356 HSE University Center for African Studies. NLNG T7: a Way to Euthanize Nigerian Power Sector. URL: https://drive.google.com/file/d/199kKtInOpwD7AGLVkKF6LQlrtu94FmX0/preview
357 HSE University Center for African Studies. E-Governance in Africa 2024: Opportunities and Challenges. URL: https://e-governancehub.ru/read-book-e-governance-in-
africa-2024-challenges-and-opportunities/
Russia is ready to use the rich legacy of ties with the
continent left over from the Soviet Union352
, as well
as to expand cooperation in new areas. Although
the awareness of the need to expand cooperation
has only recently emerged, think tanks are confi­
dent that it will bring abundant benefits to both
sides.353354355356357
Unlike all other think tanks discussed in this text, the HSE University Center for African Studies
focuses only on Africa, which allows for a special depth of analysis. In 2023, Center for African
Studies published a handbook Africa 2023: Opportunities and Challenges in Russian, dedicated
to modern-day Africa, its economy, infrastructure, natural resources, security and much more. The
book emphasises that Africa is a unique civilisation, which is based on network-centric unity, as well
as diverse and flexible social structures. In addition, it is noted that the support for multipolarity in
international relations inherent to Russian perception of the world has much in common with the
African desire for apolarity as a principle of the fair world order353
.
In addition, the Center pays special attention to the dynamics of Russia-Africa relations354
, noting
the breakthroughs that have occurred in recent years in the field of humanitarian cooperation,
educational projects, and trade and economic ties. The Russia-Africa summits played an important
role in these processes. The experts of the Center for African Studies speak positively about the
ability of the overwhelming majority of African countries to maintain neutrality in the Ukrainian
crisis despite pressure from the West355
.
The Center attaches great importance to the knowledge sharing between Russia and Africa. In par­
ticular, the Center published a whitepaper report on natural gas industry in Nigeria, where measures
to develop the domestic gas market were proposed356
. In 2023, the Center within the E-Governance
Knowledge Sharing Platform launched a handbook E-Governance in Africa 2024: Opportunities and
Challenges357
, which became world first comprehensive study of e-governance in Africa.
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African think tanks
While this chapter focuses primarily on interna­
tional think tanks views on Africa that are located
outside, it would be a shame to ignore the tre­
mendous work being done to understand the
continent’s future by think tanks based in Africa
itself. To do this, we selected all African expert
centres from the list of Top 150 Think Tanks
Around the Globe (non-US) in the Global Go To
Think Tank Index Report 2020 of the University
of Pennsylvania358
. The initial sample included 16
think tanks, but three of them were then exclu­
ded due to the lack of a publicly accessible web­
site, one is exclusively engaged in public opinion
polls (Afrobarometer), and another five either do
not publish online at all or last did it many months
ago. The final list of African think tanks inclu­
ded in the sample consists of seven think tanks.
Analytical materials selected were published on
the websites of these think tanks mostly in Au­
gust-September 2024, then a qualitative analysis
was conducted..
Perhaps the most noticeable feature of African
think tanks is their depoliticisation and
degeopoliticisation
The vast majority of publications are devoted to is­
sues of economics, poverty alleviation, trade and re­
gionalcooperation,andnottotheactionsofexternal
players on the continent or the interstate relations
of African countries. Surprisingly little attention is
paid to electoral institutions or intra-elite relations
as well. Even if the allowance is made for the fact
that African intellectuals may outsource such rea­
soning to foreign experts in order to save resources
and focus on more pressing problems for them­
selves, they can still be united by a succinct thesis:
not politics, but policy.
358 Bruegel. 2020 Global Go To Think Tank Index Report. URL: https://www.bruegel.org/sites/default/files/wp-content/uploads/2021/03/2020-Global-Go-To-Think-Tank-
Index-Report-Bruegel.pdf
359 South African Institute of International Affairs (SAIIA). Local Opportunities and Global Disputes: Tracking Japan’s Engagement with Africa Amid Geopolitical Tensions.
URL: https://saiia.org.za/research/local-opportunities-and-global-disputes-tracking-japans-engagement-with-africa-amid-geopolitical-tensions
South African Institute of International Affairs (SAIIA). China-Africa Energy and Climate Cooperation: Prospects for FOCAC 2024. URL: https://saiia.org.za/research/china-
africa-energy-and-climate-cooperation-prospects-for-focac-2024
360 South African Institute of International Affairs (SAIIA). The G7, South Africa, and the Sustainable Climate Agenda for Africa. URL: https://saiia.org.za/research/the-g7-south-
africa-and-the-sustainable-climate-agenda-for-africa
When the conversation turns to ‘big politics’, the ex­
perts manage to adhere to the principle of multilate­
ralism. The South African Institute of International
Affairs (SAIIA), which was recognised as the sec­
ond-best African think tank in 2020, is a good exam­
ple of this feature. In less than two months, the centre
managed to have a closed-to-public dialogue between
Russian and South African experts
on the future of relations between
the two countries, to discuss in
detail the negotiations on climate
with China within the framework
of FOCAC, to discuss cooperation
with Japan and the G20359
. In the case of the roundta­
ble with Russian experts, it is noted that South Africa’s
non-joining of Western sanctions against Russia has
caused international criticism, but allowed the country
to “maintain autonomy in its foreign relations”. At the
same time, the experts call on Russia to “articulate how
its engagement supports African-led development ini­
tiatives rather than pursuing narrow interests”. An ana­
lytical paper on relations with the G20 notes that after
2022, the organisation has become a much more tense
space for consensus-building on many global issues
between developed and developing economies360
.
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Like other global poles, African experts agree that
the nature of international relations has changed
significantly in recent decades. They note that af­
ter 1945, Africa remained passive and accepted
the geopolitical realities of the international system
without an assertive, unified regional policy, while
after the end of the Cold War, foreign powers paid
insufficient attention to the continent361
.362
There is a growing demand for more
representative and equitable global institutions
that can manage the risks and opportunities
of interdependence among states362
Africa must be able to integrate into these realities
and take its rightful place there.
Considerable attention is paid to security issues.
Think tanks study the prospects for reconciliation of
the conflicting parties in Sudan; discuss the deple­
tion of support for ISWAP363
, which opens a window
of opportunity to solve the problem in co­
operation
with local communities; note the negative impact
of the conflict in Western Cameroon on the na­
tional education system; emphasise the successes
of the Democratic Republic of Congo on the path
to the difficult, but increasing­
ly achievable goal of national
unity364
. In general, the recipe
for peace in Africa proposed
by experts can be summarised
361 African Centre for the Constructive Resolution of Disputes (ACCORD). The African Union’s 2063 Goal of Silencing the Guns in the New World Order.
URL: https://www.accord.org.za/conflict-trends/the-african-unions-2063-goal-of-silencing-the-guns-in-the-new-world-order
362 South African Institute of International Affairs (SAIIA). Reimagining Global Economic Governance: African and Global Perspectives. URL: https://saiia.org.za/research/
reimagining-global-economic-governance-african-and-global-perspectives
363 The organisation is recognised as terrorist, its activities are prohibited on the territory of the Russian Federation.
364 African Centre for the Constructive Resolution of Disputes (ACCORD). Impact of the Ongoing Crisis on the Education of the North-West Region of Cameroon.
URL: https://www.accord.org.za/conflict-trends/impact-of-the-ongoing-crisis-on-the-education-of-the-north-west-region-of-cameroon
African Centre for the Constructive Resolution of Disputes (ACCORD). East Africa’s Path to Unity: Community Growth and Regional Peace Initiatives in the Democratic
Republic of the Congo. URL: https://www.accord.org.za/conflict-trends/east-africas-path-to-unity-community-growth-and-regional-peace-initiatives-in-the-democratic-
republic-of-the-congo
ISS Africa. Is Peace Possible Between Sudan’s Warring Parties? URL: https://issafrica.org/iss-today/is-peace-possible-between-sudan-s-warring-parties
ISS Africa. The End of ISWAP’s Hearts and Minds Strategy. URL: https://issafrica.org/iss-today/the-end-of-iswap-s-hearts-and-minds-strategy
365 African Centre for the Constructive Resolution of Disputes (ACCORD). The African Union’s 2063 Goal of Silencing the Guns in the New World Order.
URL: https://www.accord.org.za/conflict-trends/the-african-unions-2063-goal-of-silencing-the-guns-in-the-new-world-order/#:~
366 African Centre for the Constructive Resolution of Disputes (ACCORD). Kenya’s Historic Gen Z-Led Protests: The Issues. URL: https://www.accord.org.za/analysis/kenyas-
historic-gen-z-led-protests-the-issues
African Center for Economic Transformation (ACET). Ethiopia TVET Teachers Professional Competency Challenges and Policy Recommendations. URL: https://acetforafrica.
org/research-and-analysis/insights-ideas/policy-briefs/ethiopia-tvet-teachers-professional-competency-challenges-and-policy-recommendations
African Center for Economic Transformation (ACET). Bridging the Gap: A Renewed Employment Policy for a Generation of Ghanaian Youth. URL: https://acetforafrica.org/
research-and-analysis/insights-ideas/policy-briefs/bridging-the-gap-a-renewed-employment-policy-for-a-generation-of-ghanaian-youth
African Center for Economic Transformation (ACET). Ghana Newsletter: Digital and Ecological Transition of Work for Youth Employment. URL: https://acetforafrica.org/
research-and-analysis/insights-ideas/policy-briefs/ghana-newsletter-digital-and-ecological-transition-of-work-for-youth-employment
367 African Centre for Technology Studies (ACTS). STREM Policy Brief. URL: https://www.acts-net.org/images/Publications/Policy-Briefs/CRE/STREM_Policy_Brief.pdf
African Centre for the Constructive Resolution of Disputes (ACCORD). The Impacts of Climate Change on Social Cohesion and Stability in Southern Africa.
URL: https://www.accord.org.za/analysis/the-impacts-of-climate-change-on-social-cohesion-and-stability-in-southern-africa
ISS Africa. Africa Must Help Steer the High Seas Treaty Out of Dire Straits. URL: https://issafrica.org/iss-today/africa-must-help-steer-the-high-seas-treaty-out-of-dire-straits
as the ­
formula ‘complementarity of the local and
continental’. Think tanks often offer sophisticated
strategies for interaction with local communities,
but at the same time do not forget about security
cooperation – e.g. they write about the AU Agenda
2063: Goal of Silencing the Guns365
.
Compared to all others, African think tanks are
distinguished by their increased
interest in two problems: the in­
tegration of African youth into
the labour market and environ­
mental issues. Thus, experts
write about the lack of com­
petent instructors in technical
specialties in Ethiopia; note the acute problem
of unemployment facing Ghanaian youth and
propose solving it by creating digital jobs; explain
youth protests in Kenya by the government’s
insufficient sensitivity to the needs of this age
group366
. Environmental issues are mainly not ab­
stract, but rather are tied to specific economic
problems: the authors of think tanks discuss the
impact of climate change on social stability in
South Africa; the continent’s participation in the
High Seas Treaty; and river management by local
communities in East Africa367
.
Continent’s countries should achieve greater
autonomy in the matter of economic and financial
institutional structure
149
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In macroeconomics, there is a notable thesis that,
given the changed geopolitical landscape, the
continent’s countries should achieve greater au­
tonomy in the matter of economic and financial
institutional structure. For example, the need for
an African credit agency is noted, and it is also no­
ted that the industrial policy of the United States
is becoming increasingly nationalistic and securi­
tised, which has a strong impact on the continent’s
trade prospects368
.
In addition, there is room in the intellectual de­
bate for reflection on the impact of COVID on
the continent’s economy and education sys­
tems369
; the Kush epidemic (synthetic drug, with
epidemic usage rise in Sierra Leone); women’s
rights and the role of supranational institutions
in supporting them370
; the costs of illegal gold
mining371
; corruption; technology transfer (in­
cluding AI)372
; the ineffectiveness of electoral
commissions and policies towards small and me­
dium-sized businesses373
.
An important common institutional feature of Af­
rican think tanks is their sources of funding. Their
donors can be divided into two large groups: inter­
national institutions (the World Bank, the United
Nations, OXFAM, UNICEF) and Western-based
non-profit foundations and/or governments di­
rectly. For example, the following are often men­
tioned among the donors of African think tanks:
the Norwegian Agency for Development Coop-
eration, the Bill and Melinda Gates foundation,
the Foreign, Commonwealth and Development
Office of the United Kingdom, The Swedish In-
ternational Development Cooperation Agency
and others.
368 ISS Africa. AGOA Agoner: Risks of U.S. Trade Policy for Africa. URL: https://issafrica.org/iss-today/agoa-agoing-agoner-risks-of-us-trade-policy-for-africa
African Center for Economic Transformation (ACET). Is an African Credit Rating Agency the Answer? Maybe, Maybe Not. URL: https://acetforafrica.org/research-and-
analysis/insights-ideas/articles/is-an-african-credit-rating-agency-the-answer-maybe-maybe-not
369 African Economic Research Consortium (AERC). Impact of COVID-19 Pandemic on School Attendance in Kenya. URL: https://publication.aercafricalibrary.org/
items/3c3826bb-b1fb-4731-84c2-e8da752dbe06
370 African Centre for the Constructive Resolution of Disputes (ACCORD). Bringing Women to the Table: The Evolution of FemWise-Africa. URL: https://www.accord.org.za/
analysis/bringing-women-to-the-table-the-evolution-of-femwise-africa
371 IMANI Africa. An Extended Policy Brief: Gold Rush Chaos and Golden Curse. URL: https://imaniafrica.org/2024/09/an-extended-policy-brief-gold-rush-chaos-and-golden-
curse-how-ghanas-political-elite-are-selling-out-the-nations-posterity-for-personal-gain
372 African Centre for Technology Studies (ACTS). Application of AI in Education in Africa. URL: https://ai4d.acts-net.org/wp-content/uploads/APPLICATION-OF-AI-IN-
EDUCATION-IN-AFRICA.pdf
373 African Center for Economic Transformation (ACET). A Strategic Path to Investment and Growth for African SMEs. URL: https://acetforafrica.org/research-and-analysis/
insights-ideas/articles/abt-a-strategic-path-to-investment-and-growth-for-african-smes
374 Центр изучения Африки НИУ ВШЭ. Africa 2023 Overview. URL: https://we.hse.ru/irs/cas/africa2023
Based on the above analysis, it is quite obvious that
no powers other than the Western ones support
the development of think tanks and think tanks in
Africa, which inevitably leads – as a minimum – to
a shift of focus on topics peculiar to the agenda of
Western countries.
Africa in the mirror of think
tanks vs Africa in the media
The results presented above may be compared with
the research The Image of Africa in the book Africa
2023: Opportunities and Risks, published by the
Higher School of Economics in 2023374
. At that
time, the images of Africa in the media of Brazil,
India, Russia,China,theUS,theUK,France,Germany,
Türkiye and Israel were surveyed and compared.
In general, the narratives of think tanks mostly dupli­
cate the messages formed by the media, but some
differences are still present. For example, regarding
the frequency of mentions of foreign countries in
Africa, it is striking that there is almost a complete
absence of any intelligible analysis of the actions of
the UK in Africa by experts, while the media (and
not only British ones) write about the policy of this
country on the continent quite often. Perhaps this
is due to the fact that the UK no longer plays a sig­
nificant role in Africa, but the media continue to
view it as a serious player out of habit. However,
this claim may be questioned and explained by the
number of different hypotheses.
It is also noteworthy how differently the media and
think tanks view the scale of Russia’s presence in
Africa.
150
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If in 2023 the media mostly wrote about
“Russia’s return to Africa” or “increasing
its presence on the continent”, conceptualising
Russia as an actor in the middle of the way
towards the stable presence in Africa, then
in 2024 think tanks already view it as one
of the most influential players on the continent
However, in the majority of cases,
the analysis of the media and think
tanks’ publications leads to similar
results. For example, the Chinese
press, like expert centres, is main­
ly concerned with the politics of
its own country and also pays a lot
of attention to the United States.
151
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Another interesting similarity in the variation of
themes for think tanks and media is that Russian,
Chinese and Indian actors tend to view Africa in
the context of global economics and politics, while
EU countries and the US are more inclined to view
Africa ‘as it is’, detailing the internal politics of Af­
rican countries and bilateral relations within the
continent in isolation from the actions of external
forces.
The Russian press is preoccupied with geopolitical
issues. Even economic issues take on the features
of an international confrontation: the economy and
Africa are often mentioned together in the con­
text of the expansion of BRICS or the continent’s
rejection of the dollar as a key
exchange currency. On the
contrary, Russian experts offer
a more technocratic and down-
to-earth view.
US journalists write about Africa in the context of
security much more often than intellectuals from
the same country, and much less often mention the
prospects for economic cooperation with the con­
tinent. This can probably be explained by the fact
that it is much easier for the US press to explain the
need for a presence on the continent by appealing
to national security rather than to vague prospects
for economic growth. Chinese journalists also differ
from their colleagues from think tanks. The topics of
healthcare, cultural exchange and tourism, which oc­
cupy a significant part of the media space, are almost
completely absent from expert publications. Instead,
intellectuals of their Eastern superpower focus on
the economy.
Probably, for both China and the United States,
issues of security or humanitarian exchange are
just a screen covering up purely economic interests
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Ignored potential
of the creative economy
While discussing African cultures, the first ima­
ges
that often come to mind are traditional dances,
masks and rituals passed down through gene­
rations. While these elements are integral to the
continent’s rich heritage, less attention is given to
the growing urban art scenes, such as the Afro­beat
revolution or the thriving contemporary galleries in
cities like Johannesburg. Even fewer consi­
der the
economic implications of Africa’s creative indust­
ries or their potential for economic diversification
and growth. Discussions about Africa’s develop­
ment frequently centre around industries and
commodities; yet, the continent’s post-industrial
potential, particularly through creative industries,
remains overlooked.
Digitalisation and creative industries in Africa do
not just provide more than 2 million jobs375
(5% of
global cultural and creative industries jobs) but
can also foster economic sovereignty by crea­
ting
local wealth from African narratives, arts and
ideas.
Economic independence goes hand in hand
with cultural sovereignty, enabling African
nations to control how their stories are told
and distributed globally
As African cities continue to evolve, this intersection
of creativity, digital transformation and urbanisation
has the potential to position the continent as a major
player in the global post-industrial economy.
In most countries for which data is available, there
has been a steady growth in the contribution of crea­
tive industries to GDP over the past 10 years. The
development of technology, increased investment
375 UNCTAD. Creative Industry 4.0: Towards a New Globalized Creative Economy. United Nations Conference on Trade and Development, Geneva, 2022.
and growing international inte­
rest in African culture are driving
this growth. South Africa, ­
Nigeria,
­
Kenya, and Morocco are the leaders
in developing the creative eco­
nomy on the continent, showing
significant growth and influence in various sectors,
including music, film and digital media.
Creative industries in Africa face many of the
same challenges that plague other sectors of the
economies. Issues such as a lack of infrastructure,
funding, institutional capacities, and regulations all
hinder growth. Moreover, the level of education
in creative fields remains low, further limiting the
Identifying the DNA of African
creativity
153
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HSE University Center for African Studies
ability of the African nations to compete on a global
scale. However, one of the most pressing concerns
that is important to highlight is the severe data
deficit.
Lack of reliable, comprehensive data makes
it difficult to assess the true scale of Africa’s
creative industries and prevents the development
of well-informed strategies for sustainable growth
376 World Bank. Private Consumption in Uganda. URL: https://data.worldbank.org/indicator/NE.CON.PRVT.CD?locations=UG
377 Росстат. BRICS Joint Statistical Publication 2023. URL: https://rosstat.gov.ru/storage/mediabank/BRICS%20Joint%20Statistical%20Publication-2023.pdf
378 Mungase, Sachin, and Satyanarayan Kothe. Analysing Consumption Patterns and Food Demand in BRICS Countries: A Differential Approach to Demand Theory and Policy
Analysis. MPRA Paper No. 121431, University of Munich, 12 July 2024. URL: https://mpra.ub.uni-muenchen.de/121431/
The absence of consistent data hinders governments
and investors from making decisions that could boost
the creative economy, the challenge not limited to
the creative sector but affecting multiple industries
across the continent.376377378
Africa encompasses many of the
most promising and rapidly growing
markets globally, in terms of its both
population and economic potential.
Assessing household demand for creative goods and services plays a critical role in understanding
the broadest impact of the creative economy. Families and households, as key participants in this
sector, not only consume cultural products and services but also influence their production and
distribution. This demand spans a range of activities, including cultural consumption – such as
attending performances, visiting museums and engaging in recreational activities – and the use of
leisure services.
Households are active agents in the creative economy, contributing to both its financial sustaina­
bility and the cultural dynamism that drives growth. Their expenditures on creative goods and ser­
vices fuel market demand, which in turn shapes the supply and diversity of these offerings. In many
countries, the increasing consumer spending and the growing accessibility of digital platforms for
cultural content have expanded the avenues for cultural engagement. For example, Uganda in­
creased consumer spending to USD 32 billion equivalent in 2022 from USD 21 billion in 2012376
.
Moreover, households often indirectly support the creative economy by investing in related goods,
such as technological devices for streaming or attending digital concerts, or by contributing to the
informal sectors of creative production through craft and local art consumption.
The role of households in both the consumption and production of creative goods also brings at­
tention to the way cultural activities are embedded in everyday life. Household spending patterns
reflect broader societal trends, such as urbanisation, rising literacy rates and increasing awareness
of the value of local traditions. Thus, the demand for creative goods and services does not just
sustain the cultural sector but also fosters innovation, diversity, and community identity. In recent
years, household spending on cultural events and services in BRICS countries has ranged between
2.7% and 6% of total household consumption377
. In 2017, Brazil allocated about 2% of the total
household expenditure to this category, while China spent 2.3%, and Russia allocated around 2.6%.
South Africa spent approximately 1.95%, and India, with a lower figure, allocated 0.67%378
.
Many African nations lack detailed data on household spending in cultural sector. This is primari­
ly due to underdeveloped statistical systems, limited infrastructure for collecting and processing
such data, and economic conditions that prioritise essential needs over cultural consumption.
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At the same time, the continent is a massive impor­
ter of cultural content. On platforms like Netflix, for
example, despite the growing African audience, only
one out of the top 10 films is African made, while the
rest are dominated by Indian, Chinese, and French
productions. The competition for the African mar­
kets is intensifying, as demonstrated by the growing
investments from major global players. Netflix’s en­
try into Africa, mirroring its earlier move in South Ko­
rea379
, is just one example. The presence of African
films in prestigious events, such as Senegalese cine­
ma at the Oscars380
and a Tanzanian author receiving
the Nobel Prize in Literature381
,
signals a rising recognition of
African ta­
lent. Even Disney has
joined the wave with its animat­
ed cyberpunk series Iwaju382
, set
in Lagos, while tech giants like Google are making
significant investments in African markets.
Senegalese romantic drama film
Banel e Adama by Senegalese
screenwriter Ramata-Toulaye Sy,
2023
Animated science fiction miniseries
Iwájú produced by Walt Disney
Animation Studios, written by Olufikayo
Adeola and Halima Hudson, 2024
379 Analyzing Digital Communication Trends. URL: https://ijoc.org/index.php/ijoc/article/download/20718/4392
380 Africanews. Senegalese Migrant’s Journey Inspires Oscar-Nominated Film. URL: https://www.africanews.com/2024/02/18/senegalese-migrants-journey-inspires-oscar-
nominated-film/
381 The New York Times. Nobel Prize in Literature Awarded to Abdulrazak Gurnah. URL: https://www.nytimes.com/2021/10/07/books/nobel-prize-literature-abdulrazak-gurnah.html
382 Disney+. *Iwaju Show on Disney+. URL: https://ondisneyplus.disney.com/show/iwaju
These investments are shaping cultural narra­
tives and influencing the values of Africa’s youth.
The question arises: what will the next generation
­
African generation believe in? Will they see their
own beauty and potential reflected in global me­
dia, or will they be drawn to the ideas developed
outside of Africa? It is crucial for Africa to foster
a sense of pride in local creativity, ensuring that
young people see the value in staying and building
within their own communities, rather than seeking
opportunities abroad. Cultural sovereignty is essen­
tial in this context.
This fosters a generation that not only consumes
content but also creates it, driving local innova­
tion and allowing Africa to rise as a global cultural
leader.
The creative industries, which encompass music, film,
fashion, art and design, are rapidly developing on the
African continent, becoming an important driver of
economic growth and social transformation. Today, as
the global economy increasingly shifts toward innova­
tion and creativity, Africa is showing significant poten­
tial in this area, gradually positioning itself among the
global leaders in the creative economy.
The increasing value of African contemporary artists on the global market highlights the im­
portance of creative education and investment in the continent’s cultural institutions. Many
leading African artists, such as Amoako Boafo and Ben Enwonwu, have benefitted from formal
art education in institutions across Africa. In recent years, the market for African contemporary
art has seen exponential growth. According to the Art Basel 2023 report, African contempo­
rary artists achieved record sales in auction houses, with more than 2,700 works sold — almost
double the number sold before COVID-19. The total value of these works reached USD 63
million in 2022, up from USD 47 million in 2021. The 2023 Contemporary Art Market Report
includes nine African artists in the top 500 selling contemporary artists globally. This marks a
significant achievement for African artists, whose presence in major auction houses has grown
steadily, reflecting increasing market demand and global recognition.
By investing in its creative industries, African
states can control their cultural narrative, ensuring
that African stories and values are told by Africans
155
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Nigerian historical drama film
Lisabi: The Uprising directed by Niyi
Akinmolayan, produced by Adebimpe
Oyebade and Victoria Akujobi, and
written by Yinka Olaoye and Niyi
Akinmolayan, 2024
Africa stands out with its music in­
dustry where genres like Afrobeat
and Urban Groove have gained
worldwide recognition, thereby
boosting cultural exports and pro­
383 Labinjoh, Justin. Fela Anikulapo-Kuti: Protest Music and Social Processes in Nigeria. Journal of Black Studies, vol. 13, no. 1, 1982, pp. 119–134. JSTOR, URL: http://www.jstor.org/
stable/2783979. Accessed 13 Oct. 2024.
384 Simango, John. The Paradox of Freedom and Fear in Athol Fugard’s My Children! My Africa! Imbizo, vol. 14, no. 1, 2023, 16 pages. URL: https://doi.org/10.25159/2663-
6565/12367
385 BBC. Nigerians React to Global Events in Pidgin. URL: https://www.bbc.com/pidgin/world-55656720
386 National Geographic. Bobi Wine: The People’s President. URL: https://films.nationalgeographic.com/bobi-wine-the-people-s-president
387 Box Office Mojo. Bobi Wine: The People’s President Box Office Performance. URL: https://www.boxofficemojo.com/title/tt21376900/
388 Deadline. Hillary Clinton, Sharon Stone Support “Navalny” at Cinema for Peace. URL: https://deadline.com/2024/02/hillary-clinton-sharon-stone-cinema-for-peace-navalny-
october-7-1235831358/
389 Variety. IDA Documentary Awards 2023: “Bobi Wine: The People’s President” Wins Big. URL: https://variety.com/2023/film/news/ida-documentary-awards-winners-bobi-
wine-the-peoples-president-1235831567/
moting tourism. However, evaluating the real contribu­
tionoftheseindustriestotheeconomypresentsseveral
challenges. Traditional statistical methods often over­
look the unique characteristics of creative sectors, such
as intellectual property and cultural assets, which results
in their role being underestimated.383384385386387388389
The intertwining of culture and politics is a powerful phenomenon, especially in regions where
art and expression shape public discourse. Across Africa, cultural actors have often used their
platforms to address social and political issues. Opinion leaders like Nigerian musician Fela
Kuti383
, whose Afrobeat criticised corruption and military rule, or South African playwright
Athol Fugard384
, who highlighted the injustices of apartheid, illustrate how cultural production
and political activism are closely connected. In these cases, the line between an artist and a
politi­
cal actor often blurs, as cultural figures mobilise a society and contribute to shaping na­
tional political debates.
A recent example of this is Bobi Wine, a Ugandan musician turned politician. Bobi Wine, born
Robert Kyagulanyi, first gained popularity through his socially oriented narrative, which spe­
culates with issues such as poverty, corruption and daily life of lower-income communities.
His rise from a musician to an opposition leader and his 2021 presidential run against Yoweri
­Museveni385
leveraged his fame for challenging Uganda’s long-standing political system. His
story has gained international attention, leading to the 2022 documentary Bobi Wine: The
People’s President, produced by Disney and Hulu386
. The film earned USD 30,263 in the do­
mestic box office and an additional USD 14,305 internationally, bringing its worldwide box
office total to USD 44,568387
. Despite such a moderate performance, the documentary won
two awards. At the Cinema for Peace Awards on 19 February 2024, it was named Political Film
of the Year388
, and at the IDA Documentary Awards on 12 December 2023, it won the title of
Best Feature Documentary389
. The involvement of Disney and Hulu in telling Bobi Wine’s story
reflects how major global media platforms contribute to shaping political discourse. By spot­
lighting an opposition figure through global media, the documentary becomes a part of the
broader narrative about politics in Africa. This illustrates how the media can influence political
conversations on both a local and global scale. The impact of these cultural products goes be­
yond entertainment contributing to the shaping of public perceptions and political awareness.
The creative industries are often mistakenly
associated only with the humanitarian sphere,
ignoring their economic potential
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The case of Uganda shows that
the dependence on foreign media
platforms creates unacceptable
risks of domestic political
destabilisation. That is why any
youth-oriented content should
be hosted on regulated platforms
free from foreign disruptive
influences
Creative industries are closely tied to urban envi­
ronments as cities have traditionally served as cen­
tres of innovation and cultural activity. These urban
areas concentrate human capital, access to educa­
tion, infrastructure, and technology, making them
platforms for the growth of creative clusters. In ci­
ties like Lagos, Nairobi, and Johannesburg, powerful
creative hubs have already emerged, influencing
not only the local economy but also the interna­
tional market.
Street art by Dbongz and Senzart911.
Johannesburg, South Africa, 2019.
Photo by Cale Waddacor
With global exports of creative industries of USD
524 billion in 2020390
Africa is well positioned to
capitalise on this expanding market. The crea­
tive services sector, including advertising, market
research and digital design, is also experiencing
rapid growth. As African governments and in­
ternational investors continue to support digital
infrastructure and creative innovation, the con­
tinent’s creative industries can play transforming
role.
390 UNCTAD. Creative Economy Outlook 2022. URL: https://unctad.org/publication/creative-economy-outlook-2022
391 South Korea’s transformation from an exporter of cars and electronics to a global cultural powerhouse shows how creative industries can drive economic growth. In 2021,
South Korea’s cultural exports – led by K-pop bands like BTS and global hits like “Squid Game” – generated USD 12.4 billion in export revenue, more than double the USD
4.7 billion earned from consumer electronics. These industries are not resource-dependent; instead, they thrive on human talent and innovation, which are assets that all
countries possess. The creative sectors in South Korea also employ over 600,000 people, contributing to sustainable job creation, particularly for younger generations.
Furthermore, these industries have bolstered South Korea’s global image, attracting tourism, foreign investment, and significantly enhancing the country’s soft power. South
Korea’s success demonstrates how developing nations can leverage their creative industries to diversify their economies and foster both economic growth and cultural
influence globally
Definition and measurement
of creative economy in Africa
Creative industries are based on creative potential
and the pursuit of unique cultural products. In in­
ternational practice they include art, literature, mu­
sic, cinema, theatre, television, design, advertising,
video games, and digital media. The primary driving
force of creative industries are intangible values –
ideas, innovations, and cultural expression.
In international practice the measurement of
creative industries is based on concepts deve­
loped by organisations like UNESCO, UNCTAD,
and the World Bank. They design methodologies
to assess the contribution of these industries to
GDPs, employment, and exports. The assess­
ments are based on the data related to employ­
ment, revenues from cultural products and their
impact on adjacent sectors such as tourism and
education.
A crucial aspect of evaluating creative industries
is the legal framework that defines their status
and establishes support measures at the state
level. The UK, for instance, was one of the first
in the 1990s to introduce legislative standards
to support these sectors, as well as South Korea
with its K-pop phenomenon and other creative in­
dustries that contribute significantly to the coun­
try’s economy. Developing creative industries
has proven to be highly beneficial for countries
like South Korea391
, and this model deserves con­
sidering. Several African countries have already
introduced government programmes to support
creative industries and have enshrined them at
the legislative level.
Botswana’s recent focus on developing its crea­
tive industries comes as the country grapples
with high unemployment and seeks to diversify its
economy which has traditionally relied on mining.
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Recognising the potential of the creative and cul­
tural sectors, the government supported initiatives
such as the 13th Annual National Arts Festival392
,
showcasing traditional arts while highlighting their
economic potential. As noted by Tumiso Rakgare,
Minister of Youth, Gender, Sport, and Culture,
Botswana sees creative industries as a dynamic
way to promote entrepreneurship, investment,
and innovation. The festival, which attracted more
than 14,000 artists this year, showcased traditio­
nal arts, such as Sebirwa dance, while emphasising
the sector’s potential to contribute to economic
diversification.
13th Annual National Arts Festival
in Botswana, 2024
Larger economies as South Africa, Nigeria, and
Kenya are able to invest in the long-term develop­
ment of their creative sectors. These nations have
the financial capacity to think long-term and invest
in building creative industries that contribute to na­
tional growth, whereas smaller economies are still
focused on more immediate needs like healthcare
and infrastructure. However, there is a divide in how
African nations view the role of creative industries
which is not determined by the scale of an econ­
omy. For many, the focus is on preserving pre-co­
lonial identity and culture, reflecting the broader
Afrocentric philosophy. This emphasis on the past
ties into cultural reclamation efforts and the need
to preserve heritage.
Countries like South Africa are recognising this
need, allocating separate budgets for their heri­
tage promotion and preservation and the arts
and culture promotion and development. Ac­
cording to its 2024/25 budget393
, significant
392 Xinhua. China’s Cultural Development in 2024. URL: https://english.news.cn/20240715/f136cd2a897d462ab9d1ab18f5959924/c.html
393 National Treasury (South Africa). National Budget 2024. URL: https://www.treasury.gov.za/documents/National%20Budget/2024/ene/FullENE.pdf
394 Swart, K., Bob, U., Nkambule, S.,  Gumede, A. (2018). Economic Impacts of the Touring Ventures Sub-category of the Mzanzi Golden Economy Programme in South Africa.
EuroEconomica, vol. 1(37), pp. 90–103. URL: https://ujcontent.uj.ac.za/esploro/outputs/journalArticle/Economic-impacts-of-the-touring-ventures/9910307607691#file-0
395 Department of Sport, Arts and Culture (South Africa). Mzansi Golden Economy Guidelines. URL: https://www.dsac.gov.za/Mzansi%20Golden%20Economy%20Guidelines
396 National Treasury (South Africa). South Africa National Budget 2024.
397 Bob, Urmilla, Kamilla Swart, Rivoni Gounden, Amanda Gumede, and Sizwe Nkambule. (2019). Socio-Economic Impacts of Festivals and Events: A Case Study of the Mzansi
Golden Economy Programme in South Africa. GeoJournal of Tourism and Geosites, vol. 27, pp. 1236-1250. DOI: 10.30892/gtg.27410-429
funds have been allocated to both sectors. For
heritage promotion and preservation, the go­
vernment allocated USD 142 million. In contrast,
for arts and culture promotion and development,
which is aimed at modern creative industries,
the allocation is USD 84 million. These budget
lines highlight the country’s commitment to both
safeguarding its cultural past and investing in the
creative economy of the future. By 2026/27 the
budget for heritage preservation is expected to
rise to USD 153 million while the funding for arts
and culture development is projected to increase
to USD 74 million.
Through the government’s Mzanzi Golden Economy
subprogramme, which was launched in 2011394
as a part of combatting unemployment395
, South
African government places a special emphasis
on the development of art, cinema, music, and
crafts. The programme in 2024 funds 15 projects
to enable market access, 9 provincial commu­
nity arts development programmes, 25 national
and provincial flagships, and 65 creative industry
projects. In 2024 USD 63 million396
is allocated to
the subprogramme. The funds are used to create
60,390 job opportunities in the cultural and crea­
tive sector. Of this allocation, USD 3.65 million
is earmarked for placing 1,020 artists in schools
over the next three years. The amount awarded is
capped at USD 26,316 per grant per beneficiary.
By 2019, in a three-year period, the Festivals and
Events Grant Programme under MGE had sup­
ported 153 events across the country creating
averagely 1,423 permanent jobs397
per annum in
the cultural sector.
Contemporary dance festival,
funded by Mzanzi Golden Economy
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Many African nations either lack formal policies or
have only begun to address the creative sector.
A common trend across
the continent is the focus
on cultural heritage preservation
often overshadowing modern
creative industries
While some countries prioritise traditional arts and
cultures conservation their policies do not yet fully
address the potential of emerging digital and con­
temporary creative sectors.
A key challenge facing the creative industries in de­
veloping economies is the sector’s informality. For
instance, in countries like Zimbabwe, a significant
portion of creative industry activity takes place in the
informal sector398
. The ILO-UNESCO report notes
398 UNESCO and ILO. New ILO-UNESCO Report: Despite Its Potential, Zimbabwe’s Creative Economy Remains Largely Informal. URL: https://www.unesco.org/en/articles/new-
ilo-unesco-report-despite-its-potential-zimbabwes-creative-economy-remains-largely-informal-and
399 South African Cultural Observatory. South Africa’s Cultural Economy. Accessed October 5, 2024. URL: https://www.southafricanculturalobservatory.org.za
that 93% of creative professionals are freelancers
with only 7% being salaried employees in registered
enterprises. Similarly, in the music and film industry,
many artists and producers operate outside formal
structures, rendering their contributions invisible.
Another issue is the lack of data collection. In most
African countries, there are no agencies or pro­
grammes to monitor and analyse the creative eco­
nomy on a country-wide or regional level. This results
in fragmented and often inaccurate data regarding
the sector’s contribution to GDP. In South Africa,
for example, one of the continent’s most developed
economies, official data on the creative industries’
contribution to the economy only started being col­
lected in 2015 by the Department of Arts and
Culture (DAC), Statistics South Africa (Stats SA),
and the South African Cultural Observatory (SACO).
This still does not encompass the full spectrum
of cultural production. For example, sectors like
informal craft industries, fashion and new media
are often overlooked because they lack formal
structures. The lack of comprehensive data also
extends to rural and community-based cultural ac­
tivities, which are vital to the creative ecosystem
but remain difficult to quantify due to their infor­
mal nature.
Column of Rhythm II
by Tadesse Mesfin, 2022
South African Cultural Observatory399
(SACO),
which leads the effort in gathering this data, tracks
contributions from sectors such as television and
film production, live performance, heritage in-
stitutions and visual and performing arts. These
­
areas are included because they have clearer
economic outputs and more formalised struc­
tures, allowing for easier measurement through
box office revenues, festival attendance and tick­
et sales. SACO is a national research and statistical
159
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HSE University Center for African Studies
initiative launched in 2015 under the auspices of
the ­
Department of Sport, Arts, and Culture, which
costed USD 3.38 million in the first three years of
work400
. Its primary aim is to develop a comprehen­
sive cultural information system that captures and
analyses data related to South Africa’s cultural and
creative industries (CCIs).
Cultural and creative industries contributed
USD 12 billion to South Africa’s GDP in 2020
According to the SACO 2022 study401
, the cul­
tural and creative industries contributed USD 12
billion to South Africa’s GDP in 2020, accoun­
ting for under 3% of the country’s total econom­
ic output. The largest contributors were design
and creative services, valued at USD 3.8 billion,
and audiovisual and interactive media, contri­
buting USD 3.7 billion. SACO supports policy­
making by providing analysis and data on the
economic and social impacts of arts, culture,
and heritage sectors. It operates in partner­
ship with Nelson Mandela University, Rhodes
­
University, and the University of KwaZulu-Natal.
One of the major outcomes of SACO’s work
is the establishment of a cultural information
system, which helps policymakers and industry
stakeholders make informed decisions. SACO’s
efforts have also improved the geographic and
sectoral understanding of the creative industries
in South Africa, highlighting the concentration
of creative economic activity in regions such as
Gauteng (46.5% of the sector’s economic out­
put) and the Western Cape and KwaZulu-Natal
contributing 14% and 17%, respectively402
.
Another key observatory is the Observatory of
Cultural Policies in Africa (OCPA)403
, which was
established in 2002. It operates as an indepen­
dent Pan-African organisation with support from
bodies such as UNESCO, the African Union, and
400 Parliamentary Monitoring Group (PMG). Meeting Overview: National Assembly Committee. URL: https://pmg.org.za/committee-meeting/25421/
401 South African Cultural Observatory. Snapshot of the Cultural and Creative Industries in South Africa. URL: https://www.southafricanculturalobservatory.org.za/article/
snapshot-of-the-cultural-and-creative-industries-in-south-africa
402 South African Cultural Observatory. South African CCI Mapping Study: Review of Methods. URL: https://www.southafricanculturalobservatory.org.za/download/comments/1
013/6b180037abbebea991d8b1232f8a8ca9/South+African+Cci+Mapping+Study+Review+Of+Methods
403 OCPA (Observatory of Cultural Policies in Africa). Official Website. URL: https://ocpa.irmo.hr/index-en.html
404 Africanews. Burna Boy: The First African Artist with 100 Million Streams from Three Albums. URL: https://www.africanews.com/2021/05/13/burna-boy-the-first-african-
artist-with-100-million-streams-from-three-albums-chartdata
405 Essence. Wizkid’s “Essence” Reaches Top Ten on Billboard. URL: https://www.essence.com/entertainment/wizkid-essence-top-ten-billboard/
others. Based in Mozambique, OCPA has a mission
to monitor cultural trends and national cultural
policies across Africa, with the goal of integrating
them into broader human development strategies.
It focuses on advocacy, information exchange and
capacity-building initiatives to support cultural de­
velopment in the region.
Digitalisation of creativity
Digital transformation has become a cornerstone for
the growth and evolution of Africa’s creative indust­
ries providing opportunities for artists, musicians, and
other content creators to reach international markets.
The rise in connectivity has been instrumental in em­
powering African creators to leverage digital platforms
to distribute their work, engage with global audiences,
and diversify their revenue streams.
One of the most transformative aspects of digita­
lisation has been the ability for African musicians
to bypass traditional industry bottlenecks by using
streaming platforms such as Spotify, Apple Music or
YouTube. Iconic African musicians like Burna Boy and
Wizkid have utilised these platforms to connect with
international audiences. Burna Boy’s album Twice as
Tallamassedover100millionstreamsonSpotifywith­
in just a few months of its release404
, while ­
Wizkid’s
track Essence became the first Nigerian song to
chart on the Billboard Hot 100405
gaining massive
traction through digital platforms. Spotify has played
a pivotal role in showcasing African musicians with
Afrobeats rapidly gaining global traction. One of the
standout examples is Rema, a Nigerian artist whose
song Calm Down featuring Selena Gomez made his­
tory by becoming the first African artist-led track to
surpass one billion streams on Spotify.
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According to Spotify data, Calm Down has garnered
the most of its streams from the US, India, Mexico,
Brazil, and the UK showcasing the song’s global ap­
peal406
. The official music video has also achieved re­
markable success with over 615 million views further
demonstrating its ability to resonate with audiences
across borders.
Inaddition,Spotify’s2023Wrappeddatashowedthat
Nigerian music saw a 284%407
increase in local music
consumption. Rema, along with other Afro­
beats stars
like Asake, continues to dominate the global music
charts positioning Afrobeats as one of the most ex­
ported genres from Africa. These platforms have not
only expanded the reach of African musicians but
have also allowed them to directly monetise their
work without relying solely on local markets, where
copyright systems and licensing structures are often
underdeveloped.
Wizkid, photo by Nabil Elderkin
The film and digital media sectors in Africa have also
seen a tremendous boost due to digital platforms.
406 Forbes. Rema’s “Calm Down” Makes History as First Afrobeats Song to Surpass 1 Billion On-Demand US Streams. URL: https://www.forbes.com/sites/imeekpo/2024/06/21/
remas-calm-down-makes-history-as-first-afrobeats-song-to-surpass-1-billion-on-demand-us-streams/
407 Spotify. 2024 Loud  Clear Report. URL: https://loudandclear.byspotify.com
408 PwC. Africa Entertainment and Media Outlook 2023. URL: https://www.pwc.com/ng/en/publications/entertainment-and-media-outlook.html
409 Boomplay Music. Official Website. URL: https://www.boomplay.com
410 Universal Music Group. Audiomack Signs Licensing Agreement with Universal Music Group to Expand Global Footprint in Africa. URL: https://www.universalmusic.com/
audiomack-signs-licensing-agreement-with-universal-music-group-to-expand-global-footprint-in-africa/
Streaming giants like Netflix and Showmax have re­
cognised the untapped potential of African content
and invested heavily in local production. This invest­
ment is part of a broader trend of digital platforms
serving as key drivers of growth in Africa’s creative
economy by facilitating content distribution and ex­
panding market access. According to PwC408
, Africa’s
entertainment and media industry is projected to
grow by 12% annually, outpacing global averages.
A prime example is Boomplay, a Nigeria-based plat­
form that has become a key player in the Africa’s
music market. With over 75 million active users409
,
­
Boomplay provides African musicians with an oppor­
tunity to enter the global stage, generating stream­
ing revenue and attracting attention of international
produ­
cers. The case proves that creative industries
thrive even in environments where access to re­
sources is limited, and traditions dominate modern
forms of expression.
Telecom partnerships provide better network cove­
rage
and improved bandwidth in remote areas. ­
Audiomack,
a music streaming and discovery platform signed a
licensing agreement with Universal Music Group
(UMG) in 2022, enabling access to UMG’s catalogue
for Audiomack users across 16 African countries,
including Nigeria, South Africa, Kenya and Ghana410
.
Boomplay is a music streaming platform focusing on African artists. It has become a crucial tool for
musicians across the continent. This streaming platform is owned by Transsion Holdings , a Chinese
smartphone manufacturer (which also owns TECNO, Infinix and Itel) and NetEase, a major Chinese
internet company. This app is pre-installed on millions of smartphones sold by Transsion across the
continent. In 2020 African music on the platform grew by 60% underscoring the interest in African
culture both on the continent and beyond. Boomplay continues to expand its presence across
Africa by forming strategic partnerships with telecom companies, aimed at making its vast music
catalogue more accessible to users. By collaborating with telecom providers such as AirtelTigo in
Ghana, Boomplay has created affordable subscription models that allow users to access its vast
music catalogue through their mobile accounts eliminating the need for credit cards which many
people in rural areas lack.
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This expansion aims to help African artists reach
broader audiences and strengthen the streaming
ecosystem on the continent. Audiomack has more
than 20 million monthly users globally and has
played a significant role in boosting the reach of ris­
ing African stars such as Omah Lay. MTN’s partner­
ship with Audiomack in Nigeria is another example
of this model, allowing users in remote regions to
stream music with minimal data costs, thereby ma­
king their entertainment affordable.
Digitalisation has enabled the growth of e-com­
merce platforms in the fashion and art sectors.
­
African fashion designers, who once relied on phys­
ical shopfronts and local markets, can now display
their work globally through platforms like Instagram,
TikTok and Shopify. The ability to sell directly to
consumers has significantly increased the visibility
of African fashion on the global stage. For example,
African designers have been featured at major fash­
ion shows in Paris, London or New York, largely due
to their digital presence.
Between 2013 and 2023, African designers have
increasingly gained prominence at Paris Fash­
ion Week showcasing their talents and diversi­
fying the global fashion scene. MaXhosa Africa,
­
David Tlale from South Africa and Christie Brown
from Ghana have consistently appeared at these
events marking a new era for African fashion. In
2022 nine African designers showcased their col­
lections at the Ethical Fashion Initiative’s411
official
presentation, highlighting the craft and creativity
of the continent.
Kenyan artists, working with fashion
brands, Ethical Fashion Initiative
Fashion brand Hamaji designer
Louise Sommerlatte
411 Ethical Fashion Initiative. African Fashion Shines at Paris Fashion Week. URL: https://ethicalfashioninitiative.org/stories/african-fashion-shines-at-paris-fashion-week
412 Karl Lagerfeld. Kenneth Ize x Karl Lagerfeld Collection. URL: https://www.karl.com/us-en/karlxkenneth.html
413 African Development Bank. Africa Investment Forum: Closing the Technology Gap Promises Significant Gains for Africa’s Creative Industries. URL: https://www.afdb.org/en/
news-and-events/africa-investment-forum-closing-technology-gap-promises-significant-gains-africas-creative-industries-55797
The impact of digital platforms goes far beyond fi­
nancial returns providing African creative profes­
sionals with unprecedented opportunities to colla­
borate and reach international audiences. A notable
example is the 2020 collaboration between Nigerian
designer Kenneth Ize and French fashion house Karl
Lagerfeld412
. Although the collection was developed
online due to pandemic restrictions with much of
the work carried out remotely, Ize chose to present
it through an in-person runway show. This decision
emphasised the importance of physical fashion pre­
sentations highlighting the need for a balance bet­
ween digital innovations and real-world experiences
in the fashion industry.
The future of Africa’s creative
industries is closely tied to
continuous digital transformation
The African Development Bank (AfDB) has pro­
jected413
that USD 9 billion will be needed annu­
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ally through 2030 to close the continent’s digital
infrastructure gap. This investment is needed the
most for expanding broadband
access, data centres and cloud
services, all of which are critical
for the growth of Africa’s crea­
tive sectors.
Programmes such as the AfDB’s and a Federal
Government of Nigeria Investment in Digital and
Creative Enterprises414
(iDICE) launched in 2021
have already begun addressing some of these
challenges. Additionally, the programme is pro­
jected to add USD 6.4 billion to Nigeria’s eco­
nomy by 2027. The funding breakdown includes
USD 170 million from AfDB, USD 116 million
from the French government through Agence
Française de Développement and USD 70 million
from the Islamic Development Bank. The Nigerian
government will contribute USD 45 million, while
other institutional and private investors are ex­
pected to provide the remaining funding through
a DICE Fund415
.
Making creative economy
work for Africa
The demand for African creative products
has surged, with the primary buyers being the
­
African diaspora and global streaming platforms.
414 African Development Bank. Nigeria Digital and Creative Industries Project. URL: https://mapafrica.afdb.org/en/projects/46002-P-NG-K00-009
415 African Development Bank. African Development Bank and Partners Invest $618 Million in Nigeria’s Digital and Creative Industries. URL: https://www.afdb.org/en/news-and-
events/press-releases/african-development-bank-and-partners-invest-618-million-nigerias-digital-and-creative-industries-59766
416 African Business. African Consumers Remain Loyal to Non-African Brands. URL: https://african.business/2024/06/dossier/african-consumers-remain-loyal-to-non-african-brands
Intra-African trade in creative industries is growing,
although it remains limited compared to global trade.
A report on brand preferences416
highlights that
only 14% of the top brands in Africa are of African
origin with companies from the US, Europe and Asia
dominating the market. This loyalty to foreign brands
often overshadows the growth of local industries, in­
cluding the creative sector.
The surge in demand for African creative content
internationally contrasts with the fact that African
narratives and cultural products are still largely in­
fluenced by external agendas. Western and Asian
media, global brands and international platforms
continue to shape the African story, a phenome­
non that underscores the importance of creative
sovereignty. By building and nurturing local brands
and industries, Africa can better retain the eco­
nomic and cultural benefits of its own creative
outputs.
Strengthening creative sovereignty ensures that
African cultural products not only reach global markets
but also serve as a driving force for economic growth
within the continent itself.
Despite the rising success of Africa’s creative
industries African consumers themselves
still remain highly loyal to non-African brands
163
African
businesses
–
the
emerging
regional
and
global
players
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
African business:
prospects and challenges
Africa’s future imprint in the global economy will
largely be determined by its ability to localise, if par­
tially, industrial production and place its resources
in service to its own markets. As of today, there are
only individual success stories, such as Botswana,
a country that has localised the processing of De
Beers diamonds to create an entirely new industry.
However, scaling these successes across the vast
geographies of the continent remains challenging,
and this is not only because of the opposition from
the dominant multinational corporations (MNCs)
and foreign investors. At the same time, govern­
ment policy measures, some of which were ex­
plored in previous chapters, will hardly be sufficient
on their own.
African businesses have
the potential to emerge
as the key driver of localisation
and sub-regionalisation in Africa
As well as the development of domestic markets,
especially when they enjoy the support from African
governments through regulatory measures. Inte­
gration in the global value chains, while still an im­
portant indicator, cannot be the primary measure
of success for economies. Moreover, at the current
model of globalisation, as demonstrated earlier with
the cases of the energy and food sectors, contri­
butes to the formation of isolated industries that
are export-oriented and disconnected from the
mechanics of the national economy.
African businesses – the emerging
regional and global players
164
African
businesses
–
the
emerging
regional
and
global
players Africa 2025: Prospects and Challenges
HSE University Center for African Studies
417418419420421
417 World Bank. World Development Report 2020: Trading for Development in the Age of Global Value Chains. URL: https://www.worldbank.org/en/publication/wdr2020
418 U.S. Geological Survey. Mineral Commodity Summaries 2024. URL: https://doi.org/10.3133/mcs2024
419 African Mining. The future of mineral exploration – contributions from Africa. URL: https://www.africanmining.co.za/2024/08/26/the-future-of-mineral-exploration-
contributions-from-africa/
420 ARM. ARM Ferrous. URL: https://arm.co.za/arm-ferrous/
421 UNCTAD. TradeMatrix. URL: https://unctadstat.unctad.org/datacentre/dataviewer/US.TradeMatrix.
African companies are gradually integrating into global value chains. The World Bank417
suggests
the most successful integration has been in the production of food products (e.g. cocoa and
coffee), clothing (associated with the gradual relocation of the textile industry from Asia) and
automotive components (associated with global car manufacturers setting up plants in Northern
and Southern Africa). However, this integration has largely been marginal given Africa’s relatively
low level of participation in global value chains with an average of 8% of GDP. Besides, these
8% boil down most often to Africa being a source of raw materials (hydrocarbons and other
minerals). By contrast, the continent’s share in global trade of intermediate goods is only 3%.
Additionally, production centres in Africa are highly specialised and excessively dependent on
the fluctuations of external markets.
Africa’s integration in the value chains mostly ends at the beginning of these chains, with the
supplier role, a process essentially driven by the growing demand from advanced economies
for the raw materials needed to power their technologies. The discourse of critical resources
and their accessibility has placed quite a spotlight on Africa’s role in ‘fuelling’ their devel­
opment with its cobalt reserves (55% of the world’s deposits), manganese (35%), graphite
(24%), nickel (5.6%) or lithium (around 5%), PGMs (90%) and chromium (36%)418
. Given
that prospecting and exploration activities in Africa has seen a 38% increase in the past
seven years and that the trend will likely continue, these proportions will shift even more in
Africa’s favour419
.
African business is set to play a greater role in tapping into the potential of this expanding market.
In some countries, there has been a drive to reduce the reliance on foreign investors, replacing
it with locally driven efforts to explore and develop the critical resources. For instance, South Africa’s
African Rainbow Minerals that operates in the country’s Northern Cape with minimal foreign own­
ership and management has been able to produce some 116,000 tonnes of ferromanganese an­
nually. A success story for the national economy and a top 10 producer on a global scale, the
company expanded its footprint with its participation in a joint venture to develop manganese in
Malaysia, where it is a major shareholder (with a 54% stake, while another 27% is owned by Japan’s
Sumitomo Corp., and 19% by China Steel Corp.)420
.
Another factor is the rising global demand for “daily” crops, such as coffee or cacao, which Africa
can produce with its comparative advantages and economic efficiencies. Africa’s unique climate
as well as the continent’s emerging (and therefore relatively cheap) labour markets add to the
competitiveness of African produce. Among coffee connoisseurs, African varieties are well-known
for a balance of acidity and a rich flavour palette, while cacao from the continent’s top producers,
Côte d’Ivoire, Ghana, Nigeria and Cameroon, has dominated the world’s markets for years. In 2023,
cacao exports from Africa stood at USD 10.9 billion, or 41% of the global figure. Back in 2002, this
proportion was closer to 47%, but the market has grown 3.7 times since then, despite dollar infla­
tion and the crises that affected the local producers421
.
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Still, the share of non-African businesses in the GDP
of African countries is somewhat declining, and African
companies have acquired more visibility in recent
years, especially on domestic consumer markets.
Banking and finance, telecom, construction,
transport, food and beverages, oil products
trading and retail markets are booming with local
businesses leading the way
This achievement was made possible through a com­
bination of government support measures for local
producers and companies’ consistent investment pol­
icy. In Nigeria, more than 60% of the cement market is
now controlled by the Nigerian company Dangote Ce-
ment426
. In Tanzania, more than 60% of the local LPG
market is now taken over by local companies (Taifa,
Manjis,Oilcom,LakeGas and others)427
investinginre­
gional transport, storage and distribution infrastructure.
422 ResearchGate. Pro-Poor Development and Power Asymmetries in Global Value Chains. URL: https://www.researchgate.net/publication/308606263_Pro-Poor_
Development_and_Power_Asymmetries_in_Global_Value_Chains
423 Al Jazeera Media Network. Chocolate prices to keep rising as West Africa’s cocoa crisis deepens. URL: https://www.aljazeera.com/gallery/2024/3/30/chocolate-prices-to-
keep-rising-as-west-africas-cocoa-crisis-deepens
424 ResearchGate. Pro-Poor Development and Power Asymmetries in Global Value Chains. URL: https://www.researchgate.net/publication/308606263_Pro-Poor_
Development_and_Power_Asymmetries_in_Global_Value_Chains
425 WITS. Cocoa paste, not defatted exports by country in 2022. URL: https://wits.worldbank.org/trade/comtrade/en/country/ALL/year/2022/tradeflow/Exports/partner/
WLD/product/180310
426 Dangote Cement Plc. “The Dangote Way” Operational Pillar. URL: https://cement.dangote.com/wp-content/uploads/2021/04/Operational-Pillar.pdf
427 Energy and Water Utilities Regulatory Authority. The Mid and Downstream Petroleum Subsector Performance Review Report for the Year 2022/23. URL: https://www.ewura.
go.tz/wp-content/uploads/2024/06/PetroleumReport.pdf
428 Energy and Water Utilities Regulatory Authority. The Mid and Downstream Petroleum Subsector Performance Review Report for the Year 2022/23. URL: https://www.ewura.
go.tz/wp-content/uploads/2024/06/PetroleumReport.pdf
429 Ecofin Agency. Algeria’s Djezzy Revenue Surges 9.4% in H1 2024 Amid Continued Growth. URL: https://www.ecofinagency.com/telecom/2308-45802-algeria-s-djezzy-
revenue-surges-9-4-in-h1-2024-amid-continued-growth
430 CAPA. Africa Aviation Outlook 2020: Performance lags, pending integration. URL: https://centreforaviation.com/analysis/airline-leader/africa-aviation-outlook-2020-
performance-lags-pending-integration-504774
431 African Airline Association. African airlines’ performance updates by AFRAA for June 2024. URL: https://www.afraa.org/african-airlines-performance-updates-by-afraa-for-june-2024/
432 Compiled by the authors based on calculations from open sources, including Jeune Afrique’s 500 champions africains.
In Algeria, two state majority-owned companies (Mo-
bilis428
and Djezzy429
) managed to consolidate more
than 70% of the local telecom market. In the mean­
time, the share of African air carriers on intercontinen­
tal routes increased from 30%430
in
2019 to 40%431
in 2023.
Corporate landscape is evolving
not only on the level of consumer
markets but also among big play­
ers. Research432
conducted by the authors indicates
that there are – at least – 206 companies with main
operations in Africa whose capitalisation exceeds
USD 1 billion. They represent 31 countries. 36,4% of
these companies are South African, 12,6% Egyptian,
7,8% Moroccan, 4,9% each operate in Nigeria and
Algeria, 4,4% are Tunisian, 2,9% each are Ghanaian,
and 2,4% each are Kenyan and Senegalian. The other
22 countries take up the remaining 21,4%.
The largest players on the national market remain foreign, though. America’s SACO, France’s
CEMOI-CI and Switzerland’s Barry Callebaut are the dominant forces in Côte d’Ivoire’s cocoa
market. While their procurement mostly comes from local farmers, Ivorian businesses are largely
excluded from the field, and the farmers receive a mere 4-6% of the final product’s value422
. This
has arguably exacerbated the harvest crisis of 2024 for most of the farmers, who now have less
produce to sell at more volatile prices that fail to reflect the full value423
.
No local company, aside from the few local craft producers of chocolate, has been engaged in pro­
cessing the beans or producing industrial chocolate for export (these activities account for 24% of
the final product’s value), nor has a potential to market its produce as a global brand (some 70% of
the value!)424
. Besides, no African nation tops the list of the world’s largest producers of cocoa pow­
der (these are the Netherlands, Malaysia, Germany, Indonesia and Spain), even though the raw base
could often be of African origin425
.
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433434
Some 30% of these companies are subsidiaries of
foreign (mostly, Western) transnationals or have ma­
jor foreign shareholders. Most such companies are
located in Southern Africa (28%) as well as in Western
(25%) and Northern (24%) Africa.
Some 44% of all these companies are state-owned
or operated with a strong government involvement.
433 African Business. Takeoff! Africa’s airlines show signs of revival but turbulence ahead. URL: https://african.business/2024/07/trade-investment/takeoff-africas-airlines-show-
signs-of-revival-but-turbulence-ahead
434 The Business Year. West African Air Travel in 2024. URL: https://thebusinessyear.com/article/west-african-air-travel-in-2024/
Most of these companies are in energy (38%) and
mining (15%), as well as telecommunications, utilities
and manufacturing (7,58% each).
38% of all these companies are located in the coun­
tries of Southern Africa, while 30,1% are from Northern
Africa, 16% are from Western Africa, with Eastern and
Central Africa taking up 9,2% and 6,3% respectively.
Africa’s share in the global aviation market is about 2% – a figure that has remained mostly
static for the past 20 years. However, a reverse trend seems to be emerging. Three major na­
tional airlines operate on the continent: Ethiopian Airlines, Kenya Airways and South African
Airways. These regional leaders have global ambitions as Ethiopian Airlines may well be on
track to increase passenger numbers by 30% and revenue by 20% by 2024. Meanwhile, Kenya
Airways posted a profit for the first time in seven years, reflecting positive momentum and
increased demand for air travel on its routes. In March, the airline announced additional flights
to New York and Paris, as well as new routes to Accra, Freetown and Lagos, which showcases
the company’s leadership aspirations both in Africa and beyond. South African Airways is re­
covering, as it has resumed some of its intercontinental routes, such as the direct air link from
Johannesburg to Perth in Western Australia433
.
Smaller African airlines, such as Nigeria’s Air Peace, are also expanding. In March 2023, Air
Peace launched a connection between Lagos and London, one of the first new intercontinen­
tal routes operated by a Nigerian airline in decades. Increased demand for air travel to West
Africa – destinations like Ghana, Senegal, Côte d’Ivoire and Nigeria – has local impact, too.
The trend for business expansion in the airline industry is not limited to South Africa, Ethiopia,
Kenya and Nigeria. Other countries across the continent are following suit. EgyptAir, Libya’s
Afriqiyah Airways and Air Mauritius have all placed orders for Airbus A350 aircraft, suitable
for competing on long intercontinental routes. In 2023, Air Côte d’Ivoire launched its first
non-stop flight to the United States. The airline has also introduced several long-haul flights,
including a ten-hour route to Johannesburg434
. Meanwhile, Ghana’s Civil Aviation Authority
(GCAA) plans to issue an operator’s license to GhanaAirlines, marking the start of a new air­
line in West Africa.
The trend towards the development of regional aviation hubs, which has so far been most noti­
ceable in Eastern Africa, where the past decade was marked by investments in the expansion
of airports in Addis Ababa, Dar es Salaam, Kampala, Kigali, etc. and significant support of flag
carriers such as Rwanda Air and Uganda Airlines, is likely to spread to other regions (primarily
Western Africa) in this decade. The development of regional airways is important not only as
a driver of airline business development in Africa, but also for the formation of subregional
markets (getting from Lagos to Dakar, for example, should be easier than getting from Lagos
or Dakar to Paris).
167
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Most of the combined turnover of these companies
comes from South African companies (42,6%), fol­
lowed by Algerian companies (14%), Egyptian and
Nigerian companies (10,4% and 7,1% respectively),
Moroccan companies (4,9%).
Average company revenue is highest in the coun­
tries of Southern and Northern Africa where it is es­
timated to be around USD 3.7 billion, followed by the
countries of Western Africa (USD 2.55 billion) and
Central Africa (USD 2.4 billion). The latter is due to
the discrepancy between companies from Angola
and companies from the other countries of the sub­
region. An average for Eastern African companies
stands at USD 1.65 billion.
Traditional sectors dominate the list, comprising of
the oil and gas sector (with an almost equal geo­
graphical distribution of companies across Northern,
435 Orano. Update on the situation of the Imouraren mining project. URL: https://www.orano.group/en/news/news-group/2024/june/update-on-the-situation-of-the-
imouraren-mining-project-in-niger
Central and Western Africa and only a marginal pres­
ence in Southern Africa), followed by mining houses
(half of companies are based in Southern Africa) and
telecommunications (most companies are located in
the countries of Western and Southern Africa). Oth­
ers are retailers and conglomerates. Conglomerates
combine different sectors (e.g. agriculture and in­
dustry, automotive and real estate, food processing
and retail, retail and logistics etc.).
A more robust role of African businesses and banking
groups is complemented by gradual changes in Africa’s
corporate landscape. On one hand, the enactment
of more stringent regulatory, tax and technical
oversight is helping to reduce operating margins in
certain subregions as it is becoming increasingly dif­
ficult for foreign companies to bypass these require­
ments. In practice, this could lead to instances such
as the nationalisation of Orano’s assets in Niger435
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or Shell’s exit from onshore operations in Nigeria436
,
to give a few examples from a Western Africa con­
text. On the other hand, amidst global shifts, trans­
national corporations (TNCs) and foreign investors
are likely to shift focus to their own jurisdictions.
436 Reuters. Nigeria rejects Shell’s $1.3 billion oil asset sale. URL: https://www.reuters.com/markets/deals/nigeria-rejects-shells-13-billion-oil-asset-sale-thisday-reports-2024-
10-16/#:~:text=Shell%20on%20Jan.%2016%20announced,more%20lucrative%20deep%20offshore%20fields.
437 Économie.Les banques françaises se replient du continent africain. URL: https://www.lefigaro.fr/flash-eco/societe-generale-annonce-ceder-ses-filiales-au-congo-guinee-
equatoriale-mauritanie-et-tchad-20230608
438 Challenges. Pourquoi la Société générale se désengage du continent africain URL: https://www.challenges.fr/economie/pourquoi-la-societe-generale-se-desengage-du-
continent-africain_892271
Consequently, African businesses will be there to
“fill the void”, and they are expected to play an in­
creasingly systemic role in both the economies and
politics of African countries.437438
One example is the withdrawal of the French Société Générale bank from African markets, which be­
gan in 2023 when Société Générale announced the sale of its subsidiaries in the Republic of Congo
and Equatorial Guinea to the pan-African bank Vista (whose parent company, Lilium Capital is owned
by Simon Tiemtoré, a Burkinabe entrepreneur), and the sale of its subsidiaries in Mauritania and Chad
to the pan-African Coris Bank (fully owned by the family of its founder Idrissa Nassa ALSO from
Burkina Faso)437
. In 2024, the French bank went on to announce the sale of its Moroccan subsidiary,
Société Générale Maroc, to the Moroccan company Saham, owned by local entrepreneur Moulay
Hafid Elalamy, for USD 811 million438
.
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African business is changing, and the role it plays is
evolving. Most commonly, literature439
attributes this
to “improved economic reforms and political govern­
ance”asthenecessaryprecursortothis“majortransfor­
mation”. This narrative is quite popular in the Western
line of thinking, and for good reason. However, this
is a narrative that believes that European experience
could just as well be relevant in a radically different
social environment. When praising “the wave of eco­
nomic liberalisation” in Africa, it typically underscores
opportunities for international firms to grow, which
439 UCT Graduate School of Business. Political Economy of Doing Business in Africa. URL: https://globalnetwork.io/sites/default/files/2020-11/Cape%20Town_0.pdf
440 TechnoServe. The Mozambican cashew industry. URL: https://www.technoserve.org/mozambique/the-mozambican-cashew-industry/
441 AIM. New Cashew Law Reverses World Bank’s Destructive Policies. URL: https://aimnews.org/2023/05/05/new-cashew-law-reverses-world-banks-destructive-policies/
442 Condor Anacardium. URL: https://condoranacardium.com/pt/
443 Wiley. Institutional Complementarity and Substitution as an Internationalization Strategy: The Emergence of an African Multinational Giant. URL: https://doi.org/10.1002/gsj.1143
also prompts the question: does this transformation
provide more opportunities for local business to have
greater impact on the national economy, or does it
mostly favour non-African MNCs, offering them an
easy framework to navigate in?440441442 443
Another aspect is that this narrative leaves no room for
the inherent competitive advantages of African busi­
nesses: namely, the ability to operate and thrive in un­
certain environments, which MNCs tend to avoid unless
they have a risk-sharing agreement with a local partner.
To illustrate the point, the evolution of the cashew processing industry in Mozambique is quite relevant.
This has been a traditional sector in the country, and the government encouraged domestic process­
ing by imposing export bans and high export taxes from 1987 to 1995. In the 1990s, the World Bank
demanded the liberalisation of the cashew sector as a condition for loans, urging the end of industry
protection and rather focusing on raw cashew exports. The World Bank argued that Mozambique’s pro­
cessing industry was unsustainable and that exporting raw cashews for processing elsewhere would be
more efficient440
. Before this intervention, Mozambique processed around 50,000 tonnes of cashews
annually, but the figures dropped to a mere 8,000 tonnes and unable to compete internationally, major
processing plants had to be closed. By 1999, Mozambique reintroduced protective measures, including
an export tax on raw cashews. In 2023, a new law increased the tax from 18% to 22%441
. By the 2020s
processing capacities achieved 60,000 tonnes annually. Condor Anacardium442
is just one of the local
companies that benefited from a change in policy. Commencing cashew processing in 2004, the com­
pany sources raw material from 50,000 individual farmers. Annual exports of around 5,000 tonnes
arguably make the company a Local African Exporter (LAE, see below).
In cases, such as with South African Breweries (SAB), knowing how to leverage uncertainty could
be a game-changer. The company was founded in 1895, but it achieved local success at the height
of international sanctions pressure against the apartheid, although that naturally restricted the
company’s scope of operations. By the time the multinational AB InBev acquired SAB in 2016 for
USD 107 billion, it was the world’s second largest brewery by revenue with a truly global presence
in some 80 markets. The company’s expansion drive was mostly focused on country with a business
environment resembling South Africa, where informal networking and uncertainty are two domi­
nant factors. This was SAB’s essential competitive edge in other parts of Africa, Eastern Europe,
Southeast Asia and Latin America. Achieving success in these markets helped the company gain
enough experience to establish its presence in the US in 2002 through an MA with Miller Brewing
Company, which led to a re-branding to SABMiller. Even after that, the company has retained its
unique business model with a specific focus on developing markets.443
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Moreover, local firms easily take advantage of op­
portunities in the informal sector, which remains an
integral (and even growing) part of most African
economies.
Where foreign business fails to find rationality,
local businesses build on kinship and informal
networks to deliver the result
These are all unique perspectives that may be rel­
evant even beyond the African context, especially
on other developing markets where business un­
certainty is the norm444
.
444 Thunderbird Int. Bus. Rev. The internationalization of African firms: Opportunities, challenges, and risks. URL: https://doi.org/10.1002/tie.21977
Furthermore, the narrative discounts the fact that
many African nations now have stronger and more
integrated national economies with a focus on
growing local capabilities and certain restrictions
on FDI. Ghana could be a nota­
ble example, as the country both
reinforced its national economy,
providing more space for local
businesses to grow, and retained
a reputation as one of Africa’s top investment des­
tinations. Ghana’s investment code prohibits foreign
investors from such sectors as petty trading, taxi ser­
vices with fewer than 25 vehicles, lotteries, beauty
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salons, scratch card printing for telecommunications,
office sta­
tionery (i.e. notebooks), retail of pharma­
ceutical products and the production and sale of
bottled water in sealed packages. In addition, the
code limits FDI in sectors like telecommunications,
banking, fishing, mining, oil and real estate. For in­
stance, the Ghanaian government receives a 10%
equity stake in all extractive licenses in the mining
industry through ‘free carried interest’, requiring no
financial contribution from the state. The minister
of mines can also demand the issuance of ‘special
shares’ for the president, granting the right to attend
and speak at shareholder meetings without voting or
profit-sharing privileges445
. These measures aim to
maintain some control over foreign-driven business
operations. Besides, the nation utilises its well-devel­
oped network of internal trade, supported by a rela­
tively advanced infrastructure. The ports of Takoradi
and Tema play a crucial role in facilitating trade with
the neighbouring landlocked countries of Burkina
Faso, Mali and Niger. Ghana’s livestock trade, with
the dominant presence of small- and medium-sized
445 UNCTAD. Act 865 Ghana Investment Promotion Centre Act. URL: https://investmentpolicy.unctad.org/investment-laws/laws/196/ghana-investment-promotion-act-
446 Methodology is based on Deloitte. Latin America Rising”. URL: https://www2.deloitte.com/tw/en/pages/strategy/articles/latin-america-rising.html
companies like Otuo Farms Ltd., fosters connectivity
between the northern, eastern and southern regions,
as well as with the country’s immediate neighbours.
The role of African businesses, some of which
demonstrate the ability to combine the best corpo­
rate practices with the more context-specific tradi­
tional informal practices, will have greater impact on
African economies.
