Press Review CW 21/2024: We mean business
Revue de presse 17.5.2024 jusqu'à 24.5.2024

Malheureusement, ce numéro de la revue de presse n’est actuellement disponible qu’en allemand et en anglais.


State visit of the Kenyan president to the US

The President of Kenya, William Ruto, was welcomed by US President Joe Biden at the White House on Thursday. Ruto is the first African leader to be invited to the US on a state visit in 16 years. The Kenyan President’s visit is thus an expression of stronger bilateral cooperation between the US and Kenya, but also demonstrates Kenya’s endeavours to establish itself as a global political player. The visit also marks the 60th anniversary of diplomatic relations between the US and Kenya. Biden announced that Kenya would be granted the important status of ‘major non-NATO ally’ (MNNA), which is primarily symbolic politics, but also comes with certain military and financial privileges. The announcement can be seen against the backdrop of the US administration’s endeavours to strengthen alliances with African states in order to counter the geopolitical influence of China and Russia on the African continent. Kenya is the first country in sub-Saharan Africa to receive this status.

The meeting between the two Heads of State focussed primarily on security and economic policy issues. With regard to security issues, both nations announced their support for the Somali government in the fight against terrorism and their commitment to a ceasefire in Sudan. For Kenya, US aid amounting to USD 7 million has also been pledged for the modernisation and training of the Kenyan police force. In the economic sector, further joint investments in renewable energies, education and health were agreed. Among other things, the US company Virunga Power announced investments totalling USD 100 million in various projects to expand hydropower in Kenya.

Most recently, Ruto has been campaigning for an adjustment of the international financial architecture and debt cancellation in order to support heavily indebted African countries. He has now called on Biden to double US contributions for concessional financing within the framework of the World Bank’s International Development Association (IDA). Accordingly, the US President announced that he would lead the reform of the international financial architecture and pledged a loan of up to USD 21 billion for the International Monetary Fund’s (IMF) Poverty Reduction and Growth Trust Fund and a further USD 250 million for IDA crisis management.

In addition to bilateral relations, the talks centred on the Kenyan deployment of 1,000 police officers to Haiti. The police forces from Kenya are due to arrive in Haiti this week to support the UN mission to stabilise the situation in Haiti. Last year, the UN Security Council authorised a multinational support mission to tackle the ongoing unrest and activities of armed gangs, particularly in the capital Port-au-Prince, and to ensure political stability. The deployment has also been criticised in Kenya, which has called for domestic security issues to be addressed first before sending police forces abroad. Ruto’s trip was also criticised in Kenya for its duration and cost. Prior to his stay in Washington, Ruto had already been travelling in Atlanta since Monday; a private luxury jet was hired from the United Arab Emirates for the four-day state visit, which cost Kenyan taxpayers USD 1.5 million.


Interest rate hike in Nigeria

The Monetary Policy Committee (MPC) of the Nigerian Central Bank raised the interest rate again on Tuesday. It was raised by 150 basis points from 24.75% to 26.25%. This is the third increase in the key interest rate this year; it was previously raised by 2% in March and 4% in February. This is the Nigerian government’s response to the continuing rise in inflation. According to the National Bureau of Statistics, inflation stood at 33.69% in April and had risen again compared to the previous month (33.20%). Inflation in Africa’s largest economy has not reached such a high level since 1996. The sharp rise is the result of the Nigerian government cutting subsidies for petrol, diesel and electricity and the two-time devaluation of the national currency, the naira, since President Bola Tinubu took office in 2023.

The Governor of the Nigerian Central Bank and Chairman of the MPC, Olayemi Cardoso, explained after the meeting of the committee in Abuja that they would continue to work towards achieving price stability by making effective use of the instruments available to the central bank to curb inflation. However, Nigerian experts have criticised the renewed increase in the interest rate. Leading economic experts have stated that the recent increase in the key interest rate will have a negative impact on the stock market given the inverse relationship between interest rates and stock market yields. It was also emphasised that the over-reliance on monetary policy measures to curb inflation has not had any significant positive impact so far due to the non-monetary drivers of inflation in Nigeria. Fears were also expressed that a continuous increase in the interest rate could even have the opposite effect and increase inflation rather than curb it as the cost of funds would increase. This would ultimately come at the expense of consumers and therefore the population through higher prices for goods and services.

According to the MPC, inflationary pressure, i.e. the burden that inflation places on economic operators, is largely caused by food inflation. With regard to this, the Committee emphasised the need to provide greater support to agricultural communities in order to improve food production. Agriculture is the second largest contributor to the country’s economy, accounting for around a quarter of GDP, but is not productive enough to meet Nigeria’s own needs for basic foodstuffs, which is why the country is heavily reliant on imports. Rural regions in particular suffer from high inflation. Curbing food inflation has so far been made more difficult by rising transport costs for agricultural produce, infrastructural restrictions, security problems in some food-growing regions and the convergence of exchange rates with domestic prices for imported food. As a result, the Nigerian central bank has been trying to stabilise the economy with an aggressive monetary tightening strategy.

However, the reasons for the rising inflation and the increasing deterioration of the economic situation in the West African country are manifold and go beyond the problems of agriculture. The economic downturn was already underway before Tinubu took office in May last year. However, the president’s reforms, such as the abolition of subsidies, did not initially improve the situation. The cost of food and transport tripled as a result, the local currency, the naira, lost around 70% of its value and fell to a record low after the president removed the currency’s peg to the US dollar (press review CW 23/2023).


in other news

Fidel Strub, a Swiss national from Burkina Faso and founder of the Noma survivor organisation Elysium was named one of the 100 most influential people in global health by Times Magazine on Monday. He received the award together with Nigerian Mulikat Okanlawon for his commitment to the fight against Noma. Fidel Strub contracted Noma at the age of three. He survived and has been campaigning for many years to raise awareness of the disease for many years. Thanks in part to his efforts, the WHO categorised Noma as a neglected tropical disease at the end of 2023, which means that more financial resources are being channelled into researching it. Noma is a serious bacterial disease that breaks out as a result of a combination of malnutrition, a weakened immune system, poor oral hygiene and contaminated drinking water, especially in children between the ages of two and six, and leads to inflammation of the facial tissue. Survivors of the disease are scarred for life by facial disfigurements caused by Noma. On the African continent, around 100,000 people fall ill every year, with a survival rate of just 10 per cent.


Update: Jacob Zuma excluded from elections

The South African Constitutional Court has excluded former President Jacob Zuma from the upcoming parliamentary elections on 29 May due to his conviction for corruption. The Electoral Commission had already excluded Zuma from the elections in March (press review CW 14/2024), but Zuma had appealed against this and the court spontaneously overturned the decision (press review CW 15/2024). Zuma was sentenced to 15 months in prison in the summer of 2021 because he had refused to take a stand against the corruption allegations in court. The recognition of the judgement is seen as a test for South African democracy, while protests by Zuma’s supporters are feared.

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