Africa’s Volatile Geopolitics: Regional Conflict Ahead? Part II.
Africa's geopolitical convulsions risk spreading regionally as global tensions rise. This is part II of II.
The geopolitical temperature in Africa is rising, and raising the risk of region-wide contagion. At the same time, China and Russia continue to make diplomatic inroads and elbow out US influence against the backdrop of a tense international environment.
Russia, China Court the Cradle
Beijing Rules
China has pledged 360 billion yuan ($50.7 billion) over the next three years in new credit lines and investments for Africa, but did not provide the debt relief many African countries were vying for.
This financial commitment is larger than what was offered at the 2021 FOCAC summit, though it remains below the $60 billion provided in 2015 and 2018. That marked the peak of China’s Belt and Road Initiative investments in Africa.
During those earlier years, Beijing financed large-scale infrastructure projects like roads and railways. But more recent economic pressures and rising debt risks among African nations have caused Beijing to focus on smaller, more manageable initiatives; “small and beautiful” is the new branding pivot.
The newly pledged funds will support 30 infrastructure projects aimed at boosting trade links, although specifics were not disclosed. Additionally, China will launch 30 clean energy projects and collaborate on nuclear technology to address Africa’s power shortages.
With Africa's annual infrastructure deficit estimated at $100 billion, improved transport links are crucial to the success of the African Continental Free Trade Area (AfCFTA). China's involvement in Africa remains part of its broader effort to counter growing competition from the U.S., EU, and Japan.
To further solidify its regional influence, on September 3, 2024, Chinese President Xi Jinping met with Kenyan President William Ruto during the Beijing Summit of the Forum on China-Africa Cooperation (FOCAC).
Xi emphasized the long-standing friendship between China and Kenya, highlighting their collaboration on Belt and Road projects, and outlined a vision to deepen their strategic partnership.
He proposed three key areas of cooperation: mutual trust, economic synergy through initiatives like Kenya Vision 2030, and joint efforts to uphold fairness and stability in global affairs.
Ruto praised the success of past projects, particularly the Mombasa-Nairobi Railway, and expressed hopes for expanded cooperation in infrastructure, energy, and youth development.
Both leaders reaffirmed support for the Global South and the one-China policy, with plans to sign new agreements in financing and infrastructure.
Moscow Moves
At the start of the war in Sudan, the Wagner Group, a firm of Russian mercenaries, provided the Rapid Support Forces (RSF) with surface-to-air missiles. But Moscow’s operations and vision for the continent are much larger.
Russia's deepening engagement with African nations is designed to shore up its war economy and expand its geopolitical influence, but jihadist advances in the Sahel could undermine Moscow's strategy.
On July 25-27, 2024, Tuareg rebels in Mali killed 84 members of the Wagner Group, dealing a significant blow to Russia's paramilitary presence on the continent. Wagner's operations in Africa, now overseen by Russia's Ministry of Defense, have supported regimes hostile to the West and aligned with Kremlin interests.
Economically, Russia seeks sanctions-proof revenue streams through mining and energy deals, while also recruiting African labor to offset domestic shortages. Russia's strategy extends to political interference, with countries like Cote d'Ivoire, Cameroon, and Kenya potentially in Moscow's sights as key targets.
In the Sahel, however, jihadist activity by groups like JNIM and ISSP threatens Russia's influence, forcing the Kremlin to consider either reinforcing local regimes or risking their collapse.
Russia's expanding military and economic ties with Africa could bolster its position against the West but will face increasing challenges from regional instability. In addition, Moscow may exploit migration flows from the Sahel to Europe as a tool to sow political division within the European Union.
Ethiopia, Eritrea, & Egypt
A growing military alliance between Somalia and Egypt is heightening tensions in the Horn of Africa, particularly with Ethiopia. The arrival of Egyptian military aircraft in Mogadishu signals the start of a deal that could see up to 10,000 Egyptian soldiers in Somalia.
Ethiopia views this as a destabilizing development, especially given its ongoing dispute with Egypt over the Nile and the construction of the Grand Ethiopian Renaissance Dam (GERD).
Somalia’s decision to exclude Ethiopian troops from the African Union’s new peacekeeping force and demand their full withdrawal is seen as a direct affront by Ethiopia.
Addis Ababa, which has long been a key ally in Somalia’s fight against al-Shabab, a Somalia-based militant Islamist group affiliated with al-Qaeda.
The conflict is further complicated by Ethiopia’s controversial port deal with Somaliland, which Somalia perceives as a threat to its territorial integrity and a potential precedent for international recognition of the breakaway region.