What is an African business?
Africanbusinesses(AB)areadiverselandscape.Com­
panies with African roots could be arguably grouped
into five categories depending on their ownership,
market reach, operational scope and other criteria446
:
1. Local African Businesses (LABs) are compa­
nies that operate locally, within a single African
country or even within one of its regions. Their
consumers are local, and such companies do not
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really have any partners from abroad and do not
export their goods and services to other markets.
Such companies do not have a well-­
elaborated
business strategy, and they rely heavily on the in­
formal sector, taking advantage of the local ‘rules
of the game’. These are insignificant taxpayers
for the government, although LABs represent
the greatest number of businesses on the conti­
nent. MTI Corp., a distributor operating in Egypt,
is just one example. With no foreign ownership
and public trading on the Egyptian Exchange, the
company’s business model allows it to cover 90%
of the national territory through 40,000 retail
outlets447
.
2. Local African Exporters (LAEs) are companies
that derive most of their revenue from exports
(either within or beyond Africa), although their
production capacities and business thinking are
still local. Quite often, such companies could be
integrated into global markets through trading
intermediaries or with a certain support from
government structures, formally or informally. In
most cases, such companies are especially pre­
sent in industries that first became a country’s
traditional basis of export during the colonial era.
This is why some of these companies could be
quite significant taxpayers for the government
and build on its support. Condor Anacardium is a
Mozambican company with a processing capac­
ity of 5,000 tonnes of cashew nuts annually, the
majority of which are exported. The exact export
routes are not well-documented, but the tradi­
tional routes will presumably include the United
States, Portugal and South Africa448
.
3. Multi-African Businesses (MABs) are companies
that could ramp up their operations beyond their
home country, spanning trans-border or subre­
gional markets. Such companies are more “visi­
ble” on the list of the country’s companies, and
their source of revenue is distributed between
home country and other markets. However,
447 MTI. Who we are. URL: https://mti-mmgroup.com/who-we-are/#2
448 Condor Anacardium. URL: https://condoranacardium.com/pt/
449 Prosuma. URL: https://groupeprosuma.com/
450 Marine Biotechnology Products. Home. URL: https://mbp.mu/
451 OCP. OCP Integrated report 2023. URL: https://ocpsiteprodsa.blob.core.windows.net/media/2024-04/Rapport%20Financier%20Annuel%202023.pdf
these companies do not have any presence be­
yond Africa. The retailer Prosuma Group, which
is based in Cote-d’Ivoire with no foreign owner­
ship, has operations in a number of French-spea­
king countries of the subregion, including Benin,
Burkina Faso, the Republic of Congo, Gabon,
Guinea, Mali, the DRC, Cameroon, Niger, Senegal
and Togo449
.
4. Multi-African Exporters (MAEs) are companies that
combine the most important features of MABs and
LAEs. While their consumer base could be mostly
outside of Africa, the operational core (i.e. produc­
tion, labour force) would be distributed between
the home country and other African markets. Quite
often, these markets will be countries that are part
of the same subregional integration or have a simi­
lar structure of the economy. Some MAEs could be
state-owned.OneexampleisMarineBiotechnology
Products, a private Mauritian company that produc­
es fishmeal and fish oils from by-products. The com­
pany’s production facilities are located in Mauritius
and in Cote-d’Ivoire, while the products are export­
ed to geographies as different as the United States,
Russia, South Africa and the EU450
.
5. International African Businesses (IABs) are com­
panies that have been the most successful in
socialisation, transnationalisation and interna­
tionalisation (see below for definitions). Most
of their revenue is generated outside of Africa,
which is why such companies have a broad net­
work of international partners, and they are also
often systemic players for the national economy.
Some IABs dominate the field in their subregion
or even across the whole continent. IABs could
be both state-owned and private. OCP Group,
a ­
Moroccan 95% state-controlled phosphate min­
ing and fertiliser company, falls into this group.
Operating in 16 geographies, primarily in Western
and Eastern Africa, the company has also estab­
lished a solid presence in the U.S., China, Brazil,
India, Singapore and some European countries451
.
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Another IAB is Oceana Group, a South African
fishing company with only 10% of foreign own­
ership. Conducting operations in Southern Africa
and the U.S., the company’s strategy focuses on
markets in Southern and Central Africa (52% of
revenue) as well as in Europe (17%) and Northern
America (15%)452
. The state-owned Ethiopian
Airlines is another example. The company oper­
ates secondary hubs in Togo and Malawi, offering
flights (i.e. exporting services) to 90+ countries
across all continents except for Australia and Ant­
arctica453
.
Although businesses in Africa share many opera­
tional features with companies in other developing
markets, they arguably have several characteristics
that make them quite distinct.
African business operates on a model that maxim­
ises the advantages of the formal and informal sec­
tors of the economy. The role of the informal sec­
tor cannot be disregarded when it comes to doing
business in Africa as the sector accounts for 85%
of all employment opportunities454
, contributing to
an estimated average of 62% GDP in countries of
Sub-Saharan Africa455
.
Seen from a traditional perspective, the informal
sector has a number of drawbacks, such as no le­
gal protection for workers formalised through
labour laws in the form of minimum wage, paid
leave, health insurance or pension contributions.
For governments, there could be challenges with
collecting tax in the informal sector as well as with
reflecting the sector’s role in the national GDP.
Still, 85% of Africans highly depend on the infor­
mal sector since it is the most common entry point
into the labour market for many. In most countries
on the continent, the formal economy is not large
or fast-growing enough to provide sufficient jobs.
However, there is also a specific social dimension to
the businesses in the informal sector of economies.
452 Oceana Group. Oceana Group Integrated report 2023. URL: https://www.oceana.co.za/_files/ugd/4b88cd_c3200311340743d4ae03438b1ea67190.pdf
453 Ethiopian Airlines. Ethiopian Airlines International Destinations URL: https://www.ethiopianairlines.com/ru/book/%D1%81%D0%B5%D1%82%D1%8C-%D0%BC%D0%B0%D1
%80%D1%88%D1%80%D1%83%D1%82%D0%BE%D0%B2/international
454 ILO. More than 60 per cent of the world’s employed population are in the informal economy. URL: https://www.ilo.org/resource/news/more-60-cent-worlds-employed-
population-are-informal-economy
455 Princeton University. Formalizing Africa’s Informal Sector Through the AfCFTA: An Opportunity for Economic Transformation. URL: https://jpia.princeton.edu/news/
formalizing-africas-informal-sector-through-afcfta-opportunity-economic-transformation
456 BRINK. Early Insights about the Informal Economy in Kenya. URL: https://www.hellobrink.co/post/early-insights-about-the-informal-economy-in-kenya
Like in many other African countries, Kenya’s in­
formal sector is dominated by micro-enterprises
working across various market segments (typical­
ly wholesale and/or retail trade in local markets).
The average lifespan of such businesses is esti­
mated around seven years, and they are common­
ly the sole source of income for both owners and
employees. Some 55% of these micro-enterprises
are owned by women, and another 54% are run by
young people, which are the two social groups that
face the greatest difficulty finding employment in
the formal sector (to illustrate the point: an estimat­
ed 67% of people under the age of 35 are officially
unemployed in Kenya, whereas the overall unem­
ployment rate in the country stands at 12.7%)456
.
At the same time, not only private companies, but
also large state players are increasingly working
with the informal sector. For example, instruments
to integrate the informal sector are being actively
introduced in the mining sector: initiatives to buy
174
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gold from artisanal miners are in place in Senegal,
DR Congo, Zimbabwe and other countries. There is
a growing demand for solutions in the field of dig­
ital traceability systems of goods, anti-counterfeit­
ing, and combatting the abuse of subsidy systems
(when subsidised goods are illegally exported to
neighbouring countries to be sold at market prices).
Business may become one of the drivers
of informal sector ‘recognition’, consumer demand
assessment and bridging information gaps,
which is the problem emphasised in almost every
chapter of this handbook.
African business typically relies on a network of in­
formal partnerships. Business is driven not only by
the rational pursuit of profit but also by culturally
defined ‘obligations’ that balance corporate gain
with community expectations. Obviously, business
models could hardly exist in isolation from societies,
and they are shaped by socio-cultural contexts,
which is essentially why different forms of capital­
ism have emerged around the world.
Despite the certain encouragement of individual
entrepreneurship in African cultures,
these are exactly the cultures where kinship,
mutual support and collective responsibility
are emphasised
As a result, doing business in Africa is inextricable
from traditional communal and collective values,
while entrepreneurship, defined as an individualistic
and profit-driven activity, is secondary457
.
For example, the mission of Afriland First Bank, a
Cameroonian bank founded in 1987 with branches
in Equatorial Guinea, the DRC, South Sudan, Liberia,
Côte d’Ivoire, Guinea and Zambia, is to promote African
entrepreneurship and treat employees as family
457 ScienceDirect. Untangling African indigenous management: Multiple influences on the success of SMEs in Kenya. URL: https://www.sciencedirect.com/science/article/pii/
S1090951608000047?via%3Dihub#aep-section-id35
458 Ibid.
459 Lothar Kat. Negotiating International Business - The Negotiator’s Reference Guide to 50 Countries Around the World. URL: https://www.leadershipcrossroads.com/mat/
cou/Egypt.pdf
460 ScienceDirect. Untangling African indigenous management: Multiple influences on the success of SMEs in Kenya. URL: https://www.sciencedirect.com/science/article/pii/
S1090951608000047?via%3Dihub#aep-section-id35=
members. The company delivers on the promise
through collective decision-making and practices,
such as employees attending the funerals of their
colleagues’ relatives to show support. However, the
most common form of mutual aid occurs in the in­
formal sector, where relatives or friends could step
in to replace sick employees458
. As was mentioned,
informal partnerships play an im­
portant role, too. In Egypt, strong
personal relationships are crucial
for business deals, and they could
often bear more significance than
written agreement. Egyptians tend to do business
only with those they know and trust or those who
did business with their friends and relations, which is
why they would often view a particular person rep­
resenting the company as the true partner rather
than the company itself. In business cultures like
that in Egypt, contracts are more of a formality and
a reminder rather than a strict obligation459
.
This partly explains why companies built on
Western and Chinese operational models may not
align well with local norms and values, leading to
challenges in motivating employ­
ees and a poor understanding of
the context where the company
operates. While such organisa­
tions may be profitable, this might
not be sustained in a longer term
as they fail to meet cultural ex­
pectations460
.
African business will often thrive in sectors with a
limited presence of Western, Chinese and other
multinational corporations. In sectors dominated
by large foreign companies, such as mining and oil
 gas, where French and British banks have held
sway since colonial times, African companies strug­
gle to compete and build their own reputational
brands. Instead, African companies easily occupy
market niches neglected by global competitors.
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In some cases, such hyper-localisation can lead to
the development of unique products and foster
economic growth for the respective community. Be­
sides, a company’s small size does not necessarily
mean that it is not innovative464
.
Moreover, in traditional sectors African businesses
will most often be centres of the ‘employment cir­
cle’ generated by bigger companies through a reli­
ance on local subcontractors for the outsourcing of
certain services.
461 Oriental Weavers. Investor Relations. URL: https://orientalweavers.com/presentation-publication/
462 The Arabya Company for Transportation and Domestic Flights. Contracting with the largest group in the Middle East, Oriental Weavers Group. URL: https://alarabya-
transport.com/en/contracting-with-the-largest-group-in-the-middle-east-oriental-weavers-group/
463 Daily News Egypt. IRSC Signs Contract with Oriental Weavers to Install 2.5 MWP Solar Power Plant at 10th of Ramadan Factories. URL: https://www.dailynewsegypt.
com/2024/09/11/irsc-signs-contract-with-oriental-weavers-to-install-2-5-mwp-solar-power-plant-at-10th-of-ramadan-factories/
464 MIT Press Direct. Digital Entrepreneurship in Africa: How a Continent Is Escaping Silicon Valley’s Long Shadow. URL: https://direct.mit.edu/books/oa-monograph/4850/
Digital-Entrepreneurship-in-AfricaHow-a-Continent
Going beyond local markets
and thinking
African companies have grown enough to con­
tribute
much more to the local economies and explore re­
gional and international markets. This leads to
a socialisation and internationalisation of the African
business. For the purposes of this chapter, ‘socialisa­
tion of business’ refers to a complex process whereby
companies move beyond local thinking in their brand­
ing, marketing and communication strategies.
The textile industry in Egypt is a traditional and highly competitive sector, with no dominant
players in the field. Major companies are Egyptian, and Oriental Weavers, a carpet manufac­
turing company founded in 1979, is just one example. Most of the company’s shares (some
54%) are owned by the family of its founder, Mohamed Farid Khamis. The largest foreign in­
vestor has been the Saudi Fitaihi Holding Group, which owns a 12% stake (other foreign share­
holders collectively own 6.4% of the shares). In 2023, Oriental Weavers ranked first globally in
the production of machine-made carpets and rugs, emerging as one of the largest exporters
with the market reach of 130 countries. Notably, the main export destinations lie outside of
the African continent (these are the U.S., Europe and the Gulf states), but this is also true for
supplies of raw materials that originate both from local producers (incl. small-scale businesses)
and from Saudi Arabia, New Zealand and the United Kingdom. The company has branches in
Egypt and in the U.S., formally employing 18,700 people. Oriental Weavers, a true International
African Business (IAB), invests in talented students who will then become the basis of its work­
force. Through the Farid Khamis for Development Foundation, the company sponsored the
Top 100 Students programme in collaboration with the national ministry of education. The com­
pany also collaborates with universities, such as Ain Shams University and Zagazig University,
offering internships for students461
.
Oriental Weavers is also a company that generates a certain ‘employment circle’, a concept
explored above. For instance, the local Arabya Company for Transportation and Domestic Flights
signed a distribution agreement with Oriental Weavers in 2021462
. In 2024, as part of its en­
vironmental initiatives, Oriental Weavers signed an agreement with the Innovative Renewable
Solutions Company, a local green energy business, to design and install a PV power plant with
a capacity of 2.5 MWP463
. Other local companies benefitting from the circle are the various
construction firms (that may well take advantage of the informal sector in their operations) and
businesses that manage the company’s local retail outlets (with potential links to the informal
sector, too).
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465466467468469
African companies are on a learning curve by copy­
ing or adapting business models and management
solutions from foreign companies operating in Africa.
Overall, the African business has been diversifying
the mix of its foreign partners, indicating a shift
from the Europe-oriented thinking. While it may
still be easier for Africans to negotiate with Euro­
pean investors and contractors because of a much
longer history of interaction, both before, during
and after colonialism, that brings more predictabil­
ity to the deals, the operational paradigm of most
European companies has undergone dramatic
transformations in the last five to seven years. Con­
siderations of ‘eco-friendliness’, ‘sustainability’ and
‘inclusiveness’ are some examples of what is high
on their agenda that they bring to other markets
465 Weibo. Ethiopian Airlines. URL: https://weibo.com/ethiopianairlinesCN
466 Instagram. Ethiopian Airlines. URL: https://www.instagram.com/fly.ethiopian
467 Forbes. Nigerian Fintech Startup Paystack Raises $1.3 Million. URL: https://www.forbes.com/sites/mfonobongnsehe/2016/12/19/nigerian-fintech-startup-paystack-raises-1-
3-million/
468 TechCrunch. Paystack, with ambitions to become the Stripe of Africa, raises $8M from Visa, Tencent… and Stripe itself. URL: https://techcrunch.com/2018/08/28/paystack-
with-ambitions-to-become-the-stripe-of-africa-raises-8m-from-visa-tencent-and-stripe-itself/
469 TechCrunch. Stripe acquires Nigeria’s Paystack for $200M+ to expand into the African continent. URL: https://techcrunch.com/2020/10/15/stripe-acquires-nigerias-
paystack-for-200m-to-expand-into-the-african-continent/
where they do business. Applying these principles
on African soil with somewhat of a disregard for
core African interests has resulted in some conten­
tion and a certain alienation. To communicate suc­
cessfully and drive impact, local African companies
would often have to adapt to this conditionality of
their agenda, adopting a more European-like model
of communication and behaviour.
Besides, there are more European players on the
markets. Former colonial powers are still very much
present in Africa, seeking to smooth out the ten­
sions and shift their strategies to be more collab­
orative.
However, businesses from Europe’s smaller coun­
tries, like Austria, Estonia, Switzerland or Norway,
Ethiopian Airlines, the largest African airline, is a good example. The state-owned company has
a strong social media presence that encompasses Facebook, YouTube, X, Instagram, Telegram,
LinkedIn and Weibo, with each platform having its own target audience. For instance, on China’s
­Weibo465
, the company posts daily in Mandarin, offering relevant deals that help establish the air­
line as a convenient way to travel to Africa and many destinations beyond it with minimal travel time.
On Instagram466
, the company mostly targets a pan-African audience, putting a premium on flights
that connect the continent’s main hubs.
Nigeria’s Paystack, a fintech company, illustrates the point. It was founded in 2015 in Lagos, model­
ling its payment processing solution for the SMEs on the world’s leader Stripe and aspiring for a
global role. The company soon attracted investment from the U.S. and China (this balancing act is
quite notable given the growing rift between Western and non-Western technology ecosystems),
leaving some investment shares in the local hands, Nigeria’s Singularity Investments467
. The magni­
tude of success was such that Stripe and Tencent acquired investment shares worth USD 8 million
in 2018468
, which was one of the factors that allowed for Paystack’s expansion into Ghana that
same year, South Africa in 2021 and Kenya in 2023 (all are the key financial hubs in their respective
subregions). However, the last two expansions happened under Stripe’s control of Paystack as it
acquired the company for USD 200 million in 2020 in a bid to leverage its market development in
Africa (rather than exploring ‘unknown’ markets on its own from scratch) and, most likely, arrest the
rise of a strong competitor469
.
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are now more vocal than ever before about their in­
terest in the African markets. For instance, Estonia’s
Bolt launched its transport and taxi services in
South Africa in 2016. With its first African experi­
ence proving a success, the company expanded its
offerings to Angola, Ghana, Egypt, Kenya and oth­
ers, with a scope of over 47 million passengers and
900,000 drivers registered on the platform. These
are largely new partners for African business, which
requires some ‘social adaptation’ in terms of under­
standing their motives and interests and finding an
optimal mode for mutual collaboration. The same
applies to the increasing number of non-European
partners, as their geography is truly global and rang­
es from Iran and Turkey in the Middle East, Brazil
and Chile in Latin America, Indonesia and Malaysia
in the Asia-Pacific470
.
Another development is the rising transnationalisa-
tion and localisation of the African business. While
these two notions might appear mutually exclusive
and contradictory, they are closely interconnected.
Local content policy has been a game changer in
this context. The Black Economic Empowerment
(BEE) programme which once seemed to be a
product of South Africa alone, has taken hold and
spread throughout Africa in the form of local con­
tent policies. Most African countries have legislated
local content policies, such as Nigerian content in
Nigeria. In almost all countries, localisation is en­
couraged by local regulators through a developed
system of investment incentives, including exemp­
tion from various types of taxes, etc.
For example, the expanding footprint of the world’s
major MNCs in developing mineral resources across
the vast spaces of the African continent has also led to:
• an emergence of more African companies acting
as sub-contractors for MNCs;
• an emergence of more local SMEs as a result of
CSR projects that often provide infrastructure
that stimulates demand and offers business op­
portunities;
470 Bolt. Our locations. URL: https://bolt.eu/en/cities/
471 New Era Namibia. 47 fired from Uis mine contractor. URL: https://neweralive.na/47-fired-from-uis-mine-contractor/
472 Diageo. Africa. URL: https://www.diageo.com/en/our-business/where-we-operate/africa
• an adoption of local content legislation with
policy-makers willing to consolidate strategic
projects under state- or private-owned local
companies.
Illustrative of these trends is the local impact cre­
ated by the British Andrada Mining that owns a
95% share in the Uis lithium, tin, tantalum and ru­
bidium mine in Namibia. While only 5% are owned
by the national Sinco Investments Five, Andrada
Mining relies on a network of local subcontrac­
tors, such as Metal Mill Engineering471
. The com­
pany was founded when the Uis project started in
2017, creating jobs and contributing to the area’s
economic growth.
Another example is Diageo, a British company that
specialises in alcoholic beverages. In Africa, Diageo
operates 12 breweries and 3 blending and malting
plants located in Kenya, Tanzania, Uganda, South
Africa, Ghana, Nigeria, the Seychelles, Cameroon,
Ethiopia and Angola. Employing 4,400 people, the
company is the main partner for a wide range of
suppliers, as 83% of raw materials are sourced from
the local small-scale businesses472
.
While it may be premature to speak of the transna­
tionalisation or internationalisation of the African
business in the traditional sense (i.e. when African
MNCs could have global ambitions or already ex­
ert some global influence or play an independent
and discernible role on global markets), it is still
evident that there are some African companies
that are preparing for this step. Most of such com­
panies have been building up their skill profiles
and expanding into neighbouring markets.
The current phase of increasing internationalisa­
tion of the African business could be attributed
to several factors. First, amid growing demand
and supply fragmentations, Africa continues to
be perceived globally as a resource-rich market,
particularly in the realm of critical minerals. For
example, the U.S. Strategy Toward Sub-Saharan
Africa (2022) primarily views the continent as
178
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473474475
a host of vast natural resources, specifically 30% of
theworld’scriticalminerals476
.Similarly,UNCTAD’s
most recent Economic Development in Africa
Report highlights Africa’s resource potential477
.
473 UNCTAD. Congo, Democratic Republic of the - Adoption of a mining code. URL: https://investmentpolicy.unctad.org/investment-policy-monitor/measures/3227/adoption-
of-a-mining-code
474 The Africa Report. DRC: Cancelling operating rights of 29 mining companies stirs controversy. URL: https://www.theafricareport.com/321309/drc-cancelling-operating-
rights-of-29-mining-companies-stirs-controversy/
475 CMOC. Wilson Makuya, a TFM Social Fund scholarship beneficiary, obtains his Master’s degree with distinction. URL: https://en.cmoc.com/html/2023/Education_0730/49.html
476 The White House. U.S.Strategy Toward Sub-Saharan Africa. URL:https://www.whitehouse.gov/wp-content/uploads/2022/08/U.S.-Strategy-Toward-Sub-Saharan-Africa-
FINAL.pdf
477 UNCTAD. Critical minerals: Africa holds key to sustainable energy future. URL: https://unctad.org/news/critical-minerals-africa-holds-key-sustainable-energy-future
This narrative seems to be pervasive in each discus­
sion and policy document on and around Africa and
the continent’s development trajectory. For their part,
African governments and contractor businesses tend
An example of increased regulatory attention to fostering local development and facilitating opportunities
for African SMEs is the mining industry in the DRC. The 2018 DRC Mining Code stipulates that companies
holdingminingand/orexplorationlicensesmustmeettheirsocialobligationstosupportlocalcom­munities;
otherwise, their licenses can be revoked. The minimum financial support for local com­
munities through
such agreements is 0.3% of the company’s turnover473
. Official figures show that company expenditures
on local community support projects totalled USD 83.7 million in 2020-2021. In August 2023, the DRC
Ministry of Mines revoked 29 licenses, citing non-compliance with these requirements474
. In most cases,
the licenses revoked were abandoned, and their redistribution could potentially improve the situation for
local communities if acquired by companies that implement effective CSR policies. These are another
instrument that facilitates the emergence of more local businesses. For example, the Chinese CMOC
company sponsored tuition fees for 89 students in the DRC’s provincial universities of Haut-Katanga and
Lualaba without pledging their commitment to work for CMOC when they complete the education475
.
That said, students also have the option of starting their own business or joining another local company.
179
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to make use of this narrative by focusing on extrac­
tive sectors, as this allows for more foreign invest­
ment, faster profits and easier revenue. Shifting this
paradigm would require considerable time, effort
and financial resources because this ultimately boils
down to a re-structuring of the economies with the
emergence of impactful business in non-traditional
fields – i.e. not oriented towards extraction, pro­
duction of raw materials or export.
Second, the internationalisation of the African
business still goes well with the interests of na­
tional development, aligning with governmen­
tal policies. A case in point is Sibanye-Stillwater,
a mining company with operations in South Af­
rica. Its major shareholders include the state-
owned Public Investment Corporation Ltd.
(South Africa, 16.1%), Allan Gray Ltd. (South
­
Africa, 5.7%), Lingotto Investment Management
LLP (UK, 7.5%) and JPMorgan Chase  Co. (US,
6.3%). Foreign shareholders are estimated to con­
trol about 40% of the company’s stakes. Listed on
the Johannesburg Stock Exchange, Sibanye-Stillwa­
ter offered employment for 60,800 people in South
Africa in 2023, with an additional of 19,300 contrac­
tors (the concept of ‘employment circle’ applies
here, too)478
. The company is another example of
an International African Business (IAB) that drives
local impact. Partnering with African Infrastructure
Investment Managers, Sibanye-Stillwater sponsors
the construction of the Umsinde Emoyeni Wind
478 Sibanye-Stillwater. Integrated report 2023: Empowering our workforce. URL: https://reports.sibanyestillwater.com/2023/downloads/ssw-IR23-performance-workforce.pdf
479 Sibanye-Stillwater. Integrated report 2023: Socioeconomic development. URL: https://reports.sibanyestillwater.com/2023/downloads/ssw-IR23-performance-
socioeconomic-development.pdf
480 Sibanye-Stillwater. Integrated report 2023. URL: https://reports.sibanyestillwater.com/2023/downloads/ssw-IR23.pdf
481 Oriental Weavers. Investor Relations. URL: https://orientalweavers.com/presentation-publication/
482 International Coffee Organization. Coffee Report and Outlook 2023. URL: https://icocoffee.org/documents/cy2023-24/Coffee_Report_and_Outlook_December_2023_ICO.pdf
Power Station (140 MW), which is scheduled to be
completed by 2026479
. A powerful player in South
Africa’s mining sector, Sibanye-Stillwater is also a
company that has mines and processing facilities in
the U.S., a nickel plant in France as well as stakes in
PGM projects in Canada, lithium projects in the U.S.,
­
Argentina, and Finland, and a zinc project in ­
Australia.
The company has a broad network of partners, sell­
ing the PGM mined in South Africa to domestic com­
panies and undisclosed buyers in the U.S., the EU
and the UK, and Japan. The gold it extracts is sold
to local and international banks, while Australian zinc
is directed to smelters in Australia, Korea and China,
and the nickel processed in France is sold to another
commodity trading company480
. However, here the
risks of excessive capital outflow via such ‘global’ in­
vestments should be considered as well.
Third, demand for some of the products is just so low
within the African continent, either due to market sat­
uration or limited purchasing power, that African com­
panies naturally have to turn to overseas markets. The
aforementioned Egyptian carpet manufacturer Oriental
Weaversderivesamere1%ofitsrevenuefromAfrican
markets, if Egypt (35%) is not considered. The nearly
exclusive focus on Northern America and Europe can
be explained by the higher purchasing power in these
regionsandbythefactthatthetextileindustryinAfrica
remains highly competitive, particularly in Northern
Africa, where carpet production is well-established
due to widespread cotton cultivation481
.482
In African economies, there is little demand for critical minerals such as cobalt, lithium, manganese
and others, due to the lack of necessary technologies and manufacturing capabilities. Consequently,
companies operating in Africa, both foreign and local, typically extract and (minimally) process these
metals to sell them outside the continent, primarily to China. A similar pattern exists in the coffee mar­
ket, where Africa accounts for 11% of global production. Ethiopia and Uganda are the main producers,
contributing approximately 70% of Africa’s coffee output. However, the culture of coffee consumption
is not very developed in African countries (except for Ethiopia), as people generally prefer tea. In 2023,
coffee consumption in African countries accounted for only about 7% of global consumption, with
­
Ethiopia alone representing 29% of Africa’s coffee consumption482
.
180
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Fourth, traditional business drivers may not play as im­
portant a role in Africa as in the West or even in other
regions of the developing world. This arguably refers to
companiesseekingnewmarketstoexpandtheiropera­
tions, turning to other geographic regions in a bid to cut
production costs via cheaper labour or raw materials or
attain a higher profile and international visibility to at­
tract investment or access markets of cheaper capital.
The transition from a local to an international busi­
ness depends on 1) market development, 2) compa­
ny revenue growth, 3) certain government support
and 4) favourable conditions in global markets, all
provided that the company has the necessary talent
and sufficient capital.483484485486487
483 Dangote Cement Plc. Our History. URL: https://cement.dangote.com/our-history/
484 CEO Today Magazine. The Top 50 CEO’s in The World. URL: https://www.ceotodaymagazine.com/top-50-ceos/
485 Jeune Afrique.Aliko Dangote: « Mon rêve, c’est d’utiliser les matières premières d’Afrique, de les raffiner et de les vendre sur notre propre marché ». URL: https://www.
jeuneafrique.com/1570808/economie-entreprises/aliko-dangote-mon-reve-cest-dutiliser-les-matieres-premieres-dafrique-de-les-raffiner-et-de-les-vendre-sur-notre-
propre-marche/
486 Reuters. Nigeria’s Jonathan adds Dangote to economic team. URL: https://www.reuters.com/article/ozatp-nigeria-economy-20110819-idAFJOE77I0NW20110819/
487 Dangote Cement Plc. Our History. URL: https://cement.dangote.com/our-history/
Outlook for the future
In the coming years, the trend for a broader social­
isation and internalisation of African businesses will
likely continue. Coupled with government policies
to stimulate local production and development of
local communities, this will arguably create more
spacefortheemergenceofmoreMulti-AfricanBusi­
nesses (MABs) and International African Businesses
(IABs). In turn, their operations will boost oppor­
tunities for small-scale local enterprises, as part of
their ‘employment circle’. Such companies will drive
their growth with a reliance on the informal sec­
tor, occupying niches that bigger companies tend
to overlook due to the high entry cost or inherent
Nigerian Dangote Group founded in 1977, initially specialised in importing and trading wholesale consum­
er goods and cement. In the 1990s, the company expanded into textile production and consumer goods
like sugar and flour. In 2000, Dangote acquired Benue Cement Company from the federal government,
subsequently increasing the cement plant’s annual capacity from 0.9 million tonnes to 2.8 million tonnes.
Switching gears, Dangote entered Nigeria’s cement market, which soon became its core focus. In 2002,
the company purchased the government-owned Obajana Cement Plc., which began operations in 2007
with a capacity of 5 million tonnes annually, making it the largest cement plant in Sub-­
Saharan ­
Africa.
In 2010, Benue Cement and Obajana Cement merged into Dangote Cement Plc., a step that testified
to the company’s new role in the national economy and that allowed it to go public on the Nigerian Stock
Exchange. By 2011, Dangote Cement Plc. established a presence on the subregional market, with first
exports of cement to Ghana and another capacity expansion in the Obajana and Ibese plants483
.
As one of the world’s top CEOs484
, the company’s founder Aliko Dangote is a proponent of pan-­
African economic development, often expressing his vision of utilising Africa’s raw materials for
processing and sale within the continent485
.
By making strategic choices, the company managed to secure a dominant position in Nigeria’s
cement market. Achieving strategic importance for the economy allowed the company to receive
certain support from the government486
and expand even more. With that, Dangote Cement Plc.
has established itself as one of Africa’s largest producers with cost-effective and high-quality pro­
duction and embarked on a broader African expansion, moving from a subregional presence to
a pan-African footprint. In 2014, the company opened two cement plants in South ­
Africa, a plant
in Senegal, and continued its expansion drive with investments in Cameroon, ­
Ethiopia, Zambia,
Tanzania, Sierra Leone and the Republic of Congo487
.
181
African
businesses
–
the
emerging
regional
and
global
players
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
risks with a rather low strategic return. This may
well broaden the scope of opportunities for local
entrepreneurs who can leverage their knowledge,
experience and understanding of the local context
to develop solutions unique to Africa.
However, with local problems and local solutions
come limitations to company growth. The size of
national markets essentially restricts the scalabil­
ity of companies, particularly in smaller countries.
Since many of the solutions offered and developed
by African businesses cater to markets that are rel­
atively small, with limited purchasing power and un­
derdeveloped infrastructure, the prospect of more
companies getting to the level of an MAB or an
IAB will likely be limited to the continent’s biggest
economies.
This prospect does not imply the failure of ­
African
businesses, who may be strong in their diversi­
ty. Whether innovative or not, small- and medi­
um-scale but consistently profitable companies
are a certain mark of success. One potential path­
way for scaling companies to a (sub)regional level
may be addressing the problems and leveraging
the opportunities that are common across the
continent but remain relatively unfamiliar to for­
eign multinationals.
182
Authors Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Authors
Vsevolod Sviridov
Deputy Director, HSE University Center
for African Studies
Andrey Maslov
Director, HSE University Center
for African Studies
Anna Davidchuk
Researcher, HSE University Center
for African Studies
Anna Bondarenko
COO, Intexpertise LLC
Valentin Bianki
Leading Expert, HSE University Center
for African Studies, Ph.D. in political
psychology
Egor Astrakhantsev
Researcher, HSE University Center
for African Studies
Xenia Guseva
Researcher, HSE University Center
for African Studies
Olesya Kalashnik
Expert, HSE University Center for African
Studies
Daria Sukhova
Researcher, Intexpertise, LLC
Kirill Smirnov
Researcher, HSE University Center
for African Studies
Andrei Shelkovnikov
Expert, HSE University Center for African
Studies
Organisational support
Polina Slyusarchuk
Deputy Director, HSE University Center
for African Studies
Lubov Boldyreva
Manager, HSE University Center
for African Studies
Nikita Panin
Expert, HSE University Center for African
Studies
183
Authors
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Data collection, analysis
and interpretation team
Nikolay Golovko
Research Fellow, Museum of Anthropology
and Ethnography of RAS, HSE SPB student
Igor Demin
Intern, HSE Univeristy Center for African
Studies
Anastasia Svetlova
Researcher, Intexpertise LLC
Semyon Voronin
Researcher, Intexpertise LLC
Maria Saulina
Researcher, HSE University Center
for African Studies
Angelina Pshenichnikova
Researcher, HSE University Center
for African Studies
Maxim Polyakov
Intern, HSE Univeristy Center for African
Studies
Mikhail Golubtsov
Intern, HSE Univeristy Center for African
Studies
184
About
HSE
University
Center
for
African
Studies Africa 2025: Prospects and Challenges
HSE University Center for African Studies
HSE University Center for African Studies (HSE CAS)
was established in 2020 in response to the increas­
ing significance of Africa as a focal point for foreign
policy and economic engagement for the Russian
Federation. The Center specialises in expert and
analytical research, focusing on the African markets
and the assessment of associated financial, legal
and political risks. The primary objective of HSE
CAS is to conduct a comprehensive analysis of pro­
jects that are either currently being implemented
or proposed for implementation in Africa by Russian
entities, with an emphasis on risk analysis and the
identification of strategic opportunities.
HSE University Center for African Studies
By 2024, HSE CAS aims to emerge as the
preeminent center in Russia for applied expertise
concerning the risks and opportunities inherent
in conducting business in Africa
By 2024, HSE CAS aims to emerge as the preem­
inent center in Russia for applied expertise con­
cerning the risks and opportunities inherent in
conducting business in Africa.
The core research domains of HSE CAS encom­
pass an array of topics, including but not limit­
ed to: energy and food markets, education, ICT,
transport and logistics, financial infrastructure,
decision-making systems and the overall business
environment. Additionally, the Center conducts
thorough risk assessments – spanning financial,
legal and political dimensions.
A significant focus of the Center’s scientific and
analytical work includes the training of personnel
through collaborations with universities, research
institutions and governmental bodies across Af­
rican nations. This initiative also extends to the
implementation of professional development pro­
grammes aimed at mid- and senior-level officials
from both African countries and Russia, alongside
training tailored for Russian enterprises with inter­
ests in Africa.
In 2023, HSE CAS prepared and launched a hand­
book entitled Africa 2023: Opportunities and Risks,
which addresses pertinent inquiries regarding the
current landscape of African nations, potential ave­
nues for collaborative development and associated
threats warranting consideration. The principal sec­
tions of this publication examine various facets of
human capital in Africa – including demographics,
education and cultural dynam­
ics – alongside analyses of natu­
ral resources (such as minerals,
water supply and ecosystems),
food markets, macroeconomics
(covering trade, debt, sanctions,
and currency fluctuations), in­
frastructure (including transport, energy, urbani­
sation and digitalisation), political systems, security
issues, integration processes, and the evolving na­
ture of Russian-African relations.
About HSE
University Center
for African Studies
Center for African Studies
HSE University
185
About
HSE
University
Center
for
African
Studies
Africa 2025: Prospects and Challenges
HSE University Center for African Studies
In 2023, during the Second Russia-Africa Econo­
mic and Humanitarian Forum, HSE CAS, unveiled
Russia-Africa E-Governance Knowledge Sharing
Programme. Subsequently, in December of the
same year, officials from authorities departments
participated in Winter E-Governance Knowledge
Sharing Week for African officials.
HSE CAS staff and external experts have pre­
pared and launched several publications. These
include the aforementioned Africa 2023: Oppor­
tunities and Risks (in Russian)488
, E-Governance in
Africa: Opportunities and Challenges489
, the report
Russia-Egypt: Trajectory of Cooperation (in Rus­
sian and Arabic)490
, Africa: Development Pros­
pects and Recommendations for Russian Policy491
,
as well as the report for Valdai Discussion Club entitled
Prospects and Tasks of Russian-African Cooperation492
.
Furthermore, the online platform for the Knowl­
edge Sharing Programme – E-Governance Knowledge
488 Центр изучения Африки НИУ ВШЭ. Африка 2023: Возможности и риски. URL: https://we.hse.ru/irs/cas/africa2023
489 HSE Center for African Studies. E-Governance in Africa 2024: Challenges and Opportunities. URL: https://e-governancehub.ru/read-book-e-governance-in-africa-2024-
challenges-and-opportunities/
490 Росконгресс. Россия и Египет: траектория сотрудничества. URL: https://cdnweb.roscongress.org/upload/medialibrary/a68/Russia_Egypt_rus.pdf?1655234016413490
491 НИУ ВШЭ. Африка: перспективы развития и рекомендации для политики России. URL: https://globalaffairs.ru/wp-content/uploads/2021/11/doklad_afrika_
perspektivy-razvitiya.pdf
492 Valdai Club. Russia-Africa Cooperation: Outlook and Objectives. URL: https://valdaiclub.com/a/reports/russia-africa-cooperation-outlook-and-objectives/
Hub – has been established to aggregate informa­
tion regarding e-government development in Africa,
ongoing projects, challenges and potential solutions.
Apart from that, corporate information systems and
geographic information systems are being devel­
oped to support decision-making.
E-Governance Knowledge Hub
186
About
Uralchem
Group Africa 2025: Prospects and Challenges
HSE University Center for African Studies
Uralchem Group is one of the world’s leading pro­
ducers of mineral fertilisers and chemical prod­
ucts, with combined production capacity of about
25 mln tonnes.
Uralchem Group official website
Key assets of Uralchem Group are:
– Uralchem JSC, one of the world’s largest pro­
ducers and exporters of nitrogen and complex
fertilisers. Its production assets are located
in Russia’s Kaliningrad Region, Kirov Region,
­
Moscow Region, and Perm Region.
– Uralkali PJSC, one of the world’s largest pro­
ducers and exporters of potash. Its production
assets consists of 5 mines and 7 ore treatment
plants in Berezniki and Solikamsk (Perm Region,
Russia).
– Togliattiazot JSC (TOAZ), one of the world’s
largest producers of urea, ammonia, and urea
formaldehyde concentrate. Its production as­
sets include seven ammonia units and three
urea units in Togliatti (Samara Region, Russia).
Uralchem Group has its own railway fleet, which
is one of the largest fleets of specialized mineral
wagons and ammonia tank wagons in Russia; own
and partner product storage facilities in key sales
regions around the world, more than 100+ distri­
bution sites, as well as fertiliser transshipment ter­
minals and export shipment facilities.
Uralchem Group’s product range includes over
100 comprehensive solutions created on the basis
of extensive experience in agriculture and indus­
trial technologies.
Its range of agricultural products includes nitrogen,
phosphate, potassium, NPK/NPKS fertilisers,
water-soluble fertilisers, and feed additives.
Uralchem Group’s portfolio of industrial chemicals
includes ammonia, urea, ammonium and potassium
nitrate, acids, specialty products, urea formalde-
hyde concentrate, carnallite, halite, AdBlue.
About Uralchem Group
187
For
notes
Africa 2025: Prospects and Challenges
For notes
188
For
notes Africa 2025: Prospects and Challenges
189
For
notes
Africa 2025: Prospects and Challenges
190
For
notes Africa 2025: Prospects and Challenges
191
For
notes
Africa 2025: Prospects and Challenges
Handbook
Africa 2025:
Prospects and Challenges
Edited by Andrey Maslov
Typesetting: Denis Komarov
Cover design: Lubov Gagovskaya
Infographics: Ekaterina Nevstrueva, Olesya Kandaurova
Proofreader: Daniel Johnston
Print run: 500 copies
Center for African Studies
National Research University
Higher School of Economics
Moscow, Russia
africanstudies@hse.ru
Africa 2025 - Prospects and Challenges first edition.pdf

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Africa 2025 - Prospects and Challenges first edition.pdf

  • 2. Africa 2025: Prospects and Challenges Moscow 2024 Edited by Andrey Maslov Handbook Center for African Studies HSE University The publication was prepared with the support from
  • 3. Africa 2025: Prospects and Challenges. Maslov A., Sviridov V. et al.; Higher School of Economics Center for African Studies. – Moscow : HSE, 2024. – 192 p. – 500 copies. Africa 2025: Prospects and Challenges is to serve as a handbook on Africa’s development, challenges and opportunities. Its target audience is government officials, businessmen, scholars and experts. The handbook aims to provide alternative positive vision on some issues that Africa faces, among them being fight for food and energy sovereignty, debt crisis, digital transformation, rapid urbanisation and population growth. The book was prepared by the team of experts and scholars coordinated by the HSE University Center for African Studies (Moscow, Russia). © Center for African Studies of the National Research University Higher School of Economics and authors, 2024 All rights reserved. Edited by: Andrey Maslov. Editorial coordinator: Vsevolod Sviridov. Authors: Andrey Maslov, Vsevolod Sviridov, Egor Astrakhantsev, Valentin Bianki, Anna Bondarenko, Anna Davidchuk, Xenia Guseva, Olesya Kalashnik, Nikita Panin, Kirill Smirnov, Andrei Shelkovnikov, Daria Sukhova. Typesetting: Denis Komarov.
  • 4. 3 Foreword Africa 2025: Prospects and Challenges HSE University Center for African Studies Table of contents Foreword 5 Measuring Africa’s wealth and money 7 Food for Africa: from food security to food sovereignty 34 African resources to African markets: making energy and mining work for Africa 58 African quest for digital sovereignty 76 Education is power: who teaches African leaders 107 Vision of Africa in the mirror of think tanks around the globe 131 Identifying the DNA of African creativity 152 African businesses – the emerging regional and global players 163 Authors 182 About HSE Center for African Studies 184 About Uralchem Group 186
  • 5. 4 Main contributors Africa 2025: Prospects and Challenges HSE University Center for African Studies Edited by Andrey Maslov, Director, HSE University Center for African Studies. Editorial coordinator – Vsevolod Sviridov, Deputy director, HSE University Center for African Studies. Foreword – Andrey Maslov. Measuring Africa’s wealth and money – Anna Bondarenko, Kirill Smirnov and Andrey Maslov with the assistance from Igor Demin, Mikhail Golubtsov, Daria Sukhova, Anastasia Svetlova and Semyon Voronin. Food for Africa: from food security to food sovereignty – Vsevolod Sviridov and Anna Davidchuk with the assistance from Anastasia Svetlova. African resources to African markets: making energy and mining work for Africa – Vsevolod Sviridov with the assistance from Nikolay Golovko and Mikhail Golubtsov. African quest for digital sovereignty – Olesya Kalashnik and Daria Sukhova with the assistance from Igor Demin, Angelina Pshenichnikova and Maxim Polyakov. Education is power: who teaches African leaders – Andrei Shelkovnikov with the assistance from Angelina Pshenichnikova. Vision of Africa in the mirror of think tanks around the globe – Valentin Bianki. Finding the DNA of African creativity – Xenia Guseva with the assistance from Vsevolod Sviridov. African businesses – the emerging regional and global players – Nikita Panin, Egor Astrakhantsev and Vsevolod Sviridov with the assistance from Igor Demin. Organisational support – Polina Slyusarchuk, Lubov Boldyreva. The main points, conclusions and recommendations of the Handbook’s chapters have been supplemented and nuanced based on feedback and advice from officials, industry experts and businessmen from Algeria, Egypt, Ethiopia, Kenya, Nigeria, Senegal, South Africa, Tanzania and Zimbabwe. Main contributors
  • 6. 5 Foreword Africa 2025: Prospects and Challenges HSE University Center for African Studies Africa remains a space of opportunity, the flip side of that, as it has always been, that it is still unknown. Although the African Union, AfDB, World Bank, UNECA and other UN entities, many research or­ ganisations and universities across the continent and beyond are working hard to collect and process data and research on what is happening in Africa, yet the tiny islands of reliable knowledge are being swamped by the unknown. We do not know how many people live in most count­ ries, how many diesel generators are installed and how much electricity they generate, how much it actually costs to service government debts, or where govern­ ment reserves are kept, what is the real contribution of the creative industries to the economy. It is difficult to get data on rainfall or water levels in rivers or lakes. For many areas, it is difficult to even say whether they are increasingly suffering from water scarcity or excess. The HSE University Center for African Studies is in its fifth year of operation. We are a group of researchers and consultants from a wide range of backgrounds, mostly young. The work that has been carried out by our Center over the past four years has been very concrete and practical in nature. Basically, we prepare re­ ports and proposals on the strategy for commercial vehic­ les operating or intending to operate across Africa. These were all based on the identification of prospects and challenges. In solving those practical problems, we often enter the realm of the unknown. We always look carefully for a relevant piece of research, but we do not al­ ways find anything that we can rely on. We also come across some stereotypes that at first seemed to be just mistakes. So, we had no choice but to start our own research programme to fill some gaps. The relationship between population growth and hunger was one of the first times we encountered such a gap. Overpopulation is commonly port­ rayed as the cause of many of Africa’s troubles, especially hunger. The 1992 Club of Rome report ­ Beyond the Limits was one of the first to impose such a framework. It has since been used to explain many of the continent’s conflicts and crises, inclu­ ding the infamous Rwandan genocide. At the same time, the case studies we have been able to conduct show that the relationship may be the opposite. The causes of hunger are the lack of infrastructure to store and transport food in remote areas, as well the lack of fertilisers, soil treatment, and water management in the vulnerable areas. Reports often underestimate these factors, while exaggera­ ting the role of climate change and overpopulation. As the population grows, the infrastructure gap is filled rather than expanded, local food markets develop, and undernourishment gradually decrea­ ses. A growing population also provides a more sus­ tainable market for fertilisers and advanced agricul­ tural technologies. The more people there are, the easier it is to achieve food self-sufficiency. Moreover, Africa is still a sparsely populated con­ tinent and has vast underpopulated areas suitable for living, farming and community development. Their sustainable development is an important condition for continued economic growth and the formation of the continent’s infrastructural cohe­ sion and integrity. However, this requires maintai­ ning a balance between human settlements and the environment. In Tanzania, keeping a piece of land out of agricul­ ture as a wildlife sanctuary brings in several times more income to the budget than the same piece of land used for agriculture. This means that land should be saved and developed intensively rath­ er than extensively. While population growth is a solution rather than a problem for this strategy, it has to be complemented by technology transfer, infrastructure development and investment. Foreword
  • 7. 6 Foreword Africa 2025: Prospects and Challenges HSE University Center for African Studies This was just one example, but an important one, that convinced us that our findings, based on prac­ tice, can significantly add to established percep­ tions, sometimes amending them. Therefore, their publication, further discussion and criticism can be of interest to a wide range of readers in Africa. This Handbook is intended for decision-makers across Africa who shape government and corporate policies, and for those who might be interested in reviewing and challenging their decisions. It is also for our colleagues, the experts, from whom we ex­ pect to criticise and contribute to our hypotheses. As an institution, we are interested in expanding our network across Africa. As the think-tank at the forefront of our own home market of ‘Africa’ expertise, our hope is that some of our knowledge could be also competi­ tive in the African markets if refined and tailored duly in close cooperation with our colleagues on the ground. Of course, Africa is not a country. From Algiers to Cape Town, from Dakar to Dar es Salaam, the diversity of cultures and civilisations is breathtak­ ing. But the common history, the Agenda 2063, the ­ African ­ Union, UNECA, NEPAD, the Cup of ­ African Nations and many other events and evidences prove that Africa is a space of communication full of unity. The diversity of cultures and forms of social life does not detract from the fact that it is all Africa. And there is room for more books about Africa. Leopold Senghor and Nkwame Nkrumah spoke of Africa as a unified space. Africa teaches us that unity does not necessarily mean giving up anything of oneself. States do not have to give up their sove­ reignty, and people do not have to give up their rights to join unity. On the contrary, by becoming part of another whole, they gain new opportuni­ ties and new bonds. African civilisation deserves respect for its avoidance of artificial contradictions and imposed choices, for its ability to form allian­ ces without compromising sovereignty, and for its abili­ ty to communicate despite all the obstacles. As we have mentioned hunger, we may admit that the list of challenges facing Africa has not changed for a long time. But what is changing is the set of tools that are solutions. In recent years, artificial intelli- gence is emerging as an important option. Perhaps AI algorithms are what we have been missing to restore harmony between humans and ecosystems, as they are instrumental to defeat hunger and malnutrition. The penetration of mobile payments in remote and rural areas has reached a level where big data can be collected on a wide variety of risk indicators, such as prices for food. The ‘internet of environ­ ment’ may also become a network for crisis pre­ vention. Nature can speak to us in the language of big data – and so we may have a better chance of understanding it. This book mentions experiences and options for the implementation of AI in various fields, and the issue of information and data sovereignty is central to the discussion. Obviously, sovereignty comes at a price. Is it worth this price? Attention is given to sovereignty in almost all chap­ ters of this book. We talk about food sovereignty, information sovereignty, energy sovereignty and sovereignty of creative industries. By analysing ­ African experience, we have tried to understand what sovereignty can consist of, how to achieve it and, just as importantly, how to measure it. This Handbook does not answer the question “How do you know when sovereignty has been achieved?”, but rather starts a discussion on this issue. Russia is not the focus of this Handbook. Although we are proud of our country’s role in the liberation of Africa in the 1960s and 1970s, and of the traditions of friend­ ship that have grown since then, this work does not ar­ tificially prioritise Russia and its interests in Africa. This book is about Africa, its prospects, and challenges. We would be delighted if the Handbook, to which our friends from Algeria, Egypt, Ethiopia, Kenya, Nigeria, Senegal, South Africa, Tanzania, Zimbabwe have also contributed as its critical reviewers, proves useful and stimulates the further debate.
  • 8. 7 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies What is the real value of African money? One of the main factors holding back Africa’s de­ velopment is a lack of data and information, and thus of knowledge relevant for decision-making. The unknown leads to overestimation of risk, and overestimation of risk leads to an inflated cost of capital. As a result, the cost of financing a busi­ ness in Africa can be several times higher than in a developing country outside the continent - not to mention rates in the US or Europe. There is also ‘cheap’ money in Africa - international funds, banks and several countries offer low-cost financing to certain projects and sectors, providing them an ad­ ditional, non-market competitive advantage driven by non-African interests and external agenda. Africa is not a single capital market. Almost every country suffers from the capital drain, at the same time the most of them rely on external funding for balancing their budgets. Nevertheless, the individual capital markets in Africa share many common fea­ tures, and investors often regard Africa or its sub-­ regions as destinations which are best looked at to­ gether. So, there are funds focused on investments in the continent. In addition, the role of Pan-African institutions is steadily growing, with AfDB, Afrex­ imbank, the African Union and UNECA among them. One of such common features on the continent is the depend­ ence of budgets and economies on external borrowing and trade. Taxes on domestic transactions have played a lesser role. However, the banking sector is growing dynamically, and in many countries, banks play a key role in development ac­ ting as intermediaries for external capital markets. Below we examine these and a number of other phenomena that shape the financial dimension of 1 UNCTAD. A world of debt report 2024. URL: https://unctad.org/publication/world-of-debt 2 Afreximbank. State of Play of Debt Burden in Africa in 2024. URL: https://www.afreximbank.com/reports/state-of-play-of-debt-burden-in-africa-2024-debt-dynamics-and- mounting-vulnerability/ risks and prospects for projects in Africa. Income from the foreign trade and borrowings both are highly volatile and tend to dry up during crises due to the undiversified resource-based export structures and predominance of an external debt over domestic. Better comprehension of existing vulnerabilities could help governments, businesses to implement workable strategies and policies, and navigate among country-specific risks. Our study examines the evolution of African debt throughout the 21st century and its distribution across the continent. The debt is reviewed in con­ junction with issues regarding trade: trade balances, export diversification and national currencies. The research quantifies the existing debt burden and sheds light on the problem of credit rating agen­ cies, finally offering directions for future research to enable an unbiased country classification. African debt: what has changed?1 As horrific as it may sound, the rest of developing countries experienced 2.5 times faster debt expan­ sion during the same period. After a series of defaults in the 1980s and 1990s, ­ African countries embarked on a path of debt de­ celeration, reducing the debt-to-GDP ratio from 65% in 2000 to 39.3% in 2008.2 This trend was main­ ly supported by full-scale debt relief programmes of multilateral financial institutions. In 1996, the IMF launched the Heavily Indebted Poor Countries Measuring Africa’s wealth and money Since the beginning of the 21st century African public debt has quadrupled and reached USD 1.8 trillion in 20221
  • 9. 8 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies ­ initiative (HIPC) which was targeted at low-income countries with unmanageable levels of debt. Since then, 31 African countries have graduated from HIPC and re­ ceived full debt forgiveness, reaching USD 70 billion. In 2005, HIPC was supplemented by the ­ Multilateral Debt Relief Initiative (MDRI), which guaranteed debt relief on the claims of the IMF, World Bank and African Development Bank for 29 African states at the cost of more than USD 30 billion. Though HIPC and MDRI were effective in no­ minal terms, their impact on the long-term debt sustainabil­ ity may be contradictory. To enter both programmes, a state needed to commit itself to structural reforms (more political than economic), thereby delegating decision-making to G8 (now G7) countries. Also, since the IMF offered a bailout, more and more countries started to account for the future prospect of similar debt relief, applying riskier debt manage­ ment practices. Then came the global financial crisis of 2008 when the modern history of African debt began. In res­ ponse to weakening economic activity, the Fed and the ECB lowered interest rates which resul­ ted in yield decrease on developed markets and triggered a search for higher returns elsewhere. Being less involved in global finance and thus less affected by the crisis, Africa had demonstra­ ted an average annual GDP growth rate of 5.3% during 2000-2008 and offered a substantial risk premium, which was not perceived as that risky anymore after the collapse of what seemed to be solid western banks. Since 2008, the African debt-to-GDP ratio has sharply increased, reaching 69% in 2023; yet the expan­ sion was asymmetrical in re­ gard to external and internal obligations. In the early 2010s, most sovereigns did not have capacity or credibility to ac­ 3 Federal Reserve Bank. Nominal Emerging Market Economies U.S. Dollar Index. URL: https://fred.stlouisfed.org/series/DTWEXEMEGS 4 Afreximbank. State of Play of Debt Burden in Africa in 2024. URL: https://www.afreximbank.com/reports/state-of-play-of-debt-burden-in-africa-2024-debt-dynamics-and- mounting-vulnerability/ commodate capital in their own bond markets. Little has changed since then. By 2022 the domestic debt has reached a no­ table level in five countries: Egypt (USD 258 billion), South Africa (USD 116 billion), Nigeria (USD 83 billion), Algeria (USD 95 billion), and Morocco (USD 30 billion). Unlike internal debt which depends mostly on the national economy’s performance and can be ‘print­ ed’ during times of hardship, external debt relies heavily on global macroeconomic conditions and has to be paid back in hard currency. The large share of external debt along with the overexposure of many African countries to commodity prices and a limited capacity to deal with disasters and crises are a volatile combination as was seen during the 2014 commodity price plunge, global pandemic in 2020 and crisis of 2022. However, the African debt-to-GDP ratio has soared not only due to the rise of the debt itself. It can be attributed also to a slowdown in economic growth (3.2% on average in 2010-2022) and currency de­ preciation (35% devaluation relative to USD since 2014 for emerging economies3 ) as the debt is mostly external. While comparison to GDP exposes the increase of the debt level as the main trend, it fails to reveal the magnitude of the change. Debt is very heteroge­ neous as it comes on different terms from different sources: other governments, multinational financial institutions or private banks.4 The private sector has become the main source of African debt, shifting from 25% in 2000 to 54% in 2023, leaving 27% to multilateral creditors such as the IMF or World Bank and less than 19% to bilateral loans from other countries4 In 2023, two-thirds of the total African debt or USD 1.2 trillion was external
  • 10. 9 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies Among the top lenders are private bondholders (i.e. eurobond market participants from all over the world), Chinese (USD 24 billion) and British (USD 14 billion) investors. Although this is indicative of improved investment attractiveness, it poses a number of challenges for African countries. Firstly, private debt is more expensive than bilateral or multilateral, meaning higher interest rates, lower grace periods and less space for restructuring. The UNCTAD report entitled A World of Debt 2024 shows that in 2020-2024 the borrowing costs of African countries were ten times higher than in de­ veloped economies, 44% higher than in the LATAM region and 85% higher than in Asia and Oceania, even though the share of private debt in Africa is lower than average for developing countries.5 Secondly, flows of private debt are more volatile and tend to reverse in times of crisis as foreign in­ vestors’ main concern is short to middle-term profit but not long-term and also not the abstract financial stability of a certain country. In 2022, developing countries experienced a net outflow of USD 49 billion on ex­ ternal public debt, among them were 21 African countries – five more than in 2021 and 11 more than in 2019.6 Thirdly, in case of default on private debt it may take longer to restructure it with a greater number of counterparties, who are not always willing to coope­ rate. At least 15 African countries have become tar­ gets of ‘vulture funds’ that specialise in purchasing distressed debt on the secondary market at a sub­ stantial discount and trying to recover the premium, usually through litigation and delays of the overall restructuring process.7 For example, in 2007 a vul­ ture fund received USD 15.5 million from Zambia after buying a debt of USD 3.2 million, meaning that the fund’s return was 484%.8 After a series of legal patches the activity of vulture funds in ­ Africa has 5 UNCTAD. A world of debt report 2024. URL: https://unctad.org/publication/world-of-debt 6 Ibid. 7 African Development Bank Group. Vulture Funds in the Sovereign Debt Context. URL: https://www.afdb.org/en/topics-and-sectors/initiatives-partnerships/african-legal- support-facility/vulture-funds-in-the-sovereign-debt-context 8 BBC. Zambia pays ‘vulture fund’ $15m. URL: http://news.bbc.co.uk/2/hi/business/6589287.stm diminished; however, a new wave of defaults may attract more sophisticated parties seeking to profit from distressed debt. It should also be considered that a large proportion of lenders labelled ‘private’ are in fact government affiliated. This is particularly true of lending from the Middle East and China. Africa’s external debt The debt landscape is not homogenous across ­Africa. Two-thirds of the external debt is concentrated in ten countries: South Africa (USD 172 billion), Egypt (USD 163 billion), Nigeria, Morocco, Mozambique, Angola, Kenya, Tunisia, Côte d’Ivoire, and Ghana. Almost all these countries are within the Top 10 in terms of GDP, with only Tunisia and Mozambique standing out. As local financial markets grow and be­ come more interconnected, debt distress in one of these heavyweights may trigger a wave of defaults across the continent. Eurobonds are issued in foreign currency outside the country of origin and have several benefits: they do not entail any policy changes; they are liquid relative to other types of debt, and they can be repurchased or bought back on the secondary market. However, issuing countries rely heavily on the global interest rates and their own credit rating as most eurobonds are paid off by issuing new portions of debt. Nowa­ days, both global and African interest rates remain high due to the tight monetary policy adopted by developed countries in the post-Covid era, currency depreciation and climate shocks. The frequency and magnitude of these shocks for Africa is increasing An issue with African external obligations is the ‘wall of debt’ – portions of eurobonds that were actively issued last decade and mature mainly in 2024-26
  • 11. 10 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies faster than anywhere else on Earth, and many count­ ries are trying to address the problem by issuing cli­ mate-related catastrophe bonds. In 2024, there are USD 10.3 billion in eurobonds maturing, a sharp increase from USD 3 billion in 2023. Some countries have already re-entered the eurobond market in 2024 to refinance maturing obligations: Côte d’Ivoire issued USD 2.6 billion in January and Kenya raised USD 1.5 billion in Febru­ ary. Large portion of maturing debt is still held by Egypt (USD 3.3 billion), South Africa (USD 1.5 bil­ lion), Morocco (USD 1 billion) and Ethiopia (USD 1 billion). South Africa and Morocco are not likely to face challenges paying off their debt, but Egypt may need new lines of credit including one with the IMF, while Ethiopia might end up in default by the end of 2024.9 In 2025 African countries will face USD 10.2 billion in maturing eurobonds, with USD 3 billion being held by Egypt, USD 2 billion by South Africa, USD 1 billion by Tunisia, USD 864 million by Angola, USD 750 million by Namibia, USD 700 million by Gabon and USD 500 million by Nigeria. Luckily, as inflationary expectations are decreas­ ing worldwide, the Fed and ECB are starting to cut interest rates gradually which will lead to cheaper debt. However, defaults in countries with the most vulnerable debt level are very likely to occur in the next two-three years. Market sentiment is useful to define the probability of default on a debt. In 2023, the yield on Ethiopian eurobonds maturing in December 2024 increased by 16 percentage points and reached an asto­ nishingly high 50.5% – i.e. eurobonds were sold for half of their face value.10 Ghana’s bonds maturing in 2026 had an even greater yield — 54.4%, an in­ crease by 8.2 percentage points from 2022. ­ Ethiopia and Ghana are the main candidates to default in 2024 and 2026 respectively, adding a new portion of arrears to the exis­ ting debt in default and further 9 Gregory Smith. Africa’s eurobond wall revisited. URL: https://www.linkedin.com/pulse/africas-eurobond-wall-revisited-gregory-smith/ 10 Cytonn. Sub-Saharan Africa (SSA) Eurobonds Performance in 2023. URL: https://cytonn.com/topicals/sub-saharan-africa-ssa-4 11 World bank. International Debt Report 2023. URL: https://openknowledge.worldbank.org/entities/publication/02225002-395f-464a-8e13-2acfca05e8f0 12 Boston University. Chinese Loans to Africa Database. URL: https://www.bu.edu/gdp/chinese-loans-to-africa-database/ limiting their ability to borrow on the international market. At the same time, both countries can find ways to limit the scale of the debt crisis through their political leverage. For example, Ethiopia’s debt ser­ vice costs are low relative to the size of its debt, and restructuring options can be found with new BRICS partners or competing sources of financing. China remains a major bilateral lender to Africa with over USD 90 billion in active debt commitments (fourfold increase from 2012), constituting 11% of the total external debt.11 Chinese loans to Africa started to grow from USD 100 million in 2000 and reached its peak in 2016 (USD 28.8 billion). Since then, the trend has reversed – lending dropped to just USD 1 billion in 2022.12 From a cumulative USD 180 billion, 80% was at­ tributed to infrastructure projects such as power plants, roads and railroads, port facilities and cell networks implemented by the supply of goods and services from China. Technically the money often doesn’t leave China, only the financial liabilities be­ ing recorded for the African states. China has often used resource-backed lending in countries such as Angola, Democratic Republic of Congo, Guinea and Ghana, pursuing also the goal of securitisation its strategic imports from these countries. In 2024, the top debtors to China were Angola (USD 21 billion), Ethiopia (USD 7 billion), Kenya (USD 7 billion), Zambia (USD 6 billion) and Egypt (USD 5 billion), some of them in default or being on the edge of debt distress. Yet, it remains unclear whether Chinese loans have deteriorated the debt profiles of African countries or China was just more willing to accept greater risks. However, in 2023 China demonstrated renewed in­ terest in Africa with USD 4.5 billion in loans, mainly in finance and infrastructure. USD 1.3 billion was provided to Egypt as a line of credit, with the same
  • 12. 11 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies amount being spent on facilitating trade with Africa. Nigeria received USD 1 billion to construct the Ka­ duna-Kano section of the Lagos-Kano railway, more than USD 250 million was offered to Madagascar, Uganda and Angola on energy and telecommunica­ tion projects. What seemed to be a Chinese retreat from Africa could be strategic realignment before reevaluating risks and entering new markets. Main defaulters In 2023, African debt in default totalled USD 130 bil­ lion, 13% lower than in 2022 but still 30% more than 2020. Four countries account for 90% of the defaulted debt: Ghana (USD 44 billion), Sudan (USD 43 billion), Zimbabwe (USD 16 billion) and Zambia (USD 14 bil­ lion)13 . Significant stocks of debt in arrears are also held by Mozambique, Libya, ­ Tanzania, and Ethiopia. 13 Afreximbank. State of Play of Debt Burden in Africa in 2024. URL: https://www.afreximbank.com/reports/state-of-play-of-debt-burden-in-africa-2024-debt-dynamics-and- mounting-vulnerability/ 14 Al-Monitor. Western creditors suspend debt relief to Sudan over coup as country’s economy sinks. URL: https://www.al-monitor.com/originals/2022/06/western-creditors- suspend-debt-relief-sudan-over-coup-countrys-economy-sinks Sudan owes most of its debt to Paris Club countries (23%), Saudi Arabia (13%), Kuwait (7%), China (6%) and the IMF (8%). In 2021, Sudan entered the HIPC initiative and was planning to restructure 90% of its USD 55 billion in debt. However, in 2022 IMF suspended the programme after the military coup and removal of the transitional government.14 Ghana’s 60% of debt in arrears is attributed to eu­ robonds which complicates the restructuring as it involves many private lenders and non-Paris Club countries. After defaulting on a debt of USD 30 billion in 2022, Ghana entered the G20 Common Frame­ work in January 2023, which helped to facilitate the restructuring process with China and India. In June 2024, Ghana stated that it had reached an agree­ ment on USD 13 billion of eurobonds with private lenders; yet the remaining debt remains high. With the current yield on eurobonds maturing in 2026,
  • 13. 12 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies Ghana will not be able to roll over the debt and default is most likely to occur without massive support from the external lenders. Zimbabwe’s debt in default is mostly owed to bilat­ eral creditors (67%), in particular to China. Chinese lending is opaque relative to other bilateral creditors to the level that the fact of technical default may not be disclosed. Little visible progress has been made to restructure Zimbabwe’s debt: in January 2023, the US left the restructuring programme15 “due to lack of pro­ gress on democratic reforms, alleged voter fraud and political violence targeted at opposition parties”16 . In 2023, Zambia reached an agreement with cred­ itors including China to restructure USD 6.3 billion of debt and is planning to complete its restructuring programme in 2025. Quantifying the debt burden Debt-to-GDP ratios above 100% are common among developed economies with well-capitalised markets, diversified sources of credit and hard domestic cur­ rency. Usually, for developing countries debt greater than GDP is a crisis that has already occurred. In 2023, only three states had public debt level above GDP: Cabo Verde (113%), Sudan (256%) and Zambia (110%) with Sudan and Zambia being among top defaulters. 11 countries fell in range bet­ ween 75 and 100% and 22 sovereigns resulted in 50-75% debt-to-GDP bracket.17 Overall, 19 out of 51 countries with available data demonstrated debt-to- GDP ratios above 70%.18 However, in 2023, only 22 countries experienced debt-to-GDP ratio increase. In theory, external debt had to be paid in foreign cur­ rency earned mainly through trade. Thus, another dimension of debt sustainability can be obtained by comparing external debt with exports and primary 15 The US does not have a great presence in Zimbabwe’s bilateral debt, however, their influence on the overall restructuring progress should not be underestimated since a large share of banks and credit rating agencies are located in the US. 16 VOA Zimbabwe. United States Suspends Role in Zimbabwe’s Debt Restructuring Program Citing Electoral Fraud. URL: https://www.voazimbabwe.com/a/united-states- suspends-role-in-zimbabwe-s-debt-restructuring-program-citing-electoral-fraud/7463023.html 17 Afreximbank. State of Play of Debt Burden in Africa in 2024. URL: https://www.afreximbank.com/reports/state-of-play-of-debt-burden-in-africa-2024-debt-dynamics-and- mounting-vulnerability/ 18 International Monetary Fund. The Debt Sustainability Framework for Low-Income Countries. URL: https://www.imf.org/external/pubs/ft/dsa/lic.htm 19 Calculated by the authors on the basis of World Bank and ITC Trade Map data using the formula: , where s is the country of interest, d – other countries, i – sector of interest, x – the commodity export flow, X – the total export flow of country s. income (profits from investments in other countries and residents’ remittances from abroad). In 2022, 15 countries surpassed the 240% debt-to-exports threshold, and 9 more sovereigns breached the ‘medium’ target of 180%. In the long term, greater importance for debt sus­ tainability of developing export-oriented African economies attached to export diversification, since fluctuation of individual commodity prices are com­ mon and may question economic growth for years, which is the case with, for example, oil-rich Angola. The diversification of the exports is a target recog­ nised by many governments, yet there is a lack of measurable indicators to follow the achievements. If the export is grouped by main categories, the sectoral Hirschmann index may be used to meas­ ure the distribution of a country’s exports across diffe­ rent sectors of the economy.19 The index was calculated by for 54 African countries for the year 2022 based on the data taken from the two-digit
  • 14. 13 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies level of the Harmonised System and grouped by categories by expert assessments. The index ranges from 0 to 1, with higher values in­ dicating that exports are more concentrated in fewer sectors. Conventionally, we can assume that values between 0 and 0.25 represent a ‘very high’ level of export diversification, values between 0.25 and 0.5 represent a ‘high’ level, values between 0.5 and 0.75 represent a ‘low’ level, and values between 0.75 and 1 represent a ‘very low’ level of export diversification. In this regard, the most vulnerable countries are those with high debt-to-exports ratio and very low export diversification, namely Guinea Bissau, Sao Tome and Principe, and Ethiopia The cost of servicing debts also matters in this regard, although it is more difficult to account due to lack of data. Nevertheless, what is more important in the long run, that debt can stimulate the development of new industries and export diversification (which is needed almost everywhere in Africa). If this does not happen, and debt accumulates without diversification effects, the economy is likely to approach a crisis. Very low export diversification and above medi­ um threshold debt-to-exports ratio are observed for Cabo Verde, in turn above strong threshold debt-to-exports and low export diversification can be seen for Mozambique, Niger, Central African Republic, ­ Rwanda, Malawi and Burundi.
  • 15. 14 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies In case commodity prices plummet or international trade stops, which was the case during pandemic, currency inflow dries up and governments appeal to central banks for currency reserves to finance ex­ ternal debt. From now on, time is ticking as reserves are getting thin (15-20% decrease of reserves in month-of-imports ratio from 2019 and 50% from 2007) and more investors are betting on national currency depreciation (10% since 2019 for devel­ oping countries). In 2022, precariously low levels of reserves relative to external debt had Zimbabwe (4.3%), Mozambique (4.5%), Chad (5.9%), Ethiopia (10%), Zambia (10.3%) and Ghana (11.6%).20 Abstract debt level directly affects the social sphere. In theory, countries invest borrowed money in lucrative projects and use their proceeds to pay off debts while both national income and standard of living improve.21 In Africa, however, debt service accounts for 16% more expenditures per capita than education and 79% more than health, which often leads to the opposite of an improved standard of living21 In 2024, payments on external debt are expected to take more than 23% of government revenues in 14 countries.22 A particularly dramatic share of revenues is spent on debt service in Angola (60%), Zambia (43.5%), Egypt (39%) and Djibouti (38%). Internal lending between African countries is con­ ducted mainly through the African Development Bank. Borrowing from government to government is vastly underdeveloped and is carried out in fo­ reign currency, mainly US dollars. Private lending via establishing branches of national banks abroad is untraceable and often depends on the policy of foreign investors since they represent a significant share of ownership of African banks. 20 World Bank 21 A world of debt 2024: A growing burden to global prosperity 22 Debt data portal. URL: https://data.debtjustice.org.uk/
  • 16. 15 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies The exceptions prove the rule, with some politically driven deals: Libya has offered loans to Chad (USD 277 million), Angola to Sao Tome and Principe (USD 18 million), Guinea (USD 15 million), Guinea Bissau (USD 5 million); Côte d’Ivoire to Burkina Faso (USD 100 million). Rating agencies and African premium International credit rating agencies (CRA) still play a vital role in accessing credit risk. Major rating agencies like SP, Moody’s and Fitch have limited coverage with only 30 African countries included. However, rating agencies are not only observers: in fact, they determine the cost of borrowing, and it is their decision which may exacerbate the debt burden. Recent studies question credibility of the CRA towards Africa: according to the UNDP.23 African countries have lost USD 74.5 billion because of biased credit ratings23 Researchers from UNDP have found that African countries have lower credit ratings on average than non-African states with the same level of GDP per capita. For instance, Tunisia has a 2.5 times lower rating than Philippines, Egypt has a 1.8x lower ra­ ting than Indonesia, Mauritius has a 30% lower rating than Chile. Advocates of CRA associate the dispa­ rity with underdevelopment of political institutions in African states, which sometimes may be difficult to capture statistically. In turn, their opponents remind about the country of origin of all widely accepted ratings (the US) and the resulting over­ use of western-centric financial power.24 In 2022 Moody’s purchased a controlling stake in leading African CRA Global Credit Rating, further consol­ idating its leadership on the continent.25 23 UNDP. Reducing the cost of finance in Africa. https://www.undp.org/sites/g/files/zskgke326/files/2023-04/Full%20report%20-%20Reducing%20Cost%20Finance%20 Africa%20Report%20-%20April%202023.pdf 24 Reuters. How Africa’s ‘ticket’ to prosperity fueled a debt bomb. URL: https://www.reuters.com/investigations/how-africas-ticket-prosperity-fueled-debt-bomb-2024-08-01/ 25 The conversation. Moody’s has bought a leading African rating agency: why it’s bad news. URL: https://theconversation.com/moodys-has-bought-a-leading-african-rating- agency-why-its-bad-news-176827 26 William Gbohoui, Rasmané Ouedraogo, Yirbehogre Modeste Some. Sub-Saharan Africa’s Risk Perception Premium: In the Search of Missing Factors. URL: https://www.imf. org/en/Publications/WP/Issues/2023/06/23/Sub-Saharan-Africas-Risk-Perception-Premium-In-the-Search-of-Missing-Factors-534885 27 Note that Dagong Global Credit Rating is a Chinese state-owned credit rating agency with headquarters in Beijing, while Global Credit Rating also known as GCR Ratings has become affiliate of Moody’s with offices in Mauritius, South Africa, Nigeria, Kenya and Senegal. Another important problem lying in the same dimension is risk perception of Africa among foreign investors. The existence of an “African premium” – i.e. higher borrowing cost solely because of the geographical affiliation with Africa – is a highly controversial issue. While according to traditional models it may seem ir­ rational, the lack of transparency and structural challenges as was mentioned previously could explain elevated yields.26 From a behavioural perspective, there are several interpretations: ambiguity aversion based on the lack of rel­ evant information about most of the African states and their economies, the presence of foreign bias as a result of the greater distance between Africa and its main investors’ coun­ tries of origin or, finally, simple overestimation of probabilities of shocking events such as wars and natural disasters. Taking into account the role that CRA played in the glo­ bal financial crisis of 2008, their opinion may be far from objec­ tive as their main incentive remains their own profit. Several initiatives among African coun­ tries were announced as alternatives in the field of credit ranking like Sovereign Africa Ratings (SAR) or African Credit Rating Agency. How­ ever, SAR has published reports only for Ghana, South Africa and Kenya. Until 2019, the Chinese Dagong Global Credit Rating27 published ratings of 16 African countries. They were significantly different from western agencies’ estimations and favoured borrowers and trade partners of China. In 2019 Dagong was nationalised after a series of corruption stories and stopped updating African ratings. In any event, the insightful supervision and suitable methodology matter more for debt sustainability than the final rating.
