Items filtered by date: Thursday, 03 May 2018

The United States has threatened to cut funding to South Africa, after it emerged that South Africa is among the countries in the United Nations that is most likely to vote against the US.

The US, through its USAID programme, provides funding for South African health services (related to diseases such as HIV/Aids and tuberculosis), basic education, and assistance for small and medium enterprises. In 2016, USAID’s total foreign assistance to South Africa amounted to US$459.7-million.

The threat to cut funding came after Nikki Haley, the US ambassador to the UN, warned in December that her government would be “taking names” of the countries who did not vote with America on the recognition of Jerusalem as the capital of Israel.

At the time, the US had lost a vote inside the UN to declare Jerusalem as the Israeli capital and had been widely condemned for taking the position against international consensus.

The US has now compiled its UN Voting Practices Report for 2017 and determined exactly which UN member states are likely to vote in its favour or against it.

South Africa, it found, is among the 10 countries in the UN who are least likely to vote with the US, and may therefore, Haley argued, be among the countries who are not deserving of American funding.

The UN Voting Practices Report also found that of the 93 resolutions that were voted in 2017, other UN member countries only voted with the US on an average of 31% of these resolutions. It amounts to a 10% drop since US President Donald Trump came into office.

But now, as part of the Trump administration’s “America first” policy - which prioritises the interests of US sovereignty - the government is seeking to donate to countries that give it an “acceptable return” on its investment.

“The American people pay 22% of the UN budget – more than the next three highest donor countries combined. In spite of this generosity, the rest of the UN voted with us only 31% of the time, a lower rate than in 2016. That’s because we care more about being right than popular and are once again standing up for our interests and values,” Haley said in a statement earlier this week.

“Either way, this is not an acceptable return on our investment. When we arrived at the UN last year, we said we would be taking names, and this list of voting records speaks for itself. President Trump wants to ensure that our foreign assistance dollars – the most generous in the world – always serve American interests, and we look forward to helping him see that the American people are no longer taken for granted,” said Haley.

According to the UN Voting Practices Report, the top 10 countries who are likely to vote with the US are:

  1. Israel
  2. Micronesia
  3. Canada
  4. Marshall Islands
  5. Australia
  6. United Kingdom
  7. France
  8. Palau
  9. Ukraine
  10. Czech Republic

The top 10 countries who are the least likely to vote with the US include:

  1. Zimbabwe
  2. Burundi
  3. Iran
  4. Syria
  5. Venezuela
  6. North Korea
  7. Turkmenistan
  8. Cuba
  9. Bolivia
  10. South Africa
Published in Business

The World Bank said on Thursday it had given Kenya a $1 billion concessional loan for energy, transport and water infrastructure projects in poorer regions in its north and northeast.
These regions have benefited little from Kenya’s strong economic performance, the World Bank said. The East African economy is seen growing 5.8 percent this year, after electoral turmoil and drought cut last year’s expansion to the lowest level in more than five years.

Most of the money will be spent in the counties of Garissa, Isiolo, Lamu, Mandera, Marsabit, Samburu, Tana River, Turkana, Wajir, and West Pokot which fall below national averages on development indicators, the World Bank said in a statement.

“These infrastructure investments are laying the ground for additional operations that will enable sustainable livelihoods with targeted support to farmers and pastoralists in the region and expanded support to the most vulnerable households through regular cash transfers,” the Bank said.

The funding will go to six projects including an off-grid energy access initiative worth $150 million that the World Bank says will provide electricity to 1.2 million people and contribute 96 megawatts to the national grid.

A further $500 million will go towards a 740 km stretch of the Isiolo-Wajir-Mandera road corridor in the northeast and enhance internet access there.

The average poverty rate in the regions named stands at 68 percent compared with a national average of 36 percent, the World Bank said, while electrification rates there is only 14 percent compared with an estimated 44 to 70 percent nationally.

The new loan is in addition to $1.4 billion the World Bank has already invested in the region in the areas of health, transport, agriculture and social protection.

“Given the significant needs, more needed to be done in a targeted and coordinated manner if the Bank was to support the Government of Kenya in its efforts in the north and northeastern region,” the World Bank said.

Typically, World Bank concessional loans have zero or very low interest rates and have repayments periods of 25 to 40 years, with a five- or 10-year grace period.

Reporting by Omar Mohammed; Editing by George Obulutsa and Hugh Lawson (Reuters)

Published in Bank & Finance

Nigerian President Muhammadu Buhari’s visit to the Obama White House three years ago was ecstatic. By contrast, his visit this week to the Trump White House will be awkward. This time around, his host is a president who has referred to African states as “shithole countries” and remarked that Nigerians would never want to leave the US to “go back to their huts”.

