One of Africa’s most successful economies and the country hosting next year’s Intra-African Trade Fair is itself struggling to secure access to markets due to arbitrary border closures and Ebola containment measures. A growing trade deficit may mean Rwanda will have to borrow more to fund its current budget, while bilateral disputes risk escalating into military conflict.
According to the latest findings from the Aid Worker Security Database, 2018 was the second-worst year on record for humanitarian workers deployed to conflict zones across the world. We explore the trends in this regard and threats to such personnel in the three riskiest locations in Africa: South Sudan, the Democratic Republic of Congo and the Central African Republic.
EXX Africa explores Russia’s growing influence in Africa. We look at the drivers of this foreign policy shift, the locations of interest, and the implications for traditional players across the continent.
At the end of this year, in October 2019, Russia will host its very first Russia-Africa Summit, which will bring together more than 50 African leaders in Sochi. While Russian influence across the continent is nothing new, as the former Soviet Union enjoyed extensive support among many African nations throughout the Cold War, there has been a notable shift in its focus over the past half-decade. We explore the nature of this shift and the strategic objectives behind Russia’s engagements with select countries. We further look at how Russia fares against other global powers in this latest ‘scramble’.
Russian influence across the continent is not unprecedented. From 1960 until the end of the Cold War, the former Soviet Union supported liberation movements in Algeria, Angola, the DRC, Ethiopia, Guinea, Morocco and South Africa, among others. However, with the collapse of the Soviet Union in 1991, these relations faded. Indeed, throughout the next decade, Africa experienced a so-called ‘third wave of democratisation’ during which Vladimir Putin showed limited interest in Africa.
This outlook changed significantly after 2014. With the Russian annexation of Crimea in Ukraine, relations with the West reached its lowest point since the Cold War. The US and EU responded to Russian expansionist policies in Eastern Europe by implementing sanctions against the regime, while both sides of the dispute engaged in a military build-up.
In response to actions from the West, Russia amended its foreign policy to establish strategic ties outside of the West and to insulate its economy against ongoing sanctions. As a part of this, Russia established new economic and security ties with South Asia, the Middle East, South America and indeed, Africa.
The Africa pivot
According to leaked documents obtained by the Dossier Centre, a London-based investigative unit, Russia’s pivot towards the continent typically involves a deal in which it offers some level of political or security support to African leaders in return for various concessions, such as in mining, oil and gas, arms or infrastructure contracts. Through these deals, Russia also establishes close personal ties with various heads of state and upcoming leaders, ensuring longevity to its plan.
The man reportedly driving this shift to Africa is known as Yevgeny Prigozhin, a businessman and close ally of Putin who is believed to be a funder of Wagner Group: a private military contractor with a presence in Africa. According to the leaked documents, Prigozhin has identified various countries with which Russia is seeking to bolster relations through political and economic ties, police training, media and humanitarian projects, and “rivalry with France”. Each country is ranked out of five in terms of priority with five being the highest level, and one the lowest.
The following countries are identified as part of this shift, according to the leaked documents:
― Rank five: Central African Republic (CAR), Sudan and Madagascar
― Rank four: Libya, Zimbabwe, and South Africa
― Rank three: South Sudan
― Rank two: the DRC, Chad and Zambia
― Countries cited where Russia “plans to work”: Uganda, Equatorial Guinea and Mali
― Countries cited “where cooperation is possible”: Ethiopia
― Countries cited as “traditionally supportive”: Egypt
We explore the nature of these relations and the impact on Western interests in some of these countries of interest.
Central African Republic – Rank Five
Russian influence in the CAR – a former French colony – failed to garner much attention until July 2018 when it was reported that three Russian journalists had been killed around 180km from the capital, Bangui, while on an assignment focused on investigating the activities of Wagner Group in the country. By the end of the year, Russia’s involvement had made its way into a UN Experts Report.
In the midst of a protracted armed conflict that had been ongoing since 2013, it emerged that President Faustin-Archange Touadéra sought out Russian assistance on the side-lines of a UN General Assembly meeting in 2017 to help bring about peace and get armed groups around the negotiating table. Russia responded by providing the national army with training and equipment and provided the president with security advice and personal protection.
To date, this has included: the free delivery of thousands of smalls arms to equip local law enforcement and two local battalions totalling 1,300 men; the deployment of Valery Zakharov (a former member of Russian intelligence services) as the top security advisor to Touadéra; the deployment of over 170 servicemen to train local security services; the deployment of an additional 30 servicemen to join the local UN peacekeeping mission; and plans to open a local office in the country.
Rich in natural resources – such as gold, diamonds and uranium – Russia is suspected to be shoring up support with Touadéra to secure these contracts. Indeed, reports have emerged of the presence of Wagner Group mercenaries guarding valuable gold and diamond mining operations in the country. This includes the large Ndassima gold mine that is alleged to have been taken over by Russian interests funnelled through a locally registered company known as Lobaye Invest. Ndassima was previously owned by a Canadian company before falling into the hands of Seleka rebels.
In addition to winning contracts in the extractives sector, the leaked documents further reveal that Russia plans to “replace national assembly representatives and [the] foreign minister who are orientated towards France” and “own [a] radio station and two print publications”. These objectives were partially achieved with the establishment of a new government this year and the opening of Radio Lengo Songo, which is funded by Lobaye Invest and the Russian embassy, last year.