  • 17. 16 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies
  • 18. 17 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies External debt country classification Any linear rating of countries takes into account many heterogeneous factors with different weights. If it claims to be unbiased, it is likely to be manipu­ lated. A linear rating can only be correct in relation to the interests of a single actor who orders this rat­ ing - for their own decision-making or for influen­ cing markets through publications. But some com­ ponents are unbiased and worth considering, so that everyone can make their own rating weighing these components their own way. Indicators reviewed in this chapter (sectoral Hirschmann index, debt-to-GDP, debt-to-ex­ port, reserves-to-debt, debt-to-service and ser­ vice-to-revenues ratios) might be summarised and adjusted to reflect heterogeneity caused by restructuring practices as well as country’s debt repayment discipline. Four countries are considered solvent under most scenarios, namely Algeria, Botswana, Mauritius and Morocco. Their strong debt indicators and impec­ cable repayment history guarantee future perfor­ mance on the external debt. 19 more countries are solvent under normal conditions – i.e. if no abrupt hikes in global interest rates or highly unexpected domestic shocks like civil war appear. 15 countries are sensitive to adverse trade shocks equivalent to pandemic or severe currency depre­ ciation as their debt greatly exceeds their export revenues which are often poorly diversified and backed by small amounts of foreign currency re­ serves. Ten countries have significant risk of debt distress even under current conditions. Either their expan­ sionary debt dynamic causes concern, future debt repayments, poor fiscal performance or political un­ certainty. Finally, 4 countries are in default on most of their external debt. They participate in restructuring pro­ grammes and are mainly excluded from the interna­ tional capital market. This external debt classification requires further re­ search, adjustment and validation, including the use of tools based on artificial intelligence. Such research is highly recommended as this preliminary assessment re­ veals that there are significant discrepancies between unbiased calculations and publicly available ratings. With some exceptions, fast-growing Eastern African economies demonstrate less sustainable debt le­ vels in comparison with slower-developing Western African countries. Three explanations can be drawn to attention: Monetary. Western African countries use the CFA franc, which is pegged to the euro, thus alleviating currency and inflationary risks and resulting in a sus­ tainable debt profile. However, the usage of natio­ nal currencies in Eastern Africa may have a positive impact on overall growth since countries are free to conduct independent monetary policy. Geopolitical. Eastern Africa gravitates towards mar­ ket-oriented China and cultivates corresponding values such as competition and pursuit of revenue, while Western Africa is more attached to the Paris Club countries, promoting transparency but giving the best offers to the most loyal governments with a lot of loans being politically driven. Reciprocal. Key trading partners of Eastern African countries are rapidly developing Asian economies willing to allocate capital to cover future demand. Overall positive expectations backed by strong de­ mographics and economic indicators fuel the debt expansion process. The domestic debt of Africa Most African countries have traditionally relied on external debt in the form of long-term, concession­ al financing from multilateral and bilateral lenders or non-concessional private financing. In an effort to diversify their financing sources and reduce the risk of external debt vulnerability, they have turned to domestic debt markets in recent decades. Al­ though, the amount of external financing continues to exceed that of domestic funding.
  • 19. 18 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies Domestic debt refers to the portion of a country’s total debt that is owed to creditors within its own borders. Domestic debt can therefore be described as debt which is issued in the sovereign’s local cur­ rency, or debt which is governed by the domestic sovereign laws. It can also be defined as debt which is held by residents of the issuing sovereign. Significant share of the domestic debt is held by the entities borrowing themselves from abroad. Most of the domestic debt issued by low-incomes sub-Sa­ haran African countries is held by commercial banks which, in turn, often have foreign shareholders. In 2022, the size of domestic debt in Egypt was estimated at 72% of GDP, while in Zambia it was 40% of GDP and in Zimbabwe it was 12% of GDP. The structure of domestic debt also differs. In ­ Benin, government bonds account for 91% of the domestic debt, in Senegal it is 67% and in Zimba­ bwe it is 30%. Government bonds and eurobonds account for a significant portion of Egypt’s domestic debt. In Rwanda, they make up 50% of the total, in Mauritania 68%, and in Nigeria 79%. In Mali, they account for an even larger percentage – 92%. The detailed structure of the holders of domestic debt is rarely disclosed. For example, in Kenya, 43% of the debt is owed to commercial banks, 33% - to pension funds, while 7% to insurance companies, and 4% is held by the Central Bank28 . The main buyers of Tanzanian government bonds are pension funds, commercial banks and the Bank of Tanzania. Together, these three financial institutions account for almost 80% of the total volume of loans on the financial mar­ ket. Approximately 29% of this volume is accounted for by commercial banks and pension funds, with the Bank of Tanzania accounting for 22%29 . Domestic debt has several advantages, especial­ ly for African countries. First of all, most of the 28 REPUBLIC OF KENYA THE NATIONAL TREASURY AND PLANNING. Annual Public Debt Management Report For Financial Year 2022/2023. URL: https://www.treasury.go.ke/ wp-content/uploads/2024/01/Annual-Public-Debt-Report-2022-2023-Sept-2023.pdf 29 World Bank. 20th Tanzania Economic Update. URL: https://documents.worldbank.org/en/publication/documents-reports/documentdetail/099031124044543127/p179610 1f356d10fa1b47215b969e1205b2 30 UN. World Economic Situation and Prospects: April 2024 Briefing, No. 180. URL: https://www.un.org/development/desa/dpad/publication/world-economic-situation-and- prospects-april-2024-briefing-no-180/ domestic debt in Africa is denominated in local currencies, which means that it is shielded from exchange rate fluctuations and currency mis­ matches. In addition, issuing debt in domestic cur­ rency gives central banks and governments the flexibility to use monetary policy tools for domes­ tic debt management. For decades, businesses and households have preferred to invest money abroad, and capital flight remains a critical issue for most African economies, co-existing with ex­ tensive external borrowing. Investing in domestic debt is a good alternative, especially if interme­ diated by strong local banks. The reason is that authorities have more options for dealing with domestic debt, such as inflating it away, rather than resorting to outright default. In the event of a debt default, domestic debt is usually easier to restructure, as it is subject to do­ mestic court jurisdiction. A case study conducted by the IMF on debt restructurings between 1988 and 2020 concluded that domestic debt restruc­ turing took considerably less time to complete compared to external debt restructuring, largely due to a greater sovereign control of the terms and laws governing domestic debt30 . Moreover, by restructuring domestic debt, countries can avoid the potential reputational costs associated with external debt restructurings and, in some cases, maintain access to international financing. Well-developed domestic public debt markets offer local investors opportunities to invest in go­ vernment securities, providing a two-fold advan­ tage. First and foremost, domestic investors have the opportunity to participate in the economy and receive a reasonable return on their investments, given the relatively low risk associated with go­ vernment securities. Domestic debt defaults are less common than external debt defaults
  • 20. 19 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies Levels of development in local capital markets differ31 – from more than 100% of GDP in Egypt, ­ Morocco, Mauritius and South Africa to below 40% in Cameroon, DR Congo, Ethiopia, Madagascar and Uganda32 : in the more developed economies, gov­ ernments have more opportunities to raise funds domestically. Secondly, by attracting financing from the domestic market, governments provide residents an alterna­ tive for capital outflows. Some countries combine borrowings with the measures to reduce capital outflow exposure. For example, Zambia, which has a relatively higher level of non-residents participating in the domestic debt market (above 20%), has en­ acted measures to limit non-residents’ participation in the government bonds primary market to 5%. Nevertheless, domestic debt can have several long- term implications that can negatively impact the economy of a country. One of the main disadvan­ tages of domestic debt is that it can lead to signifi­ cant crowding out effects for the domestic private sector. This is because when the government is a major borrower, the credit available to the private sector from banking and non-banking financial in­ stitutions can decrease. Another challenge is the maturity structure of do­ mestic debt instruments, as many governments are unable to issue long-term instruments at reasonable interest rates. In 2022, in Zambia and Kenya short- and medium-term securities comprised 78.5% and 78% of the domestic debt portfolio ­ respectively. The proportion was even higher in Ghana, where short- and medium-term securities accounted for approximately 90%. This short-term debt structure increases the risk of rollover, where governments continuously borrow to pay off maturing debts. In leading economies like Egypt, Ethiopia, and ­ Nigeria the financial sector is partly publicly owned. Consequently, the authorities may at­ tempt to maintain the debt at a manageable level 31 The size of the financial system can be determined by various indicators, such as the total assets of the banking sector, market capitalisation of banks, credit facilities, insurance, and investments. Other indicators include the financial transactions of capital markets, the ratio of private credit to GDP, and the percentage of adults who have formal bank accounts. Additionally, the stability of financial institutions is also a factor in determining the size of the system. 32 SP Global. African Domestic Debt: Reassessing Vulnerabilities Amid Higher-For-Longer Interest Rates. URL: https://www.spglobal.com/research/articles/231101-african- domestic-debt-reassessing-vulnerabilities-amid-higher-for-longer-interest-rates-12900489 through various financial measures. However, the side effects can include crowding out lending to the private sector with long-term detrimental effects on economic performance and competi­ tiveness. In some countries, the high burdens of domestic debt service place a heavy strain on government finances, leading to further reductions in spend­ ing that could be allocated to investments in cru­ cial sectors. For example, in Kenya, Mozambique, ­ Tanzania, Uganda or Zambia domestic debt service cost was higher than external debt service, despite domestic debt stock being lower than external debt stock. In 2023, the cost of servicing domestic debt in Uganda was 2.8% of GDP, while external debt was only 0.9%. Debt service payments in selected economies in Africa, 2022 Source: prepared by the HSE Center for African Studies and Intexpertise based on IMF and UN DESA data. Kenya Percentage of total debt Debt percentage of GDP 0 0 2 4 6 8 10 10 20 30 40 50 60 70 80 Mozambique Tanzania Uganda Zambia Domestic debt service as a percentage of GDP (RHS) External debt as a percentage of total debt (LHS) Domestic debt stock as a percentage of total debt (LHS) External debt dervice as a percentage of GDP (RHS)
  • 21. 20 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies Since 2020, two African countries (Ghana and ­ Mozambique) have defaulted on domestic obliga­ tions, while five (Angola, Ethiopia, Kenya, Uganda, and Nigeria) have engaged in non-commercial debt exchanges. Africa’s trade: a terrible scarcity or a huge opportunity Africa relies heavily on international trade, and this reliance has increased over the past decades. Trade serves as a source of foreign exchange, which is needed to import the capital goods required by lo­ cal producers. Additionally, it has the potential to enhance productivity and to contribute to job crea­ tion and economic growth. In 2000, Africa’s total trade was around USD 500 billion. By 2023, it had grown to over USD 1.3 trillion. 33 Calculated by the authors on the basis of World Bank and ITC Trade Map data using the formula: , where d – country under study, s – is the set of all other countries, X – total bilateral exports of country d, M –total bilateral imports of country d, GDP – gross domestic product of country d. The trade dependence index33 has increased signifi­ cantly in all regions of the world, including Africa, over the past three decades. The trade dependence index demonstrates the importance of trade for a particular country and also characterises the degree of openness of the economy, which involves both, risks and opportunities. Africa’s average trade ratio has increased from 45% in 1991-2000 to 59% be­ tween 2020 and 2023. However, there is a wide vari­ ation in index ratios among economies, ranging from 8% in Sudan to Djibouti and Lesotho with their ratios of 264% and 125%, respectively, in 2023. For 25 countries the trade dependence index is still below 50% level, for 22 it ranges from 50% to 100%. In Djibouti, Lesotho, Libya, The Gambia and Namibia the index exceeded 100% in 2023. While Djibouti, Lesotho and the Gambia are re-exporting exten­ sively to the neighbouring countries, Namibia and Ghana’s debt default (external and domestic) and the subsequent restructuring has put the spot­ light on domestic debt in Africa. Domestic debt grew from 22% of GDP in 2015 to approximately 40% of GDP in 2021 mainly because of government borrowing to finance the energy sector and to bail out the finance sector following the 2018–2019 financial crisis. At the time of default in December 2022, domestic debt stood at 46% of GDP. Some of the factors contributing to the default included an inflated import bill due to effects of the Ukrainian crisis, drastic depreciation of the Ghanian cedi and increased cost of debt service. At the same time, external shocks triggered significant capital outflows, which diminished access to international fi­ nancial markets. Moreover, foreign exchange reserves dwindled to 2.7 months of import cover at end-December 2022, down from 4.3 months at end-December 2021. In December 2022, the Ghanian government initiated a domestic debt exchange programme, aimed at restoring sound public finance management and debt sustainability. Domestic bondholders were offered an option to exchange their holdings with a fresh issuance of bonds with longer average maturities and lower coupon rates. New bonds were issued at a coupon rate between 0% and 10%. Before the exchange, interest rates for two-six years notes ranged between 21.5% and 29.85%. Al­ though the programme managed to lower interest rates on government securities and lengthen their maturities, analysis by the country’s financial sector regulators showed that it adversely affected the solvency of some banks and insurance companies. The government formed the Ghana Financial Sta­ bility Fund to minimise impacts of the restructuring process to the financial sector and to avoid risks of a potential financial crisis. The restructuring also took a relatively short time, with the domestic debt exchange programme concluded in 2023. Inflation declined from 54% in December 2022 to 23% in February 2024. The economy also grew at an average of 3% in 2023.
  • 22. 21 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies Libya are both the exporters of natural ­ resources with relatively small populations. However, the increased role of international trade in African economies was accompanied by growing trade deficits in many countries on the continent. The increasing trade deficits pose challenges for job creation and poverty reduction efforts especial­ ly when the deficits are caused by rising imports of consumer goods that can be produced by domestic industries. The trade deficit often co-exists with the current account deficit, which in turn may increase debt burden. Growing current account deficits often presage disruptive economic trends such as sudden stops in capital flows, severe decreases in credit and spending and sharp economic slowdowns, which generate high unemployment and poverty. A trade deficit is sustainable as long as there are sufficient funds to finance it. In last decades African countries had probably better access to interna­ tional finance than ever. However, with growing in­ terest rates and slowing growth, the continent faces risks of much more complicated access to finance which will make financing of the deficits increasing­ ly challenging. In 2023, the overall external trade deficit of ­ Africa amounted to USD 84.8 billion. Although some countries experience a high surplus in their trade balance, the large deficit recorded by most negates these surpluses, resulting in a deficit trade balance for the continent. In 2023, the sum of the trade deficits was USD 169.5 billion. Only 15 out of 54 countries on the continent re­ corded a trade surplus, their total was 84.9 billion. The top five countries with the largest trade sur­ pluses in 2023 were Angola (USD 25.8 billion), ­ Algeria (USD 17.9 billion), Libya (USD 12.7 billion), Gabon (USD 8.5 billion) and Equatorial Guinea (USD 4.4 billion). All these countries are oil and natural gas exporters. On the other hand, the five largest countries in terms of trade deficit were Egypt, Morocco, ­ Ethiopia, Kenya and Tanzania. Collectively, these five countries recorded the total trade deficit of USD 102.8 billion. Among the deficit countries, there has been a deterioration in the trade deficits over the time. Between 2013 and 2023, the trade deficit in Morocco increased by 26%, in Ethiopia by 21%, in Senegal by 75% in Uganda by 44% and in Niger by 124%. 100 000 80 000 60 000 40 000 20 000 120 000 10 000 30 000 50 000 70 000 90 000 110 000 10 000 8 000 6 000 4 000 2 000 0 10 000 8 000 6 000 4 000 2 000 Trade dependence index for African countries, 2023 Source: prepared by the HSE Center for African Studies and Intexpertise based on ITC Trade Map data. Import, mln dollars Export, mln dollars 58% South Africa 62% Zimbabwe 33% Sao Tome and Principe 80% Morocco 52% Equatorial Guinea 95% Tunisia 40% Algeria 246% Djibouti Trade Dependence Index, % 10% 250%
  • 23. 22 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies In per capita terms, three countries had significant surpluses: Gabon (USD 3,469 per person), ­ Equatorial Guinea (USD 3,469 per person) and Libya (USD 3,469 per person). In 2023, Nigeria’s per capita trade surplus was USD 0.3. The island countries had the highest trade deficit per capita, with Seychelles, ­ Mauritius and Cabo Verde topping the list. Exports and imports of most countries are highly volatile as they depend on commodities. So, the accumulated trade balances of the individual coun­ tries would provide a clearer picture of their role in international trade. Africa’s cumulative trade deficit over the period from 2014 to 2023 amounts to USD 839 billion Over this ten-year period, Angola has been a sig­ nificant leader with a trade surplus of USD 234.3 billion. By a wide margin, Libya (USD 83 billion), ­ Nigeria (USD 81 billion), South Africa (USD 62 bil­ lion), Equatorial Guinea (USD 50 billion), Djibouti (USD 48 billion), and Gabon (USD 46 billion) were 34 The index is compiled by the authors. It is calculated according to the formula: export+import/ (export-import) for a 10-year period. the next on the list of African countries with a trade surplus. Most of the countries that have a trade sur­ plus are resource-rich (Angola, Libya, Equatorial Guin­ ea, Gabon, Nigeria, etc.) or serve as the logistics hubs for neighbouring countries (Djibouti, Ghana). In total, only 16 countries on the continent were identified with a long-term positive trade balance. However, the number of countries with persistent trade deficits is considerably higher. Egypt ac­ counts for almost half of Africa’s total trade imbal­ ance, which amounts to USD 455 billion. Morocco (USD 217 billion), Ethiopia (USD 127 billion), Kenya (USD 112 billion), Tunisia (USD 64 billion), Tanzania (USD 55 billion), Sudan (USD 44 billion), Senegal (USD 42 billion) and Uganda (USD 41 billion) have also become leaders in the cumulative trade deficit. A number of African countries have recorded relatively low trade deficits, up to USD 5 billion: ­ Guinea-Bissau (USD 0.8 billion), Democratic ­ Republic of the Congo (USD 1.1 billion), Sao Tome and Principe (USD 1.5 billion), ­Comoros (USD 2.3 billion), ­ Central African Republic (USD 4 billion) and Botswana (USD 4.7 billion). But if 1.1 billion in 10 years seems to be close to nothing for DRC, 1.5 billion for São Tomé is huge. The most balanced trade34 over a ten-year peri­ od is recorded for Nigeria (0.08), Côte d’Ivoire (0.05), Zambia, South Africa, Eswatini and Ghana (with 0.3 for each country), as well as Algeria (-0.02), Botswana (-0.03), and DRC (-0.04). Guin­ ea, ­ Angola, and Chad have a tendency towards a large surplus in their accumulated trade balance. In contrast, Gambia, Cabo Verde, Sao Tome and Principe, Liberia, Somalia and the Comoros tend toward a deficit in their trade ba­ lances. Persistent and increasing trade deficits are ex­ plained differently from country to country. Chro­ nic trade deficits can be evidence that domestic producers cannot compete with imports and/or their competitors in the global markets. Africa's trade balance per capita, 2023 Source: prepared by the HSE Center for African Studies and Intexpertise based on ITC Trade Map data. 0-0,25 0,25-0,5 0,5 – + 0,5-1 1 0–0,5 0
  • 24. 23 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies Trade deficit in some cases results from a country investing in physical capital (through imports of in­ termediate goods) and productive capacity, which has the potential of boosting employment and re­ ducing poverty, provided the investments are ef­ fective and allocated to job-creating activities35 . The top ten importers of capital goods in Africa in 2023 were: South Africa, Egypt, Morocco, ­ Nigeria, Algeria, the DRC, Angola, Tunisia, Ethiopia and ­ Tanzania. Of these countries, one half experienced a trade deficit in 2023. Although Africa’s share of manufacturing value add­ ed to GDP is expanding, Africa’s market share in manufacturing exports lags far behind the global av­ erage, accounting for roughly 1.3% of world exports. This gap in exports is largely responsible for the wid­ ening trade deficit. While the end of the commodity super cycle in 2014-2016 highlighted the cost of ex­ ternal imbalances, the lockdowns triggered by Cov­ id-19 underscored the risk of depending excessively on imports for manufactured products. The above mentioned sectoral Hirschmann index fits well to measure the level of diversity in African exports. In 2023, a group of 13 countries on the continent recorded a relatively high level of export diversi­ fication. This includes both major players in trade, such as Egypt (0.34), Morocco and South Africa (0.38 each), Tunisia (0.39) and Senegal (0.41), as well as transit hubs like Djibouti (0.36), Mauritius and Togo (0.43 each) alongside Uganda, Kenya (0.46 each) and Zimbabwe (0.49) having shown impressive performance in implementing their ex­ port diversification strategies. In 2023, a total of 21 African countries recorded a low level of export diversification. The index in this group ranged from 0.50 in Tanzania, 0.55 in Ghana and Rwanda, and to 0.7 in the DRC to 0.73 in ­ Guinea-Bissau. In 2023, 19 countries recorded the lowest levels of export diversification. This group included countries such as Central African Republic (0.77), Burkina Faso (0.79), Botswana and Mali (0.8 each), Republic of Congo (0.83), 35 UNCTAD. Trade and Current Account Balance in Sub-Saharan Africa: Stylised Facts and Implications for Poverty. URL: https://unctad.org/system/files/official-document/ webaldc2016d2_en.pdf Ethiopia (0.86), Algeria (0.93), Angola (0.94), Libya and Eritrea (0.97 each). The exports of these countries mainly consist of minerals such as oil, gas and gold, as well as agri­ cultural crops like coffee. Among primary commod­ ities, exports are concentrated in products with relatively low levels of value-added or processing, which further limits the low potential for employ­ ment typical of commodity outputs. Consequently, the fluctuations in global commodity prices can se­ verely impact their trade balance. If we take the average value of the sectoral Hirschmann index over ten years and the trade bal­ ance index, we will get the following picture. Firstly, a group of oil and gas exporting countries with a low level of export concentration and a high trade surplus can be clearly distinguished. A rela­ tive trade surplus above 1.05 (Côte d’Ivoire level) can only be found in countries with an export con­ centration of 0.7 or higher. The high level of export Source: prepared by the HSE University Center for African Studies and Intexpertise based on ITC Trade Map data. Sectoral Hirschmann index of African countries, 2023 levels of export diversification 0,75–1 0,5–0,75 0,25–0,5 High level Low level The lowest 0,97 0,93 0,67 0,80 0,79 0,63 0,79 0,83 0,53 0,56 0,34 0,59 0,94 0,46 0,86 0,46 0,50 0,70 0,77 0,94 0,51 0,80 0,49 0,68 0,68 0,43 0,38
  • 25. 24 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies concentration also leads to a significant capital out­ flow, as there are less export-oriented promising in­ dustries to invest in. This group includes, inter alia, Angola, Libya and Equatorial Guinea. The second group includes Ghana, South Africa, DRC and Côte d’Ivoire. These are exporting count­ ries with relatively well-developed industries and a high degree of diversification, as well as a trade surplus. However, Ghana was in default due to eco­ nomic policy distortions and government waste. The third group includes small economies, such as Liberia, Central African Republic, the Comoros and Somalia. These countries are vulnerable due to high trade deficits and lack of export diversification. As a result, they are at risk and need to either reduce their trade deficits or diversify their exports in order to ensure their economic stability. The fourth group also includes countries that are al­ most exclusively dependent on exports of raw materials. ­ Botswana, Algeria, Mali and Burkina Faso spend a signifi­ cant amount of money on imports. Therefore, their gov­ ernments may need to carefully monitor their imports, as they should focus on investments aimed at import sub­ stitution or the development of new export industries. The larger economies like Egypt, Kenya, Tanzania and Morocco have relatively diverse exports and experience a relative trade deficit. It is also worth considering how African countries cover their trade deficits. Source: prepared by the HSE Center for African Studies and Intexpertise based on ITC Trade Map data. The Trade balance 0.4 0.6 0.8 1 Sectoral Hirschmann Circle size — External debt to GDP The trade balance index and the sectoral Hirschmann index value over a ten-year period from 2014 to 2023 are used. The index ranges from 0 to 1, with higher values indicating that exports are more concentrated in fewer sectors. ZA CD CI GH SZ TN MA ZW NA MG MR CM MZ SL TZ SD UG EG SN TG MU RW BJ BI GM CV SC LS MW NE SO CF KM ST ET LR GW ML BF ZM CG GA TD AO SS GQ DZ DJ GN BW KE Trade balance index and sectoral Hirschmann index of African countries 0.7 0.5 0.3 0.1 -0.1 -0.3 -0.5 -0.7 -0.9 -1.1 0
  • 26. 25 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies Unilateral transfers (both current and capital) have been the main source of external finance in ­ Africa for decades. Their weight increased during the 2000s from 2.6% of GDP in the 1990s to 4.4% in 2013 – driven by the strong rise of workers’ re­ mittances and capital transfers that more than com­ pensated for the decline in current transfers in the form of aid, donations and official assistance. In 2022, remittances accounted for an average of 7.6% of GDP in Western Africa, 6.8% in Eastern ­ Africa, 4.4% in Northern Africa, 3.7% in Southern ­ Africa and 1.4% in Central Africa36 . In 2022, the World Bank remittance inflow data reported that Egypt is the largest recipient market (USD 32 bil­ lion), followed by Nigeria (USD 21 billion) and Morocco (USD 11 billion). These three markets account for 65% of all remittances to African coun­ tries. Most in the top 12 in terms of remittances in 2022 have chronic trade deficits, with the excep­ tion of Nigeria and Ghana.37 In 2023, the total amount of remittances sent by migrants to and within Africa was almost USD 95 billion37 The high reliance of most African countries on uni­ lateral transfers reflects their increasing dependence on external sources. It is clear that for some countries remittances are vitally important to their economies. This particularly applies to Gambia (27% of GDP in 2022), Somalia (23%), ­Comoros (22%), Lesotho (20%), Cabo Verde (16%) and Guinea-Bissau (11%). Although these transfers represent a substantial source of external finance that can be an important tool for poverty alleviation, they also entail significant costs. The strong reliance on income generated from external sources increases the economic vulnerability of reci­ pient countries and exposes them to the economic cycle of the source countries. 36 RemitSCOPE. Africa. URL: https://gfrid.org/wp-content/uploads/2023/06/RemitSCOPE_Africa_preliminary_release.pdf 37 IFAD. Improving the management of remittances and their use for development impact in Africa. URL: https://www.ifad.org/en/prime-africa#:~:text=Remittances%20 sent%20by%20migrant%20workers,quarter%20is%20invested%20or%20saved 38 Demekas et. al., 2005, p. 209. 39 UN. 2024 World investment report. URL: https://unctad.org/system/files/official-document/wir2024_en.pdf Beside unilateral transfers, Foreign Direct Investment (FDI) is also one of the main sources of external fi­ nance for Sub-Saharan Africa. FDI is often seen as the preferred and safer alternative source of private foreign capital for developing countries because of its ‘non-debt’ character. In addition, as FDI inflows do not involve the direct payment of principal and in­ terest charges, they are a preferred method of financ­ ing deficits, especially in developing countries, where these deficits can be large and sustained38 . Since 2000, FDI flows replaced “other investments” (mainly foreign loans) as the main source of external finance other than unilateral transfers. Net FDI flows more than doubled their share to GDP from 0.9% in the 1990s to 2% in 2013, while net flows of foreign loans registered a drastic fall, reaching high negative values as a consequence of the debt relief initiatives.39 Source: prepared by the HSE Center for African Studies and Intexpertise based on World Bank data. The importance of remittances index Index scale Not important 100 0 Very important 43/100 average score Africa In 2021, there was an all-time high inflow of FDI into Africa, reaching USD 82 billion, but this decreased to USD 53 billion by 202339
  • 27. 26 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies In 2023, almost 50% of all foreign direct investment flows to Africa were directed towards Northern and Western Africa. Investments in the East accounted for 21.3% of the overall volume, with the South receiving 17.3%, and the Central receiving 11.2%. In 2023, the accumulated amount of foreign direct investment into Africa reached USD 1.04 trillion. The leaders are Egypt, South Africa, Nigeria and Morocco. Although it is true that FDI does not involve the di­ rect repayment of capital and interest, foreign di­ rect investors do not invest without the expectation of profit and the eventual repatriation or relocation of the investment. Actually, the return on FDI is the highest compared to that of other external sources of financing as the rates of profit of foreign firms largely exceed the rate of interest on foreign loans or the rate of profit related to portfolio investments. However, for many projects with foreign invest­ ment, there are also shareholder loans and trans­ fer pricing to avoid taxes. The actual price of raw materials is underestimated, and a country’s budget does not receive the taxes that should be paid. In­ vestors earn on access to cheaper, unmarketable raw materials so formal returns on investment are no longer as important to them. In addition, inves­ tors lend to their companies at commercial rates, as debt repayment is easier than income from capital. It is difficult to assess the impact of transfer pri­ cing and undervaluation of exports on the balance of payments in African countries, but this can reach tens of billions of dollars per year. The diversity of Africa is in its currencies The currency and exchange rate play an important role in assessing the economic stability of develop­ ing countries. - The Moroccan dirham is classified as having a pegged exchange rate within horizontal bands, which since 2020 has been pegged to the euro and the US dollar in a ratio of 60% and 40%, re­ spectively (basket of currencies). - The Botswana pula is classified as having craw­ ling pegs (in terms of a soft peg) with a bucket of the special drawing rights (SDR) and the South African rand. Source: prepared by the HSE Center for African Studies and Intexpertise based on UNCTAD data. Foreign direct investment in Africa, 2023 Inflow of foreign direct investment, USD million The volume of accumulated foreign direct investment, mln dollars 0 – 500-1000 + 0–500 0 Algeria 36 860 Tunisia 40 817 Morocco 69 297 Republic of Congo 34 653 Egypt 158 689 Ethiopia 38 544 Mozambique 57 281 South Africa 124 025 Democratic Republic of Congo 32 629 Ghana 47 360 Nigeria 73 375 3000 1-2000 2-3000
  • 28. 27 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies - The soft pegged exchange rates of five coun­ tries (Malawi, Mozambique, Nigeria, Sudan and Tanzania) are categorised as peg stabilised ar­ rangements. - The crawl-like arrangements category includes 12 African countries (Algeria, Kenya, Mauritius, Tunisia, Rwanda, etc.). - The conventional peg is the largest category, in­ cluding 21 countries. Of these, 17 have curren­ cies pegged to the euro: the Central African CFA franc and the West African CFA franc. Three countries are pegged to the South African rand, including Lesotho, Namibia and Eswatini. One country’s currency, Nakfa (Eritrea), is pegged to the US dollar. The floating exchange rate is used by seven count­ ries: Angola, Egypt, Zambia, Madagascar, ­ Seychelles, the Republic of South Africa and Uganda. The ­ Somali shilling’s exchange rate is free floating. The exchange rates of four countries (South Su­ dan, Zimbabwe, Liberia, and Sierra Leone) are cate­ gorised as “other managed arrangements”. Also, based on IMF data, African countries can be classified according to the main principles of their monetary policies. There are four of them: ex­ change rate anchor, monetary aggregate target, inflation-targeting framework, and other. Exchange rate anchor means that the monetary authority buys or sells foreign exchange to main­ tain the exchange rate at its predetermined level or within a range. The exchange rate thus serves as the nominal anchor or intermediate target of monetary policy. This type includes the WAEMU and CEMAC countries, along with Lesotho, Eswatini, Namibia and Botswana. Monetary aggregate target is the measure when the monetary authority uses its instruments to achieve a target growth rate for a monetary aggregate, such as
  • 29. 28 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies reserve money, M1, or M2, and the targeted aggre­ gate becomes the nominal anchor or intermediate target of monetary policy. This monetary policy frame­ work is implemented by 13 counties, including ­ Nigeria, Algeria, Zimbabwe, Angola, Ethiopia, Rwanda, etc. Inflation-targeting framework involves the pub­ lic announcement of numerical targets for in­ flation, with an institutional commitment by the monetary authority to achieve these targets, ty­ pically over a medium-term horizon. Additional key features normally include increased commu­ nication with the public and the markets about the plans and objectives of monetary policymak­ ers and increased accountability of the central bank for achieving its inflation objectives. This type includes Kenya, Seychelles, Ghana, Uganda and South Africa. The other monetary policy framework ­category means that the country has no explicitly stated nominal anchor, but rather monitors various indica­ tors in conducting monetary policy. This category is also used when no relevant information on the country is available. This group includes Malawi, Mozambique, Sudan, Tunisia, etc. Many African countries have substantial external debt, often denominated in foreign currencies like the US dollar or the euro This can make debt servicing more vulnerable to exchange rate fluctuations. Fluctuations in the exchange rate can significantly impact the debt servicing costs. For example, if the local currency depreciates against the currency in which the debt is denominated, the cost of servicing and repaying that debt increases in local currency terms. This can strain the country’s financial resources and balance of payments. However, countries with a fixed ex­ change rate regime or a currency peg might face challenges if they have high levels of external debt. Maintaining the peg can be costly, especially if the country faces a balance of payments crisis or needs to defend its currency. 40 Bloomberg. Understanding Nigeria’s Currency Slump, and What Happens Next. URL: https://www.bloomberg.com/news/articles/2024-07-30/why-nigeria-s-naira-currency- ngn-usd-slumped-and-why-it-matters Since 2022, a number of African currencies have re­ corded significant depreciation against the US dollar. Currency depreciation leads to an increase in foreign currency-denominated external debt. For example, Nigeria’s external debt in 2023 increased by 100.1% over a year because of the depreciation of the nation­ al currency — the exchange rate of the Nigerian naira fell by 70% against the dollar40 . In Kenya for instance, as of December 2023, external debt – 67% of which was dollar denominated – increased by 1.3 billion dollars owing in part to depreciation of the Kenyan shilling. Also, approximately 98% of Ghana’s external debt stock growth in 2023 was a result of the Ghanian cedi’s depreciation against the dollar. The CFA franc is pegged to the euro, which has two consequences for the respective national debt. Given that external debt and international trade are both de­ nominated in the US dollar, a depreciation of the euro relative to the dollar leads to an automatic increase in the value of the external debt of the countries that use the franc. On the other hand, an appreciation of the euro also leads to a decrease in external debt, but this can have harmful effects, such as a loss of competitive­ ness and market share for products being exported from these countries. In addition, this stability attribut­ ed to the franc does not necessarily reflect the reality of the economies that use it. Thus, we see that the pegging to the euro has apparently saved the countries in the CFA franc zone from high levels of debt (as in East Africa). However, these countries are experiencing slower economic growth. Nowadays, an increasing number of African coun­ tries are turning to gold to hedge against global po­ litical risks and protect themselves against currency losses. Several countries are trying to increase their foreign currency reserves. For instance, Nigeria has launched a plan to buy gold domestically to boost its reserves. Tanzania has announced a plan to spend USD 400 million on six tonnes of gold. The central bank of Uganda has announced a pro­ gramme to buy gold directly from local artisanal miners.
  • 30. 29 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies However, in some countries, there is a discussion about tying the national currency to gold. For ex­ ample, the Vice President of Ghana, Mahamudu Bawumia, has said that if he is elected president in the upcoming December election, he plans to in­ troduce a new exchange rate system that will link the Ghanaian cedi to gold. However, for gold-backed currencies to function ef­ fectively, African countries need to have sufficient reserves in order to maintain the stability and longev­ ity of these currencies. In addition, linking a country’s currency to gold can make its economy vulnerable to fluctuations in the price of the precious metal.41 41 Bloomberg. All About ZiG, Zimbabwe’s Latest Shot at a Stable Currency. URL: https://www.bloomberg.com/news/articles/2024-08-08/zimbabwe-s-new-zig-currency-how- does-it-work-and-can-it-last 42 GSMA. The Mobile Economy Sub-Saharan Africa. URL: https://www.gsma.com/solutions-and-impact/connectivity-for-good/mobile-economy/wp-content/ uploads/2023/10/20231017-GSMA-Mobile-Economy-Sub-Saharan-Africa-report.pdf Africa’s digital currency The digitalisation of financial services in Africa and their transfer to mobile platforms is a natural step towards expanding public access to financial servic­ es. This is particularly important in a region where less than half of the population over the age of 15 has a bank account. African countries account for 66% of the global vol­ ume of money transfers through the electronic mo­ bile payment systems. In 2022, more than 50% of new accounts worldwide were opened by users from Sub-Saharan Africa42 . In 2023, there were 835 million In 2024, the Reserve Bank of Zimbabwe launched ZIG – a new currency backed by gold, as it seeks to tackle high inflation and stabilise the country’s long-floundering economy. The Zimbabwean dollar lost almost 100% of its value against the US dollar in 2023. ZiG (literally Zimbabwean Gold) started trading on 8 April 2024, at an exchange rate of 13.56 ZiG to the dollar. All Zimbabwean dollar account holders had their balances converted to ZiG. The change also affected stock prices on the Zimbabwe Stock Exchange, as it rebased 56 of its listed securities. In order to comply with international standards, the Reserve Bank of Zimbabwe began the process of changing the currency code from ZWL to ZWG (also Zimbabwe Gold). The Reserve Bank of Zimbabwe claimed that the new currency would be fully backed by USD 100 million in cash and 2,522 kilograms of gold worth USD 185 million. Meanwhile, the central bank added that it would also adopt a tight monetary policy, linking money supply growth to growth in gold and foreign exchange reserves. On 30 April, new banknotes were released, and the Reserve Bank of Zimbabwe launched a publicity campaign to raise awareness about the new currency. In order to stimulate demand, Zimbabwe made it compulsory for companies to pay at least half of their quarterly taxes using the new currency. Cer­ tain taxes can only be paid in ZiG. However, in practice, ZiG is still a rare occurrence, as public confidence in the new currency has not yet been fully established. Zimbabweans continue to prefer using US dollars for transactions, and most consumer goods are still priced in dollars. Although there are no major obstacles to paying for goods with the new currency or receiving change in ZiG at the Central Bank’s official exchange rate. The authorities say that dollar-denominated transactions have declined to around 70% from 85% when it was introduced41 .
  • 31. 30 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies registered mobile money accounts in Sub-Saharan Africa and USD 912 billion in transactions made. The adoption of mobile communication and wire­ less internet has opened up a plethora of oppor­ tunities for the development of payment services, money transfers, peer-to-peer lending and mi­ cro-insurance. Global payment giants such as Visa, Mastercard and American Express are planning to expand their presence into this niche market. Afri­ can operators such as MTN (South Africa) are suc­ cessfully competing with these global players.4344 43 M-PESA. URL: https://www.m-pesa.africa 44 FinAccess. 2019 Finaccess Household Survey. URL: https://www.centralbank.go.ke/uploads/financial_inclusion/2050404730_FinAccess%202019%20Household%20 Survey-%20Jun.%2014%20Version.pdf However, mobile payments do have some se­ rious drawbacks. Reliability and security issues contribute to the challenges businesses face in Africa when converting to mobile banking. While many mobile payment platforms available in East Africa rely on SMS, it remains the least secure messaging option. While mobile techno­ logy is definitely more prevalent in Africa than it once was, it can still be a challenge for people in more rural areas to gain access to a mobile phone, thus enabling them to participate in mo­ bile payments. M-Pesa One of the most successful examples of introducing e-finance technologies in Africa is the M-Pesa. This mobile phone-based money transfer and payment service was launched in Kenya in 2007 by Vodafone and Safaricom. After 14 months since the launch of the service, its user base had grown to 2.7 million. Two years later, it reached seven million, which is about 40% of the adult ­ population. In 2014, it had grown to 19 million users. The app provides payment services for subscribers of mobile operators in Kenya, Tanzania, Demo­ cratic Republic of Congo, Egypt, Ethiopia, Ghana, Lesotho and Mozambique43 . More than 60 million M-Pesa customers conduct transactions worth over USD 314 billion annually. Outside of Africa, M-Pesa has also been used in countries such as Afghanistan (until 2022) and Romania. In Afghanistan, the service has been used to pay the salaries of police officers and social workers. In Kenya, the percentage of the population with access to financial services increased to 83% in 2019, while the percentage of people completely excluded from these services decreased from 41% to 11%44 . Out of the 26 million people in Kenya who own cell phones, 22 million use M-Pesa, which represents almost every adult Kenyan. In 2021, Nigeria became the first African country to issue its own digital currency, eNaira. The ex­ change rate of the digital naira is linked to that of the regular naira and its circulation is controlled by the Central Bank. By 2023, the number of transactions increased by 63% and reached 22 billion naira (approximately USD 48 million) due to the currency crisis that occurred earlier this year. However, eNaira faces several challenges that need to be addressed before it can be widely adopted in the country. Some of these challenges include the lack of necessary technological infrastructure, the need for additional training for financial institution employees who will manage the system, con­ cerns about data privacy, the current electricity crisis and fears of potential financial crimes.
  • 32. 31 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies In the long term, the growth of mobile money settle­ ments preserves the dependence of economies and budgets on foreign trade. Mobile money is depos­ ited in the accounts of operators (mostly foreign). Transaction fees are taxed - but not the transactions themselves, which are usually treated as private transfers. As a result, governments are still unable to develop a sustainable tax base that could form the basis of their financial sovereignty. The ultimate beneficiaries of mobile money platforms are banks and telecom operators, both foreign, while govern­ ments remain dependent on foreign trade and credit. Is there anything to know about Africa’s foreign exchange reserves? Foreign exchange reserves are an essential part of a country’s policy toolkit regardless of the type of exchange rate and national currency, serving as a buffer against economic shocks and comple­ menting monetary policy to maintain price and fi­ nancial stability. In recent years, changes in foreign exchange reserves in African countries have been driven by policy responses to fluctuations in export revenues, transfers, and capital flows. For example, the decline in oil prices in 2014 led to a 33% re­ duction in the foreign exchange reserves of oil-ex­ porting countries as authorities resisted pressure to devalue their currencies. Political instability is also a significant factor, especially in lower-income na­ tions. This can lead to uncertainty and volatility in foreign exchange markets, impacting reserves. As for 2021, Libya with USD 81 billion had the highest nominal foreign exchange reserves among African countries, followed by South Africa (USD 50 billion), Algeria (USD 46 billion), Nigeria, Egypt, Morocco, and Angola45 . In a vast majority of African countries, the total amount of foreign exchange reserves has increased over the period from 2019 to 2024. In dollar terms, Algeria’s foreign exchange reserves have increased to USD 64.4 billion at the beginning of 2024. 45 Statista. Foreign exchange reserves in Africa as of 2021, by country. URL: https://www.statista.com/statistics/1351876/foreign-exchange-reserves-in-africa-by-country/ According to the Central Bank of Egypt, the coun­ try’s international reserves increased to USD 41.1 billion in April 2024. The growth of reserves was also noted in the Republic of Congo, Guinea, Kenya, the Seychelles, the Republic of South Africa, and Zambia. However, in some countries, there has been a no­ ticeable trend of a decrease in the nominal value of foreign exchange reserves. Foreign exchange Dynamics of foreign exchange reserves change in selected African countries Source: prepared by the HSE Center for African Studies and Intexpertise based on Trading Economics data. 2021 2024 Algeria 44.3 64.4 Angola 15.4 14.7 Botswana 5.4 4.6 Republic of Congo 0.7 Seychelles 0.5 6.0 Egypt 40.1 46.5 Ghana 8.8 6.6 Guinea 1.5 1.7 Kenya 12.9 15.7 Mauritius 7.8 8.0 Mozambique Uganda 3.6 3.7 3.5 (ZM) Nigeria 34.4 60.8 0.7 (SL) South Africa 54.8 62.2 3.2 (UG) Zambia 1.2
  • 33. 32 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies reserves are now frequently being drawn down as central banks endeavour to fight currency depreci­ ation while households withdraw reserves from the formal financial system. For example, in Botswana, reserves decreased from USD 5.4 billion in 2021 to USD 4.3 billion in 2024, in Ghana reserves de­ creased from USD 11 billion in 2021 to USD 6.6 bil­ lion in 2024. Countries with significant reductions in foreign exchange reserves also include Angola, Nigeria and Uganda. In general, foreign exchange reserves form an in­ tegral part of a country’s self-insurance, especially in low-income countries where the government often provides insurance against foreign currency shortages. These reserves provide several ben­ efits, including a buffer to finance necessary im­ ports or repay foreign exchange debt in case of unavailabi­ lity or extreme expense of foreign ex­ change fun­ ding. Additionally, foreign exchange re­ serves allow for policy flexibility to maintain price and financial stability during large exchange rate fluctuations. Having sufficient foreign exchange reserves to co­ ver imports for several months is a top priority. The largest number of reserves to cover imports for 14 months was recorded in Algeria Comoros had reserves that could cover imports for about seven months, Cabo Verde for six months, Morocco and South Africa for five months. The shortest import coverage period was observed in Zimbabwe (0.7 months), followed by Djibouti (1.4 months), Eswatini (1.9), Mozambique (2.1) and Sao Tome and Principe (2.6 months). The fall in the import cover ratio was widespread during 2022-2023 because of rising global food and energy prices and, as a result, rising inflationary pressures. Countries with the most significant de­ cline during 2022 and early 2023 included Angola, Gambia, Mauritius, Mozambique, Kenya, Ghana and 46 SP Global. Sub-Saharan African currencies will be more vulnerable to exchange rate pressures in 2023. URL: https://www.spglobal.com/marketintelligence/en/mi/ research-analysis/-subsaharan-african-currencies-will-be-more-vulnerable-to-exch.html Nigeria46 . However, in 2024, there was a gradual re­ covery in the volume of foreign exchange reserves for these countries. While foreign exchange reserves offer crucial be­ nefits, holding them comes at a cost for the econ­ omy. From the perspective of the consolidated public sector balance sheet, accumulating reserves amounts to issuing debt to invest in foreign curren­ cy assets. From an accounting perspective, foreign exchange reserves are typically held on the central bank’s balance sheet in African countries, so these costs are borne – above all – by the central bank. The financial cost of foreign exchange reserves depends on the difference between the return earned on reserve assets and the interest paid on the corresponding liabilities. In simpler terms, to place the amount in advance in international reserves, countries need to with­ draw this amount from their national economy and transfer it to the EU and the USA for safekeeping. This accumulation of reserves has a downside, as count­ ries may refuse to honour their loan obliga­ tions, as has happened with Libya. The Libyan In­ vestment Authority (LIA), set up under Muammar Gaddafi in 2006 to manage the country’s oil wealth, has been un­ der a United Nations asset freeze since the 2011 riot that toppled Gaddafi. This means that in order for Africa’s largest sovereign wealth fund to make new investments, or even move cash from negative interest rate accounts, the LIA needs UN Securi­ ty Council sign-off. In 2020, the LIA said that the freeze had cost it some USD 4.1 billion in potential equity returns. Libyan assets are effectively confis­ cated and cannot be considered sovereign assets. It is very rare for central banks in African countries to discloseinformationaboutwhichcurrenciestheirre­ serves are held in, where these reserves are located and in what share. Non-disclosure helps to prevent speculative attacks on national currencies as preca­ riously low reserves may trigger further withdrawals.
  • 34. 33 Measuring Africa’s Wealth and Money Africa 2025: Prospects and Challenges HSE University Center for African Studies African reserves are typically held in major inter­ national currencies such as the US dollar, the euro and the British pound. Some information about reserves is available from the South African Reserve Bank. According to the bank’s report for January 2024, the Republic of South Africa’s total reserves in dollar terms amount to USD 61 billion. This includes USD 46.7 billion in foreign exchange reserves, which consist of foreign currency deposits and other assets, USD 8.2 billion in gold reserves and USD 6.2 billion dollars in hol­ dings with special drawing rights. Against the backdrop of a general lack of transparen­ cy regarding the foreign exchange reserves of ­ African countries, also the Central Bank of Egypt stands out. The regulator publishes annual financial reports on Egypt’s external position, including detailed informa­ tion on foreign exchange reserves. According to the bank’s report for the end of 2023, Egypt’s net inter­ national reserves amount to USD 35.2 billion. This in­ cludes USD 27 billion in foreign exchange reserves, USD 8.4 billion in gold reserves and USD 36 million in holdings with special drawing rights. Overall, Africa’s foreign exchange reserves are cru­ cial for managing economic stability and growth, but their effectiveness can be impacted by global eco­ nomic conditions and internal economic policies. Some African countries may use their reserves to service foreign debt or secure additional borrowing. The Libyan example clearly shows that it is not the size of sovereign reserves that guarantees sove­ reignty. Much more important is where and in what form these reserves are held. One of the most relia­ ble forms of reserves is gold - if stored in the count­ ry itself. An expensive but worth considering alter- native is to invest in reserves of exchange-traded commodities, on the import of which the country is critically dependent. Of course, these reserves cannot be considered as foreign exchange re­ serves, as their international liquidity will be limited. However, for the macroeconomic stability of many countries with foreign trade deficits, in terms of ensuring their financial sovereignty, as well as their food and energy sovereignty, the investments in such reserves should be recognised as a necessary and important measure. African money – dynamic space for research Thus, African debt has increased not only in ab­ solute terms but also relative to GDP. Secondly, it remains mostly external and concentrated in ten countries, which are essentially the largest economies. External debt has become more pri­ vate, which increases the cost of borrowing and may complicate future restructurings. In turn, the domestic debt market is underdeveloped, even though it is easier to pay off than external obli­ gations. China, which had significantly decreased lending to Africa, is starting to return in the region; however, the pattern is unclear so far. The analysis of African trade reveals a prevalence of trade defi­ cits and low export diversification for most coun­ tries, which generates additional pressure on pub­ lic debt. Overall, 14 countries are already troub­ led with their debt levels and 15 more countries are prone to have debt problems if the global condi­ tions worsen. There are questions that require further investiga­ tion and research. Does Africa need its own credit rating agency, and what approach should be used to evaluate national creditworthiness of African states? What is the relation between trade im­ balances, financial flows and economic growth? Is there any political backing of decisions on external debt? How do currency regimes affect debt sus­ tainability and availability? Where are foreign ex­ change reserves of African countries stored and who benefits from them? And, finally, can financial sustainability be achieved without financial sovereignty, and how can the lat­ ter be structured, measured, and achieved?
  • 35. 34 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Is there a food crisis in Africa now? Food issues, deficits, hunger and famines seem to come hand in hand with Africa along the way. However, many international organisations tend to showcase that the food situation in Africa is now getting even worse. At first glance, such claims seem cor­ rect – according to FAO clas­ sification in 202347 , the num­ ber of undernourished people in Africa has increased by more than 100 million (to 298 million) compared to 2005. The number 47 FAO. The State of Food Security and Nutrition in the World 2024. URL: https://openknowledge.fao.org/server/api/core/bitstreams/06e0ef30-24e0-4c37-887a- 8caf5a641616/content of undernourished over the world has decreased, except for in Africa where this number has in­ creased. However, in relative terms, the number of undernourished in Africa has been hovering bet­ ween 15-20% of the population for the past 20 years, and the number of ’non-undernourished’ people in Africa is also increasing every year. Those advocating a pessimistic view on the food sit­ uation in Africa turn to big data and look at the food situation on a continental scale. However, behind the big numbers and the isolated – albeit disturbing – cases of Nigeria and DR Congo (which together ac­ counted for almost half of the increase in the number of undernourished people in Africa), success stories do exist. For example, the number of undernourished decreased in Senegal, Cameroon, Côte d’Ivoire and ­Ethiopia (in both absolute and rela­ tive terms), as did the share of undernourished people in Mali, Rwanda and Tanzania. At the same time, the productivity of African agriculture is growing – in 2003, it amounted to USD 138 billion, while in 2022 reached USD 327 billion (in current USD). Indeed, while population growth, coupled with in­ effective agricultural policies and Africa’s depen­ dence on imports of certain basic food commodi­ ties, has meant that the number of undernourished may be rising in quantity (including as a result of population growth), it is staying the same in relative terms. Moreover, the increase in the number of undernourished in Africa did not start in 2022 af­ ter the crisis in Ukraine or even in 2020 with the ­ COVID-19 pandemic. Indeed, the last time the number of undernourished fell year-on-year in ­ Africa was in 2009, and it has been rising ever since. Food for Africa: from food security to food sovereignty The number of undernourished in Africa has been hovering between 15-20% of the population for the past 20 years
  • 36. 35 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Not only is the number of undernourished peo­ ple in Africa increasing, but so is the number of articles on food security – in both academia and the media. The topic has become ’trendy’, thus impacting interpretations and increasing securiti­ sation. The problem of hunger is often reduced to climate change. For instance, in the SIPRI report dedicated to the issue of food insecurity in Africa, ’climate’ is mentioned 93 times, while ’fertilisers’ or ’reserves’ are totally absent48 . That said, the impact of cli­ mate change has not yet been fully studied and as­ sessed, which means that its regional impacts may differ – i.e. improvements in one region and crises in another. One study, published in 2015, found that rainfall in Sahel had increased by 10% in the preceding decades and that it could be due to climate change49 . This caused Lake Chad to fill up with rainfall – in October 2020 the first peak of 700 cm (October 2) and a second peak of 711 cm (October 15), above the recorded peaks in the last decade, were reached on the lake. The rainfall helped farming in several areas; however, there ensued an overflow of major rivers, which in turn led to flooding and significant losses and internally displaced persons in the region50 . Food situation in Africa is not deteriorating, but rather is not improving fast enough So far, neither ’external shocks’, which occur regu­ larly in the world, nor climate change, nor even in­ ternal conflicts have been able to radically worsen the food situation in Africa. All this suggests that the food situation in Africa is not deteriorating, but rather is not improving fast enough. The extensive model of growth – through increased imports on the one hand and the area of land involved in agri­ culture on the other (since 2000, Africa’s agricul­ tural area has increased by 100 million hectares, almost as much as from 1964 to 2000) – will con­ tinue to maintain the ’food status quo’ in ­ Africa, unable to keep pace with population growth. 48 SIPRI. Food insecurity in Africa: drivers and solutions. URL: https://www.sipri.org/sites/default/files/2023-01/2301_sipri_rpp_food_insecurity_in_africa_1.pdf 49 Carbon Brief. Factcheck: Is climate change ‘helping Africa’? URL: https://www.carbonbrief.org/factcheck-is-climate-change-helping-africa/ 50 HumAngle. 2022 Rainy Season Has Increased The Volume Of Lake Chad – Report. URL: https://humanglemedia.com/the-2022-rainy-season-has-increased-the-volume-of- lake-chad-report/ New approaches are needed to the discussion of food issues in Africa. Agricultural potential of Africa remains mainly under­ exploited, while agriculture in Africa is characterised by low technical capacity and mechanisation (lack of agricultural machinery) and productivity level with ir­ rigation systems (average level of irrigation is 1.5-3% of agricultural lands per country; Morocco has 5.9%) and fertilisers are being a rare sight (average ferti­ liser consumption in Sub-Saharan Africa is estimated at 17 kg of nutrients per hectare of cropland com­ pared to a world average of 135 kg/ha). Developing nations becoming self-reliant and es­ tablishing sustainable food systems is a rare case
  • 37. 36 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies that requires a combination of factors, measures and tools. India and Russia are recent examples one could cite of countries becoming not only self-reliant, but also food exporting nations. Most African countries have a potential for similar suc­ cess stories, but are yet to harness it. Indeed, food access is one of the key issues that will determine the long-term development of ­ African nations, which influences the dynamics of outbound migra­ tion, urbanisation and FDI inflow. The notion of food security is the primary one used through the world today to discuss food re­ lated issues. In 1996, the Rome Declaration of the Food and Agriculture Organisation of the United Nations (FAO) defined food security as “when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life”51 . Since then, this perception has become mainstream. However, this interpretation reduces food security primarily to issues of access and provision, thereby stres­ sing the importance of uninterrupted food supply. That said, purchasing from established producers 51 The Food and Agriculture Organization of the United Nations (FAO). Rome Declaration on World Food Security. URL: https://www.fao.org/4/w3613e/w3613e00.htm 52 Sviridov V., Andreeva T. Russian Fertilizers as an Element of Strengthening Africa’s Food Sovereignty. URL: https://africajournal.ru/wp-content/uploads/2024/07/Sviridov- Russian-Fertilizers.pdf is always cheaper in the short-term than inves­ ting in local production and infrastructure, “giving the fish without teaching how to catch it”. Under this um­ brella, global suppliers are actively invol­ ving them­ selves in the securitisation of food value chains, establishing surplus food stocks on their territo­ ry and purchasing agricultural land in develo­ ping countries52 . Food sovereignty as an alternative approach may be suggested. Food sovereignty is not the alternative but is the next level of food security. The very wording highlights the role of the local, national and regional actors, focusing on local agricultural production, developing and sharpe­ ning the tools for state support and interventions (subsidies, protection measures, logistical and in­ frastructure projects, etc.), establishing its own strategy for developing the food system. The desired model can be network-centric, which will allow a more dynamic response to food cri­ ses – e.g. through the formation of food reserve systems on the side of importers rather than ex­ porters. At the same time, network-centricity should be maintained not only at global level,
  • 38. 37 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies but also at intra-country level - it is necessary to create conditions and infrastructure (primarily transportation) for the equal distribution of food products throughout the country to prevent the overconcentration of the food stocks within the metropolitan areas surrounded by wastelands. However, transition to food sovereignty, which in extreme form proposes food autarky is still unachievable due not only to the globalisation of food markets, but also climate and other natural conditions that make the production of some food staples in Africa impossible. Instead, collective food sovereignty solutions may be­ come an option corresponding with the notion of self-reliance developed by prominent African philosophers and leaders Kwame Nkrumah53 and Leopold Senghor54 . That said, no system can develop in a vacuum, and external contacts are required to enable technology and knowledge 53 Nkrumah K. Africa must unite. Melbourne: Hassell Street Press, 2021. 54 Senghor L.S. Négritude et civilisation de l’Universel (Liberte tome 3). Paris: Seuil, 1977. transfer, logistics solutions and critical supplies like fertilisers. Almost all African countries today are depen­ dent on food imports to varying degrees. In most regions, the share of food imports in the GDP structure does not exceed 1%. However, there are exceptions, such as Eswatini (with food im­ ports amounting to 12% of GDP), Côte d’Ivoire (food imports amount to 8.5% of GDP) and ­ Mauritania (6%), as well as a number of count­ ries whose share of food imports in GDP is 2–4% (Cabo Verde, Malawi, Ghana, Mozambique and Zimbabwe). Import elimination or reduction cannot be an end in itself. It should be about import restruc­ turing – assessing the feasibility of maintaining imports of certain food categories at the pre­ vious level (e.g. wheat), replacing their part in the diet with food crops grown inside Africa; more active involvement of states in the forma­ tion of consumer habits and preferences, diet; partial localisation of the production of certain food categories. The answer to solving Africa’s excessive food import dependency, while seem­ ingly paradoxical, is to increase imports, but of higher value-added goods – not finished goods, but first semi-finished products, then fertilisers, seeds, vaccines, raw materials and industrial pro­ cessing equipment. Network-centricity implies much more active co­ operation between the countries of the region than is currently the case. So far, the main con­ tribution to food cooperation has been made by smugglers or middlemen who supply food across borders, often illegally, and by nomadic herders. There is a need for more active co­ operation on food issues at the level of regional economic communities or at least a sustained dialogue between countries on major commodity cate­ gories. A shift towards regional or country-wide specialisation could be one aspect of the tran­ sition.
  • 39. 38 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Population growth and hunger: demography matters. But not as one would think? Africa’s population is currently approaching 1.5 bil­ lion. By 2050, this number is expected to reach 2.5 billion, and by 2100 – 4 billion55 . It is worth noting that Africa is still a relative­ ly sparsely populated continent. With an area of 30 million square kilometres, the population density is about 44 people per square kilometre. By this indicator Africa is behind not only Asia (104 people per sq. km), but also Europe (73 people per sq. km.)56 . Excluding the Sahara and Kalahari deserts, as well as a number of uninha­ bitable areas (about 11 million square kilomet­ res in total), Africa will still remain in third place among the parts of the world with a population density of 66 people per square kilometre. If the population grows to 2.5-3 billion, its density in the habitable part of the continent will still be three times lower than, for example, that of India today. Many expert papers and reports on Africa start with theses that population growth would challenge re­ gional stability and contribute to food crises, out­ bound migration and political turmoil. Africa’s de­ mographic transition has been later in coming than in other regions; it is in the early stages of transition, causing the population to grow rapidly. That is per­ ceived as a threat and has led to attempts to control the process. In 1992, a report Beyond the Limits57 published by the Club of Rome – one of the most influential be­ hind-the-scenes non-profit organisations, notorious for its struggle with overpopulation – was released. It warned about the threat of overpopulation and has strongly influenced how conflicts in Africa are viewed by the world. One example given to demon­ strate the danger of overpopulation in the views of the Club of Rome and numerous Western publica­ 55 UNICEF. Generation 2030. Africa 2.0. URL: https://data.unicef.org/resources/generation-2030-africa-2-0/ 56 World Bank. Population density (people per sq. km of land area). URL: https://data.worldbank.org/indicator/EN.POP.DNST 57 Meadows D., and Randers J. Beyond the limits: confronting global collapse, envisioning a sustainable future. Vermont: Chelsea Green Publishing, 1992. 58 Prunier G. The Rwanda Crisis: History of a Genocide (2nd ed.). Kampala: Fountain Publishers Limited, 1999. tions was the genocide that devastated Rwanda in 1994. The case of Rwanda was presented as a pre­ cursor of similar catastrophes in bigger “overpopu­ lated” countries58 . Publications of leading international organisations systematically built in the public consciousness the connection of population growth with crises and hun­ ger. Among the signature papers are Demographic Change in Sub-Saharan Africa (1993), Briefing Note Population and Development in Africa (prepared by the Organisation of African Unity (OAU) and the UN Economic Commission for Africa (UNECA) in
  • 40. 39 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies 1994), Harnessing the Demographic Dividend for Africa’s Socio-Economic Development (prepared by AU in 2012), Synthesis Report on the Demo­ graphic Dividend in Africa (by African Institute for Development Policy and UNFPA, 2015), UNECA’s Demographic Profile of African countries (2016) and more. The ideas developed in these works cre­ ate a negative image of population growth, while suffering from ambiguities and lacunas, igno­ ring possible posi­ tive population growth impacts on the food situation. However, the bread riots and general destabilisa­ tion of Africa engendered by population growth has never happened and the prospects of such are quite low. In contrast to the pessimistic view of the correlation between population growth and access to food, an alternative positive vision can be con­ sidered. Population growth makes agriculture more profi­ table: the number of consumers increases, as does the number of workers. In this way, both consump­ tion and production growth can and should be combined with investments in fertilisers, irrigation systems and resource allocation, leading to multi­ plicative effects. Rising urbanisation together with 59 World Bank Blogs. Can rapid population growth be good for economic development? URL: https://blogs.worldbank.org/en/africacan/can-rapid-population-growth-be-good- for-economic-development?page=1 the population leads to a gradual change in con­ sumer habits, the emergence of supermarkets, the development of the bulk purchasing segment and, consequently, the consolidation of farms (it is eas­ ier for large chains to work with a limited number of suppliers with similar standards) and, finally, an increase in their technical equipment and produc­ tivity. Therefore, it is worth considering a positive option: the larger a population is, the easier it is to feed. A growing population would lead to a more evenly distributed population, brid­ ging the gaps (i.e. unpopulated areas) between ’food hubs’, increasing not only the size of the workforce and arable land, but also develop­ ment of infrastructure59 . Low popu­ lation density results in low-quality infrastructure (inclu­ ding roads), and food is not brought into remote ar­ eas due to insufficient demand and high trans­ portation costs. To initiate the discussion about the positive im­ pact of population growth on food availability, the correlation between undernourishment rates and population growth was studied. The larger a population is, the easier it is to feed Thirty years have passed since the Rwanda genocide. Following a significant population decrease – from seven million people in the late 1980s to five million by the end of 1994 – by now, the population of Rwanda has surged to 14 million. Rwanda remains the most densely populated in continental Africa and is also one of the leaders in terms of economic growth. In terms of population density in Africa, Rwanda is surpassed only by Mauritius – which could well be the most prosperous country on the African continent. In Rwanda itself, economic growth is evident. In the past 30 years, crop production has increased more than sixfold, both due to increased agricultural productivity and fertilisers intake growth, as well as because of new land included in agricultural turnover. Development of agriculture was combined with other infrastructure investments: the length of paved roads has doubled to 1,200 km and the capacity of power plants has increased sevenfold to 230 MW. The growth of the Rwandan economy is not just a result of the balanced development of infrastructure but is also due to the consistent development of the tertiary sector of the economy.
  • 41. 40 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies
  • 42. 41 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies For the study, the sample was taken both from count­ ries suffering from acute food crises and countries with a stable economic and political si­ tuation. This sample made it possible to assess the magnitude of the trend and the hidden factors af­ fecting the correlation. Overall, the statistics show that demographic growth may work in favour of food systems, but food access still remains ex­ tremely sensitive to changes in the political and economic environment. In the long term from 2004 to 2024, with popu­ lation growth in many African countries, under- nourishment among the population is decrea­ sing. Even in those countries where the share of undernourished is rising, the rate of increase, with a few exceptions, does not appear to be catastrophic. However, the correlation of population growth with hun­ ger reduction is still very sensitive to changes in the political and economic environment. In some countries this has occurred as a result of civil wars or unrest that have led to disruptions in the food system, primarily in terms of food de­ livery, while in others the situation has worsened as a result of overdependence on external sup­ plies of basic food commodities. However, such spikes are often short-term and levelled off in the long run. Strategy of eliminating hunger through the birth rate control is not an option Thus, the expected growth of Africa’s population to 3 billion people in the coming decades is likely to contribute to food deficit reduction through market growth, infrastructure development and agricultural production60 . However, population growth is both the challenge and the opportunity. What does seem obvious is that a strategy of eliminating hunger through the birth rate control is not an option. Instead, it is worth producing working strategies of development based on the realistic and positive assumptions of population 60 RT. Maslov A. The myth of overpopulation: More people in Africa are the solution, not the problem. URL: https://www.rt.com/africa/591953-africa-population-growth-west- worried/ growth. It is also necessary that the per capita food availability not fall with population growth. The basic conditions for these demands increase in domestic production and redistribute food, hence intensifying agriculture by supplying ferti­ lisers and improving infrastructure for supplies to remote areas. There seems to be no other actors but the governments to produce these workable strategies and implement them. If destructive factors prevail (such as lack of infrastructure investments and fertilisers, de­ pendence on import, etc.), a demographic surge may have the opposite effect (rising un­ employment, excessive urbanisation, environ­ mental problems). That is why the food crises in Africa need to be addressed in a comprehen­ sive manner, given that the demographic factor is ambivalent. Technically it is almost impossi­ ble to eliminate the other factors and calculate correlation between demographic growth and undernourishment. Nevertheless, it is worth further research, based on the particular case studies as it is clearly seen that population growth generally does not lead to food situa­ tion deterioration. What does matter is the popu­ lation and supply balance be­ tween cities and food producing agricultural areas. Cities are growing faster than the population itself. Malnutrition drives people to the cities, there food distribution works better to prove the concept ‘the more people the more food available’, but the fertility rate is higher in the rural areas leading to food crises there. If destructive factors prevail, a demographic surge may have the opposite effect
  • 43. 42 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Main trends in agriculture 1. New diet trends Per capita kilocalorie consumption61 per day varies across Africa: with a global median consumption of 0.61 (in an index where the highest indicator is assigned a value of 1) in 2022, some countries performed strongly, such as Algeria (0.83) and Morocco (0.78). In Sahel and Western Africa, per­ ceived by many as food crises prone, the indicator is average at 0.61 in Mali, 0.54 in Burkina Faso and 0.53 in Senegal62 ; South Africa’s kilocalorie con­ sumption is around the same level at 0.58. The deficit in kilocalorie intake is registered in Central and Southern Africa: 0.4 in Angola, 0.38 in ­ Zambia, and 0.23 in Zimbabwe. By comparison, the US fig­ ure in the index above is 1, China’s is 0.77, and Europe’s average is 0.8 to 0.9. These indicators, first of all, allow us to draw conclusions about the diet. In some countries, a low-calorie diet is common due to the prevalence of vegetables, fruits, sometimes poultry or fish, and the lack of dairy and meat products. Overall, it is not only about food availability, but what is available as well In recent years, there has been a shift from a low-calorie diet to a new high-fat, high-sugar diet, which brings certain risks63 . With rapid urbanisa­ tion, higher incomes and female employment op­ portunities, the demand for convenience foods is growing rapidly and supply chains are undergo­ ing a transformation, with production shifting to low-cost processed foods. Consumption of pro­ cessed and ultra-processed foods is increasing not only in urban but also in rural Africa due to, among other things, the mechanisation of agricul­ tural production, increased income from non-farm 61 World Bank. Kilocalories per person per day (highest score=1). URL: https://prosperitydata360.worldbank.org/en/indicator/IDEA+GSOD+v_23_03 62 One of the reasons why calorie intake in the Sahel zone is higher than in Sub-Saharan Africa may be the abundance of dates in the diet. The caloric value of dates is about 25 calories per fruit (about 274 kcal per 100 grams of product), which with the production volumes (e.g. Niger - 16.6 thousand tons in 2020, Chad - 21.2 thousand tons in 2020) makes dates an important source of calories for local population. 63 Global Food Research Program. Ultra-processed products make up nearly half of low-income South African adults’ diets. URL: https://www.globalfoodresearchprogram.org/ ultra-processed-products-make-up-nearly-half-of-low-income-south-african-adults-diets/ 64 FAOSTAT. Food Balances (2010-). URL: https://www.fao.org/faostat/en/#data/FBS employment and the associated increase in the opportunity cost of time. Many processed foods are high in sugar, salt, saturated fats and/or preservatives and, thus, contribute to overweight and non-communicable diseases such as diabetes, cardiovascular disease and cancer. At the moment, Africa has not seen a surge in fat consumption, and it would be prema­ ture to claim a shift to an unhealthy dietary pat­ tern, but the risk in the form of a slow but steady increase in sugar consumption remains: thus, total African consumption of sugar (raw equivalent) in 2010 was 13.9 million tonnes, in 17.9 million tonnes in 2016 and 19.8 million tonnes in 202264 .
  • 44. 43 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Grains Africa has the potential to become a major pro­ ducer of cereal crops: for 2022, the area plan­ ted with maize is 41.8 million hectares with a ­ production of 92.9 million tonnes. For 2022, 16.5 million hectares have been allocated to 65 USDA. International Production Assessment Division. URL: https://ipad.fas.usda.gov/Default.aspx 66 Andrae G., Bjorn B. The Wheat Trap: Bread and Underdevelopment in Nigeria. London: Zed Books, 1986. 192 p. 67 FAOSTAT. Crops and livestock products. URL: https://www.fao.org/faostat/en/#data/QCL rice (production of 39.9 million tonnes) and 29 million hectares to sorghum with a yield of 29.6 million tonnes65 . However, due to a lack of ferti­ lisers, field yields are not sufficient to meet the growing needs of the population. Africa spends up to USD 80 billion annually on food imports, and up to USD 30 billion of this is wheat.6667 Nigeria is a textbook example of the “wheat trap” (after the title of a 1985 book by Swedish researchers Gunilla Andrae and Björn Beckman, The Wheat Trap: Bread and Underdevelopment in Nigeria)67 . Since colonial times wheat (poorly suited to the country’s climatic conditions) has been replacing traditional crops in the African diet. The process intensified with gaining independence and the influx of petrodollars, which created a westernised class of urban dwellers, consumers of wheat products. They in turn created a demand for wheat imports, which is extremely difficult to replace with local production. The most consumed cereal crop in Nigeria is maize, accounting for almost 40% of consumption in quantity terms, rice and sorghum have roughly equal shares of 22% and wheat only 15%. Wheat is the only cereal in Nigeria for which imports are the main source of supply. 2.5 times between 2000-2020, rice consumption increased 2.5 times, maize consumption increased 2 times, and sorghum consumption is stagnant67 . Urbanisation and the gradual globalisation of food behaviour standards together with population growth is leading to a gradual increase in the consumption and importation of wheat.