Given Trump’s unpalatable statements about Africans in general, and Nigerians in particular, it’s fair to wonder why Trump invited the leader of a country he despises so much for a state visit. And also why Buhari accepted the invitation.

One answer is that the meeting offers both leaders a platform to promote their various political goals. Trump could use the occasion to showcase his credentials as an indefatigable fighter against terrorism. And he could pledge to help Buhari defeat Boko Haram in northern Nigeria, much as he has done with ISIS in Syria and Iraq.

For his part, Buhari is headed for a tough re-election bid a year from now and may believe that a visit to the White House could boost his international profile. His prolonged absence from office last year due to illness led some observers to believe that Nigeria had abandoned its role as a leading voice for Africa.

It’s not inconceivable that Buhari’s visit to the White House has little to do with economic relations, but more about the political gains both leaders can make. Buhari’s US visit comes on the heels of a recent visit to Downing Street, and will soon be followed by another visit to the Elysee Palace.

What must not be forgotten is that US dependence on Nigerian oil has increased dramatically with imports jumping threefold in 2016 driven by uncertainties in Iran and Venezuela. This suggests that both countries have a common interest in maintaining a close relationship.

What will be on offer

One deal that’s likely to be consummated during the meeting is the planned sale of up to 12 Embraer A-29 Super Tucano attack planes to the Nigerian Air force for about USD$600 million to help fight Boko Haram. Trump is also likely to announce the deployment of more military advisers to assist Nigeria in fighting Boko Haram.

But fighting Boko Haram requires much more. As the commander of the US Africa Command, General Thomas D. Waldhauser, recently observed,

Unrest within West Africa is driven by local grievances, corruption and weak governance, human rights violations, and imported religious ideology.

Buhari could also do with substantial non-military assistance. In particular, he needs help to address two huge social problems in Nigeria: the fact that 70% of Nigerians live in abject poverty, and that more than 50% of the country’s young people are jobless.

But Buhari should not count on Trump to increase aid for the kind of economic transformation the country needs. In the 2017 financial year, the US budgeted a mere USD$608 million in foreign assistance to Nigeria, a number which eerily echoes the price tag for the 12 fighter jets Nigeria wants to buy.

US assistance is unlikely to increase for two main reasons. First, Trump is pursuing his “America First” philosophy and has vowed to slash its foreign aid budget. In 2017, the budget was USD$34 billion, or 0.2 percent of US budget, out of which Africa received 21%.

The other reason the aid taps are unlikely to be opened is that Trump has threatened to withhold aid to countries that supported the UN resolution condemning his administration’s decision to recognise Jerusalem as Israel’s capital. Nigeria is one of the several African countries that voted for the resolution.

Trade

Nigeria is America’s 56th largest goods trading partner. The US exported goods worth USD$1.9 billion in 2016, and imported goods worth USD$4.2 billion that year, leaving the US with a trade deficit of USD$2.3 billion with Nigeria. But these numbers are deceptive because US imports are made up mainly of crude oil. Stripping out the oil, the US would have had a trade surplus of USD$1.7 billion in 2016.

To alleviate poverty and create jobs Nigeria needs to export more non-oil products to the US. At the very least, Buhari should press Trump to strengthen the African Growth and Opportunity Act (AGOA) enacted in 2000 to facilitate the access of African exporters to the US market. Nigeria was the leading AGOA exporter in 2016, with over USD$2 billion worth of exports under the Act.

There are fears that Trump might jettison the Act, or weaken some of its provisions that he deems inimical to his “America First” philosophy. Buhari should defend it unequivocally.

And he should tell Trump that Nigeria needs more US foreign direct investment. In 2016 the number was USD$3.8 billion in 2016, far less than the USD$13 billion the Chinese invested in Nigeria in the same year.

Business as usual

The US-Nigeria relationship has historically been driven less by economics, but more by convenience and indifference. While Nigerian presidents covet a visit to the White House, US presidents tend to be indifferent, and sometimes passive, about Nigerian affairs.

An example is the blind eye various US administrations turned as successive military dictators presided over Nigeria for three decades. Some of those dictators managed to stash their ill-gotten wealth in US financial institutions. I suspect that Buhari will be asking Trump to help repatriate some of those illicit funds. Whether Buhari also gets to ask Trump to commit to trade and investment, and not fighter jets, remains to be seen.

 

Stephen Onyeiwu, Professor and Chair of the Economics Department, Allegheny College

This article was originally published on The Conversation. Read the original article.

Published in Opinion & Analysis

  1. Opinions and Analysis

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