Commercial and trade agency agreements signed at the Tokyo International Conference on African Development and adverse comments by China’s Anhui Economic Construction Group on the Zimbabwean economy are actions from August 29 that may emerge to become significant factors impacting geomarket developments in Africa.
Japan, Africa: Several Memoranda of Understanding were signed between Japanese industry and African governments during the Tokyo International Conference on African Development.
Significance: The Angolan government signed a MoU with the Japan Bank for International Cooperation for potential funding of up to $400 million; the Ivoirian as well as the Ghanaian governments signed MoUs with Toyota Tshusho for car assembly plants to be built in their respective countries; the Zambian government signed a MoU with Toyota Tshusho and Elsewedy Electric for the design and construction of photovoltaic power plants. Several other governments, including those of Sierra Leone and Zimbabwe, signed non-specific agreements during meetings with Japanese industry and trade agencies. The commercial outcomes from the Japan-Africa summit conform to expectations that important but sub-geostrategic agreements will be reached in Yokohama, assuring internal and foreign stakeholders that Japan is not monopolizing trade relations in Africa.
Zimbabwe: China’s Anhui Foreign Economic Construction Group cited inconsistent policy changes and a poor economic environment for business losses in the country.
Significance: The comments by the Chinese contractor active in Zimbabwe’s construction and diamond mining sectors are ones more commonly heard from Western and domestic stakeholders, which the Zimbabwean government ordinarily rebuts. The comments on Zimbabwe’s adverse business conditions, including a breach in investment protection provisions, are consistent with an inability by the Emmerson Mnangagwa administration to secure meaningful economic assistance from the Chinese government, the Zimbabwean government’s traditional go-to foreign lender given the absence of Western support. Separately, the Zimbabwean government announced that Mnangagwa, at the Tokyo International Conference on African Development, acquired a new round of funding (amount undisclosed) from the African Export-Import Bank (Afreximbank). Afreximbank has become for the Zimbabwean government the new go-to source of hard currency it depends on to pay for crucial imports of short term consumables. Essentially emergency funding from Afreximbank is unsurprising, and is critical to satisfy domestic consumption needs, but doesn’t make for an outlook of improved business confidence.
Other items of note:
-The cabinet of Democratic Republic of the Congo Prime Minister Sylvester Ilunga Ilunkamba will be sworn into office by September 7.
–Mauritanian President Mohamed Ould Ghazouani met in Nouakchott with BP chief executive for Upstream operations Bernard Looney.
-African National Congress party spokesman Pule Mabe said the National Treasury’s Economic Growth Strategy paper is an important and positive plan to create jobs and raise confidence amid a contracting South African economy.