  • 45. 44 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Wheat is not a traditional crop for most African countries, and compared to other regions, Africa ranks last among consumers of bakery and confectionery pro­ ducts. Nevertheless, imports of this particular crop account for a significant portion of African government and consumer expenditures. The rea­ son lies in the artificial increase in demand as part of the “wheat trap”. The way out for African countries may be to con­ sistently support more domestically adapted crops like sorghum, cassava, etc. Such measures could include imposing obligations on flour producers to replace a share of wheat flour with sorghum, intro­ ducing more pest and climate-resistant varieties and seeds. The way to African food sovereignty seems to be in reducing dependence on wheat in general, not only on wheat imports Protein intake: dairy, fish, meat and poultry The average protein intake in Africa has decreased over the last 10 years and stands at 65-66 g per person per day, which is 20 g less than the world average. The majority of protein consumed in Africa is low-quality plant proteins, with them constituing 77% of the intake (37% in the EU). African count­ ries consume plant proteins almost as much as the world average (50 g), but with animal proteins like fish, meat, eggs, dairy products their consumption is 2-3 times less. With the spread of fast food – noodles and other snacks – the share of low-quali­ ty proteins will probably increase even more. Although overall protein intake is not significantly below the recommended and required amounts, the problem lies in its composition
  • 46. 45 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Consumption specifics limit the continent-whole approach. Here, even a country-by-country ap­ proach is not sufficient, given the significant dif­ ferences in traditional diets in different regions of the same country – for example, in the count­ ries of Western Africa coastal populations depend primarily on fish, while those in the northern re­ gions depend primarily on dairy products and beef. Moreover, the share of animal protein intake is still so small and fluid that a single reform in one country may have an impact on continent-wide statistics. Dairy products remain the main source of animal protein in Africa, but this is primarily at the ex­ pense of Northern Africa, where milk powder has a significant market share, and Eastern Africa, name­ ly Kenya, where the government has consistently supported local producers and the dairy industry occupies an important position in the economy (4.5% of GDP).68 The low consumption of milk and dairy products is due to low production levels, lack of canning technology (for products on the domestic mar­ ket) and the high prevalence of lactose into­ 68 Kenya News Agency. Dairy, Mango Farmers To Access Subsidies Via E-Card. URL: https://www.kenyanews.go.ke/dairy-mango-farmers-to-access-subsidies-via-e-card/ 69 FAOSTAT. Food Balances (2010-). URL: https://www.fao.org/faostat/en/#data/FBS lerance among the African population. Overall, dairy farming remains primarily subsistence, es­ pecially for countries with a significant share of nomadic population: Mali, Niger, South Sudan, Ethiopia. Improving the efficiency of the dairy industry in such countries is not only an issue of food sovereignty and balanced diet, but also of security in its broader sense. Government sup­ port to the dairy industry, creation of additional jobs and infrastructure will help to improve life conditions of herdsmen, consequently, con­ tributing to the resolution of the centuries-old farmer-herder conflict. Meat is generally less consumed in Africa com­ pared to other regions (about 20 kg of all meat species per person per year in 2021 against 43 kg per person globally and 67 kg per person in Eu­ rope69 ) due to its high price and additional produc­ tion costs in the pastoral sector, as well as the lack of infrastructure (industrial slaughterhouses). The variation in meat and poultry consumption in Africa is very wide, ranging from an average of 5.4 kg per person per year in Ethiopia to 60 kg per person per year in South Africa, with an average of 20 kg per person per year in Africa. Chicken is the main meat The Kenyan dairy industry is among the top in Africa and is the leading in Eastern Africa. This case demonstrates the potential of the government interventions and investments in food sovereignty. The dairy is contributing 4.5%, 14% and 44% to the national, agriculture and livestock sub-sectors GDP, respectively. In 2023 total milk production in the sector is estimated to be 4.6 billion litres (for comparison, about 2.9 million litres in 2000), and the consumption of dairy products remains high (about 98 kg /capita/year in milk equivalent). Such an increase was possible due to high demand for processed milk and milk products due to a growing urban middle class and ongoing investments in value added products including long-life milk and milk powder. A chain of production has been established - milk collection from small farms is centralised in so-called ‘milk bars’, from where milk is either delivered for processing or sold to consumers in raw form. A big role in establishing value-added production is played by the government, that supports the industry through set of regulatory measures and incentives. There are also support measures from the regional governments - for example, in Murang’a the county government established a subsidy programme in early 2023 - milk producers are receiving 7 shillings (USD 0,054) per delivered litre of milk via e-card68 .
  • 47. 46 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies for the vast majority of Africans, accounting for around 30% of annual meat consumption. In gene­ ral, it is chicken that has accounted for most of the growth in meat and protein consumption in Africa. However, this consumer boom is largely driven by imports - African countries spend more than USD 2 billion a year on poultry imports. Urbanisation and low efficiency of domestic production in Africa, including feed shortages, will remain the key drivers of chicken consumption and import growth Consumption is expected to increase as the de­ mand for chicken in Africa rises, with a projected market volume of 11 million tonnes by the end of 203070 . 70 African Union Development Agency. Digitalising The Poultry Industry In Africa. URL: https://www.nepad.org/blog/digitalising-poultry-industry-africa 71 FAOSTAT. Food Balances (2010-). URL: https://www.fao.org/faostat/en/#data/FBS 72 FAO. The State of World Fisheries and Aquaculture 2018. URL: https://openknowledge.fao.org/server/api/core/bitstreams/6fb91ab9-6cb2-4d43-8a34-a680f65e82bd/ content 73 FAOSTAT. Food Balances (2010-). URL: https://www.fao.org/faostat/en/#data/FBS 74 IDH. Fish farming for African food security and job creation. URL: https://www.idhsustainabletrade.com/news/increasing-food-security-through-local-fish-production-and- market-growth-in-africa/ Because of pork’s limited potential as a source of protein, engendered by climate and religious ta­ boos, what meat African cities will eat - chicken (lo­ cal or imported), beef, lamb, fish or goat meat and in what proportions - depends on decisions with little time to make. Global consumption standards make the key role of chicken almost inevitable, but whether it comes from Africa or abroad depends on whether African governments can take measures to support the industry, introduce more efficient and crossbred types of poultry, support higher input re­ quirements (housing/shelter, commercial diet, and strict disease/vaccination programmes) associated with the more genetically efficient breeds. Other­ ways, chicken may become the new “wheat trap” for Africa. Despite the fact that Africa provides approx­ imately 10% of global fish catch71 and 10% of global fishermen are Africans72 , fish consump­ tion is almost 2 times less than world average (9 kg per capita vs 20 kg73 ). According to IDH, the African continent has been experiencing a sea­ food deficit since 2001 and this deficit has been growing by 13% every year74 . This is primarily due to the low level of knowledge of African aquatic resources, lack of skilled labor and infrastructure (storage, processing, delivery to consumers). The most pressing issue is aquaculture: fishing is hap­ hazard, extensive and often left to foreign com­ panies. At the same time, due to the low efficiency of the fishing industry in Africa, imports of fish and seafood are increasing. Fish imports have increased fivefold in 20 years and almost reached USD 5 billion by 2023. It is the development of aquaculture and improvement of technological equipment of the industry that will guarantee the growth of fish consumption in Africa.
  • 48. 47 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies 2. Shift away from subsistence farming With urbanisation, there has been a shift away from subsistence farming and, more widely, from eating locally grown food. Land is increasingly given to technical (cotton, rubber) and export crops, while food is increasingly imported: wheat, rice, corn. There is a decline in the food base in the wild, as well as in fauna, amidst popula­ tion growth, hunting and insur­ gency.75 75 The Citizen. Tanapa revenue soars by 94 percent as tourism rebounds. URL: https://www.thecitizen.co.tz/tanzania/news/national/tanapa-revenue-soars-by-94-percent-as- tourism-rebounds-4564600 As a consequence, there is a decrease in opportu­ nities for extensive growth (arable land, pastures), an increase in demand for intensive farming me­ thods introduction. One of the main methods of increasing the quality and quantity of yield is the application of fertilisers. Fertilisers market in Africa: towards agricultural intensification Land dilemma exists as well, as alternative to agriculture options arise for land use. For instance, in Tanzania in the period from 2022–2023, the territory of national parks amounted to 99.3 thousand hectares, the revenue from these territories for this period amounted to USD 123.9 million75 , the average revenue amounted to USD 12.5 thousand/ha. While the approximate income from agriculture does not exceed USD 1 thousand per ha. Fertilisers will be the main trendsetter for African agriculture development in the forthcoming decades
  • 49. 48 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies As of 2022, agricultural fertiliser use in Sub-Saha­ ran Africa is 17 kg/ha76 of active ingredients (com­ pared to APAC at 300 kg/ha), with some countries like Uganda, Guinea, Republic of Congo, Niger and CAR using less than 5 kg/ha. Following the mee­ ting of African Ministers of Agriculture in 2006 in Abuja (Nigeria), a modest goal was set to increase the average volume of fertiliser use from 8 kg/ha to 50 kg/ha, which is still yet to be achieved in most countries. According to the calculations of the United Nations Development Programme (UNDP), achieving the goal of increasing the use of ferti­ lisers could triple food production in Africa in the near future, as well as reduce malnutrition by almost 5%77 . Fertiliser consumption in Africa is 7.5 million tonnes of active ingredients, and most of it is im­ ported nitrogen, potash and phosphate fertilisers. Fertilisers have already contributed to food sove­ reignty of several African countries. Among them is Ethiopia, which has arranged an increase in pro­ duction due to the introduction of new wheat vari­ eties and an increase in the use of fertilisers. African market share of imported fertilisers (6% of global value) and exported (12%) is relatively 76 Malpass D. A transformed fertilizer market is needed in response to the food crisis in Africa. URL: https://blogs.worldbank.org/en/voices/transformed-fertilizer-market- needed-response-food-crisis-africa 77 UNDP. Towards Food Security and Sovereignty in Africa. URL: https://www.undp.org/facs/publications/towards-food-security-and-sovereignty-africa 78 Africa Fertilizer Map. URL: https://www.africafertilizermap.com/ 79 Sviridov V., Andreeva T. Russian Fertilizers as an Element of Strengthening Africa’s Food Sovereignty. URL: https://africajournal.ru/wp-content/uploads/2024/07/Sviridov- Russian-Fertilizers.pdf 80 IFASTAT. URL: https://www.ifastat.org/ 81 FAOSTAT. Food Balances (2010-). URL: https://www.fao.org/faostat/en/#data/FBS 82 FAOSTAT. Crops and livestock products. URL: https://www.fao.org/faostat/en/#data/QCL high, whereas indicators of several countries (Mo­ rocco, Algeria, Egypt) are in position to increase significantly this decade. According to the Africa Fertilizer Map, the major fer­ tiliser producers on the African continent – Morocco, Algeria, Nigeria, South Africa and Libya – manufacture fertiliser not only for their own consumption but also for export, including intra-regional exports78 . Africa is endowed with the resources for fertiliser produc­ tion. According to the USGS, up to 80% of the world’s phosphate reserves are concentrated in Africa. Afri­ ca annually produces around 250 bcm of natural gas (about 1 thousand cubic metres of gas is needed to produce 1 tonne of ammonia fertiliser). That proves the potential for wider regional cooperation in fertil­ isers production79 . South Africa, Ethiopia, Zambia, Djibouti, Tanzania and Zambia are the region’s leading fertiliser buy­ ers (the combined share of these five countries is 20% of total African imports)80 . At the same time, Morocco, South Africa, Egypt, Nigeria are among the five leaders exporting to other countries of the region: they account for 16.1% of external African exports and 76.8% of intra-regional exports.8182 Ethiopia imports up to one million tonnes of wheat annually (500,000 tonnes in the first half of 2023 and 400,000 tonnes in the first half of 2024) with an average annual consumption of 6 million tonnes for 2019-202081 . Increase in yields – the “wheat revolution” as some media refer to the phenomenon – has been made possible by the nation-wide introduction of heat-tolerant wheat varieties combined with increased mechanisaton, irrigation and fertiliser application. For instance, nitrogen fertiliser input increased from 240,000 tonnes in 2014 to 426,000 tonnes in 2022 (from 14 kg/ha to 23 kg/ha), contributing to wheat yield increasing from 2.5 tonnes/ha to 3 tonnes/ha. All measures combined led to an increase in wheat production from 4 million MT to 5.6 million MT in 2023/2482 .
  • 50. 49 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies However, intra-regional fertiliser consumption and distribution remain low. The main reasons include low qualification of farmers and specialists involved in the agricultural sector, dependence on subsidies, shortage of foreign currency and the general lack of government support for the sector. It is the government that should be the main player in the emerging fertiliser markets Given the small size of farms and their lack of working capital and knowledge of soil conditions, it is the govern­ ment that should be the main player in the emerging fertiliser markets. Examples of separate states show that the set of these measures is limited, but allows to achieve significant results even in the short term. However, the main reason remains the benefit for large African producers of targeting external mar­ kets. Countries with unstable economic and poli­ tical environment, as well as countries amidst acute food crisis, cannot pay for sufficient volumes of fer­ tilisers at market price, which directs export flows to other regions rather than inland. 83 Africa Fertilizer Map. URL: https://www.africafertilizermap.com/#Interactive Another critical reason for low consumption and intraregional exports is the poor state of logistics. For example, the main railroads and transport trade corridors on the continent pass through coastal countries, international ports and major railway stations, almost completely ignoring the inland countries (most affect­ ed by the food crisis). The de facto ‘exclusivity ’ of some routesincreasesthepriceoffertilisershipments.Ac­ cording to Africa Fertilizer Map’s 2021 calculations, the transportation cost per tonne of fertiliser from Dakar to Bamako averaged USD 54 (1,115 km), from Beira to Lusaka USD 85 (1,055 km), from Dur­ ban to Harare USD 115 (1,680 km) and from Dar es Salaam to Lusaka USD 100 (1,940 km)83 . Mean­ while, the major railroads and transport corridors affect intra-continental countries tangentially. This increases the cost of transportation at the expense of conveyance within the country itself (from the transport hub to the periphery) and adds the risk of a transport blockade if relations between states deteriorate.
  • 51. 50 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies 84 84 Federal Customs Service of the Russian Federation. URL: https://customs.gov.ru/statistics Russia, as the second largest producer of mineral fertilisers in the world, plays a significant role in fertiliser exports to Africa. In value terms, their exports have grown almost 32-fold over the past 18 years, reaching USD 511 million in 202184 ; in volume terms, exports have increased from 770,000 tonnes in 2018 to 1.6 million tonnes by 2022. Thus, Russia’s share in the African fertiliser market has reached about 12%. For comparison, Russia’s share in the supply of hydrocarbons to Africa is 3%, and 32% for wheat. At the same time, the share of Russian exporters is still significantly inferior to the volume of supplies from leading international companies. Thus, the Moroccan company OCP supplies about 2 million tonnes of phosphate fertilisers to Africa annually, and the Norwegian company Yara supplies about 1 million tonnes (mainly urea, but also complex fertilisers). Uralchem Group case: trade flows and humanitarian supplies Several large Russian companies, including PhosAgro, EuroChem, Uralchem and others, currently cooperate with African countries. An interesting example is the cooperation between African countries and Uralchem Group. Uralchem Group’s efforts to gain a foothold in the Nigerian potash fertiliser market culminated in the signing of a contract between Uralkali, part of Uralchem Group, and the Nigeria Sovereign Investment Authority (NSIA) in 2019. As a result of the contract, Uralkali remained the sole supplier of potash fertilisers to Nigeria from 2019 to 2021. In financial terms, such supplies amounted to USD 47 million in 2020 and USD 41 million in 2021. In 2022, more than 260,000 tonnes of fertilisers belonging to Uralchem Group were blocked in Riga, Ghent and other EU ports. Uralchem Group volunteered to use such blocked tonnages for gratuitous deliveries to African countries: in March 2023, 20,000 tonnes of fertilisers were delivered to Malawi, then 34,000 tonnes went to Kenya in May 2023, another 34,000 tonnes went to Nigeria in February 2024, and 23,000 more tonnes were shipped to Zimbabwe in March 2024. In total, this initiative has resulted in more than 111,000 tonnes of supplies (and counting), which were made in cooperation with the United Nations. In fact, the humanitarian shipments of Uralchem Group to African countries made in late 2022 and early2023pavedthewayforawiderengagementingratuitousdeliveriesofagriculturalcommodities from Russia to Africa, with other suppliers stepping in. An example of such development was the initiative on gratuitous deliveries of 25 to 50 thousand tonnes of grain to Burkina Faso, Zimbabwe, Mali, Somalia, Central African Republic and Eritrea, which was announced during the Russia-Africa summit in 2023. Previously, Russian food aid to Africa was mostly limited to monetary contributions to intermediary organisations, such as the WFP, FAO, the International Committee of the Red Cross and other international bodies, which then provided targeted support.
  • 52. 51 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies 8586 85 Nigeria Sovereign Investment Authority. Presidential Fertiliser Initiative (PFI). URL: https://nsia.com.ng/portfolio/presidential-fertilizer-initiative-pfi/ 86 Federal Republic of Nigeria Official Gazette. The National Quality Fertiliser Control Act. URL: https://nesgroup.org/farmgain/documents/Official%20Gazzettee%20of%20 NATIONAL%20FERTILIZER%20QUALITY%20CONTROL%20ACT,%202019.pdf Nigeria provides an example of the use of a range of government support measures for the development of the sector. Fertiliser consumption trends are positive, but reflect the general picture for Africa (less than 20 kg/ha). Nigeria’s former president Muhammadu Buhari (2015-2023) made the fertiliser programme a priority and several steps have been taken at state level in this regard: 1. Establishing a legal framework for the development of the national fertiliser market segment. – Presidential Fertiliser Initiative (2016), the objectives of which were, among others, to rehabilitate local idle infrastructure and encourage domestic production (blending) of fertilisers85 . – The National Quality Fertiliser Control Act (2019) to prevent substandard or counterfeit products from entering the market86 . One of the requirements of the act is for companies operating in Nigeria to register and obtain certificates of registration and marketing authorisation fromtherelevantagency.Tothisend,anelectronicplatform,TheNationalFertiliserManagement Platform, has been operationalised. The first certificates were issued in 2022. 2. Support for local producers of fertilisers and agricultural products. – Non-tariff measures. Import bans on urea and NPK were introduced in 2016 and 2018, respectively. – Subsidies. Subsidies to increase the amount of fertiliser per hectare of cultivated land under various schemes and programmes (including the Federal Market Stabilisation Programme, the 2010 Fertiliser Voucher Programme, and the Growth Enhancement Support Scheme) have been used in Nigeria since 1977. However, after 2015, due to declining government revenue as a result of falling oil prices and the government’s high debt obligations to agro-dealers, subsidies were not used. In 2022, the subsidy system was partially brought back; in 2023, several state governments in Nigeria announced the introduction of a 50% subsidy on fertiliser purchases. 3. Direct purchase by the government Nigeria is using contracting for the supply of raw materials for local blending in Nigeria is done through government procurement: in 2019, a contract was signed with Uralkali (a Russian company, part of Uralchem Group), for the direct supply of potash component for NPK fertilisers. 4. Introduction of a Soil Doctor programme to test soils and determine the level of fertiliser requirement, with parallel training of specialists and opening of laboratories. Despite the positive trend in fertiliser use, Nigeria remains dependent on external fertilisers, the supply of which can be drastically reduced in times of crisis, leading to higher prices and a reduction in already established local production. The only way for Nigeria to achieve food sufficiency via increased fertiliser application is to harness its vast natural gas resources for nitrogen fertiliser production.
  • 53. 52 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies The logistics of fertiliser distribution is also important: small farms, those who primarily need fertilisers, find it difficult to buy large batches of fertilisers coming to ports. At the same time, it is unprofitable for sup­ pliers to divide batches of fertilisers into small portions. Thus, investments are needed in a mechanism for re­ distributing and packaging imported fertilisers on the territory of ports or in the vicinity of them. Africa’s food sovereignty through fertiliser supply should be complemented by educational and research initiatives These include additional courses, lecture series, in­ ternships for farmers and government officials.8788 87 FAO. Using Soil Maps to Promote Efficient Use of Fertilizers Learning from the Ethiopian Experience. URL: https://www.fao.org/3/cb9452en/cb9452en.pdf 88 AfricaFertilizer. Ethiopia Fertilizer Dashboard. URL: https://viz.africafertilizer.org/#/ethiopia/wpContentPage/country-overview-8 89 Global Hunger Index. URL: https://www.globalhungerindex.org/ 3. Subsidies and subventions Many African countries, such as Algeria, Egypt and others provide government subsidies on food products, especially wheat and bread as a staple (baguettes and loaves of white bread). Subsidies are an important tool to fight hunger, which is evident when comparing with the Global Hunger Index indicators89 . Thus, in Algeria and Senegal, where subsidised products fully cover the national average bread con­ sumption, the level of malnutrition among the popu­ lation has been gradually decreasing since 2000 An USD 11 million soil fertility mapping project (launched in 2012) was completed in Ethiopia in 201987 . The maps, which contain soil characteristics and soil nutrient levels, have helped create recommendations for a more balanced use of fertilisers and new mineral mixtures, instead of using one type for all soil types. In this regard, Ethiopia has abandoned some fertilisers that did not suit the soil type in terms of nutrient composition (in particular DAP was completely replaced by NPS and its varieties in 2015)88 .
  • 54. 53 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies and fluctuations in world grain prices have not had a strong impact on the indicator. In Moroc­ co and Tunisia, where subsidised bread meets about half of the demand, malnutrition rates remain at the same level with slight fluctua­ tions (Morocco) or slightly decreasing (Tunisia). This underlines the strong influence of internatio­ nal conditions on regional bread markets that are not subsidised by the state. Nevertheless, bread subsidies are also a change-­ sensitive instrument and cannot function in iso- lation from other factors. For example, in Egypt, where subsidised bread covers more than half of the demand, the malnutrition rate has increased. This process is linked to Egypt’s dependence on wheat imports as well as the country’s crisis phenomena - food prices inflation rose by 60% between 2013 and 2023, along with foreign debt and the dollar’s exchange rate to the national currency90 . High government subsidies on bread and flour stimulate consumption but limit private sector growth 90 International Institute for Strategic Studies. Egypt’s economic crisis and uneasy position in the Middle East. URL: https://www.iiss.org/publications/strategic-comments/2023/ egypts-economic-crisis-and-uneasy-position-in-the-middle-east/ Farmers and enterprises involved in bread pro­ duction (flour mills, bakeries) find it unprofita­ ble to work below or at par with the market price. Subsidies are beneficial in the short term (instant access to food for all segments of the population) but can cause irreparable damage to the economy in the long term. For example, the impoverishment and ruin of bakeries operating at a loss leads to less competition in the market, monopolisation of the sphere, and deterioration of product quality. Finally, all this leads to distortions in the distribution of resources in the economy and, thus, social ine­ quality, which the subsidy system is originally aimed to combat. To increase the efficiency of subsidies for bread and food in general, the most of the subsidy re­ gimes requires more flexibility with policies ex­ clusive for each individual country. Such a flexible system should consider the level of self-sufficiency and grain imports; the percen­ tage of the population below the poverty threshold and the popu­ lation receiving minimum wages; the level of logistical connection
  • 55. 54 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies between the centre and the periphery and other indirect factors. For instance, in Algeria, according to Algerian re­ searcher Bouchafaa Bahia, as of 2018, about 52% of the population on average risks poverty and needs subsidised products, but 48% of the population may not need subsidies91 . Qualitative analysis of existing risks and resources for the introduction of subsidies can improve the situation of all participants in the economic life of the state. The dependence of many African countries on im­ ports and the resulting fluctuations in world product prices remains a major challenge to a flexible subsidy system. Thus, rising prices for imported wheat will inevitably lead to an increase in pric­ es for baked products, even subsidised ones. To miti­ gate risks, it is very important to ensure a long-term transition to own raw material resourc­ es. An option for countries that cannot achieve self-sufficiency may be the development of res­ ervation systems. 4. Food reservation systems Food availability remains one of the main rea­ sons behind most African food crises, which is provoked in the first place by the shortage of food not in the country as a whole, but by its uneven distribution between regions. In Afri­ ca, there has already been experience in es­ tablishing reservation models at national level. For example, Ethiopia has a reserve system (run by the Ethiopian Food Security Reserve Authority (EFS­ RA), established by the Council of Ministers; re­ named the Strategic Food Reserve Agency (SFRA), but in fact it currently has no food reserve policy92 and faces the inability to solve food crises in regions affected by political turmoil – e.g. Tigray. Issues re­ lated to the food reserve system are addressed only in related strategies such as the National Policy and 91 Bahia B. Subsidizing Bread In Algeria? Yes, But... // Revue d’économie et de statistique appliquée. 2018. Vol. 15, №1. Рр. 83 – 89. 92 Mulugeta, M. Food Reserve System in Ethiopia: Assessment of the Current Implementation Technicalities and Policy Recommendations. URL: https://jsd-africa.com/Jsda/ Vol17No5-Fall15A/PDF/Food%20Reserve%20System%20in%20Ethiopia.Messay%20Mulugeta.pdf 93 Ethiopia Ministry of Agriculture. Disaster Risk Management. Strategic Programme and Investment Framework. URL: https://www.preventionweb.net/media/97384/downloa d?startDownload=20240930; Ethiopia Ministry of Finance and Economic Development. Growth and Transformation Plan I. URL: https://www.greenpolicyplatform.org/sites/ default/files/downloads/policy-database//ETHIOPIA%29%20Growth%20and%20Transformation%20Plan%20I%2C%20Vol%20I.%20%282010%2C11-2014%2C15%29.pdf Strategy on Disaster Risk Management, Plan for Accelerated and Sustained Development to End Poverty (PASDEP) and Growth and Transformation Plans (GTP 1 and GTP 2)93 . Thus, countries face difficulties in establishing na­ tional reserve systems – in fact, there is no surplus to set aside as a reserve. A collective reserve sys­ tem could help to relieve the pressure on national systems. 5. Water withdrawal dilemma The state of water balance in Africa is an im­ portant factor for forecasting economic growth, overcoming the problem of hunger, and progress on sustainable development goals. According to the joint study by WHO and UNICEF, only in 8 countries of Africa (Botswana, Gabon, Djibouti, Egypt, Malawi, Namibia, Tunisia, South Africa) the level of access to water sources of acceptable quality exceeds 90%. The worst situation with access to water is in Angola, DR Congo, Mozam­ bique, Equatorial Guinea, Chad and Madagascar (less than 55%). Access to drinking water is becoming a separate prob­ lem. According to Aquastat, per capita availability of freshwater is reducing across the continent; in Ango­ la, Botswana and Zambia, where per capita access to freshwater was above the world average in 2002, by 2021 the rates have fallen below the world average. In some countries of the continent – Gabon, Mali, Mozambique – total renewable water resources per ca­ pita have almost halved in 20 years. One of the main problems is water loss during water withdrawal. On ave­ rage on the continent, between 80 and 95% of water withdrawals are from agriculture, with losses through evaporation or return to rivers and ground­ water aquifers ranging from 40% (in developed coun­ tries) to 80% (in developing and least developed countries) due to inefficient water systems.
  • 56. 55 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies For Africa, international water basins are the norm: there are 63 in total, covering almost two- thirds (64%) of the African continent. The largest basins are the Congo, Nile, Niger and Zambezi rivers. The most complex basin in terms of com­ bining the scale of water challenges and political disagreements today is the Nile. The population of the basin, which is shared by 11 countries, has quadrupled in half a century (from 143 million in 1971 to 564 million in 2021) and continues to grow. The first step to increase adaptability to water challenges is solutions at the basin management level This is not only information exchange based on ge­ ographic informations systems, AI and monitoring technologies, but also harmonisation and coordi­ nation of water withdrawal, mutual support mecha­ nisms, energy grid integration, joint food reserves. Without such coordination, the struggle for water quality and sanitation often makes no sense at all or multiplies costs. One of the ways to solve the problem of access to drinking water in Africa is the construction of desalination plants. Algeria is the regional leader, with 11 desalination plants already in operation, while 10 such plants are operating in South Africa. In 2021, the Egyptian government has announced plans to invest USD 8.5 billion by 2050 to build 47 seawater desalination plants, and Morocco has begun con­ struction of the continent’s larg­ est desalination plant powered by renewable energy – the first phase is expected to be completed by the end of 2026 with a capacity of 200 million cbm per year, which will increase to 300 million cbm per year by 2030. However, not all countries in the region can afford to build infrastructure – desalination and
  • 57. 56 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies the use of hard-to-reach water resources require significant investments in the construction of plants and facilities, but also in ensuring their unin­ terrupted power supply, which, given the chronic shortage of electricity, complicates efforts to en­ sure access to drinking water. The structural transformation of African economies will inevitably raise the issue of new water withdrawal dilemmas Only a few countries can afford to divert water to cities, energy or industry without improving irri­ gation efficiency. Africa’s economic boom cannot happen without investment in water conservation, desalination for coastal megacities, and improved water use efficiency, which starts with better moni­ toring and reduced losses. These measures may be supported via increasing agricultural productivity and intensifying trade in water-intensive food and goods. A modern solution to the water problem could be the development of a new multi-com­ ponent system of water use, including not only in­ frastructure but also rationalisation of water use – policies to improve water efficiency and the use of non-conventional sources. New food sovereignty systems As this chapter and the analysis of most statisti­ cal indicators show, the food situation in Africa is not worsening with population growth, and the measures taken are just enough for a “conser­ vation scenario” – there is neither improvement nor deterioration. However, population growth gives Africa an opportunity – growing consum­ er markets, and thus attractiveness to foreign investors. How African governments and busi­ nesses are able to capitalise on this growth will determine the food situation in the long term. Local content should become an integral part of international trade in food products For Africa, the issue of food sovereignty is broken down into two circuits – external and internal. On the external side, it is necessary to gradually reduce dependence on the external environment, such as global price fluctuations, political will of exporters, development agenda imposed from outside. If im­ port substitution is impossible (e.g. with wheat), African governments need to take a more proac­ tive stance and exert more pressure on suppliers. The logic of other sectors can be applied to food as well – local content should become an inte­ gral part of international trade in food products, meaning techno­ logy and knowledge sharing, food stocks creation on the territory of importers, etc. Such an approach is logical, given that the food situation in the world is indivisible. Issues in the importing country today mean problems for the exporting tomorrow – and vice versa. Another important issue is nutrition design and in­ volvementinshapingeatingandconsumptionhabits. Urbanisation is bringing about significant changes in eating behavior and the problem of access to food is widely recognised, but the responses to these chal­ lenges must be conscious and long-term. It is not just about the quantity of calories and protein, but also the quality of them. Food aid, for example, should
  • 58. 57 Food for Africa: from food security to food sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies not become a way to inculcate certain non-African consumption habits, and urbanisation should not become a driver of increased consumption of low- quality protein. The dispersal of the state support resource is also obvious. For each country a strategic food com- modities list may be developed, consisting of a food basket to ensure a healthy diet that can be ful­ ly produced within the country. These same com­ modities should be the focus of government sup­ port in terms of creating a full cycle of production: from feed, seeds and vaccines, to industrial equip­ ment and processing and packaging facilities. Full self-sufficiency is impossible, but it is achievable in basic categories. In terms of the domestic market, it is necessary to take measures to increase agricultural productivity, through transition to intensive farming, use of qua­ lity fertilsers, which increase the quality and yields of agricultural products, improve soil fertility, aqua­ culture, and industrial livestock breeding. Increa­ sing imports of fertilisers and technical equipment of farms in general is crucial here. Given the small size of farms, the role of the government is of key importance – it should be the main customer of soil quality research and mapping programmes, whole­ sale purchaser of fertilisers for further distribution among farms. The answer to solving Africa’s excessive food im­ port dependency, while seemingly paradoxical, is to increase imports, but of the means of production. International assistance in this regard may be fo­ cused on facilitating this import and maintaining favourable conditions for its expansion. The case of Egypt demonstrates that even severe arable land deficit may be leveraged by the investments in infrastructure. One should mention the long-standing policy of desert proclamation: in 1950, Ahmed Hussein, the minister of Social Affairs, suggested a plan labelled the Five Feddan Scheme aiming at distributing desert lands to farmers for reclamation. In 2023, the Minister of Agriculture and Land Reclamation, El Sayed El Qusair, announced the addition of over 1.47 million ha of agricultural land since 2013. Apart from that, there are several ongoing projects to expand greenhouses and increase efficiency of water withdrawal. According to the report by the Ministry of Planning and Economic Development, in 2023 the Egyptian government increased investments in the agriculture and irrigation sector to USD 3.77 billion, which is 71% higher than in previous year. Abovementioned measures are designed for a long-term perspective, but the results are visible now: Egypt has already managed to achieve self-sufficiency in vegetables and fruits, rice, fish and sugar, while in 2023 exports of fresh agricultural products exceeded 7 million tonnes in physical terms.
  • 59. 58 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies Role of energy in African economy Estimates of the loss African economies suffer from energy deficits, ranging from 2% to 4% of continental GDP annually, have become mainstream, but do we understand these energy deficits correctly? Why, for example, is the economy of DR Congo, where elec­ tricity generation per capita has remained unchanged at 130 kwh annually for the last 20 years, is growing at an impressive rate of 5-6% of GDP per year? Why has Africa’s economic growth not been matched by a pro­ portionate increase in electricity generation? This is because much – if not most – of the African energy generation is in the shadows. By focusing re­ search on the grid segment of generation, govern­ ments and international organisations are ignoring the booming market of small-scale diesel generators. We estimate that about 10 GW of diesel generators capacity is imported into Africa every year – this is al­ most as much as the grid installed capacity increase. Despite the seemingly simple and promising nature of this solution (1 GW of diesel generators costs USD 100-300 million, which is much cheaper than building a power plant of the same capacity), this trend itself is a consequence of systematic errors and imbalances in energy policy and threatens to have dire consequences. Firstly, 1 GW of diesel generation is actually much less than 1 GW of gas-fired power plants or hydroe­ lectric power plants (HPP), which is explained by the low capacity utilisation of diesel generators – 10- 15% compared to 40% for natural gas and 30% for HPP. Secondly, such diesel generators will be insuf­ 94 World Bank Group. Nigeria to Keep the Lights on and Power its Economy. URL: https://www.worldbank.org/en/news/press-release/2020/06/23/nigeria-to-keep-the-lights- on-and-power-its-economy 95 SA News. No load shedding on Election Day. URL: https://www.sanews.gov.za/south-africa/no-load-shedding-election-day 96 Reuters. Ghana electricity supplier briefly disconnects parliament over debt. URL: https://www.bbc.com/news/av/world-africa-68451286 ficient for industrialisation of the economy and im­ port substitution, as industry requires a stable source of energy. Thirdly, the diesel generation market itself remains beyond the control of African governments. This chapter is devoted to the main constraints that have led to structural imbalances in African energy markets, while these theses should lay the ground­ work for future discussions on how these challen­ ges can be overcome. What is African in African energy? The issues of energy sovereignty, electrification, blackouts, oil and gas, and commodities extraction always come quickly to mind during discussions on Africa’s economic development prospects: Nigeria loses USD 28 billion a year or 2% of GDP due to en­ ergy shortages94 , South Africa promises no load shedding on presidential election days95 , Ghana’s parliament plunges into darkness right during the session due to debts to electricity supplier96 , vio­ lent clashes over discussions to remove fuel sub­ sidies or impose additional fuel fees have become commonplace in African political life. On the one hand, energy resources (crude oil, natu­ ral gas, coal, uranium) for some countries remain the sole source of export earnings feeding foreign exchange reserves and debt repayments. On the other hand, the prospects for economic develop­ ment of most states in the region will be defined by the ability of governments to guarantee access to affordable electricity for the population and indus­ try. Their ability to do so will determine whether the African resources to African markets: making energy and mining work for Africa
  • 60. 59 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies demographic transition will bring about an economic boom or lead to Africa having the largest share of people living without access to electricity. Without affordable electricity, fertilisers and cement (produced using natural gas), irrigation systems that depend on dams and HPP, and without oil refineries, African economies will not be able to achieve sus­ tainable growth. ‘Energy security’ is a complex notion relating to the position of a state in the global energy markets. The term started being used in the 1970s and 1980s du­ ring energy crises and embargoes and initially referred to importing countries and implied guaranteed stable supplies that were not subject to political shocks and excessive price fluctuations – i.e. security of supply. However, for exporting countries, security of demand seems to be more relevant – i.e. long-term guarantees of demand for supplies at stable prices. It means draining its mineral resources for the good of other regions and economies. Furthermore, the African countries which depend on imports do not benefit from the security of supply logic. Indeed, they are the first to suffer during crises, since they lack the financial capabilities to compete with buyers from Eu­ rope and Asia and infrastructure to build up reserves. Energy regionalisation seems to be more promising for Africa, meaning that suppliers should pay more attention to their domestic markets and neigh­ bouring countries without relying on global de­ mand, and vice versa – buyers should look for energy sources, which are more expensive but closer to them, without relying on international markets. Main Africa's trading partners in energy commodities, 2023 Source: prepared by the HSE Center for African Studies based on ITC TradeMap and UNCTAD data. 6 35+1 EU: + 108 32 7+1 11+7 14+9 6 6+2 1 4 4 4 3+2 2+2 2+1 6 16 4 5 13 32 1 Exports to Africa Import from Africa 1 108 Data in USD bln 220+30 For energy-deficient Europe and Asia security of supply logic seems suitable, while for energy- rich Africa this means exposure to outer shocks and crises
  • 61. 60 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies This would reduce dependence on external eco­ nomic aid, strengthen collective regional efforts and establish regional markets.97 In fact, the desired model of ­­ sub-regionalism, is at odds with the current model of globalisation97 , in which African resources are not used for the development of the region, but are used outside of it It is illustrated, for example, by the position of African countries in most global value chains98 . To put it bluntly, maintaining the logic of global en­ ergy security for Africa implies, for example, conti­ nued dependence on imports of energy amounting to USD 120 billion per year, imports of petroche­ micals, most technologies, equipment, knowledge, concepts and ideas, as well as dependence on the global commodity markets. This is the cost of defi­ ning the country’s economic growth in terms of the ‘commodity booms’ rather than sound economic policies, not to mention the need to sell oil at USD 10-20 per barrel99 in years of crisis due to the lack of oil storage facilities. The previous chapters have already shown that ex­ cessive import dependence is one of the leading destabilising factors in the macroeconomic situa­ tion of most countries in the region, and energy resources play a key role in this. At the same time, African countries are endowed with energy resources: for example, up to 9% of the world’s proven natural gas reserves, 8% of the world’s crude oil reserves and 60% of the world’s solar resources are concentrated in Africa. In this regard, the problem of electricity and energy shortages in Africa is not attributable to an objec­ tive deficit, but primarily to improper distribution and management as well as a lack of relevant infrastructure. 97 Mensah J. Neoliberalism and globalization in Africa: contestations from the embattled continent. New York-: Palgrave Macmillan, 2008. 98 OECD. Regional value chains in Africa for better global integration. URL: https://www.oecd.org/coronavirus/en/data-insights/regional-value-chains-in-africa-for-better- global-integration 99 Bloomberg. Nigeria’s Banner Oil Hits $12, Millions of Barrels Remain Unsold. URL: https://www.bloomberg.com/news/articles/2020-04-17/nigeria-s-banner-oil-hits-12- millions-of-barrels-remain-unsold One is used to African countries playing an impor­ tant role in global energy markets as suppliers of crude oil, natural gas and uranium, but the question who really plays this role remains often overlooked. In fact, it is hard to say that African countries themselves, their governments and companies are actively in­ volved in shaping global markets. After all, it is not just the control over resources but also over the channels of their delivery to the final consumer that allows exporting countries to effectively use the ‘energy factor’ for their political purposes and eco­ nomic development. Historically, Africa has been a region dominated by various non-state actors who have shaped the busi­ ness environment and determined the development of entire industries, states and regions.
  • 62. 61 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies Most export infrastructure in Africa is beyond the control of African governments. One of the few ex­ ceptions is Algeria, where there is a state monopoly on natural gas exports, and the state-owned oil and gas company Sonatrach owns and operates most of the export infrastructure and determines the geography of sales. Another example can be seen in South African coal mining, which is dominated by local businesses. In most other African countries, however, the role of the state in resource production, process­ ing and then export is minimal. This is due to a whole complex of factors: budgetary and tech­ nological deficit, which does not allow the states to independently engage in exploration, production and export of commodities; construction of export infrastructure; the legacy of the colonial era, which laid long-term strategic foundations for the develop­ ment of energy industries and export specialisations; the dominant position of a limited number of mul­ tinationals in African energy markets. Thus, in most cases, African countries serve merely as a source of raw materials. African countries are represented on the world markets by a very limited pool of multinationals, mainly Western For example, with oil and gas those are Shell, BP, TotalEnergies, Chevron and ExxonMobil, Vitol, Glencore and Trafigura, and a number of other companies that dominate smaller markets like Perenco in Cameroon and Gabon and Marathon Oil in Equatorial Guinea. Every market or international regime can be di­ vided into ‘rule-makers’, who shape the agenda, and into ‘rule-takers’, who obey. In terms of this hierarchy on the energy markets, African coun­ tries are the rule-takers. The only component of influence they have so far is mineral reserves, while the main infrastructure (including tanker 100 Eskom. Integrated Report for the Year Ended 31 March 2023. URL: https://www.eskom.co.za/wp-content/uploads/2023/10/Eskom_integrated_report_2023.pdf fleets, terminals, pipelines, etc.) is under the con­ trol of Western multinationals, and the basic prin­ ciples, norms, rules, procedures and strategies are set without the involvement of African countries. Moreover, even projects within Africa aimed at de­ veloping regional energy markets and integration depend on the interests of extra-regional players who control the financing and technological sup­ port for such initiatives. It means understanding what reserves and assets are available, who owns them, how they are being deve­ loped, how they interact with each other and with the environment and what their technical condition is. In the meantime, excessive consolidation of the en­ ergy sector under state control in terms of owner- ship and management leads to long-term negative consequences. In South Africa, the state-owned Es­ kom owns facilities that generate more than 90%100 of the country’s electricity, and until recently the company con­ trolled all the country’s transmis­ sion lines. Lack of competition, non-payments by consumers and aging energy infrastructure have caused a crisis in the energy sector. However, pri­ vate African businesses, with few exceptions, do not yet have the necessary technical competencies and free funds to ensure stable operation of power systems. Partial privatisation of ‘GenCos’ (i.e. generation com­ panies) in Nigeria is an important example: Nigerian companies took loans to buy out state-owned enter­ prises. Faced with non-payment for electricity, na­ tural gas shortages and outdated transmission lines, they are suffering losses and cannot repay the loans, let alone reinvest money in infrastructure develop­ ment. For African countries, the issue of control over their own energy and power is still pressing. Here we mean control – above all – in terms of norms, strategies and regulations
  • 63. 62 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies 1 0 1 101 RT. Can Africa seize control of its own energy? URL: https://www.rt.com/africa/601547-sovereignty-africa-energy-bank/ At an extraordinary meeting of the Council of Ministers of the African Petroleum Producers Organization (APPO) in early July, it was decided that the headquarters of the new Africa Energy Bank (AEB) will be located in Nigeria. The founding documents and the AEB charter were signed in early June by Afreximbank and the Africa Petroleum Producers’ Organization (APPO). The same two organisations spearheaded the project to establish the AEB, became its founders and committed themselves to provide a large portion of the initial capital. It is assumed that the bank’s capital will initially amount to USD 5 billion. USD 1.5 billion will be provided by Afreximbank and APPO, another USD 1.5 billion will be contributed by the bank’s member countries (the minimum contribution is set at USD 83 million, so the founders are counting on about 15-17 countries to join the bank) and another USD 2 billion will be provided by external investors. There is no definite information yet as to which countries will join the membership circle, but Nigeria and Ghana have already contributed funds and, in addition to Algeria, Benin and Nigeria, countries like Angola, Egypt, Côte d’Ivoire, Libya, South Africa, and others are interested in becoming members. The AEB’s main task is to reduce and overcome Africa’s dependence on external forces. By developing intra-African cooperation and diversifying contacts with non-regional players, it aims to solve the problem of underfunding or, rather, the dependence on external financing and, accordingly, an externally imposed energy and climate agenda. The establishment of the AEB is an important development for Africa and an attempt to strengthen energy sovereignty, but the main work lies ahead and finding money is the main problem. First of all, USD 5 billion is not enough to solve the problem of energy poverty in Africa, where 600 million people still do not have access to electricity. Secondly, the USD 2 billion (or 40% of the capital) that the bank plans to obtain from external investors is a ‘black box’ and potentially the project’s biggest risk. The experience of other Pan-African financial institutions (such as the African Development Bank) shows that the shareholders are likely to be Western countries and Bretton Woods institutions (the IMF and the World Bank) that will form alliances, and as a result, their voice may become decisive at shareholder meetings, so they will get the opportunity to determine the bank’s policy. As a result, the AEB may end up financing export- oriented projects like Mozambique LNG or EACOP, ruining the prospects for the development of the domestic markets. Finally, the main players in the African energy sector (with only a few exceptions) are still Western and Chinese companies. They invest in projects and manage them and supply the necessary equipment and technologies, which means that any project will still depend on the position of non- regional players. All these risks are surmountable and, through further work, additional capitalisation, and greater sovereignty, the bank will be able to achieve its ambitious goals. The establishment of the AEB indicates an important trend: African countries want to independently determine the development of their energy markets and move away from being subject to external control. The establishment of an independent infrastructure is a key step in this direction, but it must be complemented by other measures, including: developing an adequate energy strategy (at all levels, from the local to the continental); establishing project-evaluation criteria (in terms of the contribution to the energy sovereignty of Africa and not the export of energy resources from Africa); developing regulatory, technical, and environmental supervision tools; strengthening the legislative framework; and supporting African energy companies and knowledge sharing programmes101 .
  • 64. 63 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies However, national and trans-African busines­ ses are growing stronger in Africa. Large private holdings are being established, and regional fi­ nancial institutions and banks are becoming more robust. Their role in financing energy projects is also growing, and they are ready to finance, among other things, projects targeted at the development of domestic markets. The number and weight of African companies in the continen­ tal energy market along the entire length of the value chain is growing every year – for example, Sasol, PetroSA, Oando, Axxela are successfully operating in the production and transportation of hydrocarbons; Dangote is in oil refining, ce­ ment and fertiliser production; Arab Contractors and El Sewedy are in engineering, procurement and construction (EPC) of power plants. Common framework is being formed as well, AFREC and NEPAD have been joined by public and private initiatives: ACTING, LNG2AFRICA. The number of Pan-African energy conferences and exhibitions (Africa Oil Week, Africa Energy Week), publica­ tions (Africa Oil and Gas Journal, Petroleum Africa), etc. is growing. Do we understand true African installed capacity? Per capita electricity generation in Africa remains extremely low. With the world average per ca­ pita electricity generation at 3,664 kwh, in Africa it is around 600 kwh, but in the majority of sub-­ Saharan states it is around 100-200 kwh102 . This ratio is explained by the lack of adequate statistics on electricity generation by diesel generators. With all the limitations of such comparisons, the example of Bangladesh, a country similar in economic size and population to Nigeria, but where grid electricity generation is almost three times higher than in Nigeria (100 TWh vs 37 TWh), may be illustrative. It is ob­ vious that actual electricity generation in Nigeria, as in most other countries, is actually several times more than what is reflected in the statistics of na­ tional governments and international agencies. 102 Ember. Electricity Data Explorer. URL: https://ember-climate.org/data/data-tools/data-explorer/ That said, the actual installed capacity in most Afri­ can countries remains unknown. The statistics on grid generation in Algeria, Egypt and probably South Africa, is more accurate as it is more reliable. In reality, the power systems of most African countries rely on small diesel generators (below 1 MW), which power most rural households, businesses, cafes, hospitals, airports, hotels and also serve as backup power in cities during grid power outages. In this con­ text, the situation in South Africa with load-shedding or in Ghana with dumsor does not seem to be as ca­ tastrophic as the media tend to show it – during these outages, cities are not plunged into darkness, but turn on diesel generators. In 2022, according to our estimate based on ITC and UNCTAD data, African countries imported about 200,000generatorswithcapacityupto75kW,20,000 of 75 to 375 kW and 5,000 of more than 375 kW.
  • 65. 64 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies On this basis, about 10 GW of diesel generators capacity is imported into Africa annually However, their installed capacity utilisation factor is much lower than that of grid power plants since they operate with a lower load 2-3 hours per day, meaning their output is much lower than it could be. Nevertheless, it is the estimation of the number of generators, their installed capacity and utilisation that is the key to a correct undestanding of the un­ accounted installed capacity and therefore of the and potential demand. Key importers of generators are Nigeria (USD 1.3 bn and 14 GW over five years), Egypt (USD 0.6 bn and 5.1 GW), Libya (USD 0.4 bn and 1.6 GW), Algeria (USD 0.3 bn and 0.4 GW), Sudan (USD 0.3 bn and 1.1 GW) – together accounting for 44% of the market. Key suppliers of generators over five years are China (USD 10 bn), USA (USD 3.9 bn), UK (USD 3.7 bn). 103 Energy Institute. Statistical Review of World Energy. URL: https://www.energyinst.org/statistical-review However, analysing the grid seg­ ment of power generation is im­ portant in terms of understanding the long-term development prospects of individual countries. Clearly, imports of diesel generators – ex­ pensive and dependent on diesel fuel – are a sure in­ dicator that energy policy is not yet leading to positive change and will be replaced by grid power plants. Gridlock? In general, grid electricity generation in Africa is not growing as fast as population or GDP – the growth rate per annum for 2013-2023 was only 1.9%, which is slightly higher than in the CIS (1.4%)103 , but much lower than in the Middle East (3.8%) and Asia (4.5%). In 2023, a record 902.9 TWh was generated, or 3% of the world total (ap­ proximately the same amount is generated by power plants in Japan alone).
  • 66. 65 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies So far, electricity generation is still very uneven­ ly distributed, with seven countries cumulatively contributing more than 70% of continental ge­ neration. As of 2023, those are South Africa (25%), Egypt (22%), Algeria (10%), Morocco (5%), Nigeria (5%), Libya (3%) and Ghana (2%) – collectively to­ talling 650 TWh. The structure of electricity con­ sumption is still dominated by industry (40%), but almost half of industrial consumption is ac­ counted for by one country – South Africa. On a continental scale, industrialisa­ tion is not expected to grow rapidly, and industry is unlikely to be a driver of energy consumption on a continental scale. Energy consumption growth will be driven by households: this is guaranteed by pop­ ulation growth and the gradual phase-out of bio­ mass as the main source of primary energy. Another driver of growth in electricity and energy consumption in general may be the development of the agriculture and the food and beverages in­ dustries. For example, food production enterprises in Algeria accounted for 10% of electricity, gas and oil products consumption by industry in 2021. Another major factor of demand growth will be ur­ banisation and development of urban utilities, as well as processes related to freshwater solutions: its ex­ traction, desalination, purification, delivery to the population in cities and to fields (irrigation). The sup­ ply of energy to desert and arid areas is necessary to overcome the consequences of climate change, droughts. In the future, this area will become one of the main drivers of energy consumption, as demon­ strated by the experience of Algeria, Libya (Great River project). The total installed capacity of Africa’s grid electricity sector as of 2022 can be estimated at 248 GW104 , with gas accounting for 116 GW (47%), coal 53 GW (21%), hydropower 37 GW (15%), solar 12 GW (5%), wind 9 GW (3%), nuclear 1.9 GW (0.8%) and geothermal and biogas plants less than 1% of 104 Ember. Electricity Data Explorer. URL: https://ember-climate.org/data/data-tools/data-explorer/ the total. In Sub-Saharan Africa, the lack of grid infrastructure has led to the widespread use of diesel generators and the proliferation of isolated power sys­ tems / generation facilities. With the establishment of grid infrastructure and transmission lines, gas-to-pow­ er and renewables are developing most rapidly. Northern Africa is dominated by gas-to-power, Western Africa by oil, Central and Eastern Africa by hydropower and Southern Africa by coal. Northern Africa is the only region where the prob­ lem of access to electricity can be considered solved. Even in Libya, despite political turmoil, the energy sector has been relatively stable. In all countries of the region, with the exception of Morocco, at least 90% of electricity is generated by natural gas. Morocco does not have significant gas reserves, so the country relies on a combina­ tion of coal and renewables. However, it is also looking to increase the share of gas through LNG imports. In Sahel, the grid electricity deficit is the most pressing: there is no significant hydropotential or petroleum resources, so the countries of the re­ gion depend on imports of diesel and fuel oil to supply their few power plants. Even Nigeria, where most grid-connected power plants are gas-fired, actively imports diesel for off-grid generators due to frequent blackouts caused by interruptions in gas supply to power plants and outdated trans­ mission lines. Among Western African countries, Ghana and Côte d’Ivoire have the most balanced energy policy. Over the past decade, they have taken a place among the leaders of electrification on the continent, started exporting electricity to neighbouring countries and kept electricity pri­ ces for end consumers at approximately the same level. At the moment, Africa has several energy zones defined by predominant energy source that largely coincide with the established division of the continent into sub-regions
  • 67. 66 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies The topic of Africa’s energy sovereignty is often limited to access to electricity, the development of electricity grid infrastructure and the supply of fuel for transportation. Households are left out of the discussion. Despite the seemingly small market in terms of volume, energy consumption by African households is growing annually. Moreover, households occupy key positions in the structure of energy consumption in all African countries, with their share ranging from 20-30% in countries with developed industry (Algeria, Morocco) to 90% in small, predominantly agrarian countries. Along with the gradual increase in the quality of life, changes in consumer habits and urbanisation, the structure of energy consumption by households is gradually changing. Modern and more environmentally friendly fuels are replacing ‘traditional‘ fuels. Methane, propane, butane, electricity are gradually replacing firewood, kindling and household garbage as a source of heat and energy. The specifics of Africa set a certain framework for the further process of providing access to energy for households. First, because of the warm climate, the usual mid-latitude solutions, often associated with heating infrastructure, are not suitable. Second, the lack of gas transmission infrastructure makes it almost impossible to gasify households with natural gas (methane). Third, the shortage of generating capacity and the state of the midstream infrastructure do not allow grid electricity to be considered as a reliable source of energy. All these factors are long-term, and their influence will be decisive over the next 20-30 years. LPG: Tanzania Case In Tanzania, households account for about 66% of final energy consumption, with biomass continuing to dominate – in the 2019/20 fiscal year, firewood, grass and garbage accounted for 64% of Tanzania’s cooking energy consumption, charcoal for 26%, liquefied petroleum gas (LPG) for 5% and electricity for 3%. Against this backdrop, the consumption of LPG is growing in most African countries, including Tanzania. LPG imports to Tanzania are growing at an average annual rate of 16%. Back in the 2016/17 fiscal year, imports (no LPG is produced in Tanzania) amounted to 107,000 tonnes, in 2020/21 – already 217,000 tonnes, in 2021/22 – 252,000 tonnes, in 2022/23 – 293,000 tonnes. For consumers, LPG in a cylinder in Dar es Salaam costs about USD 2.3 per kilogramme. LPG will continue to displace kerosene, firewood, garbage and dung as fuel in the domestic sector. It is important to take into account that LPG consumption in Tanzania is slightly lower than imports: due to re-export of LPG from Tanzania to other countries in the region (e.g. Zambia) – in 2022, of the 250,000 tonnes of LPG imported into Tanzania, 90,000 tonnes were exported. The key obstacle to increasing consumption of this environmentally friendly and safer domestic fuel remains the lack of infrastructure: receiving terminals, storage facilities and delivery vehicles. However, the overall trend is positive: in June 2024, Oryx in Zanzibar launched the first LPG terminal on the island, Mangapwani, and a new LPG storage facility in Tanga was built in 2023. TheTanzanianauthoritiesaimtostrengthenTanzania’spositionnotonlyintheregionalbutalsointheglobal LPG market. In December 2023, President Samia Suluhu Hassan’s Africa Women Clean Cooking Support Program (AWCCSP) initiative was presented at the COP 28 Climate Summit in Dubai to attract funding for projects to improve African households’ access to cleaner energy and move away from wood and garbage. In May 2024, Clean Cooking Summit was held in Paris, co-chaired by the President of Tanzania, the Prime Minister of Norway, the President of the African Development Bank and the Executive Director of the IEA. Also in May, the Tanzanian government published the National Clean Cooking Strategy for the period 2024-2034. LPG plays a key role in this strategy. For instance, it envisions construction and expansion of LPG storage facilities in all regions of the country; support for localisation of LPG equipment production in Tanzania; subsidisation of clean cooking projects; amendments to the sectoral legislation.
  • 69. 68 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies The countries of Central and Eastern Africa are located by the basins of the continent’s largest rivers – Zambezi, Congo, Nile, Ruvuma – and thus largely rely on HPP in the long term. They also include Angola (inland areas rich in ri­ vers) and Namibia, where the only HPP on the Kunene River (bordering Angola) has so far become the main source of electricity in the country. Some Eastern African countries – most notably Tanza­ nia – are effectively supplementing hydropower generation with gas-fired generation. The dominance of coal in Southern Africa is due to the fact (apart from thermal coal reserves) that the coal-based power sector of South Afri­ ca and other SADC countries dates back to co­ lonial times and the dependence of the econo­ mies on energy-intensive mining industry, as well as South Africa’s long political and econo­ mic autarky and limited access to hydrocarbons (due to sanctions). South Africa, Botswana and Zimbabwe, have not rebuilt their power systems since then. However, where Western and Eastern Africa has substantial gas reserves that could even­ tually replace obsolete diesel generation and Central Africa has significant hydropower po­ tential, Southern Africa has neither. The back­ bone of the region’s power sector is outdat­ ed coal-fired generation. It will not be possible to meet the growing demand and replace the decommissioned coal-fired generation only through renewable energy sources. The pillar of the region’s economy – mining – is energy- intensive and requires an uninterrupted power supply. The solution could be the use of Mozam­ bican gas in South Africa and Zimbabwe, but in­ vestors are protecting its main reserves for LNG supplies to China and India. The prospects are linked to the growth of gas and renewables, but each of Africa’s power belts will retain its own characteristics Thus, in North Africa, gas will remain the basis of the energy sector in the long term, complemented by renewables. Algeria, Egypt and Libya have their own sources of natural gas sufficient to cover the needs of domestic markets. Morocco and Tunisia are also dependent on natu­ ral gas in their energy consumption, but their own production is insufficient and they are forced to import it. These countries should expect accele­ rated development of renewable generation, as well as LNG import projects to diversify their na­ tural gas sources. The renewable energy sector in all these countries has, at the same time, certain limits to growth due to seasonal factors, lack of significant hydroresources, etc. In this regard, Mo­ rocco, for example, complements renewables by building coal-fired power plants. In Western Africa, gas-to-power is projected to develop, primarily in Ghana and Côte d’Ivoire. The currently prevailing oil in most countries of the region will be replaced by natural gas and renewables, with their respective shares deter­ mined by geographical location, as well as polit­ ical and economic conditions. For example, the Republic of Guinea, with its altitude differences and rivers, has good prospects for the construc­ tion of HPP, while Senegal and Mauritania are most likely to rely on their own offshore natural gas reserves. In Central and Eastern Africa, hydropower will retain its leading position, with renewables and natural gas serving as reserve or peaking capa­ cities. Coal-fired power in Southern Africa is likely to be gradually replaced by natural gas and renewables, the proportions depending on market conditions Eastern Africa has comparable reserves to those of Western and Northern Africa, but they are still incomparably less utilised and are still intended more for export. For land-locked regions and countries, as well as island states, a significant in­ crease in renewables is expected, but also with the option of importing LNG.
  • 70. 69 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies Access problem As mentioned above, access to grid electricity for households and businesses remains a key challenge in Sub-Saharan Africa. Universal (over 99% popu­ lation) access to electricity is still achieved only in Northern African countries and some island states (Seychelles, Mauritius). The past decade (2013-22) has seen significant progress towards the electricity access target. The number of people with access to electricity in­ creased by 200 million. However, the rate of elec­ trification growth is uneven – half of the new con­ nections came from six countries (Ethiopia, Nigeria, Egypt, Kenya, Tanzania and Uganda). Growth in access to electricity in most countries has been absorbed by population growth Only 15 countries were able to electrify faster than the population was growing – excluding Northern Africa and island countries, only six: Kenya, Ghana, Rwanda, Eswatini, South Sudan and Botswana. In a number of countries, however, the growth in ac­ cess to electricity is not able to cover the growing population, including Nigeria, where the number of new connections during the decade amounted to about 20 million and population growth to 42 million, and the DR Congo, with 7 million and 27 million, respectively. Kenya is the absolute leader in Sub-Saharan Africa in terms of electrification rates There access to electricity increased from 40% to 76% over the decade, with 12 million new con­ nections (population growth of 9 million). Ethiopia, Ghana, Rwanda and Côte d’Ivoire are also electri­ fying at high rates. In all these countries, electrifi­ cation has been driven by consistent state policies: governments have either invested in capacity (Ethi­ opia), or provided very favourable regimes for pri­ vate investors (Ghana, Kenya) or both (Rwanda). And it was state investment in the energy sector that became one of the drivers of faster GDP growth in these countries, not vice versa. It is worth noting that there is not a single ‘oil‘ economy (except for sparsely populated Gabon) among the leading SSA countries in terms of electrification rates. The UN Sustainable Development Goal (SDG) No. 7 is to achieve universal access to electrici­ ty by 2030. The estimated investment required to achieve this goal is USD 33 billion per year. Most of African countries will not be able to meet the target by this date. Projections based on the ratio of electricity consumption to per capita GDP, population density and level of urbanisation yield 515 million people without access to electricity in 2030. Kenya, Ghana and possibly Rwanda have the best prospects for success. South Africa’s strong performance may be undermined by economic stagnation and a general structural crisis in the energy sector. The biggest concerns are the pace of electrification in Sahel, CAR and DR Congo. The problem of energy supply in the interior of Africa requires significant investments – with some places requiring gas pipelines, others transmission lines and others autonomous genera­ tion and gasification.
  • 71. 70 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies What is hampering growth of domestic markets in Africa? The problem of electricity and energy deficit in Africa is primarily an access problem, which is caused by a complex of factors: export-driven decision-making, when exports to global markets are prioritised over domestic consumption; transport and in­ frastructure deficit; non-compli­ ance with standards; regulations and legal requirements; and ill-conceived policies on subsidies, tariffs and taxation. All of this, on the one hand, causes a shortage of resources and, on the other hand, a high price for the end consumer or unavailability of goods. Many African countries still have laws in force that encourage the export of raw materials and energy resources, even if they are not sufficiently supplied to the domestic market. Often such post-colonial legislative frameworks are formed with the direct participation of multinationals, which artificially limit the access of African resources to domestic markets in order to secure those resources for their own production chains outside Africa. For example, in Nigeria the same Shell supplies gas to the export terminal at a price two times lower than the domes­ tic market price105 . The practice of multinationals influencing the legis­ lation of African countries and directly lobbying their interests to the detriment of local communi­ ties and the environment has persisted and flou­ rished. Tender procedures in some countries re­ main non-transparent, and licences are extended for long periods of time without allowing other compa­ nies to participate. Those countries that have tak­ en the path of prioritising domestic markets, deve­ loping their own industry and supplying affordable electricity to the population are subject to external pressure. A prime example is Algeria, a country that has successfully solved the problems of energy ac­ cess, including by restricting natural gas exports. 105 Thus, according to NNPC, the price of gas supplied by SPDC (a joint venture with Shell participation) to the Nigeria LNG plant in May 2021 was USD 1.3 per MMBTU. At the same time, the price for the same volume for power plants in the domestic market was USD 2.5 (reduced to USD 2.18 since July 2021), and for commercial consumers - USD 3. In Algeria, the state-owned oil and gas company Sonatrach buys almost all natural gas output from operating companies, then prioritises supplying it to the domestic market at a subsidised price before finally exporting the surplus. The problem of imperfect legislation and regulatory framework should not be solved with the help of fo­ reign corporations, especially interested in impor­ ting commodities. The arguments of foreign con­ sultants (who may pursue their own hidden agen­ da) should be carefully checked and compared with solutions that work in countries that have already faced and solved similar problems. The lack of laws in Africa is compounded by the failure to enforce those that do exist. It is still often more cost-effec­ tive to violate regulations: fines for violations are less than the cost of compliance. Another facet of the same problem is the lack of tools to monitor com­ pliance: bylaws, regulations, authorised institutions, personnel and technical means. For African countries, an approach that combines empowering local communities with the neces­ sary tools and power for environmental monito­ ring and making infrastructure operators fully liable for environmental damage that occurs because of normal or abnormal operations or any damage to the infrastructure they operate, regardless of the cause, may be recommended. Even damage from illegal taps and resulting spills of oil and oil products should also be compensated by pipeline operators, as they are ultimately responsible for the integrity of the infrastructure and are obliged to take care of it. Thus, regulators will then be better able to fulfil their functions: to correlate community signals with operators’ reports on infrastructure condition and objective remote monitoring data. Operators, on the other hand, should provide regulators with The problem of imperfect legislation and regulatory framework should not be solved with the help of foreign corporations, especially interested in importing commodities
  • 72. 71 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies timely and accurate information on technical parameters of in­ frastructure performance, prob­ lems and accidents, and should be held liable for failure to provide such informa­ tion, commensurate with possible damage. In the 60 years of independence of most African countries, no continental – or even sub-regional – energy markets have emerged. In some cases, No continental – or even sub-regional – energy markets have emerged
  • 73. 72 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies pairs or triplets of countries have been formed, connected by common infrastructure, but even here it is difficult to talk about a market in its full- fledged sense. Usually, it is two or three centres of gas or oil consumption, connected by a single pipeline. For now, regional markets with a com­ mon system of pricing, distribution, storage and reservation are still absent, and the prerequisites for their emergence do not exist. The concept of regional power pools, which are proclaimed at the level of each regional economic community, is at the most advanced stage. For some count­ ries, electricity imports within such pools form the basis of the national energy system, but even in this case it is difficult to talk about complex market relations that would allow the formation of a single electricity price market or even a joint dispatch centre. There are still two or three high-voltage power lines connecting neighbour­ ing states. The prospects of African energy markets and their investment appeal – at least in the medium term – may be linked to the sub-regional cooperation As long as individual countries cannot be consi­ dered as promising investment destinations due to their low population density, low degree of in­ dustrialisation, insufficient consumption of natural gas and underdeveloped power grids, investors will be able to justify the economic feasibility of projects through plans to re-export gas, oil prod­ ucts, LPG, electricity, diesel fuel, etc. to the re­ gional market. One positive example is the emerging sub-regional markets for petroleum products, and a mar­ ker of this are such ‘statistical anomalies’ in trade statistics as Senegal, Tanzania, Togo, Kenya, Mozambique. These countries import two and sometimes three times more oil products than they consume just for re-export to neighbouring countries in the region. Regional companies and traders (incidentally, owned by local investors) are formed for these needs and invest in infrastructure for import, stor­ age, transshipment and distribution. New energy transition – new prospects and challenges Climate change and the energy transition occurring simultaneously will determine how African countries will cope with energy shortages. The transition to renewable energies is the second energy transition that African countries are experiencing as modern and independent states. The first energy transition of this kind occurred in the 1940s-60s, led to a signif­ icant increase in the share of hydrocarbons in primary consumption and coincided with the decolonisation process. The changes now underway in global de­ mand for energy, semiconductors and critical mine­ rals, although still relatively volatile, demonstrate the role that Africa will play in the global energy transi­ tion and the reshaping of the world economy in the 21st century. As the oil and gas industry shows, the norms and rules, ownership structure of the main as­ sets, and the control of reserves are difficult to revise in a fundamental way. The oil and gas industries of Al­ geria, Angola and Nigeria, despite civil wars, changes in foreign and domestic policy, are developing according to the rules that were established shortly before, during and immediately after decolonisation. That influence on legislation, strategies and decision-making leaders allows for­ eign corporations to maintain their influence de­ spite any political changes. Thus, the norm once es­ tablished becomes rigid, a situation happening not only with oil and gas, but also with gold, platinum, uranium, etc. However, in Algeria, those norms were born in the struggle against colonial pressure, while in Nigeria they were formed by British citizens. The competition between the United States and China in Africa is becoming fiercer by the year – e.g. in the struggle for access to the transportation and logistics infrastructure linking southeastern Congo to the ocean ports. This great power com­ petition gives African countries the opportunity to use this for the benefit of their economic develop­ ment, a right to decide and to tighten regulatory and environmental measures, as well as control over the activities of foreign investors.
  • 74. 73 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies The main marker of the US interest in Africa’s critical minerals remains support for the development of the so-called Lobito Corridor. The Lobito Corridor is the name for a group of projects aimed at developing transport infrastructure in Angola, DR Congo and Zambia to provide them with access to the Atlantic coast of Africa. The transport infrastructure (including the Benguela railway line from Tenke in DR Congo to Lobito in Angola with a total length of 1866 km, gauge – 1067 mm) connecting the southeastern regions of DR Congo (Katanga) with Atlantic coast was built during colonial times – in the early 20th century. At that time, some of its sections were used to export uranium, tin and copper from the Belgian Congo through the Atlantic ports. Civil wars in DR Congo and Angola in the second half of the 20th century led to the destruction of the railroad and its fragmentation. Sections of the railroad were reconstructed in the 1990s and 2000s, but were operated separately. In July 2022, the Angolan government announced the results of the tender for the concession of the Angolan railroad section Lobito-Luao (1344 km) for 30 years. The winning bid was made by the Lobito Atlantic Railway consortium (in which Singaporean trader Trafigura and Portuguese construction company Mota-Engil own 49.5% each, and Belgian rail infrastructure operator Vecturis owns 1%), which beat the bid of a Chinese consortium (CTIC, Sinotrans and CR20). In July 2023, a ceremony was held to hand over the railroad to the consortium’s management. In February 2024, the first contracts for transportation of cargoes by rail were signed. Trafigura received the right to transport 450 thousand tonnes per year from 2025, and the consortium of Canadian mining company Ivanhoe Mines and Chinese Zijin Mining, which is implementing a copper mining project in the DR Congo (Kamoa-Kakula) received the right for transportation in the range of 120-240 thousand tonnes per year from 2025 (10 thousand tonnes in 2024). In parallel, in December 2023, AGL (a division of Swiss shipping company MSC) received in concession the port of Lobito under the obligation to invest in its development at least USD 100 million. The project to develop the Lobito Corridor enjoys the support of Western countries. At the G7 summit in 2023, the US president J. Biden announced his intention to support the project as part of the global initiative Partnership for Global Infrastructure and Investment (PGI). In October 2023, the governments of the United States, Angola, DR Congo, Zambia, the European Union Commission and the African Finance Corporation (AFC) signed a memorandum of understanding to cooperate in the development of the Lobito Corridor. In February 2024, the US state-owned DFC Corporation approved a USD 250 million loan to AFC for the Lobito Corridor project to build a rail line that would connect Zambia and a section of the Benguela railroad in Angola. The loan must be approved by the US Congress. The Lobito Corridor project is apparently aimed at creating an alternative logistics route for the export of minerals from Zambia and southeastern Congo as opposed to the ‘eastbound’ route. As of May 2024, most of the ore from Katanga and the Copperbelt is trucked eastward and further exported through the port of Dar es Salaam to China. In recent years, the PRC has also been actively investing in the development of railway infrastructure in Tanzania and Zambia to optimise ore exports. In September 2024, the PRC announced its intention to finance the TAZARA railroad connecting Zambia to the Tanzanian port of Dar es Salaam.
  • 75. 74 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies African businesses are getting stronger, engaging not only in retail trade but also in large-scale investment projects across Africa African countries are now much more independent politically and have already formed relatively stable institutions, nationally oriented political and busi­ ness elites, as well as strong state-owned companies. Also, at long last, private African businesses are get­ ting stronger, engaging not only in retail trade but also in large-scale investment projects across Africa (Oando, ARM, Dangote). The growth of domestic resources allows Africa to count on better negotia­ ting positions with external players and, consequent­ ly, greater dividends from its natural wealth. 106 In terms of critical minerals one can speak about ‘Scramble for African Attention’, not about ‘Scramble for Africa’. Moreover, while Africa’s share in the world’s oil and gas reserves is 8-10%, which can be replaced by hydrocarbons from other regions of the world, of its reserves of a number of strategic mine­ rals necessary for the energy transition, such as plati­ num, palladium, cobalt, copper, titanium, graphite, REM, are irreplaceable and provide about half of the world’s production and world reserves, which, of course, will affect the interest of foreign investors in the African resource base and lead not to the Scramble for Africa, but rather for its attention106 . Data control in its broadest sense becomes key in this context.