Ethiopia’s landlocked status makes access to the Red Sea a strategic priority, but this has fueled rivalry with neighboring states, including Eritrea and Djibouti. The risk of military confrontation looms as Egypt and Ethiopia both push for influence, with the Nile dispute likely to play out on Somali soil.
Regional powers like the UAE and Turkey may step in to mediate, given their vested interests in the Red Sea’s security and global trade routes.
More recently, Ethiopian Airlines has suspended flights to Eritrea after Eritrean authorities froze its bank account in Asmara, amplifying the renewed diplomatic rift between the two nations.
Flights had only resumed six years ago, following a 20-year break, in a symbolic move that marked the easing of historic tensions. However, relations have deteriorated since the end of Ethiopia’s Tigray conflict in 2022, with Eritrea—once an ally—left lukewarm about the peace accord.
With the land border still closed and now the air link suspended, only telecom services remain as the last connection between the two countries.
But economic and financial risks posed by the current macroeconomic cycle are also threatening to destabilize vulnerable African states.
Sovereign Debt Markets at Risk?
Accessing capital markets has become increasingly difficult for the world’s poorest borrowers in recent years. Following the COVID-19 pandemic, loose monetary policies in the US and eurozone kept bond markets relatively accessible, allowing lower- and lower-middle-income countries to raise a record $36 billion in 2021.
However, this changed in 2022 as rising global inflation prompted tighter monetary policies worldwide. By 2023, market access had severely diminished.
The 10-year US Treasury yield, considered the "safe" interest rate, surged from 1.5% in December 2021 to 4.6% by the end of September 2023. At the same time, risk premiums widened across all asset classes, effectively shutting out frontier markets from issuing new bonds.
Lack of access to financing mechanisms and macroeconomic convulsions in Africa have historically resulted in a commensurate level of political volatility.
Tunisia (2010-2011): The Tunisian revolution, driven by economic despair—high unemployment and mounting debt—sparked the Arab Spring. Tunisia’s financial woes left the government vulnerable, leading to the fall of President Ben Ali.
Sudan (2018-2019): Economic collapse, marked by soaring inflation and unsustainable debt, ignited widespread protests in Sudan in 2018. The unrest culminated in the ousting of President Omar al-Bashir, as the government’s inability to manage financial instability spurred mass discontent.
Zimbabwe (2019): Zimbabwe’s economic crisis, fueled by hyperinflation and crushing debt, led to protests in 2019. The government’s austerity measures further aggravated unrest as public frustration mounted.
Nigeria (2020): The #EndSARS protests, initially focused on police brutality, were underpinned by deeper economic frustrations. High unemployment and growing debt intensified public anger, turning the protests into a broader movement against the government’s economic failures.
Ghana (2022): Rising debt and a depreciating currency pushed Ghana into economic turmoil in 2022. Protests erupted as inflation soared, with citizens demanding better economic management.
Africa’s total foreign debt reached over $1.1 trillion by the end of last year, with the African Development Bank Group reporting that more than two dozen countries are facing excessive debt or are at high risk. Out of Africa's 54 nations, 25 now allocate more resources to debt interest than to healthcare or food security.
The World Bank has flagged Angola as being at high risk of "debt distress”. In Kenya, after a controversial tax increase sparked weeks of violent protests, President William Ruto initially scrapped the finance law and reshuffled his cabinet.
However, the government recently reversed course, with the new finance minister reintroducing some of the tax hikes. Kenya is scrambling to generate revenue to manage its growing public debt and avoid default, despite cutting back on key public services.
This situation reflects a wider challenge in low- and middle-income countries, where limited local capital markets and weaker currencies make debt management and countercyclical economic policies more dependent on access to foreign exchange.
As the Finance for Development Lab put it: “Debt restructurings remain difficult, as they involve dealing with a significant heterogeneity of creditors without a formal mechanism like the equivalent of a bankruptcy law”.
The challenge for countries like Kenya and Nigeria isn't just the size of their debt but the diversity of their creditors. In recent years, the range of lenders has expanded significantly, now including numerous private bondholders as well as China.
Over the past 20 years, China has funded one in five infrastructure projects across Africa. When interest rates surged, many countries were forced to take on new, costly loans to repay existing debts.
Looking ahead, macroeconomic instability could fuel discontent, creating opportunities for insurgents to exploit the unrest.
At the same time, it may also open opportunities for foreign forces to insert geo-financial conduits to use as leverage in the great game of politics. As the saying goes “All’s fair in love and war".