Africa News blog

African business, politics and lifestyle

Will global crisis hurt remittances to Africa?

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Employee counts money at foreign currency exchange in TokyoIt seems everyone in Africa has family members living abroad.

Just stop someone on the street and ask if they have a cousin, a brother, or a sister living in Europe, the United States or elsewhere around Africa, and most likely they’ll say that they have two or three or more. Remittances from those loved ones total some $40 billion per year, according to the United Nations. In some countries, diaspora money makes up more than 20 percent of the gross domestic product, and analysts say, remittance cash may be as much as 50 percent higher than current estimates due to informal transfers.

But there is growing concern that this money could be a victim of a spiralling crisis in global financial markets.

It’s still too early to tell how much remittances from the estimated 30 million Africans living abroad have been impacted by the crisis, which, world financial bodies warn, could lead to a global slowdown. But some families have already been told to expect less money.

This year, the continent has suffered a dual attack from high oil and commodity prices. And now, if there is a shortfall in remittances, a third front would put an added strain on wallets and purses. But in some ways, Africa is better-placed to weather some of the storm because its banking sector is relatively unexposed and its economic ties with Asia are deepening. For remittances, the fear is that if a recession hits Europe or the United States, traditionally resilient flows could ebb as migrants’ purse strings are pulled tighter and tighter.

Is U.S. Africom good or bad for Africa?

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Residents of Tizimizi greet members of the US Forces upon their arrival in their area in November 2006The new U.S. command for Africa began independent operations on Wednesday, after being carved out of three other Pentagon units previously responsible for the continent. President George W. Bush originally wanted Africom to be based in Africa, and Liberia has offered to host it. But the plan met with considerable hostility on the continent, especially from big powers South Africa and Nigeria and oil giants Algeria and Libya. Many ordinary Africans were also cynical, believing Africom would be a cover for Washington to counter growing Chinese influence and control vital oil supplies from West Africa — expected to provide 25 percent of U.S. needs by 2015.

The hostility forced Washington to rethink its plans and Africom, expected to reach its full complement of 1,300 by the end of next year, began work from Stuttgart, home of the existing European command, although officials clearly expect to open a base in Africa sometime in the future. It also pushed U.S. officials to emphasise that there was no hidden agenda, that Africom would not threaten the sovereignty of any nations and that a base would not be built in Africa without the full agreement of potential host nations. They also said half of Africom’s leadership would be composed of civilian agencies including the State Department. Africom’s stated aim is to help African countries face everything from natural disasters to terrorism and its targets will including drug trafficking, arms smuggling and the kind of piracy now plaguing the waters off Somalia. Experts say U.S. forces have been cooperating quietly for years with African armies, particularly in the Horn of Africa and the Sahel where rebel and al Qaeda-affiliated groups operate. They say Africom got a bad press initially because it was associated with heavy-handed U.S. policy in Somalia and as part of the U.S.-led ”War on Terror”, but now Pentagon officials are treading more carefully, realising how sensitive Africans are about suggestions Washington is trying to dominate.

Motlanthe greeted with relief, but South Africa’s problems are not over

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Kgalema Motlanthe takes the oath of office as South Africa’s president in Cape TownSouth Africans have widely greeted new President Kgalema Motlanthe, many of them with a sense of relief after the bitter and divisive power struggle between his ousted predecessor Thabo Mbeki and Jacob Zuma, leader of the ruling African National Congress.

Motlanthe, quiet spoken and dignified, struck exactly the note the public were looking for when he took office, sober but smiling gently – a huge contrast to the theatrical ebullience of Zuma and the aloof, intellectual style of Mbeki, who was seen as arrogant and out of touch with his people.

How will Africa weather financial storm?

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Kenyan Maasai herdsmen walk on the animal migration corridor at the Nairobi National Park November 12, 2007. REUTERS/Antony Njuguna

Isolation might seem like a good idea when it comes to the storm sweeping global finance and there is no doubt that African countries are among the most isolated in the world economy.

Avoiding the impact seems unlikely, though, particularly at a time when Africa as a whole has been enjoying its fastest growth for decades and the continent has become an increasingly popular investment destination – not only for Asian countries in search of resources but for frontier investors willing to take higher risks for higher returns.

Where’s the party in Angola?

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Resident students from Angola wave national flags as Angola's President Jose Eduardo Dos Santos's motorcade drives past after his arrival at Havana's Jose Marti airport September 20, 2007. REUTERS/Claudia DautIf anyone had a reason to paint the town red, it would seem to be Angolans after their first election in 16 years.

While certainly not perfect, the poll was peaceful and free of the strife that marred others recently in Africa.

Time for colonial masters to pay up?

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Italy's PM Berlusconi is greeted by Libya's leader Gaddafi in BenghaziItaly settled its colonial era dispute with Libya at the weekend with $5 billion in compensation for wrongs done during colonial rule. The money will be invested in a major new highway as well as used for clearing mines and other projects. Both sides say that will allow them to make a new start.

Relations between Libya and Italy had been especially difficult and this was a very specific dispute, but Italian colonialism did not last all that long in Africa – even if there were episodes of particular nastiness while it did.

Back to Africa?

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Members of Sierra Leone's U15 football team FC Johansen pose for a team photo in Freetown

Earlier this month, players in a Sierra Leonean football team were hailed as heroes when they returned from Sweden – because they all came home.

In the past, they might have been more likely to scarper and seek asylum while they had the chance.

Colonial borders. Does Africa have a choice?

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Lord Lugard, founder of Nigeria

The lines of Europe’s carve up of Africa were finally taking shape. On March 11, 1913, Britain and Germany agreed who got which bits of a swampy corner of the continent that few in either of the cold and distant countries had heard of.

Two states that did not exist at that time put the border agreement into effect again on Thursday with Nigeria formally handing over the Bakassi peninsula to Cameroon.

Losing billions in Zimbabwe

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dollars.jpgZimbabwe may lose its status as the country with the world’s highest proportion of billionaires after the central bank’s decision to lop 10 zeroes from its dollar.

What it means for the currency is that 10,000,000,000 dollars will become just one - although it will still take 25 of the new dollars to buy a loaf of bread.

Birds and biofuels at odds in Kenya

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tana-demonstration.jpgThe road to Kenya’s Tana River Delta from the Indian Ocean resort of Malindi is a lonely stretch of tarmac punctuated only by road blocks manned by armed police.

Few people from the outside world come this way.

Most foreign and local holidaymakers heading for the popular Lamu Islands prefer to fly rather than use the road.

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