  • 76. 75 African resources to African markets: making energy and mining work for Africa Africa 2025: Prospects and Challenges HSE University Center for African Studies The lack of information, knowledge and data on Africa’s natural reserves and ecosystems is another key risk preventing African countries from gaining energy sovereignty The term ‘resource curse’ is often applied to Africa, but it can be complemented by another curse, namely ‘the curse of non-existent resources’. There have been dozens of conflicts based on speculation about the al­ leged availability of resources or their scarcity, when in fact it turns out that either these resources have not been proven to exist, or they do not exist at all, or they are so scarce that only one small paramilitary group can enrich itself on them. Speculation about the alleged presence of hydrocar­ bon reserves in Lake Malawi continues to contribute to tensions between Tanzania and Malawi, the myth of uranium reserves in the Central African Republic leads to ongoing conflict, speculations about declining wa­ ter levels in the Nile nearly led to interstate conflict between Egypt and Ethiopia. It is not only the lack of information about resources, the political factor, mili­ tary prestige, the interests of certain groups inclined to justify their actions by the presence of these or those resources play their role, but the lack of knowledge, geological information and even autonomy of African governments in analysing and interpreting geological information remains one of the most pressing issues. Not all countries still have legal requirements to pro­ vide the host country with geological exploration re­ sults, so foreign investors do not file their survey re­ sults with the host government, but ‘take’ them with them and then resell them to third parties. Thereaf­ ter, the state gradually loses control over its own re­ sources, as it does not understand the real condition of reserves and cannot take them into account when developing a general economic strategy. The lack of data on domestic markets, real demand and consumption, as noted above, leads to stagnation of domestic markets Companies interested in investing in domestic markets are faced with non-transparency, lack of information or deliberate mani­ pulation by intermediaries and are forced to rely on information provided by Western consultants. The most important problem re­ mains the unreliability of measurements of climate indicators, such as precipitation levels, water levels in reservoirs, groundwater levels and their quality, cli­ mate zone boundaries, etc., which allows stakehold­ ers – from governments to international non-gov­ ernmental organisations – to freely speculate on baseline indicators to justify their own interpretations of climate change and recommendations within their own agenda. From the African perspective, the industrialised countries bear the main responsibility for catastroph­ ic climate change. However, Africa needs more tools to justify and defend this position – with the ultimate goal of receiving fair compensation in material and monetary form or in the form of other concessions from their former colonisers, China or the United States. Africa’s response can be based on the estab­ lishment of its own network of measurements and observations of global climate change. Simply put, the climate agenda is owned by those who have rele­ vant, reliable and, no less importantly, legitimate (i.e. recognised by international partners) information on the dynamics of indicators. The great potential in this regard is clearly related to digital solutions. The spread of unmanned aerial vehi­ cle technologies, the cheapening of data centre tech­ nologies, sattelite survey and, finally, maturing African national companies will allow African states to form integrated systems for managing their own natural re­ sources and then integrated georgraphic information systems that can be used to monitor the state of soils and forests, water levels in rivers, fire danger, climate shocks, soil erosion and desertifi­ cation dynamics. Such information systems can be both sectoral and country-wide, but they will make it possible to better understand the structure of domestic markets, forecast the dynamics of their development, and offer more promising projects to foreign investors.
  • 77. 76 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies New stage of African digitalisation The digitalisation of African countries has entered into a new stage where governments tend to adopt a more proactive approach and aim to gain more control over the sector. For now, efforts have been concentrated on data govern­ ance and localisation; with data becoming a commodity and Af­ rica generating a vast amount of this strategic asset, governments are aiming to control and leverage the resource. 33 countries have already enacted personal data protection regulations. Some of them, like Senegal and Rwanda, require data to be stored locally. Fur­ thermore, in 2023 the African Union Convention on Cyber Security and Personal Data Protection entered into force, 9 years after its adoption. The year 2024 was marked by the release of the “Common African Position on the Application of International Law to the Use of Information and Communication Technologies in Cyberspace” communiqué. In 2016, the Network of Afri­ can Data Protection Authorities (NADPA-RAPDP) was estab­ lished in Ouagadougou to pro­ vide a platform for exchange and cooperation between member authorities and represent the interests of African countries in the global arena. It now comprises data protection au­ thorities from 18 African countries107 . In May 2024, 107 Angola, Benin, Burkina Faso, Chad, Cabo Verde, Gabon, Ghana, Côte-d’Ivoire, Kenya, Mali, Mauritius, Morocco, Niger, Nigeria, São Tomé and Príncipe, Senegal, South Africa, Tunisia, Uganda, Eswatini, Mauritania, Zambia, Zimbabwe. 108 Now Eliud Owalo serves as the Deputy Chief of Staff in the Executive Office of the President of Kenya (Performance and Delivery Management). 109 Network of African Data Protection Authorities (NADPA/RAPDP). Annual General Meeting and Conference NADPA-RAPDP. 2024. URL: https://www.rapdp.org/en/node/213 110 Sometimes, digital sovereignty and data sovereignty are even used interchangeably (e.g. one American law article states: “By “digital sovereignty” (or “data sovereignty”), I [the author] mean the state’s policy or set of policies toward ensuring national sovereignty online.”). (Source: Woods, Andrew Keane, ‘Digital Sovereignty + Artificial Intelligence’, in Anupam Chander, and Haochen Sun (eds), Data Sovereignty: From the Digital Silk Road to the Return of the State (New York, 2023; online edn, Oxford Academic, 14 Dec. 2023), https://doi.org/10.1093/oso/9780197582794.003.0006, accessed 23 Oct. 2024.) There is also an understanding of digital sovereignty in relation to cyberoperations on the territory of a foreign state with two approaches: “pure sovereignty” and “relative sovereignty”. (Source: OpinioJuris. The African Union (Rightly) Endorses Pure Sovereignty in Cyberspace. URL: https://opiniojuris.org/2024/02/05/the-african-union-rightly-endorses-pure-sovereignty-in-cyberspace/) at the network’s annual general meeting, Eliud Ow­ alo, at the time the Cabinet Secretary at the Min­ istry of Information, Communications and Digital Economy of Kenya108 , called for digital sovereignty and data governance in Africa109 . Information and communication technologies (ICTs) are widely considered as an enabler for addressing core socio-economic challenges in a resource-con­ strained environment, allowing developing nations to build self-reliance in the long run, thus giving rise to the need to ensure not just the regulation but also the sovereign development of the sector. Digital sovereignty is often reduced to the locali­ sation of data and the development of data infra­ structure or government control over the sector110 . This suggests independence at every stage of the process including strategising, regulation, design, operation, management and human resources development. African quest for digital sovereignty Given the critical importance of ICT in overcoming major socio-economic challenges and fostering self-reliance, there is a need to ensure not only regulation but also sovereign development of the sector Digital sovereignty implies sovereign decision-making about the development of ICTs in a country based on sovereign expertise and driven by national interests
  • 78. 77 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies As a result, digitalisation, along with a promise of a brighter future, brings new ways and reasons for external influence, also known as “digital colonial­ ism”. It also brings new excuses, or rather old ones under new wrapping. Under the international assis­ tance programmes and the motto of “bridging the digital divide”, external actors and transnational cor­ porations build ICT infrastructure and digital solu­ tions, develop strategies and laws, train Africans, all in order to lay the groundwork for expanding their own presence and revenues in the region, as well as accessing valuable data to train AI models and influ­ ence the decision-making. They also use loopholes in the data protection and competition laws to gain advantage in the African markets. International development assistance The untapped potential of African digital markets with the ever-growing population, ICT infrastruc­ ture and low competition has been attracting all sorts of international actors launching the “Scram­ ble for Africa of the XXI century”111 , which includes multinational corporations, development assis­ tance, foreign companies going international, with them all pursuing their own objectives – both polit­ ical and economic. In 2024, the World Bank estimated that USD 86 billion in investments is needed to ensure internet connection on the continent112 . Such an assess­ ment is a part of the effort to justify the need for and importance of foreign investment in the sector. As for African countries, digitalisation is seen not as an end in itself but as an opportunity to address major socio-economic problems, more and more ICT initiatives are labelled as “development coop­ eration”. 111 Danielle Coleman, Digital Colonialism: The 21st Century Scramble for Africa through the Extraction and Control of User Data and the Limitations of Data Protection Laws, 24 MICH. J. RACE L. 417 (2019). Available at: https://repository.law.umich.edu/mjrl/vol24/iss2/6 112 Resilient. Digital Africa. Mobilizing $86 billion to connect the entire Africa. 2024. URL: https://resilient.digital-africa.co/en/blog/2024/05/02/mobilizing-86-billion-to- connect-the-entire-africa/ 113 Global Economic Governance Programme. URL: https://www.geg.ox.ac.uk/content/marc-andre-loko-dans-sa-strategie-numerique-le-benin-est-dans-une-logique-de 114 Inclusive Development International. Following the money. International contracting. URL: https://www.followingthemoney.org/international-contracting/ 115 Moussa, Antoun, and Robert Schware. “Informatics in Africa: Lessons from World Bank Experience.” World Development 20, no. 12 (1992): 1737–52. doi:10.1016/0305- 750X(92)90088-D. African countries tend to approach the choice of partners pragmatically, without political prejudices, and strive to diversify partnership networks. In his interview to the Global Economic Governance Programme, the Director General of the Informa­ tion and Digital Systems Agency (ASIN) of Benin Marc-André Loko highlighted: “In its digital strategy, Benin seeks to diversify its network of best-in-class partners” 113 . The same approach is followed by most other governments. However, external financing and assistance often go hand in hand with aid conditions and terms. For in­ stance, Chinese institutions often tie the provision of financing to hiring a Chinese contractor114 . Similarly, the World Bank’s lending also comes with numerous conditions including hiring a contractor from a short list. Thus, external financing limits African govern­ ments’ independence in decision-making. In 1989, the continent accounted for over one- third of all ICT-related lending by the World Bank with a focus on infrastructure projects, and in 1990 over 90% of its projects in Africa contained a sig­ nificant ICT component115 . Multinational computer vendors (such as IBM France, Groupe Bull, ICL) en­ tered the market by providing equipment to gov­ ernments pursuing digitalisation. At the time, 19% of the ICT-related lending by the World Bank was in the sector of agriculture and rural development (mainly for finance and accounting, information management, management of information systems, office technology, statistics). Modern initiatives draw on this initial experience, its failures and successes. One of the main challenges lies in the gap between reality and strategy: many initiatives failed because of unrealistic and imprac­ tical goals set and a lack of preliminary analysis. Donors tended to underestimate the funding and time required for assistance projects.
  • 79. 78 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Cases of international assistance in developing e-strategies for Africa Country Project Cameroon In 2011, the National Agency for Information and Communication Technology (l’Agence Nationale des Technologies de l’Information et de la Communication, ANTIC) presented a draft of its e-government strategy, EGOV.CM developed in collaboration with the United Nations University (UNU)116 . Comoros The first national digital strategy was adopted by the Council of Ministers in 2019 – Digital Comoros 2028 (Comores Numérique 2028). The World Bank assists in the implementation of the initiative117 . Gabon The Gabon Numerique 2025 was developed with financial support and consultation from the African Development Bank (AfDB). The Gambia In September 2022, the AU-EU D4D Hub sent a technical assistance mission led by the e-Governance Academy and Estonia’s ICT cluster118 (ITL) at the request of Gambia’s Ministry of Communications and Digital Economy. The mission is to assess the country’s digital readiness and assist in developing a digital economy strategy119 . Republic of Guinea In 2015, the Ministry of Post, Telecommunications and the Digital Economy of the Republic of Guinea adopted the 2016-2020 programme which was aimed at the elaboration of a strategy for the development of telecommunications and the digital economy as an independent sector. This document was developed with material support from the West African Regional Communication Infrastructure Programme (WARCIP) of the World Bank120 . Republic of Guinea The digital road map document, aimed to provide a digital strategy for the government of the Republic of Guinea, was drafted in 2020 by the League of Arab States121 . Namibia The Namibian e-governance policy of 2005 was preceded by a study of international practices and consultations with an Indian company – one of the international centres of excellence created by the Confederation of Indian Industry122 – which also provided a feasibility report on e-governance in Namibia in June 2004 with recommendations on further e-governance development in the country. Senegal In November 2022, the Senegalese government requested technical assistance from the D4D Hub to study the prospects of EU support for Senegal’s digital strategy – Stratégie Sénégal Numérique 2025. The research was led by Expertise France in partnership with Enabel, LuxDev and GIZ123 . The development of the strategy was supported by the African Development Bank. Tanzania In December 2022, the e-Governance Academy (eGA) and the Estonian Association of Information Technology and Telecommunications (ITL) within the AU-EU D4D Hub started a technical assistance mission with the aim of assisting the Tanzanian ICT Commission (ICTC) and the Ministry of ICT in analysing existing challenges and strengths, potential of the Tanzania’s ICT sector and developing a new three-year roadmap for boosting digital transformation in the country124 . Zanzibar (Tanzania) The Danish International Development Agency (DANIDA) provided technical and financial support to assess the Zanzibar digital health sector and develop the Digital Health Strategy 2020/21-2024/25. The USAID, PATH and D-Tree International also supported the development of the strategy. Tunisia The e-Governance Academy125 experts advised the Tunisian Ministry of Communication and the National Agency of Electronic Certification (“Tuntrust”) by providing a policy note on developing e-IDs in the country126 . The project was funded by the European Bank for Reconstruction and Development. 116 United Nations University. UNU assists in developing national e-Governance strategy for Cameroon. URL: https://unu.edu/news/news/unu-assists-in-developing-national- e-governance-strategy-for-cameroon.html 117 ANADEN. Comores Numérique 2028. URL : https://www.anaden.org/uploads/media/5e3969272d9f8/strat-comores-numerique-v2-3-compresse.pdf 118 A union of Estonian ICT companies aiming to export their solutions. 119 D4D Hub. AU-EU D4D Hub supports digital transformation in Rwanda and the Gambia. 2022. URL: https://d4dhub.eu/news/rwanda-gambia 120 Ministry of Posts, Telecommunications and The Digital Economy of Guinea. Document de Politique et de Stratégies Nationales de Développement des Technologies de l’Information et de la Communication de la République de Guinée. URL: https://smartafrica.org/IMG/pdf/srategie_tic_finale_v.6_28_juillet_2016.pdf 121 Guinea Digital Roadmap. URL: https://www.arab-digital-economy.org/2020/12.pdf 122 Confederation of Indian Industry. Centres of Excellence. URL: https://www.cii.in/Centres_of_Excellence.aspx 123 D4D Hub. Le D4D Hub UA-UE renforce la coopération numérique de la Team Europe avec le Sénégal. 2022. URL: https://d4dhub.eu/news/le-d4d-hub-ua-ue-renforce-la- coop%C3%A9ration-num%C3%A9rique-de-la-team-europe-avec-le-s%C3%A9n%C3%A9gal 124 D4D Hub. A new digital transformation roadmap for Tanzania. 2023. URL: https://d4dhub.eu/news/a-new-digital-transformation-roadmap-for-tanzania 125 A non-profit organisation established in 2002 by the Government of Estonia in collaboration with the Open Society Institute (OSI) and the United Nations Development Programme (UNDP). It derives from Estonian experience. 126 e-Governance Academy. Supporting the e-Identity processes in Tunisia. 2022. URL: https://ega.ee/project/supporting-the-e-identity-processes-in-tunisia/
  • 80. 79 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Assistance programmes are instrumental as a soft power tool to increase external influence in African countries by promoting solutions and technologies that are beneficial to the initiators They provide conditions for the development and implementation of laws, regulations, policies and practices in the countries, which, through management demand and requirements, contrib­ ute to the development of their political and eco­ nomic relations with a donor. The result is the channels of access to the markets. There­ fore, such programmes are in­ creasingly being implemented by individual countries and the corporate sector. This brings to light an imbalance between the sup­ ply and demand of development assistance in the ICT sphere: the supply is often driven by interests of international actors rather than by the demand of African countries. Assistance projects tend to set ambitious, yet unrealistic goals in line with the donor’s strategies strategies, often without proper assessment and ignoring the needs of the recipient, which leads to fragmentation of efforts and waste of resources Another aspect to consider is international cooper­ ation in developing e-strategies and policies for Af­ rican countries. External actors provide assistance at the preliminary stages – i.e. assessing the digital sector of a country, challenges and perspectives, suggesting best practices – and participate di­ rectly in developing the strategies. The Namibian e-governance policy of 2005 was preceded by a study of international practices and consultations with an Indian company – one of the international 127 Confederation of Indian Industry. Centres of Excellence. URL: https://www.cii.in/Centres_of_Excellence.aspx 128 The World Bank. Ghana’s eTransform Project Trains Tomorrow’s Leaders. 2021. URL: https://www.worldbank.org/en/news/feature/2021/11/17/ghana-s-etransform-project- trains-tomorrow-s-leaders 129 World Bank. Results Brief. Digital Transformation Drives Development in Africa. 2024. URL: https://www.worldbank.org/en/results/2024/01/18/digital-transformation-drives- development-in-afe-afw-africa “centres of excellence” created by the Confederation of Indian Industry127 – which also provid­ ed a feasibility report on e-gov­ ernance in Namibia in June 2004 with recommendations on further e-governance development in the country. Likewise, the AU Digital Transformation Strategy was developed with the assistance of mul­ tiple international organisations including the UN Economic Commission for Africa, Smart Africa, ITU and the World Bank. World Bank The World Bank was among the pioneers in assisting African countries with digitalisation. The organisation has launched numerous dig­ italisation programmes tai­ lored for particular countries like the Digital Cabo Verde project (approved in 2021), Sierra Leone Digital Trans­ formation Project (approved in 2022), eTransform Ghana Project (approved in 2013)128 . Over the last decade, its in­ vestment in digitalisation projects on the con­ tinent reached USD 2.8 billion129 . The projects are financed mainly by the International Devel­ opment Association (IDA) which is funded by contributions from the governments of mem­ ber countries. Each country’s share defines its voting power in IDA: the larger the share, the greater the influence on the organisation’s strategy, priorities and funding decisions. The United States, the United Kingdom, Japan, Assistance at the stage of assessment and strategic planning grants external actors the opportunity to influence directions of further development of the sector and tailor it in line with their own interests
  • 81. 80 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies France and Saudi Arabia make up the top five countries by voting power130 131 .132 Between 1992 and 2024 the World Bank implemented in Africa more than 600 projects with a significant ICT component, total ICT investment exceeded USD 15.5 billion132 130 World Bank. Public documents. International Development Association. Voting Power of Member Countries (As of September 30, 2024). URL: https://thedocs.worldbank. org/en/doc/0d24f6d754f61643639df76dac97fda3-0330032021/original/IDACountryVotingTable.pdf 131 Noteworthy, the United States is also the only World Bank shareholder with a veto power, in particular, over structural changes in the institution. However, having 15.49% share in the IBRD, the US de facto has a veto power over its decisions, whilst the IBRD Board of Directors selects the President of the World Bank. As a result, the President has always been a US citizen. Furthermore, Catherine Gwin, who worked in operations evaluation department for corporate evaluation and methods as a lead evaluation officer (2001-2006) and for an independent evaluation group for corporate evaluation and methods as a lead evaluation officer (2006-2007), stated: “Decisions are, however, often worked out between the United States and Bank management before they ever get to the board, or among members of the board before they get to a vote”. (Source: Kapur, Devesh, Lewis, John P., Webb, Richard. 1997. The World Bank, Its First Half Century, volume 2, p. 244. URL: https://documents1.worldbank.org/curated/ pt/405561468331913038/pdf/578750PUB0v20W10Box353775B01PUBLIC1.pdf) 132 Authors’ calculations based on the World Bank Digital Governance Projects database (October 2022) and projects information. URL: https://projects.worldbank.org/en/ projects-operations/projects-list?os=0 Top five recipients in terms of investment are Ni­ geria, Kenya, Ethiopia, DR Congo, Egypt. Algeria, Eritrea, Sao Tome and Principe, Eswatini, Guinea and Zimbabwe accounted for the least lending by the World Bank.
  • 82. 81 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies The top five recipients in terms of amount are Nige­ ria, Ghana, Ethiopia, DR Congo and Uganda, where­ as Algeria, Eritrea, Sao Tome and Principe, Eswatini and Zimbabwe accounted for the least number the World Bank’s projects with ICT component. In assessing the degree of each country’s inde­ pendence in ICT development, not only interna­ tional participation should be taken into account but also the share of the ICT sector in the GDP. A specific area of cooperation for the World Bank is digital governance, or GovTech. The World Bank Digital Governance Projects database133 set in 2015 (last updated in October 2022) contains a total of 1,450 projects with ICT or e-governance components financed by the organisation world­ wide since 1992. Africa – both Sub-Saharan and Northern – accounts for 505 projects (or 35% of all projects) and USD 13.8 billion in investments (42%). It is noteworthy that not all of the projects initially included ICT components and sometimes the need for digitalisation was determined in the process of implementation (e.g. in the case of the Reforma da Administração Financeira do Estado (RAFE) in Cabo Verde). 133 The World Bank. Digital Governance Projects Database. URL: https://datacatalog.worldbank.org/search/dataset/0038056/Digital-Governance-Projects-Database World Bank projects in Africa with ICT component (1992-2024) Source: prepared by the HSE Center for African studies based on the World Bank projects information and Digital Governance Projects database (October 2022). Estimated ICT investmentof WB, mln$ low high Number of projects with ICT component
  • 83. 82 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies China At the Eighth Ministerial Conference of the Fo­ rum on China-Africa Cooperation (FOCAC) held in November 2021, China unveiled a programme dedicated to digital development in Africa, ac­ cording to which China plans to implement “10 projects in the field of digital economy for Africa by 2035, create centres of Sino-African coopera­ tion in the field of digital innovation and support the development of Sino-African joint laboratories, partner institutes and bases of cooperation in the field of scientific and technical innovations”134 . The same year, the Dakar Action Plan (2022-2024), containing points dedicated to the digital economy, the exchange of scientific and technical knowledge and experience in the field of public services, was adopted135 . In the document, China once again promises to implement “10 projects in the field of digital economy for Africa”, support the construc­ tion of digital infrastructure in Africa and continue digital dialogue via FOCAC and China-Africa Inter­ net Development and Cooperation Forum. In the Dakar Plan, China declares its readiness to enhance communication and exchanges with gov­ ernments of African countries and organisations like “Smart Africa” to boost the innovative devel­ opment of digital technology in Africa and Chi­ na-Africa digital cooperation. The two sides will enhance cooperation and promote coordination on personnel training, internet connectivity and the construction of innovation centres, among others. Both above-mentioned documents support the ex­ pansion of cooperation within the Digital Silk Road (DSR) framework. For parties participating in the initiative, China offers digital products and services at competitive prices, investments in their ICT infra­ 134 The State Council of China. China-Africa ties to spur digital field. 2021. URL: http://english.www.gov.cn/news/internationalexchanges/202112/03/content_ WS61a96889c6d0df57f98e5f5a.html 135 China International Development Cooperation Agency. Forum on China-Africa Cooperation – Dakar Action Plan (2022-2024). URL: http://www.cidca.gov.cn/2021- 12/02/c_1211471277.htm 136 China-Africa Joint Efforts to Build a «Digital Africa» and the Way Forward. URL: http://www.xyfzqk.org/UploadFile/Issue/202111080001/2022/6//20220610094501WU_FILE_0.pdf https://www.cfr.org/sites/default/files/pdf/Chinas%20Digital%20Silk%20Road%20and%20Africas%20Technological%20Future_FINAL.pdf 137 The Economic Times. China reportedly investing $ 8.43 bn in Africa as part of Digital Silk Road initiative. 2021. URL: https://economictimes.indiatimes.com/news/ international/world-news/china-reportedly-investing-8-43-bn-in-africa-as-part-of-digital-silk-road-initiative/articleshow/87039334.cms structure, joint technology projects and research programmes. In return, China receives a reduction in technological dependence on the West, new mar­ kets for its high-tech companies and the dissemina­ tion of Chinese normative and technological stand­ ards, including cyber sovereignty, respect for which is included in the list of fifteen general principles of the Digital Silk Road initiative. 16 countries have officially joined the initiative by signing a memorandum of understanding. More than 40 states, individual companies and organi­ sations participate in the initiative without signing a memorandum. The exact list of countries is un­ known. Among the 140 countries that have pre­ sumably signed a memorandum of understanding with China on joining the Belt and Road, 52 are African countries (40 of them are Sub-Saharan) with all of them also being potential participants in the DSR136 . According to the data provided by The Economic Times, for 2021, China’s total investment in Africa’s digital infrastructure under the DSR is estimated at USD 8.43 billion137 . As part of this strategy, the Chinese government is recommending its tech gi­ ants – Huawei, ZTE and Cloudwalk – to enter into mobile telephony, social media and e-commerce applications in Africa. The initiative’s projects, in­ formation about which is available online, include the joint development of a plan for the inclusive development of e-commerce between China and Africa, the introduction of a technology-driven “platform for hundreds of stores and thousands of products” in Africa, the holding of an online shop­ ping festival in Africa and the promotion of e-com­ merce activities in the tourism sector. Initiatives managed by state-owned companies play a crucial role in China’s assistance initiatives. Main actors include Huawei and ZTE
  • 84. 83 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies 1 3 8 1 3 9 Huawei is the most active Chinese state-owned company in Africa and according to data collected by the Center for Strategic and International Studies (CSIS)140 , Huawei had already concluded 23 e-gov­ ernment deals in Africa by 2021. The main area of workisthecreationofcloudservicesfordatastorage, 138 China-Africa Innovation Cooperation Centre. Official website. URL: http://www.caicc.net.cn/ 139 The China-Africa Internet Development and Cooperation Forum was held. 2021. URL: https://www.gov.cn/xinwen/2021-08/25/content_5633126.htm 140 Center for Strategic and International Studies is recognised as undesirable organisation in the Russian Federation by the decision of the Russian Prosecutor General’s Office. 141 Seetao. The Belt and Road Initiative has shifted from infrastructure construction to digital information construction. 2023. URL: https://www.seetao.com/details/213555.html 142 Further Africa. China plans digital dominance in Africa via Digital Silk Road. 2021. URL: https://furtherafrica.com/2021/12/30/china-plans-digital-dominance-in-africa-via-digital-silk-road/ 143 Reuters. Senegal aims for digital sovereign. 2021. URL: https://www.reuters.com/article/senegal-datacenter-idINL5N2O44D3 with Africa accounting for the largest number of the company’s transactions (36%). A few public­ ly disclosed examples, information are presented below. Projects funded by Huawei are classified as “assistance”, although they are commercial entities.141142143 Government initiatives: China-African Innovation Coopera- tion Center (中非创新合作中心)138 . Created in 2018 in accordance with the results of above-mentioned Chi­ na Africa Cooperation Forum and the Beijing action plan (2019-2021). It carries out technology transfer and cooperation in the field of in­ novation and entrepreneurship and supports the exchange of innovative achievements between Chinese and African youth. China-Africa Internet Development and Cooperation Forum (中非互联 网发展与合作论坛)139 .Theforumwas held only once in 2021 but with the prospect of further meetings and co­ operation. It was hosted by the State Internet Information Office of China and now is positioned as a platform for discussions and promotion of Chinese legal and ideological standards, includ­ ing the promotion of the “Sino-African Initiative to Build a Community of a Shared Future in Cyberspace”. Senegal National Data Centre of Senegal (塞内加尔国家数据中心)141 Established in 2021, the national data centre is financed with a loan by the Export-Import Bank of China (Exim) and supported by equipment and technologies from Huawei. The centre is involved in data storage, digitalisation of public services, technology transfer and personnel training. The cost of the project is estimated at USD 79 million142 . The data centre will tap into global networks through an undersea cable as well as Senegal’s 6,000-km fibre optic network. At the launch of the centre, President Macky Sall said that the government would migrate all state data and platforms to the data centre. State-owned businesses such as Senelec, the national electricity company, will also move their data to the centre in tandem with government agencies. The centre will serve both the public and private sectors and offer cheaper infrastructure to Senegal’s growing community of tech startups than entrepreneurs will find abroad143 .
  • 85. 84 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies 144145146147148 144 Huawei. Cape Verde Goes Digital. URL: https://www.huawei.com/en/huaweitech/publication/winwin/31/bringing-the-digital-world-to-cape-verde-archipelago 145 Sky Scraper City. Dar es Salaam Kijitonyama $94M National Data Center| U/C. 2015. URL: https://www.skyscrapercity.com/threads/dar-es-salaam-kijitonyama-94m-national- data-center-u-c.1829633/ 146 Huawei. Safaricom and Huawei are building the world’s first E2E 400G backbone network. 2019. URL: https://www.huawei.com/cn/news/2019/2/safaricom-end-to-end- 400g-backbone-network 147 CAAC News. Drone development in Africa: on the field of hope. 2022. URL: http://www.caacnews.com.cn/1/10/202207/t20220708_1348523.html 148 Huawei. National Center for Telemedicine: Making medical care more timely and warmer. 2020. URL: https://www.huawei.com/cn/huaweitech/publication/winwin/36/telemedicine-case Cabo Verde National data centre of Cabo Verde As part of the eGovernment project, Huawei built a national data centre for Cabo Verde. Internal office networks and videoconferencing systems for the government, schools and hospitals were also set up. The collaboration between the Cabo Verde Ministry of Education and Huawei made it possible to establish the WebLab integrated ICT training system to foster ICT talent development in the country and encourage the exchange and advancement of social information144 . Tanzania In 2015, the USD 94 million investment in constructing a government data centre was announced. Huawei Tanzania provided advisory support to the project which was completed in 2016. The data centre is managed by Tanzania Telecommunication Company Limited (TTCL)145 . Kenya Huawei and Safaricom cooperation project for the operation of public security platforms for police surveil­ lance in Nairobi and Mombasa, as well as for the training of ICT specialists and civil servants was launched in 2019 and is still in operation146 . The agreement with Huawei is renewable every five years. As a result, a large number of training sessions on artificial intelligence, cybersecurity and emerging technologies were con­ ducted. Moreover, boosted by Huawei’s Kenya deal, Safaricom launched its 5G network in October 2022, a first in the region. Since then, the service provider has commissioned over 200 5G sites across 11 counties including Nairobi, Mombasa, Kisumu, Kisii, Kakamega, Nakuru, Kiambu, Machakos, Kajiado, Vihiga and Siaya. Morocco, Kenya, Rwanda Cooperation projects of the country’s branch ministries with Chinese state-owned companies DJI and Huawei during the COVID-19 period. With the approval of the ministries, DJI provided these countries with the opportunity to use commercial drones to ensure the security of local administrations, including curfews, spraying of disinfectants and public announcements in cities147 . Huawei supplied diagnostic systems based on cloud computing and artificial intelligence, as well as communication platforms for hospitals148 .
  • 86. 85 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies 149150151152 149 SCMP. China promotes ‘digital silk road’ as solution to Africa’s data needs. 2021. URL: https://www.scmp.com/news/china/diplomacy/article/3160525/china-promotes- digital-silk-road-solution-africas-data-needs 150 SCMP. African nations continue to put trust in Huawei for data management. 2021. URL: https://www.scmp.com/news/china/diplomacy/article/3138917/african-nations- continue-put-trust-huawei-data-management 151 China Arabcf. Huawei organizes the first Seeds of the Future Alumni Conference for Northern Africa in Tunisia. URL: http://www.chinaarabcf.org/zagx/gjydyl/202206/ t20220623_10708524.htm 152 Investir au Cameroun. Télécommunications : le Cameroun se dote d’un réseau sécurisé à plus de 77 milliards de FCFA. 2022. URL: https://www.investiraucameroun.com/ gestion-publique/1407-18197-telecommunications-le-cameroun-se-dote-d-un-reseau-securise-a-plus-de-77-milliards-de-fcfa Kenya, South Africa, Zambia, Zimbabwe, Tanzania, Togo, Mali, Madagascar, Mozambique Huawei’s projects to build cloud data storage, including government data149 According to a database compiled by the Center for Strategic and International Studies Recon­ necting Asia Project, Huawei has either completed or is currently building multimillion dollar data centres and cloud services in several African countries. This is part of the company’s strategy to widen its reach in Africa – it is currently working on 25 projects across Africa. Most of the financing comes from Exim and China Development Bank (Huawei is a big beneficiary of credit from the China Development Bank)150 . Mozambique, Tunisia, Senegal, Cameroon, Libya, Cape Verde, Malawi, Zambia, etc. Huawei’s project “Seeds for the Future”151 The youth empowerment programme founded by Chinese tech giant Huawei was launched in 2008. It is involved in the training and subsequent employment of relevant personnel and the hold­ ing of thematic events. In 2020, to maintain programme continuity during the pandemic, the pro­ gramme moved online for the first time to deliver a wider range of online educational resources for more talented young students, while maintaining face-to-face activities and events. For example, Huawei “Seeds for the Future” successfully trained over 600 students across Africa in 2021. The project created a global network of top talent from developing countries and provided a number of participants with international internships as an opportunity to get a closer look into technolo­ gy, such as exhibition hall visits, factory explorations and other enterprise insights in China. This programme will allow the company to continue to double its efforts in bridging the digital gaps and spreading its technological standards. Cameroon The National Emergency Telecommunications Network (RNTU) project was launched in 2022 in collab­ oration with Chinese ZTE. The project allows for the government teams to manage emergencies confi­ dentially and securely without having to go through a public network. It also includes the e-police system, a centralised platform for managing security operations. The main services offered are: the management of police information, criminal information, registers of criminal cases and wanted persons152 .
  • 87. 86 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Read more about international assistance in digitalisation of┤African countries in the handbook by the HSE University Center for African Studies E-Governance in Africa 2024: Challenges and Opportunities For African countries digital sovereignty lies not in complete withdrawal of foreign aid but in embracing a multifaceted approach to international development assistance, recognising the importance of diversifying partners and sources of aid This includes partnering with nations outside of the list of traditional Western aid donors, such as those in Asia and the Middle East. Furthermore, at the current stage of digitalisation African countries may turn to each oth­ er and their South peers for experience, knowledge and expertise. More and more, African countries are tending to turn to peer-to-peer knowledge sharing in searchforsuitablesolutions.Often,theprocessismod­ erated and supervised by international organisations or other countries153 . However, there is an emerging trend towards intra-African initiatives.154155 153 For instance, the World Bank also established a South-South Exchange Program in the frameworks of the ID4D initiative for peer-to-peer knowledge exchange. Under the Program, in 2018, the delegations of Côte d’Ivoire and Guinea visited Peru to find out from the staff of the Peruan identification agency about the process of implementing the national ID system. 154 The New Times Rwanda. Eswatini borrows Rwanda’s best practices in e-Governance. URL: https://www.newtimes.co.rw/article/12120/news/africa/eswatini-borrows- rwandas-best-practices-in-e-governance 155 Burundi Eco. A quand la carte d’identité biométrique ? 2023. URL: https://burundi-eco.com/a-quand-la-carte-didentite-biometrique/ 156 Kwet, Michael, Digital Colonialism: US Empire and the New Imperialism in the Global South (August 15, 2018). For final version, see: Race Class Volume 60, No. 4 (April 2019) ; DOI: 10.1177/0306396818823172 International assistance projects should also be chosen based on the national strategy and inter­ ests to avoid waste of resources and fragmenta­ tion of efforts. Special attention is to be paid to studying local peculiarities and adapting knowl­ edge and solutions of the donor to the local con­ ditions, including local experts in the transfer pro­ cess in order to develop national expertise. Role of international corporations International corporations pres­ ent in the African markets invest in building ICT infrastructure and digital solutions, training, all in order to lay the groundwork for ex­ panding presence and revenues in the region, as well as accessing valuable data to train AI models. Even in South Africa, a Yale University scholar ar­ gues156 , digital ecosystems are dominated by for­ eign, notably US, entities, which endows them with unprecedented power over key sectors, whether politics, culture or the economy. In November 2023, Eswatini signed a memorandum of understanding with Rwanda with the aim of leveraging Rwanda’s expertise in developing national e-procurement and financial management information systems154 . In May 2023, technicians from the Burundian Ministry in charge of community development visited Cameroon and Benin with the aim of experience exchange in the process of introducing biometric identity cards155 . In 2023, the Korean International Cooperation Agency (KOICA) organised a knowledge sharing programme between Rwanda and Nigeria (held in Kigali) for the Nigerian Government Service Portal (GSP) team to learn about Rwanda’s digitalisation journey through study visits and discus­ sions related to policies, strategies, and programmes implemented by the country.
  • 88. 87 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Apart from revenues, companies gain access to data and human resources For instance, Samasource, a US AI data training company, employs 2,000 Kenyans and Ugandans to process data for companies including Google and Microsoft157 . Leila Janah, the founder and CEO of Sama- source, a US AI data training company: “If you use a mobile phone or laptop’s facial recognition features, drive a car or shop online, there’s a good chance that a person in East Africa helped train the algorithm that makes your technology work.” Corporations launch numerous pan-African con­ ferences, hackathons and digital skills programs to train and select ICT specialists from African countries. Only Google has more than 150 ac­ tive Google Developer Groups and 100 Devel­ oper Student Clubs in Africa. The final prize often includes visits or internships in these com­ panies which actually leads to brain drain on the continent. Corporations under the motto of “bridging digital divide” and a label “corporate social responsibility” lay the groundwork for expanding their own presence and revenues in the region For instance, Meta158 backs the development of the 2Africa sea cable. Another example is collabora­ tion between the Ministry of Digital Development of Madagascar and Orange Madagascar in 2018 to launch the ICT Buses (TIC Bus) project: buses equipped with computers, internet connection and generators travelled to remote areas of Madagas­ car in order to educate residents about new tech­ nologies159 . 157 LinkedIn. Leila Janah. How East Africa trains AI. URL: https://www.linkedin.com/pulse/how-east-africa-trains-ai-leila-janah 158 Meta is recognised as an extremist organisation in the Russian Federation by the decision of Tverskoy District Court of 21.03.2022 (Case № 33-21933/2022). 159 Call Center Madagascar. Des TIC Bus Pour Le Développement Numérique De Madagascar. 2018. URL: https://www.callcentermadagascar.com/tic-developpement- numerique-madagascar/ 160 Foreign Policy Magazine. Is Big Tech Setting Africa Back? URL: https://foreignpolicy.com/2020/11/11/is-big-tech-setting-africa-back/ International corporations are also the dominant operators of the telecommunications sector in African countries. 75% of the telecommunications market in Africa is controlled by international corpo­ rations including MTN, Vodacom, Airtel, Orange, e (ex-Etisalat), with them collectively accounting for 85% of all mobile subscribers on the continent. Na­ tional or African operators are dominant in ­ Namibia (99%, MTC Namibia and Telecom Namibia), Cabo Verde (100%, Cabo Verde Telecom under the brand Alou and Unitel T+, Angola), Ethiopia (94%, Ethio Telecom), Algeria (73%, Mobilis and Djezzy). This articulates the need for modifying antitrust regu­ lations in line with the changing market rules. Antitrust regulations for the ICT sector have not found wide rec­ ognition on the continent yet. However, the importance of data in the modern economy can allow tech giants to exert influence up to the point of “data colonialism”160 , indirectly regulating even non-digital markets, some­ times resorting to internet-for-all initiatives as a cover. Digital markets have their specific features that may lead to increased concentration of the market, pre-emption of emerging markets, while complicating antitrust regu­ lations.Theseinclude:networkeffects,scaleandscope advantages, multi-sided platform structure, ecosystem economy, re­ liance on data, zero-price business models, interoperability, switching costs and multi-homing, consumer behavioural biases (e.g. default bias and saliency bias, “nested” deci­ sion-making, status quo bias) and tipping. Contrary to common competition laws which focus on regulating the marketing of products, antitrust regulation in the digital market concerns the prod- uct itself (such as product design) and the compa- ny’s business model. The authorities may therefore demand to redesign the product (service) or adjust a business model to make it comply with the law.
  • 89. 88 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies
  • 90. 89 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies The modernisation of competition legislation requires comprehensive approaches that would include non- price dimensions in defining market power and dom­ inance and in assessing mergers. For instance, the ability to collect or generate and process big data volumes should be considered among the criteria of significant market power. Whilst assessing mergers, consequences unrelated to price should be taken into account, as mergers can affect incentives for innova­ tion, quality of service, performance, etc. Examples of anti-competitive practices in the dig­ ital markets include self-preferencing, refusal of data collection or data sharing, killer acquisition and exploiting consumer behavioural biases. In South Africa’s practice, as analysed by the World Bank’s International Bank for Reconstruction and Devel­ opment (IBRD), predatory pricing and exclusivity agreements were most common when it came to abuse of market dominance161 . As a case in point, the competition authority of South Africa expressed concern in July 2022 that Google’s paid search results – without being clearly labelled as advertising – were increasing the costs for platform customers and benefiting the tech giant. The prefer­ ential placement of Google’s own specialised search units is an example of unfair competition. In 2022, five African countries – Egypt, Kenya, Ni­ geria, Mauritius and South Africa – held a meeting to discuss cooperation in regulating competition in the digital markets of the continent162 . In a joint statement, heads of the na­ tional competition authorities affirmed that digital markets present “considerable challenges for competition law enforcement and policy in terms of the unique competition issues that arise”. 161 World Bank. Antitrust and Digital Platforms: An analysis of global patterns and approaches by competition authorities. URL: https://documents1.worldbank.org/curated/ en/893381632736476155/pdf/Antitrust-and-Digital-Platforms-An-Analysis-of-Global-Patterns-and-Approaches-by-Competition-Authorities.pdf 162 Cliffe Dekker Hofmeyr. Collaboration by African competition regulators with respect to the regulation of digital markets in Africa. URL: https://www.cliffedekkerhofmeyr.com/en/news/ publications/2022/Practice/Competition/competition-law-alert-Collaboration-by-African-competition-regulators-with-respect-to-the-regulation-of-digital-markets-in-Africa.html 163 African Union. The Digital Transformation Strategy For Africa (2020-2030). URL: https://au.int/sites/default/files/documents/38507-doc-dts-english.pdf 164 The Guardian. 70% of govt agencies host data abroad despite $220m local infrastructure. URL: https://guardian.ng/technology/70-of-govt-agencies-host-data-abroad- despite-220m-local-infrastructure/ 165 Africa Data Centres Association. State of the African Data Centre Market 2021. URL: http://africadca.org/wp-content/uploads/2021/12/ADCA-Annual-Report-2022_ Final-1.pdf?succes=1686795969 166 Innovation Origins. Marseille Is Among One Of The World’s Leading Data Hubs, But Growing At The Seams URL:https://innovationorigins.com/en/marseille-is-among-one- of-the-worlds-leading-data-hubs-but-growing-at-the-seams/ 167 Digital Reality (main page). URL: https://www.digitalrealty.com/ To date, the African continent has seen several at­ temptsofsettinganti-monopolyregulationsfortheICT actors. In 2018, the governments of Uganda, Zambia and Benin tried imposing taxes on social media. At that time, supporting local ICT projects was among the an­ nounced goals. In Uganda, a USH 200 tax was imposed on the use of 58 over-the-top (OTT) services (includ­ ingFacebook, Twitter, WhatsApp)aswell asa 1%tax on e-money transfers. However, this resulted in a decrease in social media usage, a trend coupled with a 74% slide inrevenuesof companiesthatreliedonsocial media for business. Therefore, a balanced approach is needed to maximise societal benefits without reversing the natural trends in the industries. Data sovereignty Cloud technologies have become essential for en­ hancing digitalisation and delivering public services. In recent years, the corporate sector and govern­ ments across Africa have started moving their data into the cloud. However, these clouds are mostly run by the foreign providers, whose data centres are located overseas. As stated in the Digital Transformation Strategy for Africa 2020-2030163 , plenty of IT content con­ sumed in Africa comes from outside. For instance, in 2021 it was revealed164 that 70% of Nigerian gov­ ernment agencies host their data abroad. As spec­ ified by the Oxford Business Group and the Africa Data Centres Association165 . Marseille is the main gateway166 for offshoring the data. The data is transferred to Marseille-based Dig­ ital Realty’s167 data centres via 16 undersea cables. Allegedly 80% of the African data is stored abroad
  • 91. 90 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Offshore hosting compromises the confidentiality, integrity and availability of the data and entails a variety of risks Offshoring also has a negative impact on the op­ erational performance level, which embraces the quality, dependability, speed, flexibility and cost factors. Hence, the total costs of offshoring comprise the evaluation cost (the due diligence, contracting, etc. usually involves legal fees), cultural cost168 (estimated to add from 3% to 27% to the total cost), transition cost, internal workforce cost and contract management cost (estimated to add an additional 6% to 10% to the total cost). When the data is hosted abroad, the submarine cables and satellite links transport data between users and data centres located overseas through the complex routes. Given that the African con­ tinent’s infrastructure at all stages of the value chain is often underdeveloped or outdated, it re­ mains a challenge to keep the information prop­ erly secured during the transit. Poorly developed local cloud infrastructure also multiplies the ex­ penses. According to a report by Google169 , existing un­ derwater cables are outdated and rely on older technology, while many countries lack redundan­ cy. Edge locations (Telcos, IXPs, ISPs) on the con­ tinent are yet to be fully developed. As specified by the African IXP Association170 , there are 52 active IXPs located in 47 cities in 36 countries. Middle mile infrastructure is still underdevel­ oped, despite the estimated growth (72%) be­ tween 2015 and 2020. Internet access networks do not provide universal access, as 25% of the 168 Includes cultural, language, organisational and work environment differences in the process of offshoring as well as experience differences. 169 Africa Practice. Equiano Subsea Cable: Regional Economic Impact Assessment. URL: https://africapractice.com/wp-content/uploads/2021/10/Equiano-Regional-Economic- Impact-Assessment-6-October-2021.pdf 170 The African IXP Association. List of active Internet exchange points in Africa. URL: https://www.af-ix.net/ixps-list 171 Africa Data Centres Association. State of the African Data Centre Market 2021. URL: http://africadca.org/wp-content/uploads/2021/12/ADCA-Annual-Report-2022_ Final-1.pdf?succes=1686795969 172 African Infrastructure Investment Managers. Africa’s data centre growth opportunity. URL: https://aiimafrica.com/media/media-centre/africas-data-centre-growth- opportunity/ 173 Market Spotlight. Africa’s Key Data Centre Markets. URL: http://africadca.org/wp-content/uploads/2023/07/Title_Africas-Key-Data-Centre-Markets. pdf?succes=1694286277 population does not live within the footprint of mobile broad­ band networks. Therefore, con­ tent has to travel further to end users, which increases cost of access and latency. The African continent also lacks infrastructure such as data centres. All the critical equipment and applications are housed in the data centres. Africa accounts for less than 2% of the global data centre capacity. According to the Africa Data Centers Associa­ tion (ADCA) 2021 report171 , the continent has 140,000 square metres of data centre space shared among about 100 data centres. It is no­ ticeable that the distribution of these facilities is uneven, given that South Africa accounts for more than two-thirds of the continent’s capacity. As stated in the report, 10% of the existing DC capacity serves nearly half of Sub-Saharan Afri­ ca’s economic output and broadband connec­ tions. The AIIM (African Infrastructure Invest­ ment Managers)172 estimated that as of 2023, there is 250 MW of installed data centre capac­ ity across Africa. Thus, there is a need to rely on data centres in Southern Africa or outside the continent. As stated in the ADCA 2023 report173 , South Af- rica, Nigeria, Egypt, Morocco and Kenya are the main hubs of the African data centre market. Ac­ cording to the report, South Africa comprises 165 MW of live capacity. The figures for Nigeria and Kenya are 21 MW and 15 MW respectively. Live capacity in both Morocco and Egypt comprise 13 MW. For instance, the IT capacity per million resi­ dents in Nigeria stands at 0.60 MW, compared to 47.21 MW in the United Kingdom.
  • 92. 91 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies The majority of cloud services in Africa are operated and controlled by foreign entities. Microsoft, Google, Amazon, IBM and Huawei are among the continent’s main cloud services providers For instance, Microsoft is present174 in Egypt, Morocco, Kenya, Nigeria and South Africa. According to the Africa Interconnection 2021 Report175 , Micro­ soft’s cloud business revenues within the continent come 75% from South Africa and 25% from the rest of Sub-Saharan Africa. Google operates in Africa through Digicloud Africa176 , the distributor of all Google Cloud products. The 174 Cloud Skill Challenge. Azure CDN Coverage by Metro. URL: https://learn.microsoft.com/en-us/azure/cdn/cdn-pop-locations 175 HubSpot. Africa Interconnection Report. URL: https://f.hubspotusercontent00.net/hubfs/3076203/Africa%20Interconnection%20Report%202021.pdf 176 Dig Cloud Africa. Google’s reseller enablement partner in Africa. URl: https://www.digicloud.africa/ 177 TOP 10 VPN Digital Rights Research Grant. China’s Surveillance State: A Global Project. URL: https://www.top10vpn.com/assets/2021/07/Chinas-Surveillance-State.pdf 178 Huawei Cloud. Where Can I Access HUAWEI CLOUD International Website Services?. URL: https://support.huaweicloud.com/intl/en-us/intl_faq/en-us_ topic_0115884694.html 179 University of Passau. The Importance Of Data Localisation In Cybercrime Investigations. URL: https://www.digital.uni-passau.de/fileadmin/user_upload/Musoni_M__The_ Importance_of_Data_Localisation_in_Cybercrime_Investigations.pdf 180 University of Passau. The Importance Of Data Localisation In Cybercrime Investigations. URL: https://www.digital.uni-passau.de/fileadmin/user_upload/Musoni_M__The_ Importance_of_Data_Localisation_in_Cybercrime_Investigations.pdf distribution service is operational in 39 African countries. According to the China Surveillance State: A Glob­ al Project177 2021 report, Huawei middleboxes (the devices that forward data and have an ability to read and manipulate data) are located in 18 African countries. Huawei Cloud services are available178 in at least 22 African countries. As highlighted in the Importance of Data Localisa­ tion in Cybercrime Investigations179 report. Technology companies have a monopoly on data, which allows them to determine their level of involvement in how the data are used As a consequence, the government’s power and autonomy over the data is diminishing. Poorly developed local cloud infrastructure results in the lack of employment opportunities for local spe­ cialists, as well as in a shortage in training on maintenance of sensi­ tive data for local employees. Thus, data localisation is crucial concern­ ing the development of domestic capacity in the digital sector. The legal basis of data protection and localisation re­ garding sovereignty is critical. The lack of robust data localisation laws raises concerns on data security. Ac­ cordingtotheImportanceofDataLocalisationinCyber­ crime Investigations180 report, a foreign state where the data is hosted may have a stronger jurisdictional basis over the cloud data. Hence, the hosting state can po­ tentially exercise unilateral access to data if there are no legislative measures concerning data localisation.
  • 93. 92 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Data localisation is important in terms of ensuring data privacy, protection and cybersecurity. Furthermore, data localisation requirements are adopted in order to support local law enforcement by ensuring that local authorities have access to the data needed to investigate crimes and oversee activities in such sectors as telecommuni­ cation, banking and insurance to mitigate geopolitical risk and financial sanctions and to facili­ tate economic development, in­ cluding job creation through fostering the local data processing industry. According to the UNCTAD, as of 2024, 33 African countries (61%) have enacted or embraced certain forms of regulation with the aim of protecting per­ 181 UNCTAD. Data Protection and Privacy Legislation Worldwide URL: https://unctad.org/page/data-protection-and-privacy-legislation-worldwide 182 European Commission. Policy and Regulation Initiative for Digital Africa (PRIDA). URL: https://international-partnerships.ec.europa.eu/policies/programming/programmes/ policy-and-regulation-initiative-digital-africa-prida_en 183 Smart Africa (main page). URL: https://smartafrica.org/ sonal data181 . Namibia, Eswatini, Malawi and Ethiopia have enacted draft legislation. Libya, Sudan, Eritrea, Central African Republic, Burundi, Guinea-Bissau, Sierra Leone and Liberia lack relevant legislation. Regional (UNECA, African Union) and subregion­ al organisations contribute to the development of data protection legislation. Legislative tools such as the 2008 East African Community Framework for Cyber Laws, the 2010 Supplementary Act on Personal Data Protection of the Economic Com­ munity of West African States (ECOWAS) and the 2013 Southern African Development Communi­ ty model law have been developed. The African Union developed the first pan-African framework with the African Union Convention on Cyber Security and Personal Data Protection (Malabo Convention) in 2014, which entered into force in June 2023. Among other initiatives aimed at improving data pol­ icy on the continent are the Policy and Regulation Initiative for Digital Africa (PRIDA)182 and Smart Africa183 . Being a joint initiative of the African Union, the European Union and the International Telecom­ munication Union (ITU), PRIDA has the objective of creating a harmonised and enabling regulatory framework for the use of ICT. Smart Africa supports the creation of a harmonised framework for data protection legislation in Africa through the Smart Africa Data Protection Working Group, which aims at mapping legal frameworks, implementing guide­ lines for Smart Africa Member States and making recommendations on enhancing harmonisation and collaboration mechanisms between Data Protection Authorities (DPAs). As of 2024, the majority of data protection laws of African countries (52%) only prohibit or impose regulations on cross-border data transfer. Nigeria, Rwanda and Zambia require data to be hosted within the country’s borders
  • 94. 93 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies 184185186 184 Human Rights Watch. Egypt: Data of Tens of Thousands of Students Compromised. URL: https://www.hrw.org/news/2023/04/19/egypt-data-tens-thousands-students- compromised 185 Internet Society. The Benefits of Local Content Hosting: A Case Study. URL: https://www.internetsociety.org/wp-content/uploads/2017/08/ISOC_LocalContentRwanda_ report_20170505.pdf 186 RICTA (main page). URL: https://www.ricta.org.rw/ Egypt In 2023, the Human Rights Watch (HRW) revealed184 that vast amounts of children’s personal data were exposed by the Government of Egypt and the private British company Academic Assessment Ltd. The sensitive data included over 72,000 records of children’s names, dates of birth, gender, home addresses, email addresses, phone numbers, schools that they attend, grade level, personal profile photos and copies of their passport or national ID. The data contained over 350,000 files and included information on children who applied to take the Egyptian Scholastic Test (EST) between September 2020 and December 2022. In March 2022, the ownership of the exam was changed from the Government of Egypt to a UK company. Accord­ ing to the HRW, it is unclear exactly when and how the government sold or transferred ownership of the EST and its students’ data to Academic Assessment. The unprotected data was hosted on Amazon Web Services, Amazon’s cloud storage services. The data remained accessible until it was taken down on 15 March 2023, after Human Rights Watch’s notification on the child data privacy violation. The data was left unprotected on the web for at least eight months. Egypt’s 2020 data protection law recognises that children’s data are entitled to special protections, but does not specify them. The Egyptian data protection authority is soon to be founded to ensure compliance with the law. Rwanda According to the Internet Society 2017 report185 , in 2016 the Rwanda ICT Association186 conduct­ ed the year-long ‘Rwanda Content Hosting’ pilot project of transferring the websites stored abroad to local hosting. As stated in the report, over half of all .rw and .co.rw websites were hosted in the US due to the low monthly hosting cost. According to the study, the servers for the pilot project were set up by RICTA through a sponsorship by BSC Ltd. in the Telecom House, a key hub for telecommunications in Rwanda. Three Rwandan web hosting providers (the names are not specified) participated in the pilot. Each one was provided with server capacity in the form of three virtual private servers (VPS), which were used to migrate a selection of websites previously hosted in the US (and in some cases Europe) to Rwanda. The outcome of the project is defined by the accelerated speed of the websites when accessed from the host country, which results in greater visitor engagement, an increase in the number of page views and returns to the website and longer time spent on the website.
  • 95. 94 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Hosting of government websites of African countries In order to assess the actual status of website local­ isation on the African continent, a study was con­ ducted focusing on the hosting of African govern­ ment websites. This research involved analysing the geographical locations of the servers hosting these websites, examining the proportion of sites hosted within Africa compared to those hosted outside of Africa. The government websites were chosen as fundamental for digital sovereignty of the nations and indicating governments’ approach toward it. Overall, 55% of the studied websites were hosted locally, illustrating an increased local capacity of Afri­ can countries and a trend toward digital sovereignty. Hosting of government websites of African countries Source: prepared by the HSE Center for African Studies. 22 27 32 37 31 Website of the government Website of the ministry of ICT Website of the revenue authority (or its services) Website of the ministry of education (or its services) Website of the central bank Initial study by the HSE Center for African Studies Overall, 55% of studied government websites were hosted inside the country. Share of government websites hosted inside the country 1 2 3 4 5 0 Number of studied websites hosted locally US France Canada Germany United Kingdom Netherlands 35 20 14 12 5 5 Main host countries The study examined the most common sites available for the majority of the countries and were chosen considering the following factors: The website of the government is the fundamental website for e-governance and is indicative of the government’s approach toward digital sovereignty. The website of the ministry of ICT is indicative of the responsible ministry's policy in the field of digital sovereignty. The website and services of the revenue authority transmit sensitive financial information and show the approach to its localisation and protection. The website and services of the ministry of education represent the digital sovereignty policy for G2C services and citizens’ information. The website of the central bank expands the sample as banks are often considered to lead in digitalisation and shows the bank’s approach toward digital sovereignty.
  • 96. 95 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Connectivity Another aspect to be considered is dependence on few submarine cable systems making African countries vulnerable to Internet outages due to natural disasters, cable cuts or, potentially, international sabotage.187 Overall, more than 90% of world internet traffic is transmitted via submarine cables187 To date, Africa is connected to 71 submarine ca­ bles (out of 529 globally), active or planned, most of them leading to Europe. 17 African countries are connected to 1 or 2 submarine cables which puts 187 CCDCOE. Strategic importance of, and dependence on, undersea cables. 2019. URL: https://www.ccdcoe.org/uploads/2019/11/Undersea-cables-Final-NOV-2019.pdf them in a dependent position. Countries aim to establish more resilient cable designs, expand ter­ restrial fibre, diversify communication paths in or­ der to ensure reliable Internet connection on the continent and limit reliance on vulnerable subma­ rine cable systems. Nigeria, Kenya, Cameroon with 6 cables, South Africa and Dji­ bouti with 11 and Egypt with 15 cables are among the leaders on the continent. Regionalising fibre networks and expanding terrestrial fibre is especial­ ly crucial for land-locked countries. For instance, Uganda has connected its network to those of Kenya, Tanzania, Rwanda and DR Congo.
  • 97. 96 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies 188189 188 Developing Telecoms. Internet down due to subsea cable damage in Africa. 2024. URL: https://developingtelecoms.com/telecom-technology/optical-fixed- networks/16421-connectivity-down-due-to-subsea-cable-damage-in-africa-2.html 189 Internet Society. 2024 East Africa Submarine Cable Outage Report. 2024. URL: https://www.internetsociety.org/resources/doc/2024/2024-east-africa-submarine-cable- outage-report/ Due to a dragging anchor three submarine cables in the Red Sea were damaged: the Seacom/Tata cable, the Asia Africa Europe-1 (AAE-1), and the Europe India Gateway (EIG), affecting Tanza­ nia, Kenya, Uganda and Mozam­ bique. It was possible to reroute traffic through international ca­ bles in Djibouti. Due to an undersea canyon ava­ lanche the outage happened in West Africa188 affecting 13 coun­ triesincludingCôte-d’Ivoire,Liberia, Burkina Faso, Mali, Guinea, South Africa, Nigeria, etc. Four cable systems were damaged – WACS, MainOne, South Atlantic 3 and ACE. Operators used cross-border terrestrial fibre networks to reroute traffic to the Equiano cable which was not affected by the avalanche. EASSY and SEACOM, the subma­ rine cables connecting South Africa and Kenya, were disrupted, leading to an internet outage across East Africa. The cables were repaired three weeks after the disruption. These outages are reported to have severely affected the banking sector, mobile phone operations, money transfer services and stock exchange markets in Mozambique, Malawi, Kenya and Tanzania189 . February 2024 March 2024 May 2024
  • 98. 97 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Digitalisation of languages Africa is a space of vast cultural and linguistic di­ versity. As of 2024, it accounts for 30% of the world’s languages190 . While the population of Northern Africa predominantly speaks Arabic (with a number of regional exceptions), the ma­ jority of countries of Sub-Saharan Africa do not have a single dominating local language. Being the second region in the world with such a mul­ tiplicity of languages after Asia, African linguistic density exceeds that of Asia. The “population per language” ratio stands at 646 thousand people per language, compared to 2 million people per language in Asia191 . African languages are domi­ nant in physical space; yet, they are scarcely ex­ hibited in the digital one.192 The digitalisation of African languages is a key step towards ensuring that communities can fully harness the benefits of the digital age while preserving their linguistic and cultural heritage and can be consid­ ered as a cultural aspect of digital sovereignty. 190 The Ethnologue. What continents have the most indigenous languages? URL: https://www.ethnologue.com/insights/continents-most-indigenous-languages/ 191 E-Governance in Africa 2024: Opportunities and Challenges. URL: https://e-governancehub.ru/read-book-e-governance-in-africa-2024-challenges-and-opportunities/ 192 African Union. Agenda 2063. URL: https://au.int/en/agenda2063/overview 193 Meital K. and Jason M. (2022) Language and Coloniality: Non-Dominant Languages in the Digital Landscape. Pollicy. URL: https://pollicy.org/wp-content/uploads/2022/08/ Languages-Coloniality-Report.pdf While more than 80% of the digital content is deliv­ ered in 10 languages, namely English, Chinese, Span­ ish, Arabic, Portuguese, Japanese, Russian, German, French and Malaysian193 , non-dominant languages become more vulnerable to the decline. In line with Agenda 2063192 adopted by the African Union, the governments of the states aim to: - “implement programmes for the pro­ duction of contents in national (indig­ enous) language and using national languages as part of administrative processes of the countries by 2025”; - “harness the indigenous African lan­ guages in a practical manner”. The Digital Transformation Strategy for Af­ rica 2020-2030 sets the goal of “promot­ ing the penetration and use of ICTs into lo­ cal communities using African languages”. 2,150 2,300 1,300 1,050 290 Languages by region Africa Oceania Asia Source: prepared by the HSE Center for African Studies based on the Ethnologue and UN data. Americas Europe Population by region, billion speakers 1.4 Africa 4.7 Asia 1 Americas 0.75 Europe 0.45 Oceania Indonesian Share of internet users by language, % 20 Chinese 16 English 7 Spanish 5 Hindi 4 Arabic 3 Portuguese 3 3 French 2 Russian 37 Other
  • 99. 98 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies
  • 100. 99 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies 22 out of over 2,000 languages spoken in Africa are supported and promoted by large-scale enterprises194 The use of African languages online is hindered by social constraints. European languages maintain the status of prestigious levels, while the majority of in­ digenous ones are often seen as means of informal communication. The lack of informational and scien­ tific resources in local languages also spur the ex­ pansion of their use.194 The issue of indigenous languages’ web presence is exacerbated by the scarcity of online resourc­ es needed to develop smart engines on language and data processing. The process of language re­ search and analysis is predominantly supported by local communities, small private companies and academia. With the increase in internet use, which has grown from 38% in 2014 to 63% in 2021, the number of users who are non-native English speakers has sig­ nificantly risen. The web penetration still covers less than a half of the adult population of the African con­ tinent, standing at 40% and covering roughly 450 million users, compared to 614 million in Europe195 . In 2024, 49.5% of websites implement English as a main language of content delivery196 , whilst in 2022, English along with French, Spanish and Portuguese comprised less than one-third of languages spoken by internet users. African languages, including Swa­ hili, Amharic, Oromo, Hausa and others, constituted less than 0.1% of web content. Yet, in 2000 the av­ erage number of languages represented on global company websites stood at 6 and increased more than fivefold in 2022, amounting to 34197 . 194 Lionbridge. Embrace the Online Opportunity of African Languages. URL: https://www.lionbridge.com/content/dam/lionbridge/pages/blogs/translation-localization/ embrace-the-online-opportunity-of-african-languages/embrace-the-online-opportunity-of-african-languages-infographic-english.pdf 195 E-Governance in Africa 2024: Opportunities and Challenges. URL: https://e-governancehub.ru/read-book-e-governance-in-africa-2024-challenges-and-opportunities/ 196 W3Techs. Usage statistics of content languages for websites. URL: https://w3techs.com/technologies/overview/content_language 197 Web Globalization Report Card 2022. The report assesses the availability of languages on 150 websites of global companies (e.g. Wikipedia, Toyota, eBay, Lenovo, etc.). URL: https://www.bytelevel.com/reportcard2022/ 198 Meital K. and Jason M. (2022) Language and Coloniality: Non-Dominant Languages in the Digital Landscape. Pollicy. URL: https://pollicy.org/wp-content/uploads/2022/08/ Languages-Coloniality-Report.pdf 199 Ibid. 200 Nekoto W. et al. Participatory Research for Low-resourced Machine Translation: A Case Study in African Languages. URL: https://arxiv.org/pdf/2010.02353 201 CSA Research. Africa: Localization’s Newest Frontier. 2022 Amharic and Somali are consid­ ered as digitally vital languages with a similarly high level of use for accessing Wikipedia and producing social media content. Online use of Tigrinya is predominantly support­ ed by the availability of automatic translation and presence in search engine services. etc. Although the majority of web content in Ethiopia is created in local languages, English dominates in terms of con­ tent consumption198 . In Tanzania, Swahili and English mixed use is com­ mon on social media. A pattern of regenerating the content initially coming in English to Swahili is also common. Online political activity is usual­ ly undertaken in Swahili and is viewed to be more powerful. While Swahili is a national language and a regional lingua franca, it is often considered to be “non-academic”, while English is viewed as a language of social mobility. In Uganda, most na­ tional media houses produce content in English and Luganda. Swahili is an official language as well; however, publications in this language are rather uncommon199 . As of 2020, Egyptian Arabic was a dominant Afri­ can-spoken language on Wikipedia, possessing over 573 thousand texts. It was followed by Afri­ kaans and Swahili which comprised 91 thousand (17.5 million speakers) and 59 thousand texts re­ spectively200 . In 2022, English accounted for 151 million users originating from Africa, being the most common language, and followed by Arabic with 104 million internauts. French was utilised by 84 million Afri­ cans. In comparison, the online use of Swahili and Hausa did not exceed 30 million201 .
  • 101. 100 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Big tech is taking action on implementing Afri­ can languages. As of 2023, Google enabled au­ tomatic translation to 25 African languages202 , and in 2024, the corporation added203 over 25 languages to its translation engine. Microsoft enables the users to access the content in 10 202 Afrikaans, Amharic, Arabic, Bambara, Chichewa, Ewe, Hausa, Igbo, Kinyarwanda, Krio, Lingala, Luganda, Malagasy, Oromo, Sepedi, Sesotho, Shona, Somali, Swahili, Tigrinya, Tsonga, Twi, Xhosa, Yoruba, Zulu 203 Connecting Africa. Google Translate adds 25+ African languages. URL: https://www.connectingafrica.com/author.asp?section_id=761doc_id=786935 204 Afrikaans, Amharic, Arabic, Malagasy, Somali, Swahili, Tigrinya, Tonga, Zulu 205 African Languages Lab. Facts Figures. URL: https://www.africanlanguageslab.com/old-facts-figures 206 Shikali, Casper S., and Refuoe Mokhosi. «Enhancing African low-resource languages: Swahili data for language modelling.» Data in brief 31 (2020). URL: https://www.data-in- brief.com/article/S2352-3409(20)30845-3/fulltext languages which are widespread in Africa204 , and Amazon offers six, namely Afrikaans, Amharic, Arabic, Hausa, Somali and Swahili. A Chinese public company Alibaba is the leader regard­ ing the number of introduced languages, which amounts to 40205 . Digitising a language African languages are often viewed as “low re­ source”206 . Low-resource languages are languag­ es limited in terms of digital resources critical to perform linguistic operations based on technol­ ogy use, such as machine learning and transla­ tion. Natural language processing (NLP), which in­ cludes speech recognition, text classification, natural-language understanding and natural-lan­ guage generation, faces a range of challeng­ es when put in the African linguistic landscape. 2,300 1,050 290 Asia African languages are used by less than 0.1% of the websites each. Source: prepared by the HSE Center for African Studies based on the Ethnologue and UN data. Source: prepared by the HSE Center for African Studies based on 22 Web Globalization Report and W3Tech data. Americas Europe 0.75 Europe 0.45 Oceania Indonesian Share of internet users by language, % Share of websites by language, % 53 English 5.4 Spanish Swahili Amharic Somali Zulu 0.014 0.0007 0.0004 0.00035 Afar Malagasy Bambara Hausa 0.00025 0.00025 0.00022 0.00015 Share of websites in African languages 4.6 Russian 4.6 German 4.3 French 4.1 Japanese 3 Portuguese 2.2 Italian 2.1 Turkish 16.7 Other 20 Chinese 16 English 7 Spanish 5 Hindi 4 Arabic 3 Portuguese 3 3 French 2 Russian 37 Other
  • 102. 101 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Among them are lack of resources (predomi­ nantly digital and crucial for language processing), low dis- coverability (existing research and datasets on languages are often unavailable for wide au­ dience, requiring special aca­ demic permission), scarcity of publicly-available bench- marks, low reproducibility caused by poor re­ search output exchange and societal issues (in­ digenous languages are rarely seen to become a primary communication axis)207 . Nevertheless, implementation of the technology is exacerbated by a range of obstacles. There are several methods on technology use: cross-lin- gual transfer makes it possible to transmit mod­ els trained on high-resource to low-resource lan­ guages; however, the inclusion of languages to this methodology derives from the availability of monolingual data. Furthermore, since the bench­ mark tasks are sourced from English, some draw­ backs exist. Multilingual approaches were designed in order to train the same models for many languages at once and enabled to train models on translation between English and the 10 most high-resource African languages. The language resources were derived from private data and public TED talks. Hence, the models preliminary developed on high-resource languages could be inapplicable by virtue of tech­ nological limitations, linguistic differences and lack of qualified personnel, as well as data amounts and quality208 . Furthermore, the lack of language datasets and low levels of use in the digital space exacerbate the is­ sue of misinformation. Detection machine-learning mechanisms are often unavailable due to inability to train the engine209 . 207 Masakhane. URL: https://www.masakhane.io/ 208 Nekoto W. et al. Participatory Research for Low-resourced Machine Translation: A Case Study in African Languages. URL: https://arxiv.org/pdf/2010.02353 209 Meital K. and Jason M. (2022) Language and Coloniality: Non-Dominant Languages in the Digital Landscape. Pollicy. URL: https://pollicy.org/wp-content/uploads/2022/08/ Languages-Coloniality-Report.pdf 210 Ibid. 211 Siminyu K. et al. Consultative engagement of stakeholders toward a roadmap for African language technologies. Patterns, Volume 4, Issue 8. URL: https://www.cell.com/ patterns/fulltext/S2666-3899(23)00189-7?_returnURL=https%3A%2F%2Fptop.only.wip.la%3A443%2Fhttps%2Flinkinghub.elsevier.com%2Fretrieve%2Fpii%2FS2666389923001897%3Fshowall%3Dtrue Stakeholder engagement In order to overcome the challenges of web lan­ guage resource scarcity, a “participatory approach” is being undertaken in order to conduct the research and perform NLP and MT operations.210 The key contributors to the creation and devel­ opment of machine translation technologies are content creators (journalists, copywriters, creative writers), language practitioners (translators, tran­ scribers, linguists), curators (content selectors), language technologists (software engineers, NLP practitioners) and evaluators (machine translation model analysts). Stakeholders involved in educa­ tion, legal, public relations (PR), customer service, media, government, health, commerce, and market research are considered to be the direct users of African NLP technologies, while the general public absorbing the output of the NLP in media and liter­ ature is viewed as indirect users of the technology. The groups which are unlikely to benefit from NLP are low-income, disabled or living outside the inter­ net penetration zone211 . Localisation Localisation, which stands for the adaptation of user interfaces and digital information to the local types of communication, culture and standards, is inevitable in order to adjust science and technol­ ogy within the diverse societies and cultures. The process of localisation is bound to the use of lan­ guage. In practical application, it implies software and content adaptation and an enterprise activity, African languages are predominantly being digitalised by local and academic communities, encompassing Africans either residing in African countries or those in diaspora, as well as linguists and academics210
  • 103. 102 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies whilst linguistic information is an integral part of such a process212 . The main pillars of localisation are: equipping sys­ tem deployment at local level in order to advance documents production and multilingual web con­ tent delivery; content production and translation; and adaptation of user interface to devices. Among the crucial factors are the availability of a standard­ ised orthography and local data, usefulness of local­ ised software marketing, and the user community engagement, which implies literacy and computer literacy213 . The majority of languages originating from Sub-­ Saharan Africa are written with an extended Latin script, while some languages of the Sahel zone, Northern Africa and the Horn of Africa214 use non-Latin scripts. This brings a number of challeng­ es on user interface adaptation, as the majority of website templates are originally designed for Latin scripted languages. A notable example of localisation is the adapta­ tion of operating systems and software to local context. For instance, standard Microsoft Office software is available215 in more than 100 languag­ es, with three of them (Afrikaans, Amharic and Arabic) being widespread in Africa. In addition, an additional software MS Language Accessory Pack can be downloaded in Wolof, Zulu, Igbo, Yoruba, Kinyarwanda, isiXhosa, Sesotho, Swahili, Setswana and Hausa216 . Product localisation and adaptation to the local con­ text entails significant gains to eGDP (the share of GDP that is generated by e-commerce), as indicated by online consumer behaviour217 . 212 African Languages in a Digital Age. 213 Ibid. 214 E.g. Arabic, Amharic, Tamazight, Nko script, etc. 215 Microsoft. What languages is Office available in? URL: https://support.microsoft.com/en-us/office/what-languages-is-office-available-in-26d30382-9fba-45dd-bf55- 02ab03e2a7ec 216 Microsoft. Language Accessory Pack для Microsoft 365. URL: https://support.microsoft.com/ru-ru/office/language-accessory-pack-%D0%B4%D0%BB%D1%8F-microsoft- 365-82ee1236-0f9a-45ee-9c72-05b026ee809f?redirectSourcePath=%252fen-US%252farticle%252fOffice-Language-Interface-Pack-LIP-downloads-D63007C2-E8AE- 41FD-8BFB-FCE2857010E1 217 Google. IFC. E-Conomy Africa 2020. URL: https://www.ifc.org/content/dam/ifc/doc/mgrt/e-conomy-africa-2020.pdf 218 The countries selected are: Algeria, Angola, Benin, Comoros, Democratic Republic of Congo, Ghana, Egypt, Ethiopia, Kenya, Nigeria, Morocco, Rwanda, Tanzania, Tunisia, South Africa. The spheres selected are: e-taxes and finance, business, tourism, public procurement, education, healthcare, legislation, and a platform that is supposed to serve as a one-stop shop. Case study. Languages in e-governance in Africa During the initial study of representation of African languages on official websites of public entities, web­ sites of 15 African countries were covered, including four North African countries and 11 Sub-­ Saharan countries. More than 10 websites of selected do­ mains were studied for each country218 , with the total coverage amounting to 182 websites. The availability of translation not only in any other language, but es­ pecially indigenous African languages was examined along with the methods of translation. The results show that only 41.5% of the websites provide translation in at least one language (76/183) whilst 58.5% do not have any translation (107/183). At the same time, the regional distribution suggests that North African governmental websites are almost twice as likely to have translations, as compared to e-services of Sub-Saharan countries. Overall, find­ ings of the digital linguistic landscape study show that French-Arabic and French-English pairings were the most prevalent. However, in North Africa, websites usually allow translation in European languages, mainly French despite the fact that French is not the official lan­ guage of any country in Northern Africa. Indigenous languages are available only on some Moroccan platforms, whereas in Sub-Saharan Africa the per­ centage is much higher and more than two-thirds of government websites with translations available of­ fer translation into indigenous languages (Table 1). That said, it is noteworthy that only three out of 11 Sub-Saharan countries account for 76% of websites with translation in indigenous languages – Tanzania, Ethiopia and Rwanda.
  • 104. 103 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies The most represented languages include Swahili (Tanzania, to a lesser extent Kenya), Amharic (Ethiopia), Kinyarwanda (Rwanda), and Tamazight (Morocco), whilst Somali, Afrikaans, Yoruba, Hausa, Lingala, and Malagasy are much less popular. Government portals in English-speaking countries rarely offer translation (only some 16% of the stud­ ied websites or a total of 10 out of 64) with Tanzania and Rwanda being exceptions to this rule. In Tanza­ nia, nine websites in English have a Swahili translation (45%, and there are also websites only in Swahili), whilst there are only three in Kenya (20%) and one in Nigeria (less than 10%). In Rwanda, four websites provide a Kinyarwanda translation (25%). The countries with French and Portuguese speak­ ing populations showed a similar pattern and on av­ erage are more likely to have translation than Eng­ lish-speaking countries; even so, the rate remains low (35% or 14/40 websites219 ). As for the spheres, government websites for tourists predictably more often have translations, usually in English and sometimes in other European languages or Arabic. Tanzanian, Rwandan, Kenyan and Ethiopian portals also have translations in African languages – Swahili, Kinyarwanda, Swahili and Amharic respective­ ly. Following close behind in terms of the availability of translations are government websites aimed at inte­ gration of services (i.e. “one-stop shop portals”). Indicatively, services in the educational sector are the least likely to have translation, especially in indig­ enous languages – only five out of 15 websites ex­ amined provide translation. Yet, some of them (e.g. website of the South African National Department of Basic Education) have educational content such as workbooks in native African languages. Though about one-half of websites of legislative bodies have translations available, PDF files of the documents published on the websites do not tend to have translations available in indigenous languages, which also could serve as a constraint for achieving universal legal literacy on the continent. 219 Without counting North African countries. It is worth highlighting that the stage of e-govern­ ment development does not significantly influence the linguistic landscape of services offered and does not guarantee multilingualism in the digital sphere. Existing studies of e-government routinely fail to account for this factor as a means of promoting
  • 105. 104 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies the use of digital public services and facilitating citi­ zens’ access to them and do not consider multilin­ gual provision as a way to promote social inclusion. For instance, despite being the continental leader according to the UN e-government Development Survey of 2022220 , South Africa does not provide cit­ izens with multilingual digital public service: of 11 ex­ amined websites, only two have a translation. The South African one-stop shop platform for e-servic­ es221 allows a Google-powered translation in 133 lan­ guages, including the country’s 11 official languages. The website of the South African government222 pro­ vides a translation in 11 official languages; however, it is not available on the home page, but rather only on pages with a service description. Moreover, the services are delivered predominantly in English. Whilst the same characteristic can be applied to Ghana and Kenya, which ranked in the UN E-Government Development ranking 7th and 10th on the continent respectively, the countries with the most translations available in indigenous African languages – Tanzania and Ethiopia – were ranked 26th and 43rd by the UN. By contrast, Tunisia, Morocco, Egypt, and Algeria are among the top 10 of e-government development in Af­ rica, and the countries’ governmental websites system­ atically provide translations in Arabic, French or English. 220 UN E-Government Knowledgebase. URL: https://publicadministration.un.org/egovkb/data-center 221 South African e-Services Portal. Official website. URL: https://www.eservices.gov.za/ 222 South African Government. Services for residents. Official website. URL: https://www.gov.za/services/services-residents 223 Arab Republic of Egypt. Ministry of Finance. Official website. URL: https://mof.gov.eg/en 224 Ethiopian E-Services Portal. Official website. URL: https://www.eservices.gov.et/ Regarding the methods, an automatic translation powered by Google is the most commonly used; however, since it does not translate pictures, graphs, etc., mixed methods of translation are used on some websites (e.g. website of the Egyptian Ministry of Fi­ nance223 ). Among the noted peculiarities of the digital linguis­ tic landscape of African government websites are some technical issues with the functionality of the translations, which have not been fixed over the years and therefore can be perceived as an integral feature of the landscape. For instance, even though some websites offer the translation, it does not function properly and not all the content is trans­ lated, resulting in information being provided in a mixture of two languages on the pages (Ethiopian E-Services Portal224 ). Another interesting feature applies mostly to North­ ern African countries. For instance, despite offering a translation in French or Arabic, most Algerian and some other Northern African websites do not have a button to toggle between the languages. Instead, the language can be changed via the link to the page. Based on the initial results of the study, local initia­ tives can be suggested as a means to boost the use of African languages in digital governance. Picture 1. Source: Egyptian Ministry of Finance
  • 106. 105 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies 225226 225 Ethiopian E-Services Portal. Official website. URL: https://www.eservices.gov.et/ 226 Tanzania e-Government Authority. Official website. URL: https://www.ega.go.tz/ Source: Ethiopian E-Services Portal225 Source: Tanzania E-Government Authority website226
  • 107. 106 African quest for digital sovereignty Africa 2025: Prospects and Challenges HSE University Center for African Studies Forging sovereign digital future The pursuit of digital sovereignty in Africa is a░multifaceted endeavour that cannot be reduced to mere control over data and infrastructure While these elements are undoubtedly critical, a holistic approach must incorporate various dimen­ sions, including the diversification of foreign aid sources, the mitigation of technological depend­ ency, and the assurance of reliable infrastructure. As Africa navigates its digital future, it must also prepare for potential disruptions by developing alternative solutions that ensure continuity and resilience. Central to achieving digital sovereignty is the development of human capital. Digital sovereignty cannot be realised without a robust pool of expertise and decision-makers who are equipped to address the unique challenges of the conti­ nent. This includes fostering homegrown talent capa­ ble of innovating and leading within the tech sphere. Moreover, the current stage of digitalisation pre­ sents an invaluable opportunity for African nations to collaborate and learn from one another. By shar­ ing experiences and best practices, countries can accelerate their digital agenda while fortifying the continent’s collective sovereignty.
  • 108. 107 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies The main challenges of education in Africa During the 37th African Union Summit held in Addis Ababa in January 2024, the countries of the con­ tinent, at the proposal of AU Chairperson Moussa Faki Mahamat, chose “Educate and Skill Africa for the 21st Century” as the key theme for 2024.227 228 Some of the most important goals set for 2025 and announced at the summit were to reduce the out- of-school rate to 11% for primary schools and to achieve a 46% reading proficiency rate by the end of primary school. African Union countries commit­ ted to training 79% of teachers at the pre-primary level and 85% at the primary level. These promising targets are generally achie­ vable for African countries, as they have already made notable efforts in the 21st century to im­ plement education programmes and address the challenges facing education, showing marked and sustained growth in key indicators. Howev­ er, even today the situation requires attention of those responsible for developing education poli­ cy on the continent. According to UNESCO, the current primary school enrolment rate in Africa averages over 80%, with the continent experiencing one of the largest in­ creases in primary school enrolment in the world over the last few decades (up 18 percentage points since 2000).229 230 227 Theme of The Year 2024: “Educate and Skill Africa for the 21st Century” URL: https://au.int/en/theme/2024/educate-african-fit-21st-century 228 In previous years, the themes of the year for African Union have not been education-related, in 2021 – “The AU Year of the Arts, Culture And Heritage: Levers for Building the Africa We Want”, in 2022 – “Strengthening Resilience in Nutrition and Food Security on the African Continent“, and in 2023 – “Acceleration of the AfCFTA implementation”. 229 UNESCO Institute for Statistics URL: https://data.uis.unesco.org/ 230 Musau Z. Africa grapples with huge disparities in education URL: https://www.un.org/africarenewal/magazine/december-2017-march-2018/africa-grapples-huge-disparities- education 231 UNESCO. Out-of-school numbers are growing in Sub-Saharan Africa URL: https://www.unesco.org/gem-report/en/2022-out-school 232 UNESCO Institute for Statistics URL: https://data.uis.unesco.org/ More children in Africa are now in school than ever before230 The proportion of children of lower secondary school age who are out of school has fallen from 43% to 33% over the past two decades, while for upper secondary school children it has fallen from 63% to 53%. In Africa, the rate of out-of-school children fell from 35% in 2000 to 18% in 2020, but Sub-­Saharan Africa still has the lowest enrolment rates in the world. In 2022, about 100 million primary and sec­ ondary school-age children in ­ Africa were out of school, representing 40.5% of the global total.231 Only 41% of pupils who start school complete their primary education and 23% complete se­ condary education. This is because in many parts of the continent, es­ pecially in fragile and conflict-prone regions, social barriers remain, keeping many children out of school and preventing them (especially girls) from getting an education and becoming active members of society. Equality of opportunity remains an important chal­ lenge. According to the UNESCO Institute for ­ Statistics, some 9 million girls are not receiving any education (compared to 6 million boys).232 Gender inequality starts early, with 23% of girls already out of primary school compared to 19% of boys. By adolescence, these proportions increase to 36% for girls and 32% for boys. Education is power: who teaches African leaders
  • 109. 108 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies This is underscored by the huge gaps in educatio­ nal performance between the richest and poorest segments of the population in Africa. In Sub-Saha­ ran Africa, only 13% of children from the poorest households complete secondary school, compared to 66% of children from the richest households. African countries still lack qualified teachers. Ac­ cording to UNICEF 2020 data, the average ratio of qualified teachers per country in Sub-Saharan Afri­ ca was 89% at the primary level and only 80% at the secondary level. Experts estimate that 15 million new teachers will be needed to meet the demand for schooling in Africa by 2030.233 At the same time, the problem remains complex. With­ out solving the issues of security, infrastructure deve­ lopment, development of road links, investments in connectivity,andtheneedtoimprovethequalityoflife, it is impossible to fully solve the problem of education. In this context, urbanisation is playing a pivotal role in the African continent, influencing not only eco­ nomic development, but also education. Urbani­ sation has led to increased learning opportunities 233 2022 Global Multidimensional Poverty Index URL: https://hdr.undp.org/content/2022-global-multidimensional-poverty-index-mpi#/indicies/MPI 234 van Maarseveen, R. (2021). Urbanization and educational attainment: evidence from Africa. Available at SSRN 3836097. 235 Bold, T., Filmer, D., Martin, G., Molina, E., Stacy, B., Rockmore, C., ... Wane, W. (2017). Enrollment without learning: Teacher effort, knowledge, and skill in primary schools in Africa. Journal of Economic Perspectives, 31(4), 185-204. 236 Digital Skills in Sub-Saharan Africa Spotlight on Ghana URL: https://www.ifc.org/content/dam/ifc/doc/mgrt/digital-skills-final-web-5-7-19.pdf 237 The Future of Jobs and Skills in Africa URL: https://www3.weforum.org/docs/WEF_EGW_FOJ_Africa.pdf 238 UNESCO Institute for Statistics URL: https://data.uis.unesco.org/ for African youth by providing easier access to schools.234 Moreover, according to researches, liv­ ing in an urban environment improves literacy rates by 4-5%, emphasising that longer schooling leads to better learning outcomes also.235 But still low levels of attainment mean that children in Africa are less prepared for future work than their counterparts in the rest of the world. The labour market mismatch could become even more serious in the near future, as according to the World Bank, more than 230 million jobs in Sub-Saharan Africa are expected to require digital skills by 2030.236 In addition, one of the most important challenges for education in Africa is its inefficiency and inability of graduates to take up jobs in the labour market. The World Economic Forum estimates that at the current level of educational development, only 52% of the continent’s working-age population will be able to complete secondary education by 2030.237 According to the latest data from the UNESCO, the literacy rate among young people (aged 15-24) in Sub-Saharan Africa averages about 77%, which is the lowest in the world.238 According to the UNESCO Institute for Statistics, the largest numbers of primary school-age children out of school in 2020-2021 were in Ethiopia (3.8 million, 22% of all children of this age in the country), Niger (1.8 million, 41%), Tanzania (1.8 million, 15%), South Africa (0.92 million, 12%), Burkina Faso (0.88 million, 25%), Senegal (0.8 million, 27%), Chad (0.6 million, 22%). The largest number of secondary school-age children out of school in 2020-2021 was in Niger (3 million, 78% of all children of this age in the country), Cameroon (2.3 million, 56%), Côte d’Ivoire (1.9 million, 46%), Burkina Faso (1.9 million, 55%), Chad (1.8 million, 66%), Mozambique (1.7 million, 44%), Guinea (1.3 million, 62%), Benin (0.9 million, 47%). According to the UNDP education index, which is a part of the Multidimensional Poverty Index for October 2022,233 Niger, Mali, Chad, Burkina Faso, South Sudan, Djibouti and Sudan are among those lagging behind in terms of the quality of education. Leading states on the continent include Mauritius, South Africa, Seychelles, Egypt, Tunisia.
  • 110. 109 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies This is explained by the persistence of poor infra­ structure, social, economic and cultural factors that significantly reduce not only the number of students but also their ability to effectively study. In gene­ ral, African countries with the exception of Algeria, Egypt, Ghana, Kenya, South Africa and the sparsely populated island states face similar problems. Given that school education is considered the most important factor in shaping the rest of a person’s life, the situation in Africa remains extremely chal­ lenging. Improving the quality and accessibility of education will determine Africa’s participation in the process of restructuring the global division of labour that has already begun. According to expert estimates, by 2030, China could lose 85-100 million jobs in labour-intensive industrial sectors by 2030, and a significant propor­ tion of these jobs could be shifted to Africa.239 The current demographic patterns also present an opportunity for countries of the continent to leve­ rage soon, as this high proportion of young popula­ tion will not last forever. While 60% of Africa’s population was under the age of 25 in 2020, by 2050 around 50% of Africans will belong to this age group. 239 Jobs lost, jobs gained: What the future of work will mean for jobs, skills, and wages URL: https://www.mckinsey.com/featured-insights/future-of-work/jobs-lost-jobs-gained- what-the-future-of-work-will-mean-for-jobs-skills-and-wages 240 TRANSFORMING EDUCATION IN AFRICA URL: https://www.unicef.org/media/106691/file/Transforming%20Education%20in%20Africa.pdf 241 Kirui, O. (2019). The complementarity of education and use of productive inputs among smallholder farmers in Africa. ZEF-Discussion Papers on Development Policy, (277). 242 A paradigm shift in Farmer Field Schools methodology in Eastern Africa URL: https://www.fao.org/news/countries-good-practices/article/en/c/1382854/ UNICEF estimates that by 2050, the number of peo­ ple under 18 in Africa will reach 1 billion, representing 40% of all children and adolescents in the world.240 However, in order to harness this potential, quality education and job creation for young people must be ensured so that they can successfully adapt to the labour market and contribute to the Africaan economy.241242 On the one hand, the growing population makes Africa attractive as a potential destination for a number of industries, but imbalances, including in education, can lead to the opposite effect: not industries will be attracted to the growing and educated population within Africa, but educated ­ Africans will be attracted to other regions to work for these industries. Migration and education Moreover, the complex nature of the problem of education is not merely a question of access. Perhaps even more important is the provision of opportunities for students and graduates to further apply their knowledge in practice In this situation, possible points of growth are people for growing sectors of the economy who will be able to apply their knowledge effectively for the benefit of their countries. For example, technical education and training in agriculture is one of the key factors for effective economic and social development in African countries. Studies confirm that educational programmes for retraining farmers, how to efficiently use technological innovations such as adapted crop seeds, fertilisers, irrigation technologies, have a positive impact on productivity and propensity to innovate.241 In particular, the FAO implements farmer field schools in Africa, which are institutionalised in the national policies and extension systems of Kenya, Ethiopia, Uganda with the participation of local universities.242 Such programmes require both training existing workers and placing greater emphasis on agricultural training programmes at partner institutions.
  • 111. 110 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies This is why the ‘brain drain’, where educated African youth leave their countries in search of jobs that match their skill set, is still a major problem. African migrants play an increasing role in the econ­ omies and politics of Europe. Demographic decline, aging populations and a shrinking number of young people are reducing the number of workers in ­ European economies (expected to fall by 44 million by 2050). This reduction is expected to be replaced by, inter alia, African migrants.243 The Centre for Glob­ al ­ Development predicts that around 24.5 million mi­ grants will add to Europe’s working-age population between 2015 and 2050, of which more than 7 million will be from Africa.244 It is through this framework that European coun­ tries’ investments in education programmes in Africa should be perceived. Supporting school and univer­ sity education becomes an opportunity for them to ‘offshore‘ personnel training for their own econo­ mies. As European populations age and the cost of labour rises, it is worth waiting for this co­ operation to grow further. For example, since 2021, the Talent Partnerships initiative is being implemented, which aims to provide financial support to stimulate “mu­ tually beneficial” international mobility based on matching labour market needs and skills between the EU and partner countries. EU Commissioner for Home Affairs Ilva Johansson said in June 2021: “We need legal migration: the working age population in Europe is shrinking and many key sectors are facing skills shortages, such as health and agriculture. Talent Partnerships will help match the skills of candidates for jobs in Europe with the needs of the labour market”.245 Pilot projects on legal migration funded by the European Commission and the Migration Partner­ ship Fund (MPF) have been running since 2016. 243 Kenny C., Yang G. Can Africa Help Europe Avoid Its Looming Aging Crisis? URL: https://www.cgdev.org/publication/can-africa-help-europe-avoid-looming-aging-crisis 244 Kenny C. Good News: Africa Needs More Jobs While Europe Needs More Workers URL: https://www.cgdev.org/blog/good-news-africa-needs-more-jobs-while-europe- needs-more-workers 245 Talent Partnerships: Commission launches new initiative to address EU skills shortages and improve migration cooperation with partner countries URL: https://ec.europa.eu/ commission/presscorner/detail/en/ip_21_2921 246 Africa and Europe Facts and Figures on African Migrations URL: https://mo.ibrahim.foundation/our-research/data-stories/aef-african-migrations 247 Africa and Europe Facts and Figures on African Migrations URL: https://www.friendsofeurope.org/wp/wp-content/uploads/2022/01/AEF_Summit_African-Migrations.pdf 248 Scaling Fences URL: https://www.undp.org/publications/scaling-fences The MPF has channeled EUR 30 million to more than 40 projects in 15 EU member states and 12 partner countries (mainly Northern Africa). In this model, the migration destination country agrees to provide technology and funding to train potential migrants in targeted skills in the country of origin before they move and receives workers with the skills they need to integrate and contribute to the economy. While the programme’s organisers claim that the country of origin can receive support to train the population and increase human capital, the nature of the programme itself targeted at participants who are motivated to emigrate, so it is unlikely that many of its participants will stay in their home country. At the same time, migration may also be bene­ ficial to African countries, as even workers who leave the country often provide a major boost to the eco­ nomy of the sending country by remitting a significant portion of their foreign earnings back home (15 to 20%), which becomes a crucial fac­ tor in the foreign exchange of African countries.246 Overall, this is a ‘human capital dilemma’: every dollar transferred from Europe or the Middle East means more systemic losses for the country in the long run - shortages of skilled labour, changes in ­ demographics, culture, etc. In any case, migration policies on the part of African governments need to be calibrated more carefully. This is even more relevant considering that the ma­ jority of migrants leaving Africa are economically active, hardworking and ambitious. Thus, about 80% of African migrants are in search of better economic prospects; moreover, only 7.2% of ­ AfricanmigrantsinEUcountriesarerefugees.247 A2019 study by the United Nations Development Programme reports that African migrants are often more educated than their peers who stayed in their home countries.248
  • 112. 111 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies Those who travelled to Europe had, on average, re­ ceived three more years of education compared to their peers of the same age in the countries they left. According to the Migration between Africa and Europe (MAFE) study, Africans with higher education are more likely to migrate to Europe.249 Some researchers (e.g. Dustmann C., Theodoro­ poulos N.) have noted that children of African migrants are more successful in education than their peers in the local population.250 However, it is still noted that employment of African skilled professionals is often below their skill level upon arrival in Europe.251 African migrants were much more likely to be in skilled employment if they had studied in Europe rather than arriving after holding a skilled occupation in Africa At the same time, the gradual increase in the num­ ber of African descendants living permanently in Europe has led to an increasing number of Afri­ can descendants, or their children, taking up high positions in private companies and public institutions in European countries. Children of African migrants of the first generation who were able to get a quality education in Europe and find a qualified job are suc­ cessful. For example, in the UK, the Nigerian com­ 249 Final Report Summary - MAFE (Migration between Africa and Europe) URL: https://cordis.europa.eu/project/id/217206/reporting 250 Dustmann C., Theodoropoulos N. Ethnic minority immigrants and their children in Britain // Oxford Economic Papers, New Series. April, 2010. Vol. 62. №.2. P. 209-233. 251 Final Report Summary - MAFE (Migration between Africa and Europe) URL: https://cordis.europa.eu/project/id/217206/reporting 252 Карпов, Г. А. (2016). У Великобритании-африканское будущее? Азия и Африка сегодня, (1), 59-64. 253 Кузнецов, А. В. (2020). Экономическая деятельность выходцев из Африки в крупных странах ЕС: новые подходы. Контуры глобальных трансформаций: политика, экономика, право, 13(1), 6-27. munity is distinguished by a high level of education, and as a consequence, there are many businessmen, scientists and media workers with Nigerian roots in the country.252 The number of African migrants is high in such are­ as as health care and construction. Thus, in France, about one-half of migrant doctors came from ­Africa, mainly North Africa (the figure exceeded 7 thousand people). In Germany, Italy and the UK every sixth migrant doctor is from Africa, but if their number in the first two countries is about 2,000, in Great Britain it exceeds 15,000 doctors.253 Thus, it can be noted that some areas of the Euro­ pean labour market are becoming increasingly influenced by African descendants. In an increasing number of Europe­ an countries, African descendants are occupying important positions at the political level, including in the cabinet of mi­ nisters, and this trend is likely to increase. According to the authors’ analysis of European governments for 2024, African descendants are represented in the cabinets of the UK, France and Belgium, as well as in the parliaments of these countries. African descen­ dants are also present in the parliaments (at national and regional levels) of Germany, Ireland, Italy, Portu­ gal, Finland, Sweden and Switzerland. Illustrative cases include the Prime Minister of Wales (March 2024 to August 2024), Zambian- born Humphrey Won ap David Gething (Welsh father, Zambian mother), who has held ministerial positions in the cabinet since 2016. The parents of former British Prime Minister Rishi Sunak, similarly migrated to the island from Eastern Africa where they were born. Farnce’s youngest prime minister, Gabriel Attal, was born in France but has Tunisian ancestry through his grandfather. BelgianForeignMinistersince2022,HadjaLahbibwasborntomigrantparentsfromAlgeria.Bundestag MP Karamba Diaby, born and raised in Senegal, moved to Germany for education and stayed on, becoming one of the first two African MPs in 2013, retaining the position today.
  • 113. 112 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies The greater number of African descendants in important public positions in the three countries (the UK, France, Belgium) is not only due to a long colonial history, but also to a lesser language barrier that reduces the difficulty of assimilation for Africans in these countries. This trend under­ scores the fact that people from Africa are pla­ ying an increasing role in the political life of Eu­ ropean countries, meaning that the opportunity to play such a role in their home country was not available to them for various reasons. Higher education in Africa However, the challenges faced by education in Africa are not limited to primary and secondary education. Higher education on the continent also faces serious difficulties. Adopted by the African Union in 2015 Africa ­ Agenda 2063 and the Continental Education Strategy for Africa (CESA) 2016-2025 place higher education and research at the centre of Africa’s growth and de­ velopment. This is particularly important in the con­ text of the 21st century, where science and tech­ nology are the foundation of a knowledge-based economy. Despite the growing number of African universities, which increased from 784 in 2000 to 1,700 in 2021, there is a serious shortage of places for all school graduates. Between 2011 and 2021, university en­ rolment increased from 5% to 11% The number of Africans in tertiary education is rising – the figure has increased by more than 30% in the past de­ cade to 16.1 million (14.1% of the tertiary-age popula­ tion, 121 million in 2020), outpacing the rate of population growth (+18% over the same period). However, this is still not enough. Higher education enrolment in Africa represents only 3% of enrolments at all levels of education on the continent 254 Sub-Saharan Africa: Tertiary Education URL: https://thedocs.worldbank.org/en/doc/908af3404023a2c31ef34853bba4fe60-0200022022/original/One-Africa-TE-and- COVID-19-11102021.pdf 255 Маслов А. А. и др. Африка 2023. Возможности и риски. – 2023 and 4% of all students globally. In terms of the number of students, the leading countries in ­ Africa are Egypt (2.4 million, 28% of the tertiary age population), Nigeria (1.8 million, no data), Algeria (1.6 million, 53%), South Africa (1.2 mil­ lion, 25%), Morocco (1.1 million, 39%) and Kenya (0.6 million, 11%).254 In this context, Africa accounts for 9.2% of the world’s universities, about 1% of the world’s RD expenditure, 2.5% of the world’s researchers and scientists, and 3.5% of academic publications throughout the world. The continent is characterised by a high concen­ tration of universities in a few countries with a de­ veloped academic tradition, which is illustrated by Africa’s position in international university rankings, in which Egypt and South Africa traditionally lead by a significant margin. For example, in the QS World University Rankings 2025, which compiles a list of the world’s top 1,500 universities, Africa is represented by 40 universities (the year before there were 41, and in 2023 only 32): 15 from Egypt (two in the top 500), 11 from South Africa (of which five in the top 500), four from Tunisia, two from Nigeria, Kenya and Ghana, as well as one each from Morocco, Sudan, Ethiopia and Uganda. This is also reflected in the issue of funding of major universities. Our study reveals that South ­ African and Egyptian universities lead the list of the most well-funded universities.255 Public universities in Kenya, Nigeria, Uganda and Ghana are also on the list of the most financially endowed universities. More importantly, South African universities lead in terms of spending per student, which compares fa­ vourably with other universities on the continent. At the same time, even Africa’s largest universities face funding challenges, pushing them to actively seek external funding
  • 114. 113 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies According to the World Bank, Sub-Saharan Africa accounted for USD 3.8 billion in educational aid (39% of all funds allocated to higher education) from 2015 to 2020. There is a notable lack of funding from within ­ Africa, apart from small sala­ ries secured by the government and fee-paying students, there are still no visible initiatives from foundations and philanthropists.
  • 115. 114 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies Universities’ financial constraints are leading to in­ creased outward mobility from Africa. According to UNESCO, Sub-Saharan Africa has the world’s second highest outbound student mobility rate (4.78), behind Central Asia (16.3), while the rate in Northern Africa is close to the world average (2.7) at 2.6. Africa is one of the largest importers in the high­ er education market. The total number of African students studying abroad in 2020, according to ­ UNESCO, is 624,000 (135,000 of which are in oth­ er African countries) or 10 % of the world total. The value of higher education services for African students studying outside the continent exceeded USD 13 billion. In total, the number of students studying abroad more than doubled between 2000 and 2022. The leading countries in admitting African stu­ dents outside the continent are France (138,000), ­ China (more than 80,000), the UK (68,000), Türkiye (61,000), and the US (57,500); within Africa those are South Africa (30,000), Morocco (20,000) and Senegal (15,000). 256 Cloette N. Universities and Economic Development in Africa. URL: https://www.aau.org/wp-content/uploads/sites/9/2018/04/Universities-and-Economic-Development-in-Africa.pdf At the turn of the century, calls for the improve­ ment of African universities and the need to link higher education to development were increasing­ ly voiced internationally and at the African level. In early 2000, UN Secretary-General Kofi Annan sta­ ted that “The university must become a primary tool for Africa’s development in the new century”.256
  • 116. 115 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies With knowledge playing an increasingly important role in development, universities are seen as a cri­ tical link in national development as they are insti­ tutions that can provide an adequate foundation for the emerging knowledge economy in Africa by providing skills, competencies and knowledge that are oriented towards direct application by public in­ stitutions and influencing policies.257 University-based centres of competence, techno­ logy transfer centres are increasingly being estab­ lished in Africa, and universities are developing and commercialising software, technology and their own expertise. Universities’ development efforts also focus on helping to reduce poverty and health problems, improve agricultural production and sup­ port business development, mainly through advis­ ing public institutions. External influence on education in Africa A review of the current challenges facing educa­ tion in Africa reveals that lack of funding remains a critical challenge, so the continent continues to rely on external support for development programmes and education financing. While aid still accounts for about 5% of total edu­ cation spending in Africa, its importance cannot be overestimated. According to the OECD, growth in aid to education in Africa slowed in 2021 to USD 4.8 billion, the same as in 2020. The coronavirus pandemic contributed to this, but in 2022 there was a marked increase in aid to USD 5.7 billion.258 The majority of aid is concentrated in Sub-Saha­ ran Africa (83%), while Northern Africa has a less significant share (17%). Regarding the distribu­ tion of funds among other regions in Sub-Saharan Africa, Eastern Africa (35.5 % of all aid to ­ Africa), Western Africa (32%), Central Africa (13%) and Southern Africa (1.5%) receive the largest amount of aid. 257 Cloete N., Bunting I., van Schalkwyk F. Research Universities in Africa. URL: https://library.oapen.org/handle/20.500.12657/27492 258 OECD Data Explorer URL: https://data-explorer.oecd.org/ The World Bank is the largest donor, averaging around USD 1 billion annually, but in 2022 the amount reached a record high of USD 1.9 billion, focusing entirely on Sub-Saharan Africa. In 2022, Eastern Africa accounted for 44.6% (USD 867 million), Western Africa 38.7% (USD 752 million), Central Africa 16.4% (USD 319 mil­ lion) and Southern Africa only 0.3% (USD 5.8 million). While traditional external influences on education have centred on the financing of projects on the ground as well as the infrastructure, in recent years there has been increasing cooperation at institutional level, including collaboration between universities and university associations, the growing provision of edu­ cational scholarships, training, promotion and foreign language teaching. If we assume that the main objec- tive of aid is to secure the flow of migration and im- prove its quality, the shift in priorities is well explained.
  • 117. 116 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies European states Western countries have long had the greatest in­ fluence on education in Africa, which can be ex­ plained by their historical ties and the European role in establishing academic institutions in Africa. When African countries gained independence, they mainly adopted the education systems of the former colonial powers. The high level of European influence on education in Africa remains relevant today. European states are still the most popular destinations for African students. According to the UNESCO Institute for Statistics, more than 320,000 Africans are studying in European countries in 2022, which corresponds to about 50% of all African students studying abroad. The largest num­ ber of students study in France (138,000), the United Kingdom (68,000) and Germany (41,000). In addition to the World Bank and the US, the list of the largest donors of foreign aid to education in Africa includes France, Germany, the EU (as an institution) and the UK. According to the OECD, these actors account for about 75% of external aid to education in Africa. According to European Union data for the period 2014-2020, the EU has allocated more than EUR 1.5 billion to support education in Africa. This as­ sistance is not limited to basic education, but also includes significant cooperation in higher educa­ tion, to which European countries pay particular at­ tention. Such funding for universities provides both access to human resources and to sites for joint re­ search, which is also important for data collection. According to reports from the European Union’s Eras­ mus+ academic exchange and mobility programme: funding allocated under the programme for Sub-Saha­ ran Africa in 2021-2027 was EUR 570 million, compared toonlyEUR120millionfrom2014to2020.Thefunding for 2021-2027 will account for more than 25% of the programme’s overall total, highlighting the continent’s increasing importance. The aim of the programme is to increase annual mobility between Europe and Africa 259 6th European Union - African Union Summit: A Joint Vision for 2030 URL: https://www.consilium.europa.eu/media/54412/final_declaration-en.pdf from around 16,000 in 2021 to 105,000 by 2027. Gi­ ven the interest of European countries in skilled labour, it can be noted that the focus of aid in education remains the selection of future migrants. The importance of the educational sphere in coopera­ tion with the countries of the continent is emphasised at the highest political level. Thus, at the end of the summit of the European and African Unions in February 2022, a final declaration was adopted,259 which stressed that higher education and research are areas of joint action (where the long-term beneficiary is likely to re­ main the EU) within the framework of the Erasmus+ programme The declaration referred to the need to promote vocational education and training in Africa. An investment package was also announced to support the implementation of the African Union Agenda 2063, including education, with a focus on enhancing student mobility and employability, im­ proving quality and increasing access to the digi­ tal and information economy. The EU has allocated EUR 970 million for this purpose. Other notable in­ itiatives include the EU’s EUR 100 million allocation for teacher training for Africa, as well as the Skills and Vocational Education Training Initiative with over EUR 500 million in funding. The EU is also actively involved in other projects, notably the Global Partnership for Education organised by the WorldBank.In2021,aheadoftheG7summit,European Commission President Ursula von der Leyen announced that the EU will allocate EUR 700 million to support GPE projects. In 2023, former Tanzanian President Jakaya Kik­ wete was appointed as the first African president of the GPE Board of Directors, highlighting the continent’s im­ portance in the organisation’s activities. EU countries are the GPE’s largest donors after the UK (15%) and the US (8.2%): the European Com­ mission (12.33%), Norway (9%), the Netherlands (8.3%), Denmark (6.8%), France (6.3%). Africa is the largest recipient of financial support from the GPE. Almost all countries in Africa (except South Africa, Namibia, Botswana, Gambia, Gabon,
  • 118. 117 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies Equatorial Guinea, and Libya) are partner count­ ries and recipients of GPE support. Ethiopia, DRC, Uganda, Nigeria, Mozambique, Tanzania, Niger, ­ Somalia are among the largest recipients of part­ nership funding (USD 2.7 billion from 2003 to June 2024), receiving about 30% of all aid.260 Despite large amounts of aid, it often does not reach desired results, keeping local levels of under­ education high. Big African businesses have not yet realised the stra­ tegic importance of local universities as a potential infrastructure for expert, human resources and GR support for their business and therefore have limited in­ vestment in the universities’ development. Moreover, it has been argued that, due to over-reliance on external aid, many African governments are neither leading nor fully committed to the reform process itself.261 This il­ lustrates that funding and external aid are no guarantee of effectively overcoming the challenges facing educa­ tion in Africa. European countries are also implementing projects at bilateral level. France, for example, has been implementing campus programmes in Africa since 2017, with two pilot projects launched in Senegal and Côte d’Ivoire, offering programmes, often in partnership with local universities, allowing students to obtain a degree while continuing their studies in Africa. French universities are increasing their col­ laboration with African universities and opening branches in Africa, with École Centrale de Lyon es­ tablishing branches in Morocco and Mauritius. Since 2021, France has been implementing the Part­ nerships with African Higher Education programme through the French Development Agency (AFD). The second phase of the programme runs from 2023 involving 14 higher education institutions from Africa and 35 from France. Providing a network of partner courses via the programme costs EUR 20 million. Germany through the German Agency for Devel­ opment Cooperation and the German Academic 260 GPE Partner countries URL: https://www.globalpartnership.org/where-we-work/partner-countries 261 Woldegiorgis ET, Jonck P, Goujou A (2015) Regional HE reform initiatives in Africa: A comparative analysis with the BP. International Journal of HE 4(1): 224–253. 262 Developing equitable TNE partnerships: where to begin URL: https://www.universitiesuk.ac.uk/universities-uk-international/insights-and-publications/uuki-insights/ developing-equitable-tne-partnerships Exchange Service (DAAD) promotes programmes for higher education and supports centres of excellence. For example, since 2012 DAAD, together with the ­ Alexander von Humboldt Foundation and with funding from the Federal Ministry of Education and Research, has been supporting the Next Einstein Initiative. ­ African master’s students study applied mathematics at The Africa Institute for Mathematical Sciences (AIMS) centres in South Africa, Cameroon, Ghana, Rwanda, Senegal, Tanzania and Ghana. Non-surprisingly, the geo­ graphy of this initiative partly coincides with the ar­ chipelago of the former German colonies in Africa. In July 2024, Germany with the World Bank, agreed on a joint initiative to support education and skills development in Sahel region through the centres of excellence in the region. The UK is implementing development programmes through the DFID (Department for International De­ velopment), the British Council and UK Research and Innovation both at primary education level and also developing collaboration with the network of universities in Africa. For example, in 2023, the University of Nottingham signed a relationship development agreement with the Association of African Universities (AAU) to support research, mobility and academic collabora­ tion between the parties. The British Council has launched Innovation for African Universities (IAU), a learning and collaboration platform that brings to­ gether UK and African universities to engage and collaborate, creating centres of excellence with one UK and one African university (specifically Ghana, Kenya, Nigeria and South Africa). The initiative to deliver UK Transnational Education (TNE) through the formation of overseas campu­ ses and joint programmes with overseas universi­ ties is seen as an important part of the impact.262 In 2022, over 550,000 people were studying in UK degree programme outside the UK. Similar oppor­ tunities are present in several countries in Africa, such as Egypt, Nigeria, South Africa and Ghana.
  • 119. 118 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies These initiatives also have a business component, acting as an important revenue stream: presenting migration opportunities and well-known brands in a comfortable English-speaking environment, without there necessarily being any guarantee of quality. USA In contrast to European countries, the United States is much more focused on investment in supporting primary and basic education. The main actor in this process is the development agency USAID, which in 2021-2023 provided nearly USD 1 billion in foreign aid to Sub-Saharan Africa in the field of education. This includes USD 240 million in 2021, USD 255 million in 2022, USD 391 million in 2023 (and over USD 145 million as of July 2024).263 At the same time, there is less interaction at the high­ er education level. At the end of the US-Africa Lead­ ers Summit 2022 in December 2022 in Washington, DC, the topic of education was not prioritised. Among the most notable initiatives implemented in recent years is the University Partnership Initi- ative, mainly implemented with universities in South Africa with the prospect of expanding to other ­ African countries. The US State Department-fund­ ed initiative is aimed at exchanges of scientists and students between the parties. Since 2016, Michigan State University has been implementing an initiative called the Alliance for African Partnerships (AAP) with ten leading African universities and a network of African research institutes. There are several campuses and joint programmes of American universities operating in Africa. In par­ ticular, Carnegie Mellon University’s Rwanda cam­ pus, the first US university to offer master’s de­ grees on the continent, has been open since 2019. In May 2024, the US entered into a framework coop­ eration agreement with the Kenyan government to support university-industry partnerships to foster inno­ vation, research and job growth in STEM-related fields. 263 Foreign Assistance URL: https://www.foreignassistance.gov/
  • 120. 119 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies China264265266 At the same time, it is not only Western countries that are focusing on education to expand their in­ fluence. At the Forum on China-Africa Cooperation (FOCAC) in 2012, it was made clear that greater emphasis would be placed on education. Back in 2010, China launched the China-Africa University Cooperation Plan 20+20 partner- ship, bringing together the interaction of 20 Chi­ nese universities with 20 African universities from 17 countries. This partnership was subsequently expanded. In 2023, a new format was launched: the China-Africa 100 University Cooperation Program. 264 Young African Leaders Initiative URL: https://www.usaid.gov/yali 265 Nantulya P. China Escalates Its Political Party Training in Africa YRL: https://africacenter.org/spotlight/china-escalates-its-political-party-training-in-africa/ 266 China’s Political Schools: Expanding Influence in Africa URL: https://www.riotimesonline.com/chinas-political-schools-expanding-influence-in-africa/ In August 2023, at the BRICS Summit in South Africa, China launched the China-Africa Talent Development Cooperation Plan, aimed at training 500 principals and highly qualified vocational col­ lege teachers each year, as well as 10,000 tech­ nicians with Chinese language and professional skills and internships for African civil servants in China. China is rapidly expanding its network of Confucius Institutes, offering language and cultural courses for Africans. 66 Confucius Institutes have been estab­ lished in 46 African countries. The first was launched in Nairobi, Kenya in 2004, and South Africa hosts the most Confucius Institutes on the continent (7). Although exact statistics are not available, many stu­ The Young African Leaders Initiative (YALI) is the most notable educational programme ­ imple­ men- ted by the United States on the continent.264 This initiative was launched in 2010 under the Obama ad­ ministration. The programme includes the Mandela Washington Fellowship, a six-week training course in the US. The programme provides leadership training courses for young people between the ages of 18 and 35. Since its launch, more than 28,000 people have participated in the programme. In 2023, 700 scholarships have been awarded. Participants receive online and face-to-face training and professional development opportunities in business, civil society and public policy management, and governance. The US has opened four regional centres in Ghana, Kenya, Senegal and South Africa, which are also responsible for interaction with neighboring countries. Moreover, as of 2019, these centres have begun to jointly coordinate and collaborate under YALI Africa, a body that brings the centres together and serves as a central point for mobilising resources and ‘maintaining a unified vision and development.’ China also is implementing education and training programmes within the political sphere by building par­ ty schools in Africa: the Mwalimu Julius Nyerere Leadership School in Tanzania in February 2022 and the renovation of the Herbert Chitepo School of Ideology in Zimbabwe for the ruling ZANU-PF party in 2023. Burundi, Republic of Congo, Equatorial Guinea, Morocco, Uganda, Kenya have also expressed in­ terest for similar projects. In addition, in 2019, China launched the China-Africa Institute, which is based in Addis Ababa and aimed at training African party and government leaders.265 China also runs training programmes for African parties and government officials, both in Africa and in ­ China.TheseprogrammesareaimedatpromotingtheChinesemodelofdevelopmentandstrengthening friendly ties between states. China is expected to receive more than 50 such delegations over 2024.266
  • 121. 120 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies dents who have received language training at the institutes later continue their studies at universities in China, becoming an important area of educational cooperation. New institutional forms are being established to systematise cooperation between countries. At the first Joint Conference of Confucius Institutes in ­ Africa held in Kenya in May 2024, 16 Institutes from 9 East African countries established the East African Confucius Institute Alliance. In this context, 16 countries in Africa have incor- porated Chinese into their national education sys- tems, and about 30 universities now offer degree programmes specialising in Chinese. African students have been studying in China since the 1960s, but their numbers have increased in recent years, reaching 80,000 in 2018. In 2018, the Chinese government, as part of FOCAC, pledged to provide 50,000 scholarships for African students to pursue higher education in China over the next three years.
  • 122. 121 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies Japan Japan is also in the race to influence and support the education sector in Africa. According to the OECD, Tokyo provides more than USD 196 million in educational aid to Africa in 2022. The Japan International Cooperation Agency (JICA) has been implementing the School for All programme to strengthen education in Africa since 2004. As of 2023, the project has been implemen­ ted in 53,000 schools in eight African countries (Niger, Senegal, Mali, Burkina Faso, Côte d’Ivoire, Madagascar, Djibouti and Ghana). A feature of Japanese involvement was the use of outsourcing practices: JICA worked with government agencies to develop a tailored strategy for the local environ­ ment, providing advice and expertise rather than doing everything itself.267 From June 2020, JICA is implementing the ­ AFRICA- ai-JAPAN project, which aims to transform partner institutions on the continent into leading regional centres for science, technology and innovation. The project is being implemented at the Jomo Kenyatta University of Agriculture and Technology (JKUAT) in Kenya and the Pan African University Institute for Basic Science, Technology and Inno­ vation (PAUSTI), based at JKUAT. Projects are be­ ing implemented in applied areas important for the continent’s development: agriculture, engineering and ICTs.268 Türkiye The influence of non-Western actors has been in­ creasing in Africa in recent years, with Türkiye being one of the most active contributors. Ankara’s most visible presence in Africa are the Turkish Maarif Foundation schools. As of 2024, more than 17,500 students are in Turkish Maarif Foundation schools in 26 African countries.269 267 School for All is a key part of Japan’s educational support of Africa URL: https://japanupclose.web-japan.org/policy/p20221014_1.html 268 Waruru M. Japan-backed science hub to involve 10 African universities URL: https://www.universityworldnews.com/post.php?story=20240331163854340 269 Turkey’s Maarif schools educate over 17,000 students in Africa URL: https://www.dailysabah.com/politics/diplomacy/turkeys-maarif-schools-educate-over-17000-students- in-africa 270 Waruru M. Scholarships attracting African students to Turkey URL: https://thepienews.com/turkey-african-student-numbers-grow/ 271 Интервью Посла России в Кении в преддверии Дня дипломатического работника агентству Россия Сегодня URL: https://www.mid.ru/ru/maps/ke/1426523/ The number of schools in Africa has increased sharply in recent years, from 18 in 2016 to 125 in 2024. More than half of the schools (63) are locat­ ed in the ECOWAS region. Maarif schools offer a curriculum with elements of Turkish, including science, coding and IT ­ classes, and classes on local culture. This strategy and af­ fordable price allows the foundation to compete with other international schools in each country where it operates. Maarif Foundation schools also play a key role in attracting students to Turkish uni­ versities. But the presence is not limited to schools. There are 14 Turkish language centres of Emre Yunus Institute, and the stated goal is to open another 11. Ankara is increasingly offering scholarships for edu­ cation in Türkiye. According to the country’s foreign minister, the number of African students studying at colleges and universities in Türkiye rose to 61,000 in 2023 (of which more than 14,000 are scholarship students).270 Russia Russia is also regaining its educational influence in Africa. In the days of the Soviet Union, Moscow was actively involved in building educational infrastruc­ ture in Africa, establishing universities, schools and colleges. In recent years, Russia has focused on in­ stitutional cooperation. During the Soviet period, more than 70,000 spe­ cialists from African countries were trained. These people returned to their countries and held impor­ tant positions in the economy and public service. For example, according to the Russian Embassy in Nairobi, in Kenya every tenth doctor was educated in Russia (USSR).271
  • 123. 122 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies Today, there are a large number of Africans stu­ dying in Russia, a number that has already exceed­ ed the Soviet level, and the number of scholar­ ships awarded is increasing. In 2023/2024, more than 34,000 Africans studied in Russia and the number of state scholarships totalled 4,700 (2,300 in the 2022/2023 academic year). African students traditionally choose the follow­ ing programmes of study: medical (up to 30% of Africans students in Russia medical specialties), engineering and technology (about 20%), as well as management, finance and economics, which are specialisations with practical relevance to the development of countries on the continent.
  • 124. 123 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies Russian companies operating in Africa are involved in supporting practical education for African stu­ dents with subsequent employment as a strategy for the future (Rosatom, RUSAL in Guinea). Having significantly increased its quantitative pre­ sence in the African market (more African students now study in Russia than studied in the USSR), Russia began to offer executive education courses focusing on public administration. The first notable example here – outside of defense and security sectors – was the Winter e-Gover­ nance Knowledge Sharing Week held in December 2023 in the HSE University with the support of the Russian ­ Ministry of Finance. More than 40 African senior civil servants from 23 countries came to Moscow for train­ ing. The programme will be continued in 2024 and 2025. Other Russian organisations have also started to participate in similar initiatives. For example, the Agency for Strategic Initiatives together with the Russian Academy of National Economy and Public Administration is developing a training programme for African managerial personnel. Other Russian universities are also implementing in­ itiatives in Africa. For example, In August 2021, the Russian-African Network University (RAFU) con­ sortium was established, bringing together 12 ­ Russian universities and research centres. The RAFU educa­ tional model works as a single pool of courses and dis­ ciplines available to consortium members in Russian, English and French. In 2024, the number of Russian RAFU member universities increased to 63 and the number of African universities reached 31. The oldest Russian technical university, St. Petersburg Mining University, which is one of the leaders in the number of ed­ ucated Africans in St. Petersburg in July 2023 signed an agreement with universities from nine Afri­ can countries to create a profes­ sional community of universities Subsoil of Africa, developed for the mineral complex and aimed at improving the effectiveness of technical education in these countries. In December 2023, branches of Ka- zan Federal University and St. Petersburg State Uni- versity started operating in the Egyptian capital Cairo. Russian universities open their representative offi­ ces in African countries on the basis of local uni­ versities, which carry out preparatory work and pro­ vide opportunities for learning Russian language. As of 2023, such centres have been opened and are ope­ rating in Cameroon, Madagascar, Algeria, Tunisia, Egypt, Uganda, Seychelles. There are plans to open similar centres in South Africa, Zimbabwe, Botswana, Namibia and Mali. To sum up, we can note that Russian educational initiatives in Africa are becoming more quality-ori­ ented, advanced and flexible. Languages and the education of the African leadership Investing in higher education has long been one of the best ways to influence and indirectly control deci­ sion-making at various levels. Africa has never been an exception. Moreover, Africa has welcomed foreign in­ fluence through education, which has become a key competitive tool for former metropolises and their rivals. Metropoles invested in the education of the local elites with the aim of shaping the ruling class of ­ Africans who would serve as a link between colo­ nial power and the local population. The first generation of postcolonial leaders in Africa also grew up with European education (e.g. Leopold Sedar Senghor was educated in France, Patrice Lumumba was educated as an évolué). Nowadays the quality of education in Africa is gradually increasing, African ‘forges of talent’ are being formed, so the share of leaders educated in their own countries is steadily growing. The ‘educational sovereignty’ may become a trend for the next generations of political leaders
  • 125. 124 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies Where have the African leaders of ­ today been educated? The conducted research involved all 54 countries on the continent. Given the heterogeneity of cabinet compositions, the following key ministerial portfolios and government positions were selected for analysis: presidents (kings), prime ministers, speakers of par­ liament (in the case of the bicameral system, speak­ ers of the lower houses were selected for accuracy), foreign ministers, finance ministers, defense ministers, interior ministers, energy ministers, higher education ministers, health ministers, agriculture ministers, mi­ neral resources ministers, ICT ministers and chief jus­ tices of the Supreme Courts. 719 African statesmen in cabinet and key government positions as of Septem­ ber 2024 made up the group we researched. Primary information was collected on the country of tertiary education (or other forms of education if spending more than one year in the country) and the languages spoken. Information was primarily collected from official sources, including govern­ ment websites, official biographies, social media profiles and their own interviews. Often, it was pos­ sible to find and confirm information in local media. Finding information on proficiency in African lan­ guages proved more difficult, so they were taken into account to a lesser extent in the analysis. In our further assessments and interpretation of the data, we will say that a certain language is spoken by “at least X” statesmen, as there is a possibility that other public figures may also speak the language, about which there is no available information in the public domain. Key findings English and French remain the dominant languages spoken by government officials and statesmen in Africa This is easily explained by the official status of these languages in most African countries. French is the of­ ficial language in 26 African countries, and in seven is administrative or de facto official language, English is the official language in 21 African countries. English is spoken by at least 456 decision-makers considered in the study (approximately 63%), while French is spo­ ken by at least 365 (approximately 50%). This is followed by Arabic, spoken by at least 164 (22%) and it is the official language in 12 ­ African countries. Portuguese is spoken by at least 67 (9%) and is an official language in five African coun­ tries. At least 45 speak Swahili (6%), the official language in three African countries. At least 27 speak ­ Spanish (3.7%) – the official language in one ­ African country, at least 22 – Amharic (3%) – the official language in one country. At least 19 speak Russian (2.6%) and at least 18 speak German (2.5%). In terms of languages which are not official in the country of origin, it is noteworthy that both English and French remain the most widely learnt languag- es among African statesmen, English is learnt as a second or third language by at least 140 African statesmen and French by at least 51 statesmen.
  • 126. 125 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies This is followed by Russian with at least 19 of the group, Arabic also learnt by at least 19 and German is familiar for 18. Spanish has been learnt by at least 14 and at least eight have learnt Dutch as a second foreign language. At least three of the group speak Japanese, at least three speak Chinese and at least 2 speak Swedish. The situation regarding the country of tertiary edu­ cation presents a broadly similar picture. Of the 719 government ministers, heads of state, jud­ ges and speakers of parliament covered in this study, not less than 114 were educated at French universities. In second place is the rest of Africa, with at least 109 African statesmen having studied in other African countries. Next is predictably the United Kingdom, with 94 leaders having studied there. Meanwhile, in third place among the coun­ tries are the USA, with 78 leaders educated in the US universities. No fewer than 41 of them were educated in Portugal, and if in the first three coun­ tries these are representatives of various states, not always reflecting the colonial past, then in Por­ tugal are mainly educated representatives of Portu­ guese-speaking Cabo Verde, Angola, Guinea-Bis­ sau, Sao Tome and Principe. The next most popular destination for education was the first African country on the list, South ­Africa, where 39 statesmen were educated (12 national, and 27 from other states). This reflects the high level of local higher education and universities from South Africa also top the list of the most endowed univer­ sities in Africa. South Africa as an educational desti­ nation has gained the greatest popularity with neigh­ bouring countries: Mozambique, Namibia, ­ Eswatini, Botswana, but also with Kenya and Tanzania. No less than 21 received their higher education in Cameroon, (12 from Cameroon, nine from other countries) it is a popular destination with Franco­ phone leaders from Chad, Central African ­Republic, the Republic of Congo. Kenya is similarly ­ popular, with no fewer than 21 leaders (13 Kenyans, eight from other countries) educated in Kenya, ­ ranging from regional neighbours Uganda, Sudan and ­ Somalia, to Liberia and Malawi. Ethiopia and Egypt, recorded the same score of 21 leaders each. In the case of Ethiopia, the number includes mostly Ethiopians (14), but also representatives of neighbouring Eritrea (6), who were educated when the countries were part of the same state. In Egypt, on the other hand, the geography is more diverse, with representatives from Arab countries: Sudan, Mauritania, Libya and Djibouti. 17 leaders studied in Uganda (13 national and four from Rwanda and South Sudan); Morocco hosted education of 15 leaders, eight of them from abroad, mainly neighbors (Mauritania, Senegal, Comoros). Russia (USSR) was also among the top ten most pop­ ular destinations, with 20 statesmen having been ed­ ucated there. Russia as a destination was popular with leaders from Angola, Namibia, Mali, ­ Mozambique and the Republic of Congo, countries that maintained a trusting dialogue with the Soviet Union. It is followed by Canada, where at least 18 states­ men from Africa (mainly from Francophone Guinea, ­ Gabon, Burkina Faso, Burundi) studied, Germany with 13 (statesmen from different African regions), Belgium with 12 (from Rwanda, DRC, Burkina Faso, Burundi), Netherlands with 11 (from Egypt, Namib­ ia, Ghana), Spain with nine (mainly from Equatorial Guinea). Five leaders each studied in Malaysia, Italy and Cuba (mainly representatives of Portuguese-spea­ king Angola, Sao Tome and Principe, Guinea-Bissau). It is noteworthy that a relatively low representation of the group studied were educated in Australia (4), India (4), China (3), Japan (3). It can be assumed that in the coming years, given the large num­ ber of scholarships provided by these countries, peop­ le who studied there may become more rep­ resented. In the following, we propose to examine the main ministerial posts and government positions to iden­ tify where the leaders responsible for the most ­ important areas of state development in Africa have been educated.
  • 127. 126 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies In most African states, presidents (kings) rep­ resent full-fledged heads of state. Thus, most ­ African heads of state to date have received part or all of their education outside their home coun­ tries (46 statesmen). A significant number of Af­ rican leaders (43%) were educated in the former colonial powers, and the absolute minority strict­ ly in their home country (13%), while as many as 17 heads of state were educated in other ­ African countries, which is also a significant indicator (32%). Among African heads of government (prime min­ isters) who studied abroad we can note the domi­ nant position of France (13), where representatives of francophone and Portuguese-speaking count­ ries (Mozambique, Sao Tome and Principe) were educated, and the fact that among the heads of government only six (15%) were trained in other African countries (South Africa, Togo, Cameroon, Benin, Morocco). The majority of security-linked ministers studied in their home countries. 40% of them were edu­ cated strictly in their home countries. This may be due to the fact that most of them come from military backgrounds, which traditionally are more likely to be trained in their home countries and further received supplementary training abroad. 37 ministers of defence in Africa were educated in their home country (at least partly), while only 16 African ministers of defence were educated strict­ ly outside their home countries. 38 African minis­ ters of the interior were educated in their home countries (at least partly), while only 14 of them strictly abroad. The judicial systems of countries are also ­ mostly headed by people who have been ­ domestically edu­cated: 39 African chief justices (76%) were educated in their home countries (at least partly), while 12 of them studied only abroad (24%). The same situation with the speakers of parliament in African countries, where 33 statesmen were edu­ cated in their home countries (65%), while 18 (35%) were educated strictly abroad. Interestingly, it is the finance and economics sector in Africa that appears to be most influ- enced by studying abroad (89%). The majority
  • 128. 127 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies
  • 129. 128 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies of finance ministers were educated abroad – 48 mi­ nisters, with only six of them (11%) being ed­ ucated only in their home country. This empha­ sises that most professionals in this field had to seek more opportunities for education outside their home country. Similar situation with African foreign ministers, mostly edu­ cated outside their home countries – 38 minis­ ters, with 16 of them studying only in their home country (29%). Based on the data collected, it can be noted that the vast majority of ministries and countries are headed by highly educated professionals who have received higher education both at home and abroad
  • 130. 129 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies Only ten of the statesmen considered in the study do not have tertiary education or the fact that they have it is disputed; yet, these statesmen have gained significant experience that they employ as part of their public service. While 472 of 719 leaders considered in the study had obtained one of their degrees in their home country, at least 223 of them had also studied abroad. 249 of them received their education only in their home country without studying abroad, while 237 received their education only abroad. Several major conclusions can be drawn from the findings. Firstly, at the level of African leaders and leading African government ministers, the key roles are played by people educated in the former metropo­ lises who speak English and French. This is also due to the fact that current political elites are on aver­ age over 55 years old, but these trends may begin to change in the coming years, given the rise of non-Western states in Africa as well as intra-African student mobility. Secondly, a notable number of individuals in Afri­ can leadership received their education in other African countries, which is also a notable factor in education that will also increase in importance with the further development of higher education in the continent. Thirdly, it can be noted that in many areas, there is a notable importance of local education, which in one way or the other was received by about 2/3 of the group considered in the study. Fourth, the higher the level of local education in a country, the more often national leadership is edu­ cated in their own country without travelling abroad (e.g. South Africa, Cameroon). This emphasises the need for further investment and development of higher education in African countries in order to strengthen their own sovereignty and create effective governance solutions Who is going to teach next generation of African leaders? Education continues to be a significant challenge and a space of opportunities for African states. The future of the continent’s economic, political and social development lies in successfully overcoming the challenges facing Africa in education. Transformations in the ICT sector offer new oppor­ tunities to address the challenges of education in Africa. It is directly linked to solving the continent’s infrastructure problems, developing digital tech­ nologies, increasing access to such services for the local population and the growing number of African youth. Whatisrequirediscontinuedandsustainedinvestment in infrastructure, support for initiatives aimed at building the necessary competences, sus­ tainable formats of interaction and ensuring the effective functioning of local institutions, and the deve­ lopment of educational policies that support these changes.
  • 131. 130 Education is power: who teaches African leaders Africa 2025: Prospects and Challenges HSE University Center for African Studies At the same time, Africa’s growing and highly promising higher education sector remains un­ derinvested, both by governments and local big business. While most of South Africa’s leading universities still exist in isolation from the rest of Africa and are closely tied to the former met­ ropolises, the research shows that universities in the rest of Africa remain vastly underfunded even in terms of the purchasing power of the population – most universities in other countries (Nigeria, as an example) have a huge potential for growth. In the field of education at all levels, deeper strategic planning is needed, including identify­ ing priority areas consistent with national strate­ gic goals. Such areas could include agriculture, medicine, engineering and programming, STEM. It is the mismatch between the level and quality of education and the needs of the labour market that leads to the outflow of the most promising personnel outside Africa. External involvement in supporting educational pro­ grammes within Africa also needs to be more care­ fully monitored to ensure that this deep integration into the educational process does not become a stimulus for brain drain, but only complements the needs of African countries themselves. African countries need to invest more in educational sovereignty. Despite widespread international support, most external actors are ultimately interested in obtai­ ning skilled workers for their own countries, which con­ tributes to ‘brain drain’ and increased migration from Africa. The opportunities for African countries and en­ trepreneurs are growing and external assistance needs to be managed, which can be an important part of edu­ cational sovereignty and have a positive impact on the development of the entire continent. Given the continued high level of external influ­ ence on key education processes in Africa, initia­ tives aimed at strengthening domestic African solu­ tions to emerging challenges should be supported.
  • 132. 131 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies How do think tanks around the globe perceive Africa? We define a think tank as “an institute, corporation or group organised for interdisciplinary research with the objective of providing advice on a diverse range of policy issues and products through the use of specialised knowledge and the activation of net­ works”272 . Think tanks serve as both objects of analysis and important political actors in the system of inter­ national relations. On the one hand, think tanks create narratives about Africa based on ideas that dominate among political and economic elites. On the other hand, an analysis of think tanks publica­ tions allows us to identify the main attitudes that ruling elites, the private sector and NGOs, rely­ ing on the expertise of intellectuals, follow when taking decisions interacting with African countries. Thus, they simultaneously influence the political processes. This chapter relies on a qualitative analysis of ar- ticles that were published by think tanks in 2024 and the second half of 2023 (although in some cases the analysis period was somewhat extended due to lack of information) and also mentioned the word ‘Africa’ in the title or text. Our survey covered more than 300 publications. The sample was stratified by ‘global poles’. Thus, we surveyed publications of think tanks registered in the United States, Europe, China, India and Russia. For each global pole, five think tanks were selected. When forming the sample, we relied on data from the Global Go To Think Tank Index Re- port of the University of Pennsylvania, the latest version of which was published in 2020273 . The in­ dex authors catalogued 11,175 think tanks around 272 Britannica. Think Tank. URL: https://www.britannica.com/topic/think-tank 273 James G. McGann. 2020 Global Go To Think Tank Index Report. URL: https://www.bruegel.org/sites/default/files/wp-content/uploads/2021/03/2020-Global-Go-To-Think- Tank-Index-Report-Bruegel.pdf the world. For each global pole, we selec­ ted the top five think tanks based on their position in the ranking. Unfortunately, a couple of times we had to abandon this strict scheme of sampling for methodological reasons. Firstly, in some cases the top five included think tanks that either focused on too specific mat­ ters (Urban Institute, USA) or did not cover Africa in their publications during the period under review (several think tanks from the top five for India). Se­ condly, due to technical limitations, we considered publications only in English, Russian and French. Vision of Africa in the mirror of think tanks around the globe
  • 133. 132 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies For this reason, we had to ex­ clude some of the top five Chinese think tanks, since they publish their materials only in Chinese. Thirdly, the Russian think tank market has undergone significant chan­ ges in recent years, so only in this case centres for analysis were selected based on the authors’ ex­ pertise. We have reflected the metanarratives inherent in the think tanks of each of the poles on two-dimen­ sional spaces. The discourse of risks is almost completely absent in the publications of Chinese think tanks. They perceive Africa as a space of opportunities which is almost the same case with Russia, while India sticks to a more balanced approach. At the same time, Eu­ rope and the US to a much greater extent tend to view Africa as it is, without references to the rela­ tions between ‘global players’. Europe, to a much greater extent than other regions of the world, views Africa as a source of risks. The US shares almost the same attitude
  • 134. 133 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies China views Africa almost exclusively in a global context While Russia occupies a middle position and India is located between them. India, Europe and especially China are interested in Africa as a promising partner for trade and investment The US sees Africa as a storehouse of natural re­ sources, and Russia is quite balanced in this issue, striving for all forms of cooperation. Moreover, Russia and China occupy the extreme position in terms of ‘Africa receives – Africa gives’. On this scale, the extent to which national think tanks write about what the continent can give to the outside world is reflected as well as to what extent they are focused on what it can get from it. Experts from Russia and China focus mainly only on ques­ tions about what they can give to Africa, keeping silent about what they can receive in return. India and, somewhat more clearly, the US, on the contrary, mostly write about what Africa can offer to them and other countries. Europe is located in the middle, but somewhat gravitates towards ‘Africa receives’. In terms of ‘cooperation-confrontation’ logic India clearly assesses the continent as a room for coopera­ tion among all interested parties, Russians experts al­ mostalwayspursuethenarrativeofAfricaasaspacefor the confrontation between foreign powers, which may be explained by the fact that right now this country faces strong pressure from the US and Europe in terms of economic and financial sanctions all around the globe as well as attempts to prevent governments of the developing world from cooperation with it. The US and, especially, China are also closer to the confrontational pole. Europe generally shares the views of Indian experts, trying to push the decision-makers towards the reas­ sessment of its current policy on the continent. It is also noteworthy that Russia writes about the interests of Western countries in Africa more of­ ten than about BRICS countries interests in Africa. China, on the contrary, pays somewhat more atten­ tion to BRICS, focusing mostly on the role of South Africa in the club as well as prospects for the in­ clusion of some new African countries, while India maintains a balanced position, and Europe and the US are more interested in their own prospects. Finally, there is a slight bias in all poles towards dis­ cussing Africa in economic rather than security terms. For example, China almost does not touch on security (at least in English-language materials). In addition, Europe is much more likely than others to talkabouthumanitarianissuesonthecontinent,andthe US is also focused on this rather than the business pole. Methodological note on think tanks interest in Africa If the website’s built-in search engine allowed a time limit for searching, we entered the search query and either counted the articles manually or copied the number representing the quantity of target articles. Otherwise, the results were arranged chronologically and then counted manually. However, the sheer number of articles mentioning Africa does not tell us anything about the ex­ tent of a think tank’s interest in the continent. To avoid this problem, three comparative categories were added to the analysis: the number of articles mentioning the words ‘Europe’, ‘America’ and ‘Asia’. So, for each think tank, we came up with the four values, which were then converted into percentages of the total number of articles mentioning any of the keywords. In addition to calculat­ ing the shares for each think tank, the average level of interest in Africa, Asia, America and Europe across the five global poles was also calculated.
  • 135. 134 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies
  • 136. 135 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies Russia and India are much more balanced, although they tend towards the ‘Africa and business’ extreme. China overwhelmingly discusses only business. Russia and Europe are slightly more biased towards security than the others In addition to meta-narratives, one may also assess each think tank’s interest in Africa by counting the number of articles mentioning the keyword ‘Africa’. We did this for the period from August 2023 to Sep­ tember 2024: the raw numbers were later transformed into the shares indicating the think tanks’ interest in different world regions. Finally, the average interest towards Africa for each global pole was calculated. China’s interest in different geographic regions out­ side of Asia is almost perfectly balanced. The level of interest of local think tanks in Africa is 19, roughly the same for Europe (17.3) and the Americas (17.4). For European think tanks, Africa is the second prio­ rity destination after the Europe itself: on average, 18.6 out of all articles mention Africa, followed closely by Asia (16.1), while the interest in the Americas is significantly lower (12.9). The United States think tanks are writing relatively rarely about their home region, the Americas (37). In­ terest in Europe is only 9 percentage points lower, at 27.8. Moreover, for US think tanks, Asia is a higher priority than Africa: 21.1 interest points versus 14.1. As our meta-narrative analysis suggested, Indian think tanks show the strongest interest in Africa, at 20.2. This is still lower than the think tanks’ interest in Europe (23.2), but significantly higher than in America (15.9). Russia shows the most interest in America (36), fol­ lowed by Europe (25.3), Asia (20.8) and Africa (17.9). If we compare the interest in Africa across the global poles, India will occupy the first place with an index of 20.2, followed by China with 19. Europe shows slightly less interest with a figure of 18.6, Russia is quite close with 17.9. The US comes in last with 14.1. However, all the values for each of the global poles are relatively close to each other. Therefore, the main takeaway from this study may be that by 2024, all global players – without exception – have realised the importance of studying Africa. At the think tank level most involved in studying Africa in the sample is the Dutch Clingednael Institute, closely followed by the Center for China and Globalization, and the Indian Gateway House. The top also includes oneRussianthinktank,the Valdai Discussion Club,with a score of 26.7. Notably, there is not a single American think tank among the centres most interested in Africa. However, almost all of them are located in the middle of the ranking. Among the institutes least interested in Africa, one can find the China Institute of Internation- al Studies (CIIS), Indian Delhi Policy Group, Russia in Global Affairs, Institute of International and Strategic Studies of Peking University (IISS)andSpanishElcano Royal Institute. Calculating the average interest of think tanks in dif­ ferent regions around the world shows that Africa is of interest to them overall at 17.96 points out of a possible 100, Europe at 28.3, America at 23.84 and, finally, Asia at 29.9. Given that Africa’s current economic and politi­ cal role in the world is much lower, this interest can be considered extremely high and linked to projections of the continent’s growing role in world politics.
  • 137. 136 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies
  • 138. 137 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies China: business is business, global game is global game When analysing the image of Africa in the pub­ lications of Chinese think tanks, several features inherent to the intellectual centres of this country should be taken into account. Firstly, Chinese think tanks are the most closely intertwined with the state, so their opinion should be considered as a reflection of the attitudes of the state apparatus or one of the many influence groups within the CPC (Communist Party of China). Secondly, analytical groups rarely post English-language publications on their websites, and those that are published should be perceived primarily as a broadcast of China’s po­ sition for an international, rather than domestic audience. This may create some bias but does not completely exclude the op­ portunity for analysis. One of the most prominent narratives present in the discourse of Chinese think tanks is the constant comparison of the Chinese and Western policies in Africa Thus, it is argued that Chinese loans are more beneficial for the countries of the continent, as Chinese banks primarily focus on promoting the comprehensive development of borrowing count­ ries (i.e. infrastructure development and industrial growth). It is implied that Chinese investments lead to increased productivity and, ultimately, finan­ cial returns. At the same time, Western banks and governments are much more focused on financial market conditions (i.e. credit ratings), making them more susceptible to cycles in the global economy and, thus, a less reliable source of financing274 . In addition, the political conditionality of US energy and economic programmes is emphasised275 , and 274 Xiaoyang Tang, Shuai Pan. Impact of market-based financing on Africa’s debt and development. URL: https://link.springer.com/article/10.1007/s42533-024-00164-7 275 Yu Hongyuan. The US is seeking to form an exclusive energy club based on its alliances and partnerships which will impact on the global transition. URL: https://www.siis.org. cn/sp/15391.jhtml 276 Jin Liangxiang. U.S. Motives in the Red Sea Go Beyond Bringing Stability. URL: https://www.siis.org.cn/Commentary/15458.jhtml 277 Wang Yi. Self-Confidence and Self-Reliance, Openness and Inclusiveness, Fairness and Justice, and Win-Win Cooperation. URL: https://www.ciis.org.cn/gjwtyj/ ywqk/202404/t20240407_9217.html 278 Zhou Yuyuan. Does China’s oil-for-infrastructure lending model in Africa need a rethink? URL: https://www.siis.org.cn/Commentary/15613.jhtml 279 Zhao Minghao. The belt road initiative and U.S.-China competition over the global South. URL: http://en.iiss.pku.edu.cn/info/1015/3591.htm skepticism is expressed regarding the US ability to resolve security problems in Africa – e.g. in the Red Sea276 . It is acknowledged that the EU is actively re­ thinking its policy in Africa, but so far these efforts are held back by the “Cold War mentality”277 . It is important to note that criticism of Western ap­ proaches does not mean idealising Chinese policy in Africa. For example, there is an open discussion about the shortcomings of loans secured by Afri­ can natural resources, as fluctuations in commodity prices can complicate loan repayments278 . Moreo­ ver, criticism of external efforts to ensure security on the continent does not mean that China is trying to offer its own approaches. There is no doubt that for Chi­ nese think tanks, Africa is an arena of geopolitical competition (but not open confrontation). Ana­ lysts mainly talk about this in terms of the Global South and the Glob- al North. It is acknowledged that the Global South, of which Africa is a key component, is dissatisfied with the current world order and is ready to make efforts to change it, while China is po­ sitioned as the clear leader for developing countries. As for the role of the Global North in this process, think tanks promote two competing narratives in this regard. On the one hand, it is mentioned that the EU and the US are trying to drive a wedge between the countries of the Global South and compete with the Belt and Road Initiative with their own investment and economic programmes. On the other hand, it is mentioned that “Africa is non-Western, but not an­ ti-Western”279 , which implies the coexisten­ ce and even cooperation of various geopolitical poles on The topic of China exporting security to Africa is almost completely absent from the analysed publications
  • 139. 138 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies the continent. At the same time, Chinese think tanks do not put much focus on the substantive prospects of cooperation with Russia, the US or Europe. Russia is mentioned only in the context of BRICS as one of its core members. To a much greater extent than all other global poles, China is focused on cooperation with African countries within the framework of international institutions and agreements Many analytical materials are devoted to the potential expansion of BRICS and the role of the organisation in the continent’s development. It is emphasised that African countries and BRICS share a common histor­ ical experience, as well as the fact that this organisa­ tion can play an important role in strengthening the continent’s voice in the interna­ tional arena280 . The G7 is perceived as an asso­ ciation competing with BRICS for influence in the Global South. In addition, at­ tention is paid to the G77 (China sees itself as the leader of this group281 ), as well as the African Union. Chinese think tanks express hope that Chi­ na can benefit from the African Continental Free Trade Area (AfCFTA) and also call for considering the possibility of a China-Africa Continental Free Trade Area, CAFTA282 . Chinese intellectuals are quite transparent in de­ fining the country’s national interests on the con­ tinent: trade and sales of Chinese goods. Howev­ er, the situation with the Belt and Road Initiative seems a little more ambiguous. Think tanks pay great attention to describing the benefits that Af­ rica can gain from cooperation within the frame­ work of this initiative, but do not describe at all how this programme will enrich China itself. In addition, economic plans noticeably prevail over descriptions of humanitarian projects, although think tanks also write about sharing experiences 280 Haibin Niu. A Greater Voice for Developing Countries. URL: https://www.siis.org.cn/Commentary/15108.jhtml 281 Yuan Sha. G77+China to Play a Bigger Role in the Global South Agenda. URL: https://www.ciis.org.cn/english/COMMENTARIES/202309/t20230918_9072.html 282 Zhuo Li. Prospects for China–Africa continental free trade area (CAFTA). URL: https://link.springer.com/article/10.1007/s42533-023-00148-z 283 IFRI. After the Failure in the Sahel, Rethinking French Policy in Africa. URL: https://www.ifri.org/en/publications/briefings-de-lifri/after-failure-sahel-rethinking-french-policy-africa in public administration, fighting poverty, and tal­ ent management. Last but not least, Chinese think tanks are charac­ terised by their attention to the continent in the context of world politics and the interests of the great powers, but events within the continent itself seem to remain terra incognita for analysts: it is difficult to find publications that would describe the internal politics, conflicts or economic changes within a single African country. It is highly likely that in the Chinese intellectual context, materials of this kind are treated as im­ polite and colonial-looking. Therefore, Chinese experts try to avoid the discussion of African do­ mestic affairs in public. EU and UK: we failed, but we will become better In 2024, European think tanks were most focused on rethinking Western policies in Africa, this process has been going on in Europe since decolonisation and seems to be never-ending. First of all, the trig­ ger for this new wave of interest towards rethinking European approaches were recent developments in the Sahel region. The unexpectedness of this turnaround is empha­ sised, as is the inability of the EU and the United States to quickly find common grounds with new rulers of Sahel countries283 . France is recognised as the main ‘loser’ in this context. Despite the fact that the think tanks represent various count­ ries (Spain, Belgium, Great Britain, France, the Nether­lands), most authors share the idea that the era of unconditional dominance of the West China prefers to present Africa in a ­ long-term macro perspective, without going into the details of current events
  • 140. 139 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies on the continent is firmly in the past: “external ac- tors – and in particular Western governments – have consistently overestimated their ability to influence and effect real change in the region and have to become more modest in their objectives”284 . This is complemented by a discussion about how the number of international actors active in Africa, as well as their interest in expanding their presence in the region, has increased. Some authors note that the developing countries often view the EU as “self-serv­ ing, hypocritical and postcolo­ nial”285 . It is also acknowledged that, in seeking to resolve con­ flicts on the continent, Western governments have often made deals with elites that have not benefited citizens. Typically, such ar­ guments end with calls for the recognition of grea­ ter African agency as well as for more flexible and people-centered strategies for engagement on the continent. External actors operating in Africa are most often described in terms of competition rather than conflict However, there are notable exceptions. Spanish think tank Elcano notes that the Global South is a battleground between the West on the one side and China and Russia on the other, positioning Spain as a possible vanguard of this clash286 . Anoth­ er intriguing implication of the Global South and Global North division for European analysts is that the two groups of countries have competing inter­ ests in the global economic system: the South’s growth model is built on the sale of resources, while the North is increasingly focused on the export of technology. Finally, if the reference country for China is the United States, then European think 284 Clingendael. Stabilisation and the Central Sahel. URL: https://www.clingendael.org/publication/stabilisation-and-central-sahel 285 ELCANO. Europe and the Global South. How to gain influence and credibility in a complex world. URL: https://www.realinstitutoelcano.org/en/analyses/europe-and-the- global-south-how-to-gain-influence-and-credibility-in-a-complex-world/ 286 ELCANO. Spearhead?: Spain, Europe and the battle for the global South. URL: https://www.realinstitutoelcano.org/en/policy-paper/spearhead-spain-europe-and-the-battle- for-the-global-south/ 287 Bruegel. While Africa’s economic relations with China are hyped, its relationship with the EU is more favourable. URL: https://www.bruegel.org/newsletter/while-africas- economic-relations-china-are-hyped-its-relationship-eu-more-favourable 288 Bruegel. Global trends in countries’ perceptions of the Belt and Road Initiative. URL: https://www.bruegel.org/working-paper/global-trends-countries-perceptions-belt-and- road-initiative 289 ELCANO. The geopolitics of the global energy demand shift. URL: https://www.realinstitutoelcano.org/en/analyses/the-geopolitics-of-the-global-energy-demand-shift/ tanks, in turn, are concerned about comparing Eu­ ropean policies with Chinese ones. A competitive advantage for Europe is that trade with it is more balanced and surplus for Africa, in addition, Europe is still able to provide more direct investments on the continent287 . Much attention is paid to the Belt and Road Initiative. Experts urge a more sober look at its prospects and learn to separate the promises of Chinese from real actions. According to their as­ sessment, the image of the initiative in Africa is still positive, but a trend of some decline is recorded288 . It is considered both within Africa and beyond. Thus, experts discuss Africa’s contribution to the fight against climate change and note the exis­ tence of an almost insoluble conflict between the goal of transition to renewable energy and achieving universal electricity access. According to them, since African countries are primarily concerned with ensuring energy security at any cost, it would be too bold to place hopes on them to limit the use of fossil fuels in the short run289 . In addition, much attention is paid to conflicts and tensions in countries such as Ethiopia, Sudan, Libya, Mali and Nigeria, which threaten both regional stabi­ lity and can lead to an increase in the influx of refugees into the countries of the Global North. The transfer of power under military control in the Sahel countries is also perceived as an unam­ biguous threat. Among all the global poles examined, Europe most often discusses Africa in the context of humanitarian issues. Think tanks analyse human trafficking on the A significant place in the discourse of European think tanks is occupied by the risks of collective security
  • 141. 140 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies continent, smuggling290 , drug addiction291 , food and water security and gender equality292 . Consideration is being given to which resources the EU already of­ fers to the continent and can provide in the future to resolve these difficulties. Local government institu­ tions also attract the attention of think tanks. As expected, formal democratic institutions such as transparent and fair elections as well as indepen­ dent judiciary have a high importance for European intellectuals. Perhaps, compared to the other poles, Europe pays the most attention to monitoring the continent’s election campaigns. To sum up, European think tanks are concerned about reshaping the African policies of European countries and insist on the need to acknowledge the mistakes of the past. Much attention is paid to humanitarian issues, and the continent is often being considered as a source of risks for itself and the surrounding world. It is assumed that the work on eliminating these risks is the responsibility of mankind in general. China appears to be the main competitor in the issue of economic policy, but the standard assumption among think tanks is the threat it poses to European interests may be ex­ aggerated. India: cooperation matters India is perhaps the only case in which intellectuals are ready to admit that Africa not only needs foreign assistance and experience, but is also capable of bringing useful insights to external players 290 Clingendael. Niger’s Repeal of the 2015/36 Anti-Smuggling Law. URL: https://www.clingendael.org/publication/nigers-repeal-201536-anti-smuggling-law 291 Clingendael. Deadly drug Kush haunts West Africa. URL: https://www.clingendael.org/news/deadly-drug-kush-haunts-west-africa 292 Clingendael. Young South Sudanese Women as Community Change Agents. URL: https://www.clingendael.org/news/young-south-sudanese-women-community-change-agents 293 ORF. G7’s African pivot: Energy, migration, and beyond. URL: https://www.orfonline.org/expert-speak/g7-s-african-pivot-energy-migration-and-beyond 294 ORF. India-Africa education partnership holds the key to a prosperous future. URL: https://www.orfonline.org/expert-speak/india-africa-education-partnership-holds-the- key-to-a-prosperous-future 295 CPR India. The Politics of Slums in the Global South: Urban Informality in Brazil, India, South Africa and Peru. URL: https://cprindia.org/books/the-politics-of-slums-in-the- global-south-urban-informality-in-brazil-india-south-africa-and-peru/ 296 Hindy Centre. Citizens and the State: Policing, Impunity, and the Rule of Law in India. URL: https://www.thehinducentre.com/incoming/citizens-and-the-state-policing- impunity-and-the-rule-of-law-in-india/article67887312.ece 297 ORF. How does an expanded BRICS benefit India? URL: https://www.orfonline.org/expert-speak/how-does-an-expanded-brics-benefit-india 298 Gateway House. West must listen to emerging middle powers. URL: https://www.gatewayhouse.in/west-must-listen-to-emerging-middle-powers/ 299 ORF. China’s conflict resolution mechanism in Africa: Mediation with Chinese characteristics. URL: https://www.orfonline.org/expert-speak/china-s-conflict-resolution- mechanism-in-africa-mediation-with-chinese-characteristics 300 ORF. Shrinking Chinese demand, loan volumes weaken Africa’s growth prospects. URL: https://www.orfonline.org/expert-speak/shrinking-chinese-demand-loan-volumes- weaken-africa-s-growth-prospects Indian think tanks are the most ardent supporters of non-aligned values and call for a balanced inter­ national policy for Africa. Analysts consider this a true sign of sovereignty of the continent: “it is time for African leaders to show their agency and avoid taking sides”293 . Moreover, India is perhaps the only case in which intellectuals are ready to admit that Africa not only needs foreign assistance and experience, but is also capable of bringing useful insights to external players: “partnership between India and Africa should be a two-way street”294 . For think tanks, African experience in addressing the issue of slum growth295 and ensuring the rule of law (in the case of South Africa) is important296 . India places a strong emphasis on cooperation rather than confrontation. Experts say their coun­ try aims to move towards a multipolar but peaceful world order, calling for BRICS, for example, to be a platform for balanced dialogue rather than an anti-Western bloc297 . There are also many analysts who advocate fruitful cooperation between the West and the Global South298 . Despite the generally peaceful discourse, China’s policy in Africa has left some authors openly irrita­ ted. One analyst recalls Xi Jinping bragging about Bei­ jing’s “non-interference” in African affairs, and then shows that this statement is far from the truth299 . However, other publications that mention China generally provide a balanced and neutral analysis of economic developments on the continent, primarily the Belt and Road Initiative300 . The largely neut­raltonedoesnotpreventIndi­ an experts from analysing current conflicts that affect the continent.
  • 142. 141 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies Thus, the ORF research center predicts an inevitable clash of interests between the UAE and Saudi Ara- bia in Africa301 , and the Delhi Policy Group analyses the consequences of the Ukrainian crisis and prob­ lems with grain supplies for Russia’s image among African countries302 . Moreover, Indian think tanks are joining the chorus of voices noting the fail­ ures of French and US policies in Sahel, and the withdrawal of some states from ECOWAS is being called the “West African Brexit”303 . Unlike China, which clearly claims to be the leader of the Global South, India rather positions itself as a lobbyist for the countries of the Global South. For example, Indian analysts credit their country with establishing the position of the African Union as permanent member of the G20304 . The country is said to be committed to the ideas of pluralism and advocacy of the interests of the South at interna­ tional level, ready to defend peace, prosperity and sustainability. One of India’s key competitive advantages on the continent appears to be its ability to supply cheap medicines and share health expertise with African countries. According to experts at the Delhi Policy Group, the supply of millions of vaccine doses du­ ring the pandemic has allowed India to confirm its status as a global power305 . Another point of pride is the systems for measuring the competency of healthcare providers that are now being used in 20 countries in Sub-Saharan Africa306 . However, huma­ nitarian projects remain much less important for In­ dia than the prospects for trade with African count­ ries, which are discussed much more often. Indian think tanks rarely talk about the domes­ tic politics of African countries, but a notable ex­ 301 ORF. UAE and Saudi Arabia’s agricultural diplomacy in Africa: Competition, cooperation and its strategic implications. URL: https://www.orfonline.org/expert-speak/uae-and- saudi-arabia-s-agricultural-diplomacy-in-africa-competition-cooperation-and-its-strategic-implications 302 Delhi Policy Group. Global Horizons. URL: https://www.delhipolicygroup.org/publication/global-horizons/global-horizons-4945.html 303 ORF. The Alliance of Sahel States: A regional crisis in troubled West Africa. URL: https://www.orfonline.org/expert-speak/the-alliance-of-sahel-states-a-regional-crisis-in- troubled-west-africa 304 Gateway House. India’s G20 Presidency: Furthering India-Africa Ties. URL: https://www.gatewayhouse.in/events/indias-g20-presidency-furthering-india-africa-ties/ 305 Delhi Policy Group. East Asia Explorer. URL: https://www.delhipolicygroup.org/publication/east-asia-explorer/east-asia-explorer-4932.html 306 CPR India. Policy in Action- Health. URL: https://cprindia.org/policy-in-action-health/ 307 Gateway House. South Africa goes to the polls. URL: https://www.gatewayhouse.in/south-africa-goes-polls/ 308 Heritage. Africa in Focus: Shifting the Paradigm Together. URL: https://www.heritage.org/global-politics/report/africa-focus-shifting-the-paradigm-together ception to this rule is South Africa, whose recent elections have attracted much attention307 . Among external players that do not claim the status of a ‘global power centre’, the actions of Italy and Japan in Africa are mentioned. From their point of view, the continent, whose importance for international politics has grown dramatically in recent years, should become a platform for cooperation of all interested forces. African countries themselves are being pushed towards non-alignment and balancing between various centres of power. These efforts can be supported by India as a lobbyist for the interests of the Global South and a link between them and the West. US: minerals, national security and humanitarian aid In the context of the upcoming presidential elections, it is noteworthy how Africa is viewed by Republican-leaning and Democratic-leaning US think tanks. Experts from the conservative Herit- age Foundation are convinced that the US should reconsider its policy towards the continent: it is argued that despite large-scale financial aid to African countries, most of them remain poor and demonstrate low rates of economic growth. The authors of the Republican think tank sug­ gest focusing on trade and investment rather than direct aid308 . In addition, in their view, the United States should refuse to cooperate with countries that do not support its foreign policy. Indian think tanks are broadcasting one of the more balanced views of Africa of the present and future
  • 143. 142 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies First of all, this concerns South Africa: “Pretoria sup­ ported Gaddafi, Castro and Mugabe; sold weapons to al-Assad and Putin; is now forming alliances with China, Iran, and Russia; and supports Hamas”309 . Res­ ponsibility for the failure of US policy in Sahel is placed on the administration of Joseph Biden310 . Thus, if Don­ ald Trump wins the election, the likelihood of the United States reducing direct financial and humanitarian aid to Africa, as well as reconsidering long-term alliances on the continent, in­ creases. Democratic think tanks, citing increased activity in Africa by China and Russia, are discussing the possibilities of strengthening the po­ sition of NATO there. Although the importance of the continent for the future of the alliance is not in question, some experts urge caution in this regard: it is acknowledged that for young Africans NATO is associated with outdated colonial and post-colonial systems. In general, US think tanks share the senti­ ments of their European colleagues regarding the fact that residents of many African countries are disappointed in ‘democracy’ and cooperation with the West. It is noted that the real winners of formal democratisation have often been the ruling elites, and many citizens have not seen any of the widely advertised benefits of democracy311 . It is predicted that in the near future, the US go­ vernment will be faced with difficult trade-offs: to adhere to its obligations to protect democracy, which means refusing to cooperate with regimes that have gained power non-electorally, or to ac­ commodate these regimes to a certain extent, main­ taining strategic and economic access to the conti­ nent, but violating the declared principles of foreign policy312 . However, the same authors predict that 309 Heritage. Time to Cut U.S. Foreign Aid to South Africa. URL: https://www.heritage.org/global-politics/report/time-cut-us-foreign-aid-south-africa 310 Heritage. Niger Coup Raises Questions About U.S. Sahel Strategy. URL: https://www.heritage.org/defense/report/niger-coup-raises-questions-about-us-sahel-strategy 311 Brookings. How African governments can regain the trust of their citizens. URL: https://www.brookings.edu/articles/how-african-governments-can-regain-the-trust-of-their-citizens/ 312 Brookings. Addressing and preventing coups in Africa: What the United States can do. URL: https://www.brookings.edu/articles/addressing-and-preventing-coups-in-africa- what-the-united-states-can-do/ 313 Brookings. Africa’s prosperity tied to investing in democracy. URL: https://www.brookings.edu/articles/africas-prosperity-tied-to-investing-in-democracy/ 314 China Global South. Africa is at the Center of U.S.-China Competition for Critical Resources. URL: https://chinaglobalsouth.com/podcasts/africa-is-at-the-center-of-u-s- china-competition-for-critical-resources Peterson Institute for International Economics (PIIE). Who Are China’s Fellow Travelers in the International System? URL: https://www.piie.com/blogs/realtime-economics/2024/who-are-chinas-fellow-travelers-international-system military governments or political leaders who violate constitutional restrictions on holding office will most likely also be unable to solve the structural problems of their countries, which will open a new window of opportunity for democratisation.313 The US discourse clearly expresses a narrative about Africa as an arena of competition between the United States and China314 and, to a much les­ ser extent, Russia. China is positioned as a potential economic hegemon of the continent. The United States do not differ from the think tanks of other poles of power in recognising the subjectivity of the Global South, as well as the fact that the new multipolar geopolitical reality requires the forma­ tion of a new approach to this group of countries. There is a call for a more restrained attitude towards the fact that many developing countries refuse to openly condemn Russia’s foreign policy. For exam­ ple, discussing nuclear weapons, experts agree that the leaders of the Global South may be frightened by nuclear weapons as such, and not by the count­ ries that possess them and could potentially use them. In addition to Russia and China, considerable attention is also being paid to other players, such as Türkiye and Japan. Several publications focus on the presence of the Gulf states, the UAE, Qatar and Saudi Arabia on the continent. Experts claim that Washington sees these countries as a natural counterweight to Russia and China, but increased Electoral democracy is still unambiguously linked by the US think tanks to economic growth. African countries are supposed to prosper only by holding regular, transparent elections, although the experts very rarely try to substantively explain this connection or simply neglect the necessity of doing so313
  • 144. 143 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies tolerance for their activity could also weaken the continent’s drive for democracy315 . Beyond geopolitics and trade, analysts view US national interests in Africa as mitigating securi­ ty risks, maintaining supply chains for minerals and supporting the continent in resolving huma­ nitarian issues. It is telling that the issue of US exports to Africa is virtually absent from public analyses. In the context of security threats, analysts may mention the activity of non-state actors316 , inclu­ ding terrorists, piracy317 and the transfer of power to non-legitimate politicians.318 Compared to other global poles the US are most concerned about the extraction of critical minerals in Africa318 This is justified by the shortage of critical mine­ rals for the production of semiconductors and re­ newable energy. For example, one text analyses the prospects for cooperation with Madagascar, Mozambique and Tanzania in the area of gra­ phite extraction. At the moment, China appears to be far ahead in the global race to build supply chains for cobalt, rare earth metals, lithium and a number of other important metals and miner­ als, although mining companies from Europe and US have a large presence in precious metals and gemstones in many African countries. As for the humanitarian dimension of US national interests in Africa, it should be noted that issues of food security319 and the development of local educa­ 315 Time. Gulf Investment Boom in Africa. URL: https://time.com/6975593/gulf-investment-boom-afric 316 Brookings Institution. Nonstate Armed Actors in 2024: The Middle East and Africa. URL: https://www.brookings.edu/articles/nonstate-armed-actors-in-2024-the-middle- east-and-africa 317 Peterson Institute for International Economics (PIIE). Beware Pirates: Challenges to Shipping Today. URL: https://www.piie.com/events/2024/beware-pirates-challenges- shipping-today 318 Peterson Institute for International Economics (PIIE). Political Unrest in Africa Threatens Global Critical Mineral Supplies. URL: https://www.piie.com/research/piie- charts/2023/political-unrest-africa-threatens-global-critical-mineral-supplies-and 319 Peterson Institute for International Economics (PIIE). Food Insecurity: What Can the World Trading System Do About It? URL: https://www.piie.com/publications/policy- briefs/food-insecurity-what-can-world-trading-system-do-about-it 320 Brookings Institution. New Trends in Africa-Asia Economic Relations. URL: https://www.brookings.edu/articles/new-trends-in-africa-asia-economic-relations 321 Brookings Institution. Championing Green Energy in Africa: A Strategy for Quick Wins. URL: https://www.brookings.edu/articles/championing-green-energy-in-africa-a- strategy-for-quick-wins 322 Brookings Institution. Should African Central Banks Pursue Digital Currencies? URL: https://www.brookings.edu/articles/should-african-central-banks-pursue-digital- currencies 323 Brookings Institution. Subnational Democracy and Local Governance in Africa. URL: https://www.brookings.edu/articles/subnational-democracy-and-local-governance-in-africa 324 Brookings Institution. Subnational Democracy and Local Governance in Africa. URL: https://www.brookings.edu/articles/subnational-democracy-and-local-governance-in-africa 325 Brookings Institution. Promoting Gender Equality in Africa Through Gender-Responsive Procurement. URL: https://www.brookings.edu/articles/promoting-gender-equality- in-africa-through-gender-responsive-procurement tion systems320 occupy an important place in it. Another distinctive feature of the intellec­ tual debate about Africa in the United States is the increased attention to energy security and cli­ mate change. Experts point out that African countries are the most vulnerable to extreme weather conditions and climate change, al­ though they are relatively little responsible for these problems. Much attention is drawn to the lack of stable access to energy in most African countries. These difficulties are proposed to be addressed through the development of hydro­ power, the exploitation of alternative energy sources321 and a more equitable distribution of financial assistance from the United States. Because of the high level of com­ petition for attention and resour­ ces between think tanks in the US, the perception of Africa in this case is distinguished by the greatest diversity of topics covered and views on the future of Africa, which are difficult to distill into coherent semantic blocks. Think tanks pay attention even to such issues that are not directly related to US in­ terests as the use of digital currencies by African banks322 , local self-governance323 , cybersecurity324 and gender equality325 . Although the US, like Europe, acknowledges the imperfection of many of its decisions regarding the continent and the significant change in the balance of power in the world, experts express hope that their country will continue to work actively in Africa.
  • 145. 144 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies From their point of view, the continental security system, humanitarian projects, trade, infrastructure, investment and energy of the continent are too dependent on support from the US and indivisible from this country, and Africa, in turn, is a source of critical minerals and one of the future drivers of global economic growth, which makes cooperation with the West inevitable. Russia: we are so back According to Russian experts, many African states have made important steps towards real sovereign­ ty and liberation from neo-colonial practices in re­ cent years326 . Russia appears to be an exporter of sovereignty327 , supporting governments pursuing independent policies. In addition to sovereign­ ty, Russia is willing to offer assistance in the fight against terrorism328 on the continent. Because Rus­ sian military presence has increased most in Sahel in recent years, this region of Africa is the most fre­ quently mentioned in articles.329 Russia’s advantage over other players on this issue is justified by the fact that it does not make political demands in exchange for aid, as is often the case with Western countries329 Being able to rely on the thesis “Russia is the only white power that has never colonised anyone in Africa”330 , which is almost omnipresent in Africa (at least in the 35+ years old generations), makes this 326 Valdai Club. В Африку бегом. URL: https://ru.valdaiclub.com/a/chairman-speech/v-afriku-begom/?sphrase_id=752363 327 Российский совет по международным делам (РСМД). Круглый стол РСМД и Института Африки РАН: информационно-культурный суверенитет стран Сахеля в условиях глобализации. URL: https://russiancouncil.ru/news/kruglyy-stol-rsmd-i-instituta-afriki-ran-informatsionno-kulturnyy-suverenitet-stran-sakhelya-v-uslov/?sphrase_id=153513930 328 Российский совет по международным делам (РСМД). Блог И. Захарова: Информационная политика в Африке. URL: https://russiancouncil.ru/blogs/i- zakharov/36491/?sphrase_id=153513930 329 Valdai Club. Благонадёжные партнёры. URL: https://ru.valdaiclub.com/events/posts/articles/blagonadyezhnye-partnyery/?sphrase_id=752363 330 Российский совет по международным делам (РСМД). Главная задача — вернуть народам Сахеля суверенитет. URL: https://russiancouncil.ru/analytics-and-comments/ columns/africa/glavnaya-zadacha-vernut-narodam-sakhelya-suverenitet/?sphrase_id=153513930 331 Российский совет по международным делам (РСМД). России необходимо укреплять финансовые и производственные позиции в Африке. URL: https://russiancouncil.ru/ analytics-and-comments/columns/africa/rossii-neobkhodimo-ukreplyat-finansovye-i-proizvodstvennye-pozitsii-v-afrike/?sphrase_id=153513930 332 Российский совет по международным делам (РСМД). Африка сейчас уже совсем другая, и мы многому можем у неё поучиться. URL: https://russiancouncil.ru/ analytics-and-comments/comments/afrika-seychas-uzhe-sovsem-drugaya-i-my-mnogomu-mozhem-u-neye-pouchitsya/?sphrase_id=153513930 333 Российский совет по международным делам (РСМД). Африканская экспансия бренда «Made in Russia» и роль РЭЦ. URL: https://russiancouncil.ru/analytics-and- comments/columns/sandbox/afrikanskaya-ekspansiya-brenda-made-in-russia-i-rol-rets/?sphrase_id=153513930 334 Российский совет по международным делам (РСМД). Картина нарождающегося мира: глобальный юг. URL: https://russiancouncil.ru/analytics-and-comments/ comments/kartina-narozhdayushchegosya-mira-globalnyy-yug/?sphrase_id=153513930 335 Российский совет по международным делам (РСМД). Основные направления сотрудничества КНР со странами Северной Африки. URL: https://russiancouncil.ru/ analytics-and-comments/analytics/osnovnye-napravleniya-sotrudnichestva-knr-so-stranami-severnoy-afriki/?sphrase_id=153513930 336 Valdai Club. Африканская турбулентность. URL: https://ru.valdaiclub.com/events/posts/articles/afrikanskaya-turbulentnost/?sphrase_id=752363 Российский совет по международным делам (РСМД). Главная задача — вернуть народам Сахеля суверенитет. URL: https://russiancouncil.ru/analytics-and-comments/ columns/africa/glavnaya-zadacha-vernut-narodam-sakhelya-suverenitet/?sphrase_id=153513930 position seem winnable. Russian intellectuals agree that cooperation with Africa should not be limited to security issues: “Given the growing interest of African countries in full-scale co-operation, Russia needs to focus on strengthening not only its mili­ tary-political but also its financial-industrial posi­ tions”331 . This process is still at an early stage: it is noted that only a very limited number of joint pro­ jects have been implemented between the 2019 and 2023 Russia-Africa summits332 . Nevertheless, the presence of the “Made in Russia” brand on the continent, as claimed by the experts, is slowly but surely growing333 . From a geopolitical point of view, think tanks are trying to overcome some ambiguity arising from numerous social, economic and cultural differ­ ences between Russia and African countries. Rus­ sia, on the one hand, is attributed to the ‘global majority’ and the Global South, on the other, it is the bearer of the ‘real’ (traditional in terms of last couple of centuries) European values, which are no longer characteristic of modern Europe334 . China in this new geopolitical reality is seen as a natural counterweight used by African countries to gain more autonomy from Europe and the US335 . Western coun­ tries themselves, in turn, are portrayed as desperately clinging to their status as the continent’s dominant powers. Some experts regard terrorist activity or protests as Western-inspired actions to maintain influence336 . As for Africa itself, the average point of view is that
  • 146. 145 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies African countries can become powerful players on the international stage by coordinating their policies and profess values close to neo-Pan-­ Africanism337 . In general, the Russian intellectual discussion about Africa can be divided into two large fields. The au­ thors belonging to the first one are emphasising global political factors shaping African affairs. Africa, like the whole world, seems to them to be a large arena of confrontation between great powers. On the continent itself, they discover zones of in- fluence and determine the most influential regional powers338 . Thanks to them, Russian think tanks write almost more often about the actions of Western countries in Africa than the European or US think tanks themselves. Most publications of this kind are devoted to France: experts note the failure of the Françafrique policy339 , the replacement of France by Russia in Sahel in security matters, and the personal mistakes of Emmanuel Macron340 . Another topic of experts from this field is neocolo­ nialism politics by the EU and the USA. It is noteworthy that even this category of experts does not imply that China and Russia act as a single coordinated force. If these countries are mentioned together, this happens al­ most exclusively in the context of cooperation on African issues in BRICS. At the same time, Western think tanks often list China and Russia with a comma, as if they have common goals and a single policy on the continent. 337 Valdai Club. Уроки второго саммита Россия-Африка. URL: https://ru.valdaiclub.com/a/highlights/uroki-vtorogo-sammita-rossiya-afrika/?sphrase_id=752363 338 ИМЭМО РАН. Regional Powers on the African Continent: Trends and Prospects. URL: https://www.imemo.ru/publications/periodical/meimo/archive/2024/4-t-68/africa- today-and-tomorrow/regional-powers-on-the-african-continent-trends-and-prospects 339 Российский совет по международным делам (РСМД). Блог И. Захарова: Информационная политика в Африке. URL: https://russiancouncil.ru/blogs/i- zakharov/36491/?sphrase_id=153513930 340 ИМЭМО РАН. Francophonie: New Approaches of Emmanuel Macron. URL: https://www.imemo.ru/publications/periodical/meimo/archive/2024/5-t-68/europe-new- realities/francophonie-new-approaches-of-emmanuel-macron ИМЭМО РАН. France: From Macron’s Revolution to Stagnation. URL: https://www.imemo.ru/news/events/text/france-from-macrons-revolution-to-stagnation 341 Российский совет по международным делам (РСМД). Африка на распутье: мировой рынок редкоземельных металлов переживает тектонические сдвиги. URL: https://russiancouncil.ru/analytics-and-comments/analytics/afrika-na-raspute-mirovoy-rynok-redkozemelnykh-metallov-perezhivaet-tektonicheskie-sdvigi/?sphrase_ id=153513930 342 Valdai Club. Россия-Африка: энергетическое сотрудничество. URL: https://ru.valdaiclub.com/a/highlights/rossiya-afrika-energeticheskoe-sotrudnichestvo/?sphrase_id=752363 343 Valdai Club. К вопросу подготовки кадров высшей квалификации. URL: https://ru.valdaiclub.com/a/highlights/k-voprosu-podgotovki-kadrov-vysshey- kvalifikatsii/?sphrase_id=752363 344 Global Affairs. ИТ-экспансия в Африку. URL: https://globalaffairs.ru/articles/it-ekspansiya-v-afriku 345 Российский совет по международным делам (РСМД). Снится ли им рокот космодрома: заметки о перспективах стран Африки в космосе. URL: https://russiancouncil.ru/ analytics-and-comments/analytics/snitsya-li-im-rokot-kosmodroma-zametki-o-perspektivakh-stran-afriki-v-kosmose/?sphrase_id=153513930 346 Valdai Club. Как Африке преодолеть зависимость. URL: https://ru.valdaiclub.com/a/highlights/kak-afrike-preodolet-zavisimost/?sphrase_id=752363 347 Global Affairs. Цифровизация в Африке. URL: https://globalaffairs.ru/articles/czifrovizacziya-v-afrike 348 E-Governance Hub. URL: https://e-governancehub.ru Representatives of the second field focus not on the grand chessboard, but on specific areas of co­ operation between Russia and Africa. Their texts are quite technocratic and often lack any geopoli­ tical pathos. Like the US, Russian think tanks pay at­ tention to rare earth elements mined in Africa, also noting China’s dominance in this area341 . They can help solve the problem of energy deficit on the continent342 . In addition, Russian think tanks write much more about cooperation in the field of education than representatives of other global poles, suggesting that the number of African students in Russian universities can be significantly increased343 . Two other unique topics mentioned almost exclu­ sively by Russian experts are digital cooperation344 and development of the space industry345 . Digital­ isation of public administration and everyday life in Africa is seen as one of the ways to overcome ine­ quality346 and ensure sovereignty by reducing de­ pendence on Western companies and countries347 . The Center for African Studies at the Higher School of Economics is doing a strategic project to share ex­ perience between Russia and Africa in this area348 . While US think tanks are characterised by the greatest diversity of topics discussed in the con­ Experts consider energy cooperation to be a much more promising idea. They emphasise Russia has unique competencies and is ready to offer almost any services, from personnel training to infrastructure construction
  • 147. 146 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies text of Africa, Russian think tanks are distinguished by the depth of their analysis of domestic political issues on the continent, especially in the area of security349 . When discussing the conflict in Libya350 or near the African Great Lakes351 analysts demon­ strate a very high level of awareness of the actors opera­ ting in the region and their interests. Overall, experts agree that Africa has become one of the top priorities for Russian foreign policy in recent years 349 ИМЭМО РАН. Islamist Terrorism in Africa in the 2010-2020s: Main Trends and Prospects. URL: https://www.imemo.ru/publications/periodical/meimo/archive/2024/4-t-68/ africa-today-and-tomorrow/islamist-terrorism-in-africa-in-the-20102020s-main-trends-and-prospects 350 Российский совет по международным делам (РСМД). Игра в бирюльки на ливийском поле (Часть 3). URL: https://russiancouncil.ru/analytics-and-comments/analytics/ igra-v-biryulki-na-liviyskom-pole-3/?sphrase_id=153513930 351 Российский совет по международным делам (РСМД). Ситуационный анализ РСМД и ИМИ МГИМО: Конфликт в районе Великих Африканских озёр — РВО и позиция России. URL: https://russiancouncil.ru/news/situatsionnyy-analiz-rsmd-i-imi-mgimo-konflikt-v-rayone-velikikh-afrikanskikh-ozer-rvo-i-pozitsiya-r/?sphrase_id=153513930 352 Valdai Club. Россия из Африки никуда не уходила. URL: https://ru.valdaiclub.com/a/highlights/rossiya-iz-afriki-nikuda-ne-ukhodila/?sphrase_id=752363 353 Центр изучения Африки НИУ ВШЭ. Африка 2023: Возможности и риски. URL: https://we.hse.ru/irs/cas/africa2023 354 НИУ ВШЭ. Африка: перспективы развития и рекомендации для политики России. URL: https://globalaffairs.ru/wp-content/uploads/2021/11/doklad_afrika_ perspektivy-razvitiya.pdf 355 Valdai Club. Russia-Africa Cooperation: Outlook and Objectives. URL: https://valdaiclub.com/a/reports/russia-africa-cooperation-outlook-and-objectives/ 356 HSE University Center for African Studies. NLNG T7: a Way to Euthanize Nigerian Power Sector. URL: https://drive.google.com/file/d/199kKtInOpwD7AGLVkKF6LQlrtu94FmX0/preview 357 HSE University Center for African Studies. E-Governance in Africa 2024: Opportunities and Challenges. URL: https://e-governancehub.ru/read-book-e-governance-in- africa-2024-challenges-and-opportunities/ Russia is ready to use the rich legacy of ties with the continent left over from the Soviet Union352 , as well as to expand cooperation in new areas. Although the awareness of the need to expand cooperation has only recently emerged, think tanks are confi­ dent that it will bring abundant benefits to both sides.353354355356357 Unlike all other think tanks discussed in this text, the HSE University Center for African Studies focuses only on Africa, which allows for a special depth of analysis. In 2023, Center for African Studies published a handbook Africa 2023: Opportunities and Challenges in Russian, dedicated to modern-day Africa, its economy, infrastructure, natural resources, security and much more. The book emphasises that Africa is a unique civilisation, which is based on network-centric unity, as well as diverse and flexible social structures. In addition, it is noted that the support for multipolarity in international relations inherent to Russian perception of the world has much in common with the African desire for apolarity as a principle of the fair world order353 . In addition, the Center pays special attention to the dynamics of Russia-Africa relations354 , noting the breakthroughs that have occurred in recent years in the field of humanitarian cooperation, educational projects, and trade and economic ties. The Russia-Africa summits played an important role in these processes. The experts of the Center for African Studies speak positively about the ability of the overwhelming majority of African countries to maintain neutrality in the Ukrainian crisis despite pressure from the West355 . The Center attaches great importance to the knowledge sharing between Russia and Africa. In par­ ticular, the Center published a whitepaper report on natural gas industry in Nigeria, where measures to develop the domestic gas market were proposed356 . In 2023, the Center within the E-Governance Knowledge Sharing Platform launched a handbook E-Governance in Africa 2024: Opportunities and Challenges357 , which became world first comprehensive study of e-governance in Africa.
  • 148. 147 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies African think tanks While this chapter focuses primarily on interna­ tional think tanks views on Africa that are located outside, it would be a shame to ignore the tre­ mendous work being done to understand the continent’s future by think tanks based in Africa itself. To do this, we selected all African expert centres from the list of Top 150 Think Tanks Around the Globe (non-US) in the Global Go To Think Tank Index Report 2020 of the University of Pennsylvania358 . The initial sample included 16 think tanks, but three of them were then exclu­ ded due to the lack of a publicly accessible web­ site, one is exclusively engaged in public opinion polls (Afrobarometer), and another five either do not publish online at all or last did it many months ago. The final list of African think tanks inclu­ ded in the sample consists of seven think tanks. Analytical materials selected were published on the websites of these think tanks mostly in Au­ gust-September 2024, then a qualitative analysis was conducted.. Perhaps the most noticeable feature of African think tanks is their depoliticisation and degeopoliticisation The vast majority of publications are devoted to is­ sues of economics, poverty alleviation, trade and re­ gionalcooperation,andnottotheactionsofexternal players on the continent or the interstate relations of African countries. Surprisingly little attention is paid to electoral institutions or intra-elite relations as well. Even if the allowance is made for the fact that African intellectuals may outsource such rea­ soning to foreign experts in order to save resources and focus on more pressing problems for them­ selves, they can still be united by a succinct thesis: not politics, but policy. 358 Bruegel. 2020 Global Go To Think Tank Index Report. URL: https://www.bruegel.org/sites/default/files/wp-content/uploads/2021/03/2020-Global-Go-To-Think-Tank- Index-Report-Bruegel.pdf 359 South African Institute of International Affairs (SAIIA). Local Opportunities and Global Disputes: Tracking Japan’s Engagement with Africa Amid Geopolitical Tensions. URL: https://saiia.org.za/research/local-opportunities-and-global-disputes-tracking-japans-engagement-with-africa-amid-geopolitical-tensions South African Institute of International Affairs (SAIIA). China-Africa Energy and Climate Cooperation: Prospects for FOCAC 2024. URL: https://saiia.org.za/research/china- africa-energy-and-climate-cooperation-prospects-for-focac-2024 360 South African Institute of International Affairs (SAIIA). The G7, South Africa, and the Sustainable Climate Agenda for Africa. URL: https://saiia.org.za/research/the-g7-south- africa-and-the-sustainable-climate-agenda-for-africa When the conversation turns to ‘big politics’, the ex­ perts manage to adhere to the principle of multilate­ ralism. The South African Institute of International Affairs (SAIIA), which was recognised as the sec­ ond-best African think tank in 2020, is a good exam­ ple of this feature. In less than two months, the centre managed to have a closed-to-public dialogue between Russian and South African experts on the future of relations between the two countries, to discuss in detail the negotiations on climate with China within the framework of FOCAC, to discuss cooperation with Japan and the G20359 . In the case of the roundta­ ble with Russian experts, it is noted that South Africa’s non-joining of Western sanctions against Russia has caused international criticism, but allowed the country to “maintain autonomy in its foreign relations”. At the same time, the experts call on Russia to “articulate how its engagement supports African-led development ini­ tiatives rather than pursuing narrow interests”. An ana­ lytical paper on relations with the G20 notes that after 2022, the organisation has become a much more tense space for consensus-building on many global issues between developed and developing economies360 .
  • 149. 148 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies Like other global poles, African experts agree that the nature of international relations has changed significantly in recent decades. They note that af­ ter 1945, Africa remained passive and accepted the geopolitical realities of the international system without an assertive, unified regional policy, while after the end of the Cold War, foreign powers paid insufficient attention to the continent361 .362 There is a growing demand for more representative and equitable global institutions that can manage the risks and opportunities of interdependence among states362 Africa must be able to integrate into these realities and take its rightful place there. Considerable attention is paid to security issues. Think tanks study the prospects for reconciliation of the conflicting parties in Sudan; discuss the deple­ tion of support for ISWAP363 , which opens a window of opportunity to solve the problem in co­ operation with local communities; note the negative impact of the conflict in Western Cameroon on the na­ tional education system; emphasise the successes of the Democratic Republic of Congo on the path to the difficult, but increasing­ ly achievable goal of national unity364 . In general, the recipe for peace in Africa proposed by experts can be summarised 361 African Centre for the Constructive Resolution of Disputes (ACCORD). The African Union’s 2063 Goal of Silencing the Guns in the New World Order. URL: https://www.accord.org.za/conflict-trends/the-african-unions-2063-goal-of-silencing-the-guns-in-the-new-world-order 362 South African Institute of International Affairs (SAIIA). Reimagining Global Economic Governance: African and Global Perspectives. URL: https://saiia.org.za/research/ reimagining-global-economic-governance-african-and-global-perspectives 363 The organisation is recognised as terrorist, its activities are prohibited on the territory of the Russian Federation. 364 African Centre for the Constructive Resolution of Disputes (ACCORD). Impact of the Ongoing Crisis on the Education of the North-West Region of Cameroon. URL: https://www.accord.org.za/conflict-trends/impact-of-the-ongoing-crisis-on-the-education-of-the-north-west-region-of-cameroon African Centre for the Constructive Resolution of Disputes (ACCORD). East Africa’s Path to Unity: Community Growth and Regional Peace Initiatives in the Democratic Republic of the Congo. URL: https://www.accord.org.za/conflict-trends/east-africas-path-to-unity-community-growth-and-regional-peace-initiatives-in-the-democratic- republic-of-the-congo ISS Africa. Is Peace Possible Between Sudan’s Warring Parties? URL: https://issafrica.org/iss-today/is-peace-possible-between-sudan-s-warring-parties ISS Africa. The End of ISWAP’s Hearts and Minds Strategy. URL: https://issafrica.org/iss-today/the-end-of-iswap-s-hearts-and-minds-strategy 365 African Centre for the Constructive Resolution of Disputes (ACCORD). The African Union’s 2063 Goal of Silencing the Guns in the New World Order. URL: https://www.accord.org.za/conflict-trends/the-african-unions-2063-goal-of-silencing-the-guns-in-the-new-world-order/#:~ 366 African Centre for the Constructive Resolution of Disputes (ACCORD). Kenya’s Historic Gen Z-Led Protests: The Issues. URL: https://www.accord.org.za/analysis/kenyas- historic-gen-z-led-protests-the-issues African Center for Economic Transformation (ACET). Ethiopia TVET Teachers Professional Competency Challenges and Policy Recommendations. URL: https://acetforafrica. org/research-and-analysis/insights-ideas/policy-briefs/ethiopia-tvet-teachers-professional-competency-challenges-and-policy-recommendations African Center for Economic Transformation (ACET). Bridging the Gap: A Renewed Employment Policy for a Generation of Ghanaian Youth. URL: https://acetforafrica.org/ research-and-analysis/insights-ideas/policy-briefs/bridging-the-gap-a-renewed-employment-policy-for-a-generation-of-ghanaian-youth African Center for Economic Transformation (ACET). Ghana Newsletter: Digital and Ecological Transition of Work for Youth Employment. URL: https://acetforafrica.org/ research-and-analysis/insights-ideas/policy-briefs/ghana-newsletter-digital-and-ecological-transition-of-work-for-youth-employment 367 African Centre for Technology Studies (ACTS). STREM Policy Brief. URL: https://www.acts-net.org/images/Publications/Policy-Briefs/CRE/STREM_Policy_Brief.pdf African Centre for the Constructive Resolution of Disputes (ACCORD). The Impacts of Climate Change on Social Cohesion and Stability in Southern Africa. URL: https://www.accord.org.za/analysis/the-impacts-of-climate-change-on-social-cohesion-and-stability-in-southern-africa ISS Africa. Africa Must Help Steer the High Seas Treaty Out of Dire Straits. URL: https://issafrica.org/iss-today/africa-must-help-steer-the-high-seas-treaty-out-of-dire-straits as the ­ formula ‘complementarity of the local and continental’. Think tanks often offer sophisticated strategies for interaction with local communities, but at the same time do not forget about security cooperation – e.g. they write about the AU Agenda 2063: Goal of Silencing the Guns365 . Compared to all others, African think tanks are distinguished by their increased interest in two problems: the in­ tegration of African youth into the labour market and environ­ mental issues. Thus, experts write about the lack of com­ petent instructors in technical specialties in Ethiopia; note the acute problem of unemployment facing Ghanaian youth and propose solving it by creating digital jobs; explain youth protests in Kenya by the government’s insufficient sensitivity to the needs of this age group366 . Environmental issues are mainly not ab­ stract, but rather are tied to specific economic problems: the authors of think tanks discuss the impact of climate change on social stability in South Africa; the continent’s participation in the High Seas Treaty; and river management by local communities in East Africa367 . Continent’s countries should achieve greater autonomy in the matter of economic and financial institutional structure
  • 150. 149 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies In macroeconomics, there is a notable thesis that, given the changed geopolitical landscape, the continent’s countries should achieve greater au­ tonomy in the matter of economic and financial institutional structure. For example, the need for an African credit agency is noted, and it is also no­ ted that the industrial policy of the United States is becoming increasingly nationalistic and securi­ tised, which has a strong impact on the continent’s trade prospects368 . In addition, there is room in the intellectual de­ bate for reflection on the impact of COVID on the continent’s economy and education sys­ tems369 ; the Kush epidemic (synthetic drug, with epidemic usage rise in Sierra Leone); women’s rights and the role of supranational institutions in supporting them370 ; the costs of illegal gold mining371 ; corruption; technology transfer (in­ cluding AI)372 ; the ineffectiveness of electoral commissions and policies towards small and me­ dium-sized businesses373 . An important common institutional feature of Af­ rican think tanks is their sources of funding. Their donors can be divided into two large groups: inter­ national institutions (the World Bank, the United Nations, OXFAM, UNICEF) and Western-based non-profit foundations and/or governments di­ rectly. For example, the following are often men­ tioned among the donors of African think tanks: the Norwegian Agency for Development Coop- eration, the Bill and Melinda Gates foundation, the Foreign, Commonwealth and Development Office of the United Kingdom, The Swedish In- ternational Development Cooperation Agency and others. 368 ISS Africa. AGOA Agoner: Risks of U.S. Trade Policy for Africa. URL: https://issafrica.org/iss-today/agoa-agoing-agoner-risks-of-us-trade-policy-for-africa African Center for Economic Transformation (ACET). Is an African Credit Rating Agency the Answer? Maybe, Maybe Not. URL: https://acetforafrica.org/research-and- analysis/insights-ideas/articles/is-an-african-credit-rating-agency-the-answer-maybe-maybe-not 369 African Economic Research Consortium (AERC). Impact of COVID-19 Pandemic on School Attendance in Kenya. URL: https://publication.aercafricalibrary.org/ items/3c3826bb-b1fb-4731-84c2-e8da752dbe06 370 African Centre for the Constructive Resolution of Disputes (ACCORD). Bringing Women to the Table: The Evolution of FemWise-Africa. URL: https://www.accord.org.za/ analysis/bringing-women-to-the-table-the-evolution-of-femwise-africa 371 IMANI Africa. An Extended Policy Brief: Gold Rush Chaos and Golden Curse. URL: https://imaniafrica.org/2024/09/an-extended-policy-brief-gold-rush-chaos-and-golden- curse-how-ghanas-political-elite-are-selling-out-the-nations-posterity-for-personal-gain 372 African Centre for Technology Studies (ACTS). Application of AI in Education in Africa. URL: https://ai4d.acts-net.org/wp-content/uploads/APPLICATION-OF-AI-IN- EDUCATION-IN-AFRICA.pdf 373 African Center for Economic Transformation (ACET). A Strategic Path to Investment and Growth for African SMEs. URL: https://acetforafrica.org/research-and-analysis/ insights-ideas/articles/abt-a-strategic-path-to-investment-and-growth-for-african-smes 374 Центр изучения Африки НИУ ВШЭ. Africa 2023 Overview. URL: https://we.hse.ru/irs/cas/africa2023 Based on the above analysis, it is quite obvious that no powers other than the Western ones support the development of think tanks and think tanks in Africa, which inevitably leads – as a minimum – to a shift of focus on topics peculiar to the agenda of Western countries. Africa in the mirror of think tanks vs Africa in the media The results presented above may be compared with the research The Image of Africa in the book Africa 2023: Opportunities and Risks, published by the Higher School of Economics in 2023374 . At that time, the images of Africa in the media of Brazil, India, Russia,China,theUS,theUK,France,Germany, Türkiye and Israel were surveyed and compared. In general, the narratives of think tanks mostly dupli­ cate the messages formed by the media, but some differences are still present. For example, regarding the frequency of mentions of foreign countries in Africa, it is striking that there is almost a complete absence of any intelligible analysis of the actions of the UK in Africa by experts, while the media (and not only British ones) write about the policy of this country on the continent quite often. Perhaps this is due to the fact that the UK no longer plays a sig­ nificant role in Africa, but the media continue to view it as a serious player out of habit. However, this claim may be questioned and explained by the number of different hypotheses. It is also noteworthy how differently the media and think tanks view the scale of Russia’s presence in Africa.
  • 151. 150 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies If in 2023 the media mostly wrote about “Russia’s return to Africa” or “increasing its presence on the continent”, conceptualising Russia as an actor in the middle of the way towards the stable presence in Africa, then in 2024 think tanks already view it as one of the most influential players on the continent However, in the majority of cases, the analysis of the media and think tanks’ publications leads to similar results. For example, the Chinese press, like expert centres, is main­ ly concerned with the politics of its own country and also pays a lot of attention to the United States.
  • 152. 151 Vision of Africa in the mirror of think tanks around the globe Africa 2025: Prospects and Challenges HSE University Center for African Studies Another interesting similarity in the variation of themes for think tanks and media is that Russian, Chinese and Indian actors tend to view Africa in the context of global economics and politics, while EU countries and the US are more inclined to view Africa ‘as it is’, detailing the internal politics of Af­ rican countries and bilateral relations within the continent in isolation from the actions of external forces. The Russian press is preoccupied with geopolitical issues. Even economic issues take on the features of an international confrontation: the economy and Africa are often mentioned together in the con­ text of the expansion of BRICS or the continent’s rejection of the dollar as a key exchange currency. On the contrary, Russian experts offer a more technocratic and down- to-earth view. US journalists write about Africa in the context of security much more often than intellectuals from the same country, and much less often mention the prospects for economic cooperation with the con­ tinent. This can probably be explained by the fact that it is much easier for the US press to explain the need for a presence on the continent by appealing to national security rather than to vague prospects for economic growth. Chinese journalists also differ from their colleagues from think tanks. The topics of healthcare, cultural exchange and tourism, which oc­ cupy a significant part of the media space, are almost completely absent from expert publications. Instead, intellectuals of their Eastern superpower focus on the economy. Probably, for both China and the United States, issues of security or humanitarian exchange are just a screen covering up purely economic interests
  • 153. 152 Identifying the DNA of African creativity Africa 2025: Prospects and Challenges HSE University Center for African Studies Ignored potential of the creative economy While discussing African cultures, the first ima­ ges that often come to mind are traditional dances, masks and rituals passed down through gene­ rations. While these elements are integral to the continent’s rich heritage, less attention is given to the growing urban art scenes, such as the Afro­beat revolution or the thriving contemporary galleries in cities like Johannesburg. Even fewer consi­ der the economic implications of Africa’s creative indust­ ries or their potential for economic diversification and growth. Discussions about Africa’s develop­ ment frequently centre around industries and commodities; yet, the continent’s post-industrial potential, particularly through creative industries, remains overlooked. Digitalisation and creative industries in Africa do not just provide more than 2 million jobs375 (5% of global cultural and creative industries jobs) but can also foster economic sovereignty by crea­ ting local wealth from African narratives, arts and ideas. Economic independence goes hand in hand with cultural sovereignty, enabling African nations to control how their stories are told and distributed globally As African cities continue to evolve, this intersection of creativity, digital transformation and urbanisation has the potential to position the continent as a major player in the global post-industrial economy. In most countries for which data is available, there has been a steady growth in the contribution of crea­ tive industries to GDP over the past 10 years. The development of technology, increased investment 375 UNCTAD. Creative Industry 4.0: Towards a New Globalized Creative Economy. United Nations Conference on Trade and Development, Geneva, 2022. and growing international inte­ rest in African culture are driving this growth. South Africa, ­ Nigeria, ­ Kenya, and Morocco are the leaders in developing the creative eco­ nomy on the continent, showing significant growth and influence in various sectors, including music, film and digital media. Creative industries in Africa face many of the same challenges that plague other sectors of the economies. Issues such as a lack of infrastructure, funding, institutional capacities, and regulations all hinder growth. Moreover, the level of education in creative fields remains low, further limiting the Identifying the DNA of African creativity
  • 154. 153 Identifying the DNA of African creativity Africa 2025: Prospects and Challenges HSE University Center for African Studies ability of the African nations to compete on a global scale. However, one of the most pressing concerns that is important to highlight is the severe data deficit. Lack of reliable, comprehensive data makes it difficult to assess the true scale of Africa’s creative industries and prevents the development of well-informed strategies for sustainable growth 376 World Bank. Private Consumption in Uganda. URL: https://data.worldbank.org/indicator/NE.CON.PRVT.CD?locations=UG 377 Росстат. BRICS Joint Statistical Publication 2023. URL: https://rosstat.gov.ru/storage/mediabank/BRICS%20Joint%20Statistical%20Publication-2023.pdf 378 Mungase, Sachin, and Satyanarayan Kothe. Analysing Consumption Patterns and Food Demand in BRICS Countries: A Differential Approach to Demand Theory and Policy Analysis. MPRA Paper No. 121431, University of Munich, 12 July 2024. URL: https://mpra.ub.uni-muenchen.de/121431/ The absence of consistent data hinders governments and investors from making decisions that could boost the creative economy, the challenge not limited to the creative sector but affecting multiple industries across the continent.376377378 Africa encompasses many of the most promising and rapidly growing markets globally, in terms of its both population and economic potential. Assessing household demand for creative goods and services plays a critical role in understanding the broadest impact of the creative economy. Families and households, as key participants in this sector, not only consume cultural products and services but also influence their production and distribution. This demand spans a range of activities, including cultural consumption – such as attending performances, visiting museums and engaging in recreational activities – and the use of leisure services. Households are active agents in the creative economy, contributing to both its financial sustaina­ bility and the cultural dynamism that drives growth. Their expenditures on creative goods and ser­ vices fuel market demand, which in turn shapes the supply and diversity of these offerings. In many countries, the increasing consumer spending and the growing accessibility of digital platforms for cultural content have expanded the avenues for cultural engagement. For example, Uganda in­ creased consumer spending to USD 32 billion equivalent in 2022 from USD 21 billion in 2012376 . Moreover, households often indirectly support the creative economy by investing in related goods, such as technological devices for streaming or attending digital concerts, or by contributing to the informal sectors of creative production through craft and local art consumption. The role of households in both the consumption and production of creative goods also brings at­ tention to the way cultural activities are embedded in everyday life. Household spending patterns reflect broader societal trends, such as urbanisation, rising literacy rates and increasing awareness of the value of local traditions. Thus, the demand for creative goods and services does not just sustain the cultural sector but also fosters innovation, diversity, and community identity. In recent years, household spending on cultural events and services in BRICS countries has ranged between 2.7% and 6% of total household consumption377 . In 2017, Brazil allocated about 2% of the total household expenditure to this category, while China spent 2.3%, and Russia allocated around 2.6%. South Africa spent approximately 1.95%, and India, with a lower figure, allocated 0.67%378 . Many African nations lack detailed data on household spending in cultural sector. This is primari­ ly due to underdeveloped statistical systems, limited infrastructure for collecting and processing such data, and economic conditions that prioritise essential needs over cultural consumption.
  • 155. 154 Identifying the DNA of African creativity Africa 2025: Prospects and Challenges HSE University Center for African Studies At the same time, the continent is a massive impor­ ter of cultural content. On platforms like Netflix, for example, despite the growing African audience, only one out of the top 10 films is African made, while the rest are dominated by Indian, Chinese, and French productions. The competition for the African mar­ kets is intensifying, as demonstrated by the growing investments from major global players. Netflix’s en­ try into Africa, mirroring its earlier move in South Ko­ rea379 , is just one example. The presence of African films in prestigious events, such as Senegalese cine­ ma at the Oscars380 and a Tanzanian author receiving the Nobel Prize in Literature381 , signals a rising recognition of African ta­ lent. Even Disney has joined the wave with its animat­ ed cyberpunk series Iwaju382 , set in Lagos, while tech giants like Google are making significant investments in African markets. Senegalese romantic drama film Banel e Adama by Senegalese screenwriter Ramata-Toulaye Sy, 2023 Animated science fiction miniseries Iwájú produced by Walt Disney Animation Studios, written by Olufikayo Adeola and Halima Hudson, 2024 379 Analyzing Digital Communication Trends. URL: https://ijoc.org/index.php/ijoc/article/download/20718/4392 380 Africanews. Senegalese Migrant’s Journey Inspires Oscar-Nominated Film. URL: https://www.africanews.com/2024/02/18/senegalese-migrants-journey-inspires-oscar- nominated-film/ 381 The New York Times. Nobel Prize in Literature Awarded to Abdulrazak Gurnah. URL: https://www.nytimes.com/2021/10/07/books/nobel-prize-literature-abdulrazak-gurnah.html 382 Disney+. *Iwaju Show on Disney+. URL: https://ondisneyplus.disney.com/show/iwaju These investments are shaping cultural narra­ tives and influencing the values of Africa’s youth. The question arises: what will the next generation ­ African generation believe in? Will they see their own beauty and potential reflected in global me­ dia, or will they be drawn to the ideas developed outside of Africa? It is crucial for Africa to foster a sense of pride in local creativity, ensuring that young people see the value in staying and building within their own communities, rather than seeking opportunities abroad. Cultural sovereignty is essen­ tial in this context. This fosters a generation that not only consumes content but also creates it, driving local innova­ tion and allowing Africa to rise as a global cultural leader. The creative industries, which encompass music, film, fashion, art and design, are rapidly developing on the African continent, becoming an important driver of economic growth and social transformation. Today, as the global economy increasingly shifts toward innova­ tion and creativity, Africa is showing significant poten­ tial in this area, gradually positioning itself among the global leaders in the creative economy. The increasing value of African contemporary artists on the global market highlights the im­ portance of creative education and investment in the continent’s cultural institutions. Many leading African artists, such as Amoako Boafo and Ben Enwonwu, have benefitted from formal art education in institutions across Africa. In recent years, the market for African contemporary art has seen exponential growth. According to the Art Basel 2023 report, African contempo­ rary artists achieved record sales in auction houses, with more than 2,700 works sold — almost double the number sold before COVID-19. The total value of these works reached USD 63 million in 2022, up from USD 47 million in 2021. The 2023 Contemporary Art Market Report includes nine African artists in the top 500 selling contemporary artists globally. This marks a significant achievement for African artists, whose presence in major auction houses has grown steadily, reflecting increasing market demand and global recognition. By investing in its creative industries, African states can control their cultural narrative, ensuring that African stories and values are told by Africans
  • 156. 155 Identifying the DNA of African creativity Africa 2025: Prospects and Challenges HSE University Center for African Studies Nigerian historical drama film Lisabi: The Uprising directed by Niyi Akinmolayan, produced by Adebimpe Oyebade and Victoria Akujobi, and written by Yinka Olaoye and Niyi Akinmolayan, 2024 Africa stands out with its music in­ dustry where genres like Afrobeat and Urban Groove have gained worldwide recognition, thereby boosting cultural exports and pro­ 383 Labinjoh, Justin. Fela Anikulapo-Kuti: Protest Music and Social Processes in Nigeria. Journal of Black Studies, vol. 13, no. 1, 1982, pp. 119–134. JSTOR, URL: http://www.jstor.org/ stable/2783979. Accessed 13 Oct. 2024. 384 Simango, John. The Paradox of Freedom and Fear in Athol Fugard’s My Children! My Africa! Imbizo, vol. 14, no. 1, 2023, 16 pages. URL: https://doi.org/10.25159/2663- 6565/12367 385 BBC. Nigerians React to Global Events in Pidgin. URL: https://www.bbc.com/pidgin/world-55656720 386 National Geographic. Bobi Wine: The People’s President. URL: https://films.nationalgeographic.com/bobi-wine-the-people-s-president 387 Box Office Mojo. Bobi Wine: The People’s President Box Office Performance. URL: https://www.boxofficemojo.com/title/tt21376900/ 388 Deadline. Hillary Clinton, Sharon Stone Support “Navalny” at Cinema for Peace. URL: https://deadline.com/2024/02/hillary-clinton-sharon-stone-cinema-for-peace-navalny- october-7-1235831358/ 389 Variety. IDA Documentary Awards 2023: “Bobi Wine: The People’s President” Wins Big. URL: https://variety.com/2023/film/news/ida-documentary-awards-winners-bobi- wine-the-peoples-president-1235831567/ moting tourism. However, evaluating the real contribu­ tionoftheseindustriestotheeconomypresentsseveral challenges. Traditional statistical methods often over­ look the unique characteristics of creative sectors, such as intellectual property and cultural assets, which results in their role being underestimated.383384385386387388389 The intertwining of culture and politics is a powerful phenomenon, especially in regions where art and expression shape public discourse. Across Africa, cultural actors have often used their platforms to address social and political issues. Opinion leaders like Nigerian musician Fela Kuti383 , whose Afrobeat criticised corruption and military rule, or South African playwright Athol Fugard384 , who highlighted the injustices of apartheid, illustrate how cultural production and political activism are closely connected. In these cases, the line between an artist and a politi­ cal actor often blurs, as cultural figures mobilise a society and contribute to shaping na­ tional political debates. A recent example of this is Bobi Wine, a Ugandan musician turned politician. Bobi Wine, born Robert Kyagulanyi, first gained popularity through his socially oriented narrative, which spe­ culates with issues such as poverty, corruption and daily life of lower-income communities. His rise from a musician to an opposition leader and his 2021 presidential run against Yoweri ­Museveni385 leveraged his fame for challenging Uganda’s long-standing political system. His story has gained international attention, leading to the 2022 documentary Bobi Wine: The People’s President, produced by Disney and Hulu386 . The film earned USD 30,263 in the do­ mestic box office and an additional USD 14,305 internationally, bringing its worldwide box office total to USD 44,568387 . Despite such a moderate performance, the documentary won two awards. At the Cinema for Peace Awards on 19 February 2024, it was named Political Film of the Year388 , and at the IDA Documentary Awards on 12 December 2023, it won the title of Best Feature Documentary389 . The involvement of Disney and Hulu in telling Bobi Wine’s story reflects how major global media platforms contribute to shaping political discourse. By spot­ lighting an opposition figure through global media, the documentary becomes a part of the broader narrative about politics in Africa. This illustrates how the media can influence political conversations on both a local and global scale. The impact of these cultural products goes be­ yond entertainment contributing to the shaping of public perceptions and political awareness. The creative industries are often mistakenly associated only with the humanitarian sphere, ignoring their economic potential
  • 157. 156 Identifying the DNA of African creativity Africa 2025: Prospects and Challenges HSE University Center for African Studies The case of Uganda shows that the dependence on foreign media platforms creates unacceptable risks of domestic political destabilisation. That is why any youth-oriented content should be hosted on regulated platforms free from foreign disruptive influences Creative industries are closely tied to urban envi­ ronments as cities have traditionally served as cen­ tres of innovation and cultural activity. These urban areas concentrate human capital, access to educa­ tion, infrastructure, and technology, making them platforms for the growth of creative clusters. In ci­ ties like Lagos, Nairobi, and Johannesburg, powerful creative hubs have already emerged, influencing not only the local economy but also the interna­ tional market. Street art by Dbongz and Senzart911. Johannesburg, South Africa, 2019. Photo by Cale Waddacor With global exports of creative industries of USD 524 billion in 2020390 Africa is well positioned to capitalise on this expanding market. The crea­ tive services sector, including advertising, market research and digital design, is also experiencing rapid growth. As African governments and in­ ternational investors continue to support digital infrastructure and creative innovation, the con­ tinent’s creative industries can play transforming role. 390 UNCTAD. Creative Economy Outlook 2022. URL: https://unctad.org/publication/creative-economy-outlook-2022 391 South Korea’s transformation from an exporter of cars and electronics to a global cultural powerhouse shows how creative industries can drive economic growth. In 2021, South Korea’s cultural exports – led by K-pop bands like BTS and global hits like “Squid Game” – generated USD 12.4 billion in export revenue, more than double the USD 4.7 billion earned from consumer electronics. These industries are not resource-dependent; instead, they thrive on human talent and innovation, which are assets that all countries possess. The creative sectors in South Korea also employ over 600,000 people, contributing to sustainable job creation, particularly for younger generations. Furthermore, these industries have bolstered South Korea’s global image, attracting tourism, foreign investment, and significantly enhancing the country’s soft power. South Korea’s success demonstrates how developing nations can leverage their creative industries to diversify their economies and foster both economic growth and cultural influence globally Definition and measurement of creative economy in Africa Creative industries are based on creative potential and the pursuit of unique cultural products. In in­ ternational practice they include art, literature, mu­ sic, cinema, theatre, television, design, advertising, video games, and digital media. The primary driving force of creative industries are intangible values – ideas, innovations, and cultural expression. In international practice the measurement of creative industries is based on concepts deve­ loped by organisations like UNESCO, UNCTAD, and the World Bank. They design methodologies to assess the contribution of these industries to GDPs, employment, and exports. The assess­ ments are based on the data related to employ­ ment, revenues from cultural products and their impact on adjacent sectors such as tourism and education. A crucial aspect of evaluating creative industries is the legal framework that defines their status and establishes support measures at the state level. The UK, for instance, was one of the first in the 1990s to introduce legislative standards to support these sectors, as well as South Korea with its K-pop phenomenon and other creative in­ dustries that contribute significantly to the coun­ try’s economy. Developing creative industries has proven to be highly beneficial for countries like South Korea391 , and this model deserves con­ sidering. Several African countries have already introduced government programmes to support creative industries and have enshrined them at the legislative level. Botswana’s recent focus on developing its crea­ tive industries comes as the country grapples with high unemployment and seeks to diversify its economy which has traditionally relied on mining.
  • 158. 157 Identifying the DNA of African creativity Africa 2025: Prospects and Challenges HSE University Center for African Studies Recognising the potential of the creative and cul­ tural sectors, the government supported initiatives such as the 13th Annual National Arts Festival392 , showcasing traditional arts while highlighting their economic potential. As noted by Tumiso Rakgare, Minister of Youth, Gender, Sport, and Culture, Botswana sees creative industries as a dynamic way to promote entrepreneurship, investment, and innovation. The festival, which attracted more than 14,000 artists this year, showcased traditio­ nal arts, such as Sebirwa dance, while emphasising the sector’s potential to contribute to economic diversification. 13th Annual National Arts Festival in Botswana, 2024 Larger economies as South Africa, Nigeria, and Kenya are able to invest in the long-term develop­ ment of their creative sectors. These nations have the financial capacity to think long-term and invest in building creative industries that contribute to na­ tional growth, whereas smaller economies are still focused on more immediate needs like healthcare and infrastructure. However, there is a divide in how African nations view the role of creative industries which is not determined by the scale of an econ­ omy. For many, the focus is on preserving pre-co­ lonial identity and culture, reflecting the broader Afrocentric philosophy. This emphasis on the past ties into cultural reclamation efforts and the need to preserve heritage. Countries like South Africa are recognising this need, allocating separate budgets for their heri­ tage promotion and preservation and the arts and culture promotion and development. Ac­ cording to its 2024/25 budget393 , significant 392 Xinhua. China’s Cultural Development in 2024. URL: https://english.news.cn/20240715/f136cd2a897d462ab9d1ab18f5959924/c.html 393 National Treasury (South Africa). National Budget 2024. URL: https://www.treasury.gov.za/documents/National%20Budget/2024/ene/FullENE.pdf 394 Swart, K., Bob, U., Nkambule, S., Gumede, A. (2018). Economic Impacts of the Touring Ventures Sub-category of the Mzanzi Golden Economy Programme in South Africa. EuroEconomica, vol. 1(37), pp. 90–103. URL: https://ujcontent.uj.ac.za/esploro/outputs/journalArticle/Economic-impacts-of-the-touring-ventures/9910307607691#file-0 395 Department of Sport, Arts and Culture (South Africa). Mzansi Golden Economy Guidelines. URL: https://www.dsac.gov.za/Mzansi%20Golden%20Economy%20Guidelines 396 National Treasury (South Africa). South Africa National Budget 2024. 397 Bob, Urmilla, Kamilla Swart, Rivoni Gounden, Amanda Gumede, and Sizwe Nkambule. (2019). Socio-Economic Impacts of Festivals and Events: A Case Study of the Mzansi Golden Economy Programme in South Africa. GeoJournal of Tourism and Geosites, vol. 27, pp. 1236-1250. DOI: 10.30892/gtg.27410-429 funds have been allocated to both sectors. For heritage promotion and preservation, the go­ vernment allocated USD 142 million. In contrast, for arts and culture promotion and development, which is aimed at modern creative industries, the allocation is USD 84 million. These budget lines highlight the country’s commitment to both safeguarding its cultural past and investing in the creative economy of the future. By 2026/27 the budget for heritage preservation is expected to rise to USD 153 million while the funding for arts and culture development is projected to increase to USD 74 million. Through the government’s Mzanzi Golden Economy subprogramme, which was launched in 2011394 as a part of combatting unemployment395 , South African government places a special emphasis on the development of art, cinema, music, and crafts. The programme in 2024 funds 15 projects to enable market access, 9 provincial commu­ nity arts development programmes, 25 national and provincial flagships, and 65 creative industry projects. In 2024 USD 63 million396 is allocated to the subprogramme. The funds are used to create 60,390 job opportunities in the cultural and crea­ tive sector. Of this allocation, USD 3.65 million is earmarked for placing 1,020 artists in schools over the next three years. The amount awarded is capped at USD 26,316 per grant per beneficiary. By 2019, in a three-year period, the Festivals and Events Grant Programme under MGE had sup­ ported 153 events across the country creating averagely 1,423 permanent jobs397 per annum in the cultural sector. Contemporary dance festival, funded by Mzanzi Golden Economy
  • 159. 158 Identifying the DNA of African creativity Africa 2025: Prospects and Challenges HSE University Center for African Studies Many African nations either lack formal policies or have only begun to address the creative sector. A common trend across the continent is the focus on cultural heritage preservation often overshadowing modern creative industries While some countries prioritise traditional arts and cultures conservation their policies do not yet fully address the potential of emerging digital and con­ temporary creative sectors. A key challenge facing the creative industries in de­ veloping economies is the sector’s informality. For instance, in countries like Zimbabwe, a significant portion of creative industry activity takes place in the informal sector398 . The ILO-UNESCO report notes 398 UNESCO and ILO. New ILO-UNESCO Report: Despite Its Potential, Zimbabwe’s Creative Economy Remains Largely Informal. URL: https://www.unesco.org/en/articles/new- ilo-unesco-report-despite-its-potential-zimbabwes-creative-economy-remains-largely-informal-and 399 South African Cultural Observatory. South Africa’s Cultural Economy. Accessed October 5, 2024. URL: https://www.southafricanculturalobservatory.org.za that 93% of creative professionals are freelancers with only 7% being salaried employees in registered enterprises. Similarly, in the music and film industry, many artists and producers operate outside formal structures, rendering their contributions invisible. Another issue is the lack of data collection. In most African countries, there are no agencies or pro­ grammes to monitor and analyse the creative eco­ nomy on a country-wide or regional level. This results in fragmented and often inaccurate data regarding the sector’s contribution to GDP. In South Africa, for example, one of the continent’s most developed economies, official data on the creative industries’ contribution to the economy only started being col­ lected in 2015 by the Department of Arts and Culture (DAC), Statistics South Africa (Stats SA), and the South African Cultural Observatory (SACO). This still does not encompass the full spectrum of cultural production. For example, sectors like informal craft industries, fashion and new media are often overlooked because they lack formal structures. The lack of comprehensive data also extends to rural and community-based cultural ac­ tivities, which are vital to the creative ecosystem but remain difficult to quantify due to their infor­ mal nature. Column of Rhythm II by Tadesse Mesfin, 2022 South African Cultural Observatory399 (SACO), which leads the effort in gathering this data, tracks contributions from sectors such as television and film production, live performance, heritage in- stitutions and visual and performing arts. These ­ areas are included because they have clearer economic outputs and more formalised struc­ tures, allowing for easier measurement through box office revenues, festival attendance and tick­ et sales. SACO is a national research and statistical
  • 160. 159 Identifying the DNA of African creativity Africa 2025: Prospects and Challenges HSE University Center for African Studies initiative launched in 2015 under the auspices of the ­ Department of Sport, Arts, and Culture, which costed USD 3.38 million in the first three years of work400 . Its primary aim is to develop a comprehen­ sive cultural information system that captures and analyses data related to South Africa’s cultural and creative industries (CCIs). Cultural and creative industries contributed USD 12 billion to South Africa’s GDP in 2020 According to the SACO 2022 study401 , the cul­ tural and creative industries contributed USD 12 billion to South Africa’s GDP in 2020, accoun­ ting for under 3% of the country’s total econom­ ic output. The largest contributors were design and creative services, valued at USD 3.8 billion, and audiovisual and interactive media, contri­ buting USD 3.7 billion. SACO supports policy­ making by providing analysis and data on the economic and social impacts of arts, culture, and heritage sectors. It operates in partner­ ship with Nelson Mandela University, Rhodes ­ University, and the University of KwaZulu-Natal. One of the major outcomes of SACO’s work is the establishment of a cultural information system, which helps policymakers and industry stakeholders make informed decisions. SACO’s efforts have also improved the geographic and sectoral understanding of the creative industries in South Africa, highlighting the concentration of creative economic activity in regions such as Gauteng (46.5% of the sector’s economic out­ put) and the Western Cape and KwaZulu-Natal contributing 14% and 17%, respectively402 . Another key observatory is the Observatory of Cultural Policies in Africa (OCPA)403 , which was established in 2002. It operates as an indepen­ dent Pan-African organisation with support from bodies such as UNESCO, the African Union, and 400 Parliamentary Monitoring Group (PMG). Meeting Overview: National Assembly Committee. URL: https://pmg.org.za/committee-meeting/25421/ 401 South African Cultural Observatory. Snapshot of the Cultural and Creative Industries in South Africa. URL: https://www.southafricanculturalobservatory.org.za/article/ snapshot-of-the-cultural-and-creative-industries-in-south-africa 402 South African Cultural Observatory. South African CCI Mapping Study: Review of Methods. URL: https://www.southafricanculturalobservatory.org.za/download/comments/1 013/6b180037abbebea991d8b1232f8a8ca9/South+African+Cci+Mapping+Study+Review+Of+Methods 403 OCPA (Observatory of Cultural Policies in Africa). Official Website. URL: https://ocpa.irmo.hr/index-en.html 404 Africanews. Burna Boy: The First African Artist with 100 Million Streams from Three Albums. URL: https://www.africanews.com/2021/05/13/burna-boy-the-first-african- artist-with-100-million-streams-from-three-albums-chartdata 405 Essence. Wizkid’s “Essence” Reaches Top Ten on Billboard. URL: https://www.essence.com/entertainment/wizkid-essence-top-ten-billboard/ others. Based in Mozambique, OCPA has a mission to monitor cultural trends and national cultural policies across Africa, with the goal of integrating them into broader human development strategies. It focuses on advocacy, information exchange and capacity-building initiatives to support cultural de­ velopment in the region. Digitalisation of creativity Digital transformation has become a cornerstone for the growth and evolution of Africa’s creative indust­ ries providing opportunities for artists, musicians, and other content creators to reach international markets. The rise in connectivity has been instrumental in em­ powering African creators to leverage digital platforms to distribute their work, engage with global audiences, and diversify their revenue streams. One of the most transformative aspects of digita­ lisation has been the ability for African musicians to bypass traditional industry bottlenecks by using streaming platforms such as Spotify, Apple Music or YouTube. Iconic African musicians like Burna Boy and Wizkid have utilised these platforms to connect with international audiences. Burna Boy’s album Twice as Tallamassedover100millionstreamsonSpotifywith­ in just a few months of its release404 , while ­ Wizkid’s track Essence became the first Nigerian song to chart on the Billboard Hot 100405 gaining massive traction through digital platforms. Spotify has played a pivotal role in showcasing African musicians with Afrobeats rapidly gaining global traction. One of the standout examples is Rema, a Nigerian artist whose song Calm Down featuring Selena Gomez made his­ tory by becoming the first African artist-led track to surpass one billion streams on Spotify.
  • 161. 160 Identifying the DNA of African creativity Africa 2025: Prospects and Challenges HSE University Center for African Studies According to Spotify data, Calm Down has garnered the most of its streams from the US, India, Mexico, Brazil, and the UK showcasing the song’s global ap­ peal406 . The official music video has also achieved re­ markable success with over 615 million views further demonstrating its ability to resonate with audiences across borders. Inaddition,Spotify’s2023Wrappeddatashowedthat Nigerian music saw a 284%407 increase in local music consumption. Rema, along with other Afro­ beats stars like Asake, continues to dominate the global music charts positioning Afrobeats as one of the most ex­ ported genres from Africa. These platforms have not only expanded the reach of African musicians but have also allowed them to directly monetise their work without relying solely on local markets, where copyright systems and licensing structures are often underdeveloped. Wizkid, photo by Nabil Elderkin The film and digital media sectors in Africa have also seen a tremendous boost due to digital platforms. 406 Forbes. Rema’s “Calm Down” Makes History as First Afrobeats Song to Surpass 1 Billion On-Demand US Streams. URL: https://www.forbes.com/sites/imeekpo/2024/06/21/ remas-calm-down-makes-history-as-first-afrobeats-song-to-surpass-1-billion-on-demand-us-streams/ 407 Spotify. 2024 Loud Clear Report. URL: https://loudandclear.byspotify.com 408 PwC. Africa Entertainment and Media Outlook 2023. URL: https://www.pwc.com/ng/en/publications/entertainment-and-media-outlook.html 409 Boomplay Music. Official Website. URL: https://www.boomplay.com 410 Universal Music Group. Audiomack Signs Licensing Agreement with Universal Music Group to Expand Global Footprint in Africa. URL: https://www.universalmusic.com/ audiomack-signs-licensing-agreement-with-universal-music-group-to-expand-global-footprint-in-africa/ Streaming giants like Netflix and Showmax have re­ cognised the untapped potential of African content and invested heavily in local production. This invest­ ment is part of a broader trend of digital platforms serving as key drivers of growth in Africa’s creative economy by facilitating content distribution and ex­ panding market access. According to PwC408 , Africa’s entertainment and media industry is projected to grow by 12% annually, outpacing global averages. A prime example is Boomplay, a Nigeria-based plat­ form that has become a key player in the Africa’s music market. With over 75 million active users409 , ­ Boomplay provides African musicians with an oppor­ tunity to enter the global stage, generating stream­ ing revenue and attracting attention of international produ­ cers. The case proves that creative industries thrive even in environments where access to re­ sources is limited, and traditions dominate modern forms of expression. Telecom partnerships provide better network cove­ rage and improved bandwidth in remote areas. ­ Audiomack, a music streaming and discovery platform signed a licensing agreement with Universal Music Group (UMG) in 2022, enabling access to UMG’s catalogue for Audiomack users across 16 African countries, including Nigeria, South Africa, Kenya and Ghana410 . Boomplay is a music streaming platform focusing on African artists. It has become a crucial tool for musicians across the continent. This streaming platform is owned by Transsion Holdings , a Chinese smartphone manufacturer (which also owns TECNO, Infinix and Itel) and NetEase, a major Chinese internet company. This app is pre-installed on millions of smartphones sold by Transsion across the continent. In 2020 African music on the platform grew by 60% underscoring the interest in African culture both on the continent and beyond. Boomplay continues to expand its presence across Africa by forming strategic partnerships with telecom companies, aimed at making its vast music catalogue more accessible to users. By collaborating with telecom providers such as AirtelTigo in Ghana, Boomplay has created affordable subscription models that allow users to access its vast music catalogue through their mobile accounts eliminating the need for credit cards which many people in rural areas lack.
  • 162. 161 Identifying the DNA of African creativity Africa 2025: Prospects and Challenges HSE University Center for African Studies This expansion aims to help African artists reach broader audiences and strengthen the streaming ecosystem on the continent. Audiomack has more than 20 million monthly users globally and has played a significant role in boosting the reach of ris­ ing African stars such as Omah Lay. MTN’s partner­ ship with Audiomack in Nigeria is another example of this model, allowing users in remote regions to stream music with minimal data costs, thereby ma­ king their entertainment affordable. Digitalisation has enabled the growth of e-com­ merce platforms in the fashion and art sectors. ­ African fashion designers, who once relied on phys­ ical shopfronts and local markets, can now display their work globally through platforms like Instagram, TikTok and Shopify. The ability to sell directly to consumers has significantly increased the visibility of African fashion on the global stage. For example, African designers have been featured at major fash­ ion shows in Paris, London or New York, largely due to their digital presence. Between 2013 and 2023, African designers have increasingly gained prominence at Paris Fash­ ion Week showcasing their talents and diversi­ fying the global fashion scene. MaXhosa Africa, ­ David Tlale from South Africa and Christie Brown from Ghana have consistently appeared at these events marking a new era for African fashion. In 2022 nine African designers showcased their col­ lections at the Ethical Fashion Initiative’s411 official presentation, highlighting the craft and creativity of the continent. Kenyan artists, working with fashion brands, Ethical Fashion Initiative Fashion brand Hamaji designer Louise Sommerlatte 411 Ethical Fashion Initiative. African Fashion Shines at Paris Fashion Week. URL: https://ethicalfashioninitiative.org/stories/african-fashion-shines-at-paris-fashion-week 412 Karl Lagerfeld. Kenneth Ize x Karl Lagerfeld Collection. URL: https://www.karl.com/us-en/karlxkenneth.html 413 African Development Bank. Africa Investment Forum: Closing the Technology Gap Promises Significant Gains for Africa’s Creative Industries. URL: https://www.afdb.org/en/ news-and-events/africa-investment-forum-closing-technology-gap-promises-significant-gains-africas-creative-industries-55797 The impact of digital platforms goes far beyond fi­ nancial returns providing African creative profes­ sionals with unprecedented opportunities to colla­ borate and reach international audiences. A notable example is the 2020 collaboration between Nigerian designer Kenneth Ize and French fashion house Karl Lagerfeld412 . Although the collection was developed online due to pandemic restrictions with much of the work carried out remotely, Ize chose to present it through an in-person runway show. This decision emphasised the importance of physical fashion pre­ sentations highlighting the need for a balance bet­ ween digital innovations and real-world experiences in the fashion industry. The future of Africa’s creative industries is closely tied to continuous digital transformation The African Development Bank (AfDB) has pro­ jected413 that USD 9 billion will be needed annu­
  • 163. 162 Identifying the DNA of African creativity Africa 2025: Prospects and Challenges HSE University Center for African Studies ally through 2030 to close the continent’s digital infrastructure gap. This investment is needed the most for expanding broadband access, data centres and cloud services, all of which are critical for the growth of Africa’s crea­ tive sectors. Programmes such as the AfDB’s and a Federal Government of Nigeria Investment in Digital and Creative Enterprises414 (iDICE) launched in 2021 have already begun addressing some of these challenges. Additionally, the programme is pro­ jected to add USD 6.4 billion to Nigeria’s eco­ nomy by 2027. The funding breakdown includes USD 170 million from AfDB, USD 116 million from the French government through Agence Française de Développement and USD 70 million from the Islamic Development Bank. The Nigerian government will contribute USD 45 million, while other institutional and private investors are ex­ pected to provide the remaining funding through a DICE Fund415 . Making creative economy work for Africa The demand for African creative products has surged, with the primary buyers being the ­ African diaspora and global streaming platforms. 414 African Development Bank. Nigeria Digital and Creative Industries Project. URL: https://mapafrica.afdb.org/en/projects/46002-P-NG-K00-009 415 African Development Bank. African Development Bank and Partners Invest $618 Million in Nigeria’s Digital and Creative Industries. URL: https://www.afdb.org/en/news-and- events/press-releases/african-development-bank-and-partners-invest-618-million-nigerias-digital-and-creative-industries-59766 416 African Business. African Consumers Remain Loyal to Non-African Brands. URL: https://african.business/2024/06/dossier/african-consumers-remain-loyal-to-non-african-brands Intra-African trade in creative industries is growing, although it remains limited compared to global trade. A report on brand preferences416 highlights that only 14% of the top brands in Africa are of African origin with companies from the US, Europe and Asia dominating the market. This loyalty to foreign brands often overshadows the growth of local industries, in­ cluding the creative sector. The surge in demand for African creative content internationally contrasts with the fact that African narratives and cultural products are still largely in­ fluenced by external agendas. Western and Asian media, global brands and international platforms continue to shape the African story, a phenome­ non that underscores the importance of creative sovereignty. By building and nurturing local brands and industries, Africa can better retain the eco­ nomic and cultural benefits of its own creative outputs. Strengthening creative sovereignty ensures that African cultural products not only reach global markets but also serve as a driving force for economic growth within the continent itself. Despite the rising success of Africa’s creative industries African consumers themselves still remain highly loyal to non-African brands
  • 164. 163 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies African business: prospects and challenges Africa’s future imprint in the global economy will largely be determined by its ability to localise, if par­ tially, industrial production and place its resources in service to its own markets. As of today, there are only individual success stories, such as Botswana, a country that has localised the processing of De Beers diamonds to create an entirely new industry. However, scaling these successes across the vast geographies of the continent remains challenging, and this is not only because of the opposition from the dominant multinational corporations (MNCs) and foreign investors. At the same time, govern­ ment policy measures, some of which were ex­ plored in previous chapters, will hardly be sufficient on their own. African businesses have the potential to emerge as the key driver of localisation and sub-regionalisation in Africa As well as the development of domestic markets, especially when they enjoy the support from African governments through regulatory measures. Inte­ gration in the global value chains, while still an im­ portant indicator, cannot be the primary measure of success for economies. Moreover, at the current model of globalisation, as demonstrated earlier with the cases of the energy and food sectors, contri­ butes to the formation of isolated industries that are export-oriented and disconnected from the mechanics of the national economy. African businesses – the emerging regional and global players
  • 165. 164 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies 417418419420421 417 World Bank. World Development Report 2020: Trading for Development in the Age of Global Value Chains. URL: https://www.worldbank.org/en/publication/wdr2020 418 U.S. Geological Survey. Mineral Commodity Summaries 2024. URL: https://doi.org/10.3133/mcs2024 419 African Mining. The future of mineral exploration – contributions from Africa. URL: https://www.africanmining.co.za/2024/08/26/the-future-of-mineral-exploration- contributions-from-africa/ 420 ARM. ARM Ferrous. URL: https://arm.co.za/arm-ferrous/ 421 UNCTAD. TradeMatrix. URL: https://unctadstat.unctad.org/datacentre/dataviewer/US.TradeMatrix. African companies are gradually integrating into global value chains. The World Bank417 suggests the most successful integration has been in the production of food products (e.g. cocoa and coffee), clothing (associated with the gradual relocation of the textile industry from Asia) and automotive components (associated with global car manufacturers setting up plants in Northern and Southern Africa). However, this integration has largely been marginal given Africa’s relatively low level of participation in global value chains with an average of 8% of GDP. Besides, these 8% boil down most often to Africa being a source of raw materials (hydrocarbons and other minerals). By contrast, the continent’s share in global trade of intermediate goods is only 3%. Additionally, production centres in Africa are highly specialised and excessively dependent on the fluctuations of external markets. Africa’s integration in the value chains mostly ends at the beginning of these chains, with the supplier role, a process essentially driven by the growing demand from advanced economies for the raw materials needed to power their technologies. The discourse of critical resources and their accessibility has placed quite a spotlight on Africa’s role in ‘fuelling’ their devel­ opment with its cobalt reserves (55% of the world’s deposits), manganese (35%), graphite (24%), nickel (5.6%) or lithium (around 5%), PGMs (90%) and chromium (36%)418 . Given that prospecting and exploration activities in Africa has seen a 38% increase in the past seven years and that the trend will likely continue, these proportions will shift even more in Africa’s favour419 . African business is set to play a greater role in tapping into the potential of this expanding market. In some countries, there has been a drive to reduce the reliance on foreign investors, replacing it with locally driven efforts to explore and develop the critical resources. For instance, South Africa’s African Rainbow Minerals that operates in the country’s Northern Cape with minimal foreign own­ ership and management has been able to produce some 116,000 tonnes of ferromanganese an­ nually. A success story for the national economy and a top 10 producer on a global scale, the company expanded its footprint with its participation in a joint venture to develop manganese in Malaysia, where it is a major shareholder (with a 54% stake, while another 27% is owned by Japan’s Sumitomo Corp., and 19% by China Steel Corp.)420 . Another factor is the rising global demand for “daily” crops, such as coffee or cacao, which Africa can produce with its comparative advantages and economic efficiencies. Africa’s unique climate as well as the continent’s emerging (and therefore relatively cheap) labour markets add to the competitiveness of African produce. Among coffee connoisseurs, African varieties are well-known for a balance of acidity and a rich flavour palette, while cacao from the continent’s top producers, Côte d’Ivoire, Ghana, Nigeria and Cameroon, has dominated the world’s markets for years. In 2023, cacao exports from Africa stood at USD 10.9 billion, or 41% of the global figure. Back in 2002, this proportion was closer to 47%, but the market has grown 3.7 times since then, despite dollar infla­ tion and the crises that affected the local producers421 .
  • 166. 165 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies 422423424425 Still, the share of non-African businesses in the GDP of African countries is somewhat declining, and African companies have acquired more visibility in recent years, especially on domestic consumer markets. Banking and finance, telecom, construction, transport, food and beverages, oil products trading and retail markets are booming with local businesses leading the way This achievement was made possible through a com­ bination of government support measures for local producers and companies’ consistent investment pol­ icy. In Nigeria, more than 60% of the cement market is now controlled by the Nigerian company Dangote Ce- ment426 . In Tanzania, more than 60% of the local LPG market is now taken over by local companies (Taifa, Manjis,Oilcom,LakeGas and others)427 investinginre­ gional transport, storage and distribution infrastructure. 422 ResearchGate. Pro-Poor Development and Power Asymmetries in Global Value Chains. URL: https://www.researchgate.net/publication/308606263_Pro-Poor_ Development_and_Power_Asymmetries_in_Global_Value_Chains 423 Al Jazeera Media Network. Chocolate prices to keep rising as West Africa’s cocoa crisis deepens. URL: https://www.aljazeera.com/gallery/2024/3/30/chocolate-prices-to- keep-rising-as-west-africas-cocoa-crisis-deepens 424 ResearchGate. Pro-Poor Development and Power Asymmetries in Global Value Chains. URL: https://www.researchgate.net/publication/308606263_Pro-Poor_ Development_and_Power_Asymmetries_in_Global_Value_Chains 425 WITS. Cocoa paste, not defatted exports by country in 2022. URL: https://wits.worldbank.org/trade/comtrade/en/country/ALL/year/2022/tradeflow/Exports/partner/ WLD/product/180310 426 Dangote Cement Plc. “The Dangote Way” Operational Pillar. URL: https://cement.dangote.com/wp-content/uploads/2021/04/Operational-Pillar.pdf 427 Energy and Water Utilities Regulatory Authority. The Mid and Downstream Petroleum Subsector Performance Review Report for the Year 2022/23. URL: https://www.ewura. go.tz/wp-content/uploads/2024/06/PetroleumReport.pdf 428 Energy and Water Utilities Regulatory Authority. The Mid and Downstream Petroleum Subsector Performance Review Report for the Year 2022/23. URL: https://www.ewura. go.tz/wp-content/uploads/2024/06/PetroleumReport.pdf 429 Ecofin Agency. Algeria’s Djezzy Revenue Surges 9.4% in H1 2024 Amid Continued Growth. URL: https://www.ecofinagency.com/telecom/2308-45802-algeria-s-djezzy- revenue-surges-9-4-in-h1-2024-amid-continued-growth 430 CAPA. Africa Aviation Outlook 2020: Performance lags, pending integration. URL: https://centreforaviation.com/analysis/airline-leader/africa-aviation-outlook-2020- performance-lags-pending-integration-504774 431 African Airline Association. African airlines’ performance updates by AFRAA for June 2024. URL: https://www.afraa.org/african-airlines-performance-updates-by-afraa-for-june-2024/ 432 Compiled by the authors based on calculations from open sources, including Jeune Afrique’s 500 champions africains. In Algeria, two state majority-owned companies (Mo- bilis428 and Djezzy429 ) managed to consolidate more than 70% of the local telecom market. In the mean­ time, the share of African air carriers on intercontinen­ tal routes increased from 30%430 in 2019 to 40%431 in 2023. Corporate landscape is evolving not only on the level of consumer markets but also among big play­ ers. Research432 conducted by the authors indicates that there are – at least – 206 companies with main operations in Africa whose capitalisation exceeds USD 1 billion. They represent 31 countries. 36,4% of these companies are South African, 12,6% Egyptian, 7,8% Moroccan, 4,9% each operate in Nigeria and Algeria, 4,4% are Tunisian, 2,9% each are Ghanaian, and 2,4% each are Kenyan and Senegalian. The other 22 countries take up the remaining 21,4%. The largest players on the national market remain foreign, though. America’s SACO, France’s CEMOI-CI and Switzerland’s Barry Callebaut are the dominant forces in Côte d’Ivoire’s cocoa market. While their procurement mostly comes from local farmers, Ivorian businesses are largely excluded from the field, and the farmers receive a mere 4-6% of the final product’s value422 . This has arguably exacerbated the harvest crisis of 2024 for most of the farmers, who now have less produce to sell at more volatile prices that fail to reflect the full value423 . No local company, aside from the few local craft producers of chocolate, has been engaged in pro­ cessing the beans or producing industrial chocolate for export (these activities account for 24% of the final product’s value), nor has a potential to market its produce as a global brand (some 70% of the value!)424 . Besides, no African nation tops the list of the world’s largest producers of cocoa pow­ der (these are the Netherlands, Malaysia, Germany, Indonesia and Spain), even though the raw base could often be of African origin425 .
  • 167. 166 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies 433434 Some 30% of these companies are subsidiaries of foreign (mostly, Western) transnationals or have ma­ jor foreign shareholders. Most such companies are located in Southern Africa (28%) as well as in Western (25%) and Northern (24%) Africa. Some 44% of all these companies are state-owned or operated with a strong government involvement. 433 African Business. Takeoff! Africa’s airlines show signs of revival but turbulence ahead. URL: https://african.business/2024/07/trade-investment/takeoff-africas-airlines-show- signs-of-revival-but-turbulence-ahead 434 The Business Year. West African Air Travel in 2024. URL: https://thebusinessyear.com/article/west-african-air-travel-in-2024/ Most of these companies are in energy (38%) and mining (15%), as well as telecommunications, utilities and manufacturing (7,58% each). 38% of all these companies are located in the coun­ tries of Southern Africa, while 30,1% are from Northern Africa, 16% are from Western Africa, with Eastern and Central Africa taking up 9,2% and 6,3% respectively. Africa’s share in the global aviation market is about 2% – a figure that has remained mostly static for the past 20 years. However, a reverse trend seems to be emerging. Three major na­ tional airlines operate on the continent: Ethiopian Airlines, Kenya Airways and South African Airways. These regional leaders have global ambitions as Ethiopian Airlines may well be on track to increase passenger numbers by 30% and revenue by 20% by 2024. Meanwhile, Kenya Airways posted a profit for the first time in seven years, reflecting positive momentum and increased demand for air travel on its routes. In March, the airline announced additional flights to New York and Paris, as well as new routes to Accra, Freetown and Lagos, which showcases the company’s leadership aspirations both in Africa and beyond. South African Airways is re­ covering, as it has resumed some of its intercontinental routes, such as the direct air link from Johannesburg to Perth in Western Australia433 . Smaller African airlines, such as Nigeria’s Air Peace, are also expanding. In March 2023, Air Peace launched a connection between Lagos and London, one of the first new intercontinen­ tal routes operated by a Nigerian airline in decades. Increased demand for air travel to West Africa – destinations like Ghana, Senegal, Côte d’Ivoire and Nigeria – has local impact, too. The trend for business expansion in the airline industry is not limited to South Africa, Ethiopia, Kenya and Nigeria. Other countries across the continent are following suit. EgyptAir, Libya’s Afriqiyah Airways and Air Mauritius have all placed orders for Airbus A350 aircraft, suitable for competing on long intercontinental routes. In 2023, Air Côte d’Ivoire launched its first non-stop flight to the United States. The airline has also introduced several long-haul flights, including a ten-hour route to Johannesburg434 . Meanwhile, Ghana’s Civil Aviation Authority (GCAA) plans to issue an operator’s license to GhanaAirlines, marking the start of a new air­ line in West Africa. The trend towards the development of regional aviation hubs, which has so far been most noti­ ceable in Eastern Africa, where the past decade was marked by investments in the expansion of airports in Addis Ababa, Dar es Salaam, Kampala, Kigali, etc. and significant support of flag carriers such as Rwanda Air and Uganda Airlines, is likely to spread to other regions (primarily Western Africa) in this decade. The development of regional airways is important not only as a driver of airline business development in Africa, but also for the formation of subregional markets (getting from Lagos to Dakar, for example, should be easier than getting from Lagos or Dakar to Paris).
  • 168. 167 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies Most of the combined turnover of these companies comes from South African companies (42,6%), fol­ lowed by Algerian companies (14%), Egyptian and Nigerian companies (10,4% and 7,1% respectively), Moroccan companies (4,9%). Average company revenue is highest in the coun­ tries of Southern and Northern Africa where it is es­ timated to be around USD 3.7 billion, followed by the countries of Western Africa (USD 2.55 billion) and Central Africa (USD 2.4 billion). The latter is due to the discrepancy between companies from Angola and companies from the other countries of the sub­ region. An average for Eastern African companies stands at USD 1.65 billion. Traditional sectors dominate the list, comprising of the oil and gas sector (with an almost equal geo­ graphical distribution of companies across Northern, 435 Orano. Update on the situation of the Imouraren mining project. URL: https://www.orano.group/en/news/news-group/2024/june/update-on-the-situation-of-the- imouraren-mining-project-in-niger Central and Western Africa and only a marginal pres­ ence in Southern Africa), followed by mining houses (half of companies are based in Southern Africa) and telecommunications (most companies are located in the countries of Western and Southern Africa). Oth­ ers are retailers and conglomerates. Conglomerates combine different sectors (e.g. agriculture and in­ dustry, automotive and real estate, food processing and retail, retail and logistics etc.). A more robust role of African businesses and banking groups is complemented by gradual changes in Africa’s corporate landscape. On one hand, the enactment of more stringent regulatory, tax and technical oversight is helping to reduce operating margins in certain subregions as it is becoming increasingly dif­ ficult for foreign companies to bypass these require­ ments. In practice, this could lead to instances such as the nationalisation of Orano’s assets in Niger435
  • 169. 168 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies or Shell’s exit from onshore operations in Nigeria436 , to give a few examples from a Western Africa con­ text. On the other hand, amidst global shifts, trans­ national corporations (TNCs) and foreign investors are likely to shift focus to their own jurisdictions. 436 Reuters. Nigeria rejects Shell’s $1.3 billion oil asset sale. URL: https://www.reuters.com/markets/deals/nigeria-rejects-shells-13-billion-oil-asset-sale-thisday-reports-2024- 10-16/#:~:text=Shell%20on%20Jan.%2016%20announced,more%20lucrative%20deep%20offshore%20fields. 437 Économie.Les banques françaises se replient du continent africain. URL: https://www.lefigaro.fr/flash-eco/societe-generale-annonce-ceder-ses-filiales-au-congo-guinee- equatoriale-mauritanie-et-tchad-20230608 438 Challenges. Pourquoi la Société générale se désengage du continent africain URL: https://www.challenges.fr/economie/pourquoi-la-societe-generale-se-desengage-du- continent-africain_892271 Consequently, African businesses will be there to “fill the void”, and they are expected to play an in­ creasingly systemic role in both the economies and politics of African countries.437438 One example is the withdrawal of the French Société Générale bank from African markets, which be­ gan in 2023 when Société Générale announced the sale of its subsidiaries in the Republic of Congo and Equatorial Guinea to the pan-African bank Vista (whose parent company, Lilium Capital is owned by Simon Tiemtoré, a Burkinabe entrepreneur), and the sale of its subsidiaries in Mauritania and Chad to the pan-African Coris Bank (fully owned by the family of its founder Idrissa Nassa ALSO from Burkina Faso)437 . In 2024, the French bank went on to announce the sale of its Moroccan subsidiary, Société Générale Maroc, to the Moroccan company Saham, owned by local entrepreneur Moulay Hafid Elalamy, for USD 811 million438 .
  • 170. 169 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies African business is changing, and the role it plays is evolving. Most commonly, literature439 attributes this to “improved economic reforms and political govern­ ance”asthenecessaryprecursortothis“majortransfor­ mation”. This narrative is quite popular in the Western line of thinking, and for good reason. However, this is a narrative that believes that European experience could just as well be relevant in a radically different social environment. When praising “the wave of eco­ nomic liberalisation” in Africa, it typically underscores opportunities for international firms to grow, which 439 UCT Graduate School of Business. Political Economy of Doing Business in Africa. URL: https://globalnetwork.io/sites/default/files/2020-11/Cape%20Town_0.pdf 440 TechnoServe. The Mozambican cashew industry. URL: https://www.technoserve.org/mozambique/the-mozambican-cashew-industry/ 441 AIM. New Cashew Law Reverses World Bank’s Destructive Policies. URL: https://aimnews.org/2023/05/05/new-cashew-law-reverses-world-banks-destructive-policies/ 442 Condor Anacardium. URL: https://condoranacardium.com/pt/ 443 Wiley. Institutional Complementarity and Substitution as an Internationalization Strategy: The Emergence of an African Multinational Giant. URL: https://doi.org/10.1002/gsj.1143 also prompts the question: does this transformation provide more opportunities for local business to have greater impact on the national economy, or does it mostly favour non-African MNCs, offering them an easy framework to navigate in?440441442 443 Another aspect is that this narrative leaves no room for the inherent competitive advantages of African busi­ nesses: namely, the ability to operate and thrive in un­ certain environments, which MNCs tend to avoid unless they have a risk-sharing agreement with a local partner. To illustrate the point, the evolution of the cashew processing industry in Mozambique is quite relevant. This has been a traditional sector in the country, and the government encouraged domestic process­ ing by imposing export bans and high export taxes from 1987 to 1995. In the 1990s, the World Bank demanded the liberalisation of the cashew sector as a condition for loans, urging the end of industry protection and rather focusing on raw cashew exports. The World Bank argued that Mozambique’s pro­ cessing industry was unsustainable and that exporting raw cashews for processing elsewhere would be more efficient440 . Before this intervention, Mozambique processed around 50,000 tonnes of cashews annually, but the figures dropped to a mere 8,000 tonnes and unable to compete internationally, major processing plants had to be closed. By 1999, Mozambique reintroduced protective measures, including an export tax on raw cashews. In 2023, a new law increased the tax from 18% to 22%441 . By the 2020s processing capacities achieved 60,000 tonnes annually. Condor Anacardium442 is just one of the local companies that benefited from a change in policy. Commencing cashew processing in 2004, the com­ pany sources raw material from 50,000 individual farmers. Annual exports of around 5,000 tonnes arguably make the company a Local African Exporter (LAE, see below). In cases, such as with South African Breweries (SAB), knowing how to leverage uncertainty could be a game-changer. The company was founded in 1895, but it achieved local success at the height of international sanctions pressure against the apartheid, although that naturally restricted the company’s scope of operations. By the time the multinational AB InBev acquired SAB in 2016 for USD 107 billion, it was the world’s second largest brewery by revenue with a truly global presence in some 80 markets. The company’s expansion drive was mostly focused on country with a business environment resembling South Africa, where informal networking and uncertainty are two domi­ nant factors. This was SAB’s essential competitive edge in other parts of Africa, Eastern Europe, Southeast Asia and Latin America. Achieving success in these markets helped the company gain enough experience to establish its presence in the US in 2002 through an MA with Miller Brewing Company, which led to a re-branding to SABMiller. Even after that, the company has retained its unique business model with a specific focus on developing markets.443
  • 171. 170 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies Moreover, local firms easily take advantage of op­ portunities in the informal sector, which remains an integral (and even growing) part of most African economies. Where foreign business fails to find rationality, local businesses build on kinship and informal networks to deliver the result These are all unique perspectives that may be rel­ evant even beyond the African context, especially on other developing markets where business un­ certainty is the norm444 . 444 Thunderbird Int. Bus. Rev. The internationalization of African firms: Opportunities, challenges, and risks. URL: https://doi.org/10.1002/tie.21977 Furthermore, the narrative discounts the fact that many African nations now have stronger and more integrated national economies with a focus on growing local capabilities and certain restrictions on FDI. Ghana could be a nota­ ble example, as the country both reinforced its national economy, providing more space for local businesses to grow, and retained a reputation as one of Africa’s top investment des­ tinations. Ghana’s investment code prohibits foreign investors from such sectors as petty trading, taxi ser­ vices with fewer than 25 vehicles, lotteries, beauty
  • 172. 171 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies salons, scratch card printing for telecommunications, office sta­ tionery (i.e. notebooks), retail of pharma­ ceutical products and the production and sale of bottled water in sealed packages. In addition, the code limits FDI in sectors like telecommunications, banking, fishing, mining, oil and real estate. For in­ stance, the Ghanaian government receives a 10% equity stake in all extractive licenses in the mining industry through ‘free carried interest’, requiring no financial contribution from the state. The minister of mines can also demand the issuance of ‘special shares’ for the president, granting the right to attend and speak at shareholder meetings without voting or profit-sharing privileges445 . These measures aim to maintain some control over foreign-driven business operations. Besides, the nation utilises its well-devel­ oped network of internal trade, supported by a rela­ tively advanced infrastructure. The ports of Takoradi and Tema play a crucial role in facilitating trade with the neighbouring landlocked countries of Burkina Faso, Mali and Niger. Ghana’s livestock trade, with the dominant presence of small- and medium-sized 445 UNCTAD. Act 865 Ghana Investment Promotion Centre Act. URL: https://investmentpolicy.unctad.org/investment-laws/laws/196/ghana-investment-promotion-act- 446 Methodology is based on Deloitte. Latin America Rising”. URL: https://www2.deloitte.com/tw/en/pages/strategy/articles/latin-america-rising.html companies like Otuo Farms Ltd., fosters connectivity between the northern, eastern and southern regions, as well as with the country’s immediate neighbours. The role of African businesses, some of which demonstrate the ability to combine the best corpo­ rate practices with the more context-specific tradi­ tional informal practices, will have greater impact on African economies. What is an African business? Africanbusinesses(AB)areadiverselandscape.Com­ panies with African roots could be arguably grouped into five categories depending on their ownership, market reach, operational scope and other criteria446 : 1. Local African Businesses (LABs) are compa­ nies that operate locally, within a single African country or even within one of its regions. Their consumers are local, and such companies do not
  • 173. 172 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies really have any partners from abroad and do not export their goods and services to other markets. Such companies do not have a well-­ elaborated business strategy, and they rely heavily on the in­ formal sector, taking advantage of the local ‘rules of the game’. These are insignificant taxpayers for the government, although LABs represent the greatest number of businesses on the conti­ nent. MTI Corp., a distributor operating in Egypt, is just one example. With no foreign ownership and public trading on the Egyptian Exchange, the company’s business model allows it to cover 90% of the national territory through 40,000 retail outlets447 . 2. Local African Exporters (LAEs) are companies that derive most of their revenue from exports (either within or beyond Africa), although their production capacities and business thinking are still local. Quite often, such companies could be integrated into global markets through trading intermediaries or with a certain support from government structures, formally or informally. In most cases, such companies are especially pre­ sent in industries that first became a country’s traditional basis of export during the colonial era. This is why some of these companies could be quite significant taxpayers for the government and build on its support. Condor Anacardium is a Mozambican company with a processing capac­ ity of 5,000 tonnes of cashew nuts annually, the majority of which are exported. The exact export routes are not well-documented, but the tradi­ tional routes will presumably include the United States, Portugal and South Africa448 . 3. Multi-African Businesses (MABs) are companies that could ramp up their operations beyond their home country, spanning trans-border or subre­ gional markets. Such companies are more “visi­ ble” on the list of the country’s companies, and their source of revenue is distributed between home country and other markets. However, 447 MTI. Who we are. URL: https://mti-mmgroup.com/who-we-are/#2 448 Condor Anacardium. URL: https://condoranacardium.com/pt/ 449 Prosuma. URL: https://groupeprosuma.com/ 450 Marine Biotechnology Products. Home. URL: https://mbp.mu/ 451 OCP. OCP Integrated report 2023. URL: https://ocpsiteprodsa.blob.core.windows.net/media/2024-04/Rapport%20Financier%20Annuel%202023.pdf these companies do not have any presence be­ yond Africa. The retailer Prosuma Group, which is based in Cote-d’Ivoire with no foreign owner­ ship, has operations in a number of French-spea­ king countries of the subregion, including Benin, Burkina Faso, the Republic of Congo, Gabon, Guinea, Mali, the DRC, Cameroon, Niger, Senegal and Togo449 . 4. Multi-African Exporters (MAEs) are companies that combine the most important features of MABs and LAEs. While their consumer base could be mostly outside of Africa, the operational core (i.e. produc­ tion, labour force) would be distributed between the home country and other African markets. Quite often, these markets will be countries that are part of the same subregional integration or have a simi­ lar structure of the economy. Some MAEs could be state-owned.OneexampleisMarineBiotechnology Products, a private Mauritian company that produc­ es fishmeal and fish oils from by-products. The com­ pany’s production facilities are located in Mauritius and in Cote-d’Ivoire, while the products are export­ ed to geographies as different as the United States, Russia, South Africa and the EU450 . 5. International African Businesses (IABs) are com­ panies that have been the most successful in socialisation, transnationalisation and interna­ tionalisation (see below for definitions). Most of their revenue is generated outside of Africa, which is why such companies have a broad net­ work of international partners, and they are also often systemic players for the national economy. Some IABs dominate the field in their subregion or even across the whole continent. IABs could be both state-owned and private. OCP Group, a ­ Moroccan 95% state-controlled phosphate min­ ing and fertiliser company, falls into this group. Operating in 16 geographies, primarily in Western and Eastern Africa, the company has also estab­ lished a solid presence in the U.S., China, Brazil, India, Singapore and some European countries451 .
  • 174. 173 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies Another IAB is Oceana Group, a South African fishing company with only 10% of foreign own­ ership. Conducting operations in Southern Africa and the U.S., the company’s strategy focuses on markets in Southern and Central Africa (52% of revenue) as well as in Europe (17%) and Northern America (15%)452 . The state-owned Ethiopian Airlines is another example. The company oper­ ates secondary hubs in Togo and Malawi, offering flights (i.e. exporting services) to 90+ countries across all continents except for Australia and Ant­ arctica453 . Although businesses in Africa share many opera­ tional features with companies in other developing markets, they arguably have several characteristics that make them quite distinct. African business operates on a model that maxim­ ises the advantages of the formal and informal sec­ tors of the economy. The role of the informal sec­ tor cannot be disregarded when it comes to doing business in Africa as the sector accounts for 85% of all employment opportunities454 , contributing to an estimated average of 62% GDP in countries of Sub-Saharan Africa455 . Seen from a traditional perspective, the informal sector has a number of drawbacks, such as no le­ gal protection for workers formalised through labour laws in the form of minimum wage, paid leave, health insurance or pension contributions. For governments, there could be challenges with collecting tax in the informal sector as well as with reflecting the sector’s role in the national GDP. Still, 85% of Africans highly depend on the infor­ mal sector since it is the most common entry point into the labour market for many. In most countries on the continent, the formal economy is not large or fast-growing enough to provide sufficient jobs. However, there is also a specific social dimension to the businesses in the informal sector of economies. 452 Oceana Group. Oceana Group Integrated report 2023. URL: https://www.oceana.co.za/_files/ugd/4b88cd_c3200311340743d4ae03438b1ea67190.pdf 453 Ethiopian Airlines. Ethiopian Airlines International Destinations URL: https://www.ethiopianairlines.com/ru/book/%D1%81%D0%B5%D1%82%D1%8C-%D0%BC%D0%B0%D1 %80%D1%88%D1%80%D1%83%D1%82%D0%BE%D0%B2/international 454 ILO. More than 60 per cent of the world’s employed population are in the informal economy. URL: https://www.ilo.org/resource/news/more-60-cent-worlds-employed- population-are-informal-economy 455 Princeton University. Formalizing Africa’s Informal Sector Through the AfCFTA: An Opportunity for Economic Transformation. URL: https://jpia.princeton.edu/news/ formalizing-africas-informal-sector-through-afcfta-opportunity-economic-transformation 456 BRINK. Early Insights about the Informal Economy in Kenya. URL: https://www.hellobrink.co/post/early-insights-about-the-informal-economy-in-kenya Like in many other African countries, Kenya’s in­ formal sector is dominated by micro-enterprises working across various market segments (typical­ ly wholesale and/or retail trade in local markets). The average lifespan of such businesses is esti­ mated around seven years, and they are common­ ly the sole source of income for both owners and employees. Some 55% of these micro-enterprises are owned by women, and another 54% are run by young people, which are the two social groups that face the greatest difficulty finding employment in the formal sector (to illustrate the point: an estimat­ ed 67% of people under the age of 35 are officially unemployed in Kenya, whereas the overall unem­ ployment rate in the country stands at 12.7%)456 . At the same time, not only private companies, but also large state players are increasingly working with the informal sector. For example, instruments to integrate the informal sector are being actively introduced in the mining sector: initiatives to buy
  • 175. 174 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies gold from artisanal miners are in place in Senegal, DR Congo, Zimbabwe and other countries. There is a growing demand for solutions in the field of dig­ ital traceability systems of goods, anti-counterfeit­ ing, and combatting the abuse of subsidy systems (when subsidised goods are illegally exported to neighbouring countries to be sold at market prices). Business may become one of the drivers of informal sector ‘recognition’, consumer demand assessment and bridging information gaps, which is the problem emphasised in almost every chapter of this handbook. African business typically relies on a network of in­ formal partnerships. Business is driven not only by the rational pursuit of profit but also by culturally defined ‘obligations’ that balance corporate gain with community expectations. Obviously, business models could hardly exist in isolation from societies, and they are shaped by socio-cultural contexts, which is essentially why different forms of capital­ ism have emerged around the world. Despite the certain encouragement of individual entrepreneurship in African cultures, these are exactly the cultures where kinship, mutual support and collective responsibility are emphasised As a result, doing business in Africa is inextricable from traditional communal and collective values, while entrepreneurship, defined as an individualistic and profit-driven activity, is secondary457 . For example, the mission of Afriland First Bank, a Cameroonian bank founded in 1987 with branches in Equatorial Guinea, the DRC, South Sudan, Liberia, Côte d’Ivoire, Guinea and Zambia, is to promote African entrepreneurship and treat employees as family 457 ScienceDirect. Untangling African indigenous management: Multiple influences on the success of SMEs in Kenya. URL: https://www.sciencedirect.com/science/article/pii/ S1090951608000047?via%3Dihub#aep-section-id35 458 Ibid. 459 Lothar Kat. Negotiating International Business - The Negotiator’s Reference Guide to 50 Countries Around the World. URL: https://www.leadershipcrossroads.com/mat/ cou/Egypt.pdf 460 ScienceDirect. Untangling African indigenous management: Multiple influences on the success of SMEs in Kenya. URL: https://www.sciencedirect.com/science/article/pii/ S1090951608000047?via%3Dihub#aep-section-id35= members. The company delivers on the promise through collective decision-making and practices, such as employees attending the funerals of their colleagues’ relatives to show support. However, the most common form of mutual aid occurs in the in­ formal sector, where relatives or friends could step in to replace sick employees458 . As was mentioned, informal partnerships play an im­ portant role, too. In Egypt, strong personal relationships are crucial for business deals, and they could often bear more significance than written agreement. Egyptians tend to do business only with those they know and trust or those who did business with their friends and relations, which is why they would often view a particular person rep­ resenting the company as the true partner rather than the company itself. In business cultures like that in Egypt, contracts are more of a formality and a reminder rather than a strict obligation459 . This partly explains why companies built on Western and Chinese operational models may not align well with local norms and values, leading to challenges in motivating employ­ ees and a poor understanding of the context where the company operates. While such organisa­ tions may be profitable, this might not be sustained in a longer term as they fail to meet cultural ex­ pectations460 . African business will often thrive in sectors with a limited presence of Western, Chinese and other multinational corporations. In sectors dominated by large foreign companies, such as mining and oil gas, where French and British banks have held sway since colonial times, African companies strug­ gle to compete and build their own reputational brands. Instead, African companies easily occupy market niches neglected by global competitors.
  • 176. 175 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies 461462463 In some cases, such hyper-localisation can lead to the development of unique products and foster economic growth for the respective community. Be­ sides, a company’s small size does not necessarily mean that it is not innovative464 . Moreover, in traditional sectors African businesses will most often be centres of the ‘employment cir­ cle’ generated by bigger companies through a reli­ ance on local subcontractors for the outsourcing of certain services. 461 Oriental Weavers. Investor Relations. URL: https://orientalweavers.com/presentation-publication/ 462 The Arabya Company for Transportation and Domestic Flights. Contracting with the largest group in the Middle East, Oriental Weavers Group. URL: https://alarabya- transport.com/en/contracting-with-the-largest-group-in-the-middle-east-oriental-weavers-group/ 463 Daily News Egypt. IRSC Signs Contract with Oriental Weavers to Install 2.5 MWP Solar Power Plant at 10th of Ramadan Factories. URL: https://www.dailynewsegypt. com/2024/09/11/irsc-signs-contract-with-oriental-weavers-to-install-2-5-mwp-solar-power-plant-at-10th-of-ramadan-factories/ 464 MIT Press Direct. Digital Entrepreneurship in Africa: How a Continent Is Escaping Silicon Valley’s Long Shadow. URL: https://direct.mit.edu/books/oa-monograph/4850/ Digital-Entrepreneurship-in-AfricaHow-a-Continent Going beyond local markets and thinking African companies have grown enough to con­ tribute much more to the local economies and explore re­ gional and international markets. This leads to a socialisation and internationalisation of the African business. For the purposes of this chapter, ‘socialisa­ tion of business’ refers to a complex process whereby companies move beyond local thinking in their brand­ ing, marketing and communication strategies. The textile industry in Egypt is a traditional and highly competitive sector, with no dominant players in the field. Major companies are Egyptian, and Oriental Weavers, a carpet manufac­ turing company founded in 1979, is just one example. Most of the company’s shares (some 54%) are owned by the family of its founder, Mohamed Farid Khamis. The largest foreign in­ vestor has been the Saudi Fitaihi Holding Group, which owns a 12% stake (other foreign share­ holders collectively own 6.4% of the shares). In 2023, Oriental Weavers ranked first globally in the production of machine-made carpets and rugs, emerging as one of the largest exporters with the market reach of 130 countries. Notably, the main export destinations lie outside of the African continent (these are the U.S., Europe and the Gulf states), but this is also true for supplies of raw materials that originate both from local producers (incl. small-scale businesses) and from Saudi Arabia, New Zealand and the United Kingdom. The company has branches in Egypt and in the U.S., formally employing 18,700 people. Oriental Weavers, a true International African Business (IAB), invests in talented students who will then become the basis of its work­ force. Through the Farid Khamis for Development Foundation, the company sponsored the Top 100 Students programme in collaboration with the national ministry of education. The com­ pany also collaborates with universities, such as Ain Shams University and Zagazig University, offering internships for students461 . Oriental Weavers is also a company that generates a certain ‘employment circle’, a concept explored above. For instance, the local Arabya Company for Transportation and Domestic Flights signed a distribution agreement with Oriental Weavers in 2021462 . In 2024, as part of its en­ vironmental initiatives, Oriental Weavers signed an agreement with the Innovative Renewable Solutions Company, a local green energy business, to design and install a PV power plant with a capacity of 2.5 MWP463 . Other local companies benefitting from the circle are the various construction firms (that may well take advantage of the informal sector in their operations) and businesses that manage the company’s local retail outlets (with potential links to the informal sector, too).
  • 177. 176 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies 465466467468469 African companies are on a learning curve by copy­ ing or adapting business models and management solutions from foreign companies operating in Africa. Overall, the African business has been diversifying the mix of its foreign partners, indicating a shift from the Europe-oriented thinking. While it may still be easier for Africans to negotiate with Euro­ pean investors and contractors because of a much longer history of interaction, both before, during and after colonialism, that brings more predictabil­ ity to the deals, the operational paradigm of most European companies has undergone dramatic transformations in the last five to seven years. Con­ siderations of ‘eco-friendliness’, ‘sustainability’ and ‘inclusiveness’ are some examples of what is high on their agenda that they bring to other markets 465 Weibo. Ethiopian Airlines. URL: https://weibo.com/ethiopianairlinesCN 466 Instagram. Ethiopian Airlines. URL: https://www.instagram.com/fly.ethiopian 467 Forbes. Nigerian Fintech Startup Paystack Raises $1.3 Million. URL: https://www.forbes.com/sites/mfonobongnsehe/2016/12/19/nigerian-fintech-startup-paystack-raises-1- 3-million/ 468 TechCrunch. Paystack, with ambitions to become the Stripe of Africa, raises $8M from Visa, Tencent… and Stripe itself. URL: https://techcrunch.com/2018/08/28/paystack- with-ambitions-to-become-the-stripe-of-africa-raises-8m-from-visa-tencent-and-stripe-itself/ 469 TechCrunch. Stripe acquires Nigeria’s Paystack for $200M+ to expand into the African continent. URL: https://techcrunch.com/2020/10/15/stripe-acquires-nigerias- paystack-for-200m-to-expand-into-the-african-continent/ where they do business. Applying these principles on African soil with somewhat of a disregard for core African interests has resulted in some conten­ tion and a certain alienation. To communicate suc­ cessfully and drive impact, local African companies would often have to adapt to this conditionality of their agenda, adopting a more European-like model of communication and behaviour. Besides, there are more European players on the markets. Former colonial powers are still very much present in Africa, seeking to smooth out the ten­ sions and shift their strategies to be more collab­ orative. However, businesses from Europe’s smaller coun­ tries, like Austria, Estonia, Switzerland or Norway, Ethiopian Airlines, the largest African airline, is a good example. The state-owned company has a strong social media presence that encompasses Facebook, YouTube, X, Instagram, Telegram, LinkedIn and Weibo, with each platform having its own target audience. For instance, on China’s ­Weibo465 , the company posts daily in Mandarin, offering relevant deals that help establish the air­ line as a convenient way to travel to Africa and many destinations beyond it with minimal travel time. On Instagram466 , the company mostly targets a pan-African audience, putting a premium on flights that connect the continent’s main hubs. Nigeria’s Paystack, a fintech company, illustrates the point. It was founded in 2015 in Lagos, model­ ling its payment processing solution for the SMEs on the world’s leader Stripe and aspiring for a global role. The company soon attracted investment from the U.S. and China (this balancing act is quite notable given the growing rift between Western and non-Western technology ecosystems), leaving some investment shares in the local hands, Nigeria’s Singularity Investments467 . The magni­ tude of success was such that Stripe and Tencent acquired investment shares worth USD 8 million in 2018468 , which was one of the factors that allowed for Paystack’s expansion into Ghana that same year, South Africa in 2021 and Kenya in 2023 (all are the key financial hubs in their respective subregions). However, the last two expansions happened under Stripe’s control of Paystack as it acquired the company for USD 200 million in 2020 in a bid to leverage its market development in Africa (rather than exploring ‘unknown’ markets on its own from scratch) and, most likely, arrest the rise of a strong competitor469 .
  • 178. 177 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies are now more vocal than ever before about their in­ terest in the African markets. For instance, Estonia’s Bolt launched its transport and taxi services in South Africa in 2016. With its first African experi­ ence proving a success, the company expanded its offerings to Angola, Ghana, Egypt, Kenya and oth­ ers, with a scope of over 47 million passengers and 900,000 drivers registered on the platform. These are largely new partners for African business, which requires some ‘social adaptation’ in terms of under­ standing their motives and interests and finding an optimal mode for mutual collaboration. The same applies to the increasing number of non-European partners, as their geography is truly global and rang­ es from Iran and Turkey in the Middle East, Brazil and Chile in Latin America, Indonesia and Malaysia in the Asia-Pacific470 . Another development is the rising transnationalisa- tion and localisation of the African business. While these two notions might appear mutually exclusive and contradictory, they are closely interconnected. Local content policy has been a game changer in this context. The Black Economic Empowerment (BEE) programme which once seemed to be a product of South Africa alone, has taken hold and spread throughout Africa in the form of local con­ tent policies. Most African countries have legislated local content policies, such as Nigerian content in Nigeria. In almost all countries, localisation is en­ couraged by local regulators through a developed system of investment incentives, including exemp­ tion from various types of taxes, etc. For example, the expanding footprint of the world’s major MNCs in developing mineral resources across the vast spaces of the African continent has also led to: • an emergence of more African companies acting as sub-contractors for MNCs; • an emergence of more local SMEs as a result of CSR projects that often provide infrastructure that stimulates demand and offers business op­ portunities; 470 Bolt. Our locations. URL: https://bolt.eu/en/cities/ 471 New Era Namibia. 47 fired from Uis mine contractor. URL: https://neweralive.na/47-fired-from-uis-mine-contractor/ 472 Diageo. Africa. URL: https://www.diageo.com/en/our-business/where-we-operate/africa • an adoption of local content legislation with policy-makers willing to consolidate strategic projects under state- or private-owned local companies. Illustrative of these trends is the local impact cre­ ated by the British Andrada Mining that owns a 95% share in the Uis lithium, tin, tantalum and ru­ bidium mine in Namibia. While only 5% are owned by the national Sinco Investments Five, Andrada Mining relies on a network of local subcontrac­ tors, such as Metal Mill Engineering471 . The com­ pany was founded when the Uis project started in 2017, creating jobs and contributing to the area’s economic growth. Another example is Diageo, a British company that specialises in alcoholic beverages. In Africa, Diageo operates 12 breweries and 3 blending and malting plants located in Kenya, Tanzania, Uganda, South Africa, Ghana, Nigeria, the Seychelles, Cameroon, Ethiopia and Angola. Employing 4,400 people, the company is the main partner for a wide range of suppliers, as 83% of raw materials are sourced from the local small-scale businesses472 . While it may be premature to speak of the transna­ tionalisation or internationalisation of the African business in the traditional sense (i.e. when African MNCs could have global ambitions or already ex­ ert some global influence or play an independent and discernible role on global markets), it is still evident that there are some African companies that are preparing for this step. Most of such com­ panies have been building up their skill profiles and expanding into neighbouring markets. The current phase of increasing internationalisa­ tion of the African business could be attributed to several factors. First, amid growing demand and supply fragmentations, Africa continues to be perceived globally as a resource-rich market, particularly in the realm of critical minerals. For example, the U.S. Strategy Toward Sub-Saharan Africa (2022) primarily views the continent as
  • 179. 178 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies 473474475 a host of vast natural resources, specifically 30% of theworld’scriticalminerals476 .Similarly,UNCTAD’s most recent Economic Development in Africa Report highlights Africa’s resource potential477 . 473 UNCTAD. Congo, Democratic Republic of the - Adoption of a mining code. URL: https://investmentpolicy.unctad.org/investment-policy-monitor/measures/3227/adoption- of-a-mining-code 474 The Africa Report. DRC: Cancelling operating rights of 29 mining companies stirs controversy. URL: https://www.theafricareport.com/321309/drc-cancelling-operating- rights-of-29-mining-companies-stirs-controversy/ 475 CMOC. Wilson Makuya, a TFM Social Fund scholarship beneficiary, obtains his Master’s degree with distinction. URL: https://en.cmoc.com/html/2023/Education_0730/49.html 476 The White House. U.S.Strategy Toward Sub-Saharan Africa. URL:https://www.whitehouse.gov/wp-content/uploads/2022/08/U.S.-Strategy-Toward-Sub-Saharan-Africa- FINAL.pdf 477 UNCTAD. Critical minerals: Africa holds key to sustainable energy future. URL: https://unctad.org/news/critical-minerals-africa-holds-key-sustainable-energy-future This narrative seems to be pervasive in each discus­ sion and policy document on and around Africa and the continent’s development trajectory. For their part, African governments and contractor businesses tend An example of increased regulatory attention to fostering local development and facilitating opportunities for African SMEs is the mining industry in the DRC. The 2018 DRC Mining Code stipulates that companies holdingminingand/orexplorationlicensesmustmeettheirsocialobligationstosupportlocalcom­munities; otherwise, their licenses can be revoked. The minimum financial support for local com­ munities through such agreements is 0.3% of the company’s turnover473 . Official figures show that company expenditures on local community support projects totalled USD 83.7 million in 2020-2021. In August 2023, the DRC Ministry of Mines revoked 29 licenses, citing non-compliance with these requirements474 . In most cases, the licenses revoked were abandoned, and their redistribution could potentially improve the situation for local communities if acquired by companies that implement effective CSR policies. These are another instrument that facilitates the emergence of more local businesses. For example, the Chinese CMOC company sponsored tuition fees for 89 students in the DRC’s provincial universities of Haut-Katanga and Lualaba without pledging their commitment to work for CMOC when they complete the education475 . That said, students also have the option of starting their own business or joining another local company.
  • 180. 179 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies to make use of this narrative by focusing on extrac­ tive sectors, as this allows for more foreign invest­ ment, faster profits and easier revenue. Shifting this paradigm would require considerable time, effort and financial resources because this ultimately boils down to a re-structuring of the economies with the emergence of impactful business in non-traditional fields – i.e. not oriented towards extraction, pro­ duction of raw materials or export. Second, the internationalisation of the African business still goes well with the interests of na­ tional development, aligning with governmen­ tal policies. A case in point is Sibanye-Stillwater, a mining company with operations in South Af­ rica. Its major shareholders include the state- owned Public Investment Corporation Ltd. (South Africa, 16.1%), Allan Gray Ltd. (South ­ Africa, 5.7%), Lingotto Investment Management LLP (UK, 7.5%) and JPMorgan Chase Co. (US, 6.3%). Foreign shareholders are estimated to con­ trol about 40% of the company’s stakes. Listed on the Johannesburg Stock Exchange, Sibanye-Stillwa­ ter offered employment for 60,800 people in South Africa in 2023, with an additional of 19,300 contrac­ tors (the concept of ‘employment circle’ applies here, too)478 . The company is another example of an International African Business (IAB) that drives local impact. Partnering with African Infrastructure Investment Managers, Sibanye-Stillwater sponsors the construction of the Umsinde Emoyeni Wind 478 Sibanye-Stillwater. Integrated report 2023: Empowering our workforce. URL: https://reports.sibanyestillwater.com/2023/downloads/ssw-IR23-performance-workforce.pdf 479 Sibanye-Stillwater. Integrated report 2023: Socioeconomic development. URL: https://reports.sibanyestillwater.com/2023/downloads/ssw-IR23-performance- socioeconomic-development.pdf 480 Sibanye-Stillwater. Integrated report 2023. URL: https://reports.sibanyestillwater.com/2023/downloads/ssw-IR23.pdf 481 Oriental Weavers. Investor Relations. URL: https://orientalweavers.com/presentation-publication/ 482 International Coffee Organization. Coffee Report and Outlook 2023. URL: https://icocoffee.org/documents/cy2023-24/Coffee_Report_and_Outlook_December_2023_ICO.pdf Power Station (140 MW), which is scheduled to be completed by 2026479 . A powerful player in South Africa’s mining sector, Sibanye-Stillwater is also a company that has mines and processing facilities in the U.S., a nickel plant in France as well as stakes in PGM projects in Canada, lithium projects in the U.S., ­ Argentina, and Finland, and a zinc project in ­ Australia. The company has a broad network of partners, sell­ ing the PGM mined in South Africa to domestic com­ panies and undisclosed buyers in the U.S., the EU and the UK, and Japan. The gold it extracts is sold to local and international banks, while Australian zinc is directed to smelters in Australia, Korea and China, and the nickel processed in France is sold to another commodity trading company480 . However, here the risks of excessive capital outflow via such ‘global’ in­ vestments should be considered as well. Third, demand for some of the products is just so low within the African continent, either due to market sat­ uration or limited purchasing power, that African com­ panies naturally have to turn to overseas markets. The aforementioned Egyptian carpet manufacturer Oriental Weaversderivesamere1%ofitsrevenuefromAfrican markets, if Egypt (35%) is not considered. The nearly exclusive focus on Northern America and Europe can be explained by the higher purchasing power in these regionsandbythefactthatthetextileindustryinAfrica remains highly competitive, particularly in Northern Africa, where carpet production is well-established due to widespread cotton cultivation481 .482 In African economies, there is little demand for critical minerals such as cobalt, lithium, manganese and others, due to the lack of necessary technologies and manufacturing capabilities. Consequently, companies operating in Africa, both foreign and local, typically extract and (minimally) process these metals to sell them outside the continent, primarily to China. A similar pattern exists in the coffee mar­ ket, where Africa accounts for 11% of global production. Ethiopia and Uganda are the main producers, contributing approximately 70% of Africa’s coffee output. However, the culture of coffee consumption is not very developed in African countries (except for Ethiopia), as people generally prefer tea. In 2023, coffee consumption in African countries accounted for only about 7% of global consumption, with ­ Ethiopia alone representing 29% of Africa’s coffee consumption482 .
  • 181. 180 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies Fourth, traditional business drivers may not play as im­ portant a role in Africa as in the West or even in other regions of the developing world. This arguably refers to companiesseekingnewmarketstoexpandtheiropera­ tions, turning to other geographic regions in a bid to cut production costs via cheaper labour or raw materials or attain a higher profile and international visibility to at­ tract investment or access markets of cheaper capital. The transition from a local to an international busi­ ness depends on 1) market development, 2) compa­ ny revenue growth, 3) certain government support and 4) favourable conditions in global markets, all provided that the company has the necessary talent and sufficient capital.483484485486487 483 Dangote Cement Plc. Our History. URL: https://cement.dangote.com/our-history/ 484 CEO Today Magazine. The Top 50 CEO’s in The World. URL: https://www.ceotodaymagazine.com/top-50-ceos/ 485 Jeune Afrique.Aliko Dangote: « Mon rêve, c’est d’utiliser les matières premières d’Afrique, de les raffiner et de les vendre sur notre propre marché ». URL: https://www. jeuneafrique.com/1570808/economie-entreprises/aliko-dangote-mon-reve-cest-dutiliser-les-matieres-premieres-dafrique-de-les-raffiner-et-de-les-vendre-sur-notre- propre-marche/ 486 Reuters. Nigeria’s Jonathan adds Dangote to economic team. URL: https://www.reuters.com/article/ozatp-nigeria-economy-20110819-idAFJOE77I0NW20110819/ 487 Dangote Cement Plc. Our History. URL: https://cement.dangote.com/our-history/ Outlook for the future In the coming years, the trend for a broader social­ isation and internalisation of African businesses will likely continue. Coupled with government policies to stimulate local production and development of local communities, this will arguably create more spacefortheemergenceofmoreMulti-AfricanBusi­ nesses (MABs) and International African Businesses (IABs). In turn, their operations will boost oppor­ tunities for small-scale local enterprises, as part of their ‘employment circle’. Such companies will drive their growth with a reliance on the informal sec­ tor, occupying niches that bigger companies tend to overlook due to the high entry cost or inherent Nigerian Dangote Group founded in 1977, initially specialised in importing and trading wholesale consum­ er goods and cement. In the 1990s, the company expanded into textile production and consumer goods like sugar and flour. In 2000, Dangote acquired Benue Cement Company from the federal government, subsequently increasing the cement plant’s annual capacity from 0.9 million tonnes to 2.8 million tonnes. Switching gears, Dangote entered Nigeria’s cement market, which soon became its core focus. In 2002, the company purchased the government-owned Obajana Cement Plc., which began operations in 2007 with a capacity of 5 million tonnes annually, making it the largest cement plant in Sub-­ Saharan ­ Africa. In 2010, Benue Cement and Obajana Cement merged into Dangote Cement Plc., a step that testified to the company’s new role in the national economy and that allowed it to go public on the Nigerian Stock Exchange. By 2011, Dangote Cement Plc. established a presence on the subregional market, with first exports of cement to Ghana and another capacity expansion in the Obajana and Ibese plants483 . As one of the world’s top CEOs484 , the company’s founder Aliko Dangote is a proponent of pan-­ African economic development, often expressing his vision of utilising Africa’s raw materials for processing and sale within the continent485 . By making strategic choices, the company managed to secure a dominant position in Nigeria’s cement market. Achieving strategic importance for the economy allowed the company to receive certain support from the government486 and expand even more. With that, Dangote Cement Plc. has established itself as one of Africa’s largest producers with cost-effective and high-quality pro­ duction and embarked on a broader African expansion, moving from a subregional presence to a pan-African footprint. In 2014, the company opened two cement plants in South ­ Africa, a plant in Senegal, and continued its expansion drive with investments in Cameroon, ­ Ethiopia, Zambia, Tanzania, Sierra Leone and the Republic of Congo487 .
  • 182. 181 African businesses – the emerging regional and global players Africa 2025: Prospects and Challenges HSE University Center for African Studies risks with a rather low strategic return. This may well broaden the scope of opportunities for local entrepreneurs who can leverage their knowledge, experience and understanding of the local context to develop solutions unique to Africa. However, with local problems and local solutions come limitations to company growth. The size of national markets essentially restricts the scalabil­ ity of companies, particularly in smaller countries. Since many of the solutions offered and developed by African businesses cater to markets that are rel­ atively small, with limited purchasing power and un­ derdeveloped infrastructure, the prospect of more companies getting to the level of an MAB or an IAB will likely be limited to the continent’s biggest economies. This prospect does not imply the failure of ­ African businesses, who may be strong in their diversi­ ty. Whether innovative or not, small- and medi­ um-scale but consistently profitable companies are a certain mark of success. One potential path­ way for scaling companies to a (sub)regional level may be addressing the problems and leveraging the opportunities that are common across the continent but remain relatively unfamiliar to for­ eign multinationals.
  • 183. 182 Authors Africa 2025: Prospects and Challenges HSE University Center for African Studies Authors Vsevolod Sviridov Deputy Director, HSE University Center for African Studies Andrey Maslov Director, HSE University Center for African Studies Anna Davidchuk Researcher, HSE University Center for African Studies Anna Bondarenko COO, Intexpertise LLC Valentin Bianki Leading Expert, HSE University Center for African Studies, Ph.D. in political psychology Egor Astrakhantsev Researcher, HSE University Center for African Studies Xenia Guseva Researcher, HSE University Center for African Studies Olesya Kalashnik Expert, HSE University Center for African Studies Daria Sukhova Researcher, Intexpertise, LLC Kirill Smirnov Researcher, HSE University Center for African Studies Andrei Shelkovnikov Expert, HSE University Center for African Studies Organisational support Polina Slyusarchuk Deputy Director, HSE University Center for African Studies Lubov Boldyreva Manager, HSE University Center for African Studies Nikita Panin Expert, HSE University Center for African Studies
  • 184. 183 Authors Africa 2025: Prospects and Challenges HSE University Center for African Studies Data collection, analysis and interpretation team Nikolay Golovko Research Fellow, Museum of Anthropology and Ethnography of RAS, HSE SPB student Igor Demin Intern, HSE Univeristy Center for African Studies Anastasia Svetlova Researcher, Intexpertise LLC Semyon Voronin Researcher, Intexpertise LLC Maria Saulina Researcher, HSE University Center for African Studies Angelina Pshenichnikova Researcher, HSE University Center for African Studies Maxim Polyakov Intern, HSE Univeristy Center for African Studies Mikhail Golubtsov Intern, HSE Univeristy Center for African Studies
  • 185. 184 About HSE University Center for African Studies Africa 2025: Prospects and Challenges HSE University Center for African Studies HSE University Center for African Studies (HSE CAS) was established in 2020 in response to the increas­ ing significance of Africa as a focal point for foreign policy and economic engagement for the Russian Federation. The Center specialises in expert and analytical research, focusing on the African markets and the assessment of associated financial, legal and political risks. The primary objective of HSE CAS is to conduct a comprehensive analysis of pro­ jects that are either currently being implemented or proposed for implementation in Africa by Russian entities, with an emphasis on risk analysis and the identification of strategic opportunities. HSE University Center for African Studies By 2024, HSE CAS aims to emerge as the preeminent center in Russia for applied expertise concerning the risks and opportunities inherent in conducting business in Africa By 2024, HSE CAS aims to emerge as the preem­ inent center in Russia for applied expertise con­ cerning the risks and opportunities inherent in conducting business in Africa. The core research domains of HSE CAS encom­ pass an array of topics, including but not limit­ ed to: energy and food markets, education, ICT, transport and logistics, financial infrastructure, decision-making systems and the overall business environment. Additionally, the Center conducts thorough risk assessments – spanning financial, legal and political dimensions. A significant focus of the Center’s scientific and analytical work includes the training of personnel through collaborations with universities, research institutions and governmental bodies across Af­ rican nations. This initiative also extends to the implementation of professional development pro­ grammes aimed at mid- and senior-level officials from both African countries and Russia, alongside training tailored for Russian enterprises with inter­ ests in Africa. In 2023, HSE CAS prepared and launched a hand­ book entitled Africa 2023: Opportunities and Risks, which addresses pertinent inquiries regarding the current landscape of African nations, potential ave­ nues for collaborative development and associated threats warranting consideration. The principal sec­ tions of this publication examine various facets of human capital in Africa – including demographics, education and cultural dynam­ ics – alongside analyses of natu­ ral resources (such as minerals, water supply and ecosystems), food markets, macroeconomics (covering trade, debt, sanctions, and currency fluctuations), in­ frastructure (including transport, energy, urbani­ sation and digitalisation), political systems, security issues, integration processes, and the evolving na­ ture of Russian-African relations. About HSE University Center for African Studies Center for African Studies HSE University
  • 186. 185 About HSE University Center for African Studies Africa 2025: Prospects and Challenges HSE University Center for African Studies In 2023, during the Second Russia-Africa Econo­ mic and Humanitarian Forum, HSE CAS, unveiled Russia-Africa E-Governance Knowledge Sharing Programme. Subsequently, in December of the same year, officials from authorities departments participated in Winter E-Governance Knowledge Sharing Week for African officials. HSE CAS staff and external experts have pre­ pared and launched several publications. These include the aforementioned Africa 2023: Oppor­ tunities and Risks (in Russian)488 , E-Governance in Africa: Opportunities and Challenges489 , the report Russia-Egypt: Trajectory of Cooperation (in Rus­ sian and Arabic)490 , Africa: Development Pros­ pects and Recommendations for Russian Policy491 , as well as the report for Valdai Discussion Club entitled Prospects and Tasks of Russian-African Cooperation492 . Furthermore, the online platform for the Knowl­ edge Sharing Programme – E-Governance Knowledge 488 Центр изучения Африки НИУ ВШЭ. Африка 2023: Возможности и риски. URL: https://we.hse.ru/irs/cas/africa2023 489 HSE Center for African Studies. E-Governance in Africa 2024: Challenges and Opportunities. URL: https://e-governancehub.ru/read-book-e-governance-in-africa-2024- challenges-and-opportunities/ 490 Росконгресс. Россия и Египет: траектория сотрудничества. URL: https://cdnweb.roscongress.org/upload/medialibrary/a68/Russia_Egypt_rus.pdf?1655234016413490 491 НИУ ВШЭ. Африка: перспективы развития и рекомендации для политики России. URL: https://globalaffairs.ru/wp-content/uploads/2021/11/doklad_afrika_ perspektivy-razvitiya.pdf 492 Valdai Club. Russia-Africa Cooperation: Outlook and Objectives. URL: https://valdaiclub.com/a/reports/russia-africa-cooperation-outlook-and-objectives/ Hub – has been established to aggregate informa­ tion regarding e-government development in Africa, ongoing projects, challenges and potential solutions. Apart from that, corporate information systems and geographic information systems are being devel­ oped to support decision-making. E-Governance Knowledge Hub
  • 187. 186 About Uralchem Group Africa 2025: Prospects and Challenges HSE University Center for African Studies Uralchem Group is one of the world’s leading pro­ ducers of mineral fertilisers and chemical prod­ ucts, with combined production capacity of about 25 mln tonnes. Uralchem Group official website Key assets of Uralchem Group are: – Uralchem JSC, one of the world’s largest pro­ ducers and exporters of nitrogen and complex fertilisers. Its production assets are located in Russia’s Kaliningrad Region, Kirov Region, ­ Moscow Region, and Perm Region. – Uralkali PJSC, one of the world’s largest pro­ ducers and exporters of potash. Its production assets consists of 5 mines and 7 ore treatment plants in Berezniki and Solikamsk (Perm Region, Russia). – Togliattiazot JSC (TOAZ), one of the world’s largest producers of urea, ammonia, and urea formaldehyde concentrate. Its production as­ sets include seven ammonia units and three urea units in Togliatti (Samara Region, Russia). Uralchem Group has its own railway fleet, which is one of the largest fleets of specialized mineral wagons and ammonia tank wagons in Russia; own and partner product storage facilities in key sales regions around the world, more than 100+ distri­ bution sites, as well as fertiliser transshipment ter­ minals and export shipment facilities. Uralchem Group’s product range includes over 100 comprehensive solutions created on the basis of extensive experience in agriculture and indus­ trial technologies. Its range of agricultural products includes nitrogen, phosphate, potassium, NPK/NPKS fertilisers, water-soluble fertilisers, and feed additives. Uralchem Group’s portfolio of industrial chemicals includes ammonia, urea, ammonium and potassium nitrate, acids, specialty products, urea formalde- hyde concentrate, carnallite, halite, AdBlue. About Uralchem Group
  • 188. 187 For notes Africa 2025: Prospects and Challenges For notes
  • 189. 188 For notes Africa 2025: Prospects and Challenges
  • 191. 190 For notes Africa 2025: Prospects and Challenges
  • 193. Handbook Africa 2025: Prospects and Challenges Edited by Andrey Maslov Typesetting: Denis Komarov Cover design: Lubov Gagovskaya Infographics: Ekaterina Nevstrueva, Olesya Kandaurova Proofreader: Daniel Johnston Print run: 500 copies Center for African Studies National Research University Higher School of Economics Moscow, Russia [email protected]