France’s response to Russian meddling in its former colony has been vociferous. Following the free delivery of arms to the CAR the French Defence Minister noted, “I am not sure that this presence and the actions deployed by Moscow… help to stabilize the country”. In November 2018, in a show of force, France announced that it would be delivering its own arms to the CAR as well as aid to the value of USD 27.4 million.
South Africa – Rank Four
Ranked as a level four, recent Russian interests in South Africa have revolved around entering into political consultations with the ruling African National Congress (ANC) party ahead of the May 2019 general elections, monitoring of public-political social processes, and creating a new media – according to the leaked documents. This plan was formed as part of Putin’s strategy to support incumbents in office and to work against “pro-Western” parties and movements.
Just prior to the elections in May, in which doubt began to emerge as to whether the ANC would garner above 50 percent of the vote, a local investigation by the Daily Maverick revealed that these plans were underway. It emerged that entities linked to Prigozhin had devised to “create a disinformation campaign that favoured the ANC and put out a propaganda action against the opposition DA [Democratic Alliance] and EFF [Economic Freedom Fighters].” As a part of this strategy, Russia reportedly deployed a small team of political analysts to South Africa to work within a research outfit that would influence public rhetoric, degenerate and disseminate video content, coordinate with a “loyal pool of journalists” and produce “pro-ANC videos”.
While subsequent reports revealed that the initiative was not very effective and that there was no disinformation campaign, the attempt nevertheless points to the intent my Russia to meddle in African politics to ensure a favourable outcome.
Moreover, the investigation by the Daily Maverick further pointed to various business interests in South Africa that Russia planned to pursue under the leadership of Prigozhin. These include the supply of ammunitions and short-barrelled weapons to a South African company, the acquisition of stakes in a local industrial packaging company and various infrastructure projects, particularly in Johannesburg.
Beyond South Africa, the report revealed interests in Zimbabwe (a rank four country), particularly under the new president, Emmerson Mnangagwa. Here, Russia is looking to secure access to gold mining, tantalite, copper and chromium deposits – it is already developing one of the world’s largest deposits of platinum group metals – and the establishment of a military industrial complex.
South Sudan – Rank Three
Russia’s relationship with South Sudan cannot be explored without acknowledging the close ties it enjoys with its neighbour, Sudan (a rank five country). Putin had long enjoyed a close relationship with former Sudanese President Omar Al Bashir who reportedly even offered Russia a naval base at the Red Sea in return for support for his government, particularly in light of mounting protests. While Al Bashir was eventually removed in 2019, Putin still enjoys relations with the transitional military council in power and will likely play an active role in the 2020 elections.
South Sudan is crucial to Sudan, and therefore Russia. While Sudan lost 75 percent of its proven oil reserves after South Sudan gained independence in 2011, it nevertheless retains the infrastructure required to bring South Sudan’s oil to market and, as such, continued flow between the two states is necessary. As South Sudan has looked to open up its hydrocarbons sector to potential investors in light of its peace deal in 2018, Russia has emerged as a top contender.
In late 2018, a delegation from South Sudan along with officials from the government-owned Nile Petroleum Company travelled to Russia to a sign an MoU with a Russian oil company, Zarubezhneft, to explore some of its blocks open for licensing. The officials also signed two other MoUs with Russian oil producer, Gazprom Neft and energy company, Rosneft, to develop a geological map of the country’s minerals. In addition to these oil exploration deals, Russia is also reportedly working to establish a refinery for South Sudanese oil back in Sudan.
Furthermore, it is alleged that as Russia’s commercial relationship with South Sudan continues to expand, Russia may soon shift to promoting its military interests in the country. In this scenario, much like in the CAR, its security forces are expected to be deployed to guard Russian interests – such as oil blocks – and train local forces.
Democratic Republic of Congo – Rank Two
Russia has recently hedged its bets by backing newly-elected President Félix Tshisekedi following the controversial general elections that took place at the end of 2018. While many Western countries – including France and Belgium – supported opposition concerns that Tshisekedi had struck a deal with former President Joseph Kabila ahead of the vote, Russia not only sided with the new president but – along with China and South Africa – also blocked the UN from taking any meaningful action regarding the vote.
This action is unsurprising given that Russia had engaged in discussions with Kabila and his supporters about reviving a 1999 agreement on military cooperation in 2018, and had reportedly cultivated a relationship with Tshisekedi ahead of the vote. Rich in natural resources, Russia is likely looking to gain access to new concessions whilst promoting an anti-Western ideology in the country – a stance previously undertaken by Kabila and likely to be pursued under Tshisekedi.
While Russian engagement with Africa has certainly grown, with trade and investment climbing by 185 percent between 2005 and 2015, it lags behind the initiatives of other major powers, such the US, the EU, and China. Each one of these countries has established economic and military ties across the continent and has their own programmes in this regard.
While US investment in Africa has barely risen since 2010, in June 2019, it launched a new Prosper Africa policy to reverse this trend and, indeed, counter both Chinese and Russian influence across the continent. The US also has a vast military presence in Africa, which includes 34 sites with high concentrations in the north, west and the Horn of Africa.
The EU and Africa also have extensive ties. Economically, 41 African states have signed Economic Partnership Agreements with the bloc and there is even talk of a continent-to-continent free trade agreement. Military, France has a large presence across the continent, particularly in the Sahel and the Maghreb. As part of Operation Barkhane alone, France has deployed over 3,000 personnel to the region in its largest overseas operation.
Lastly, China remains the top contender (economically speaking) with it being the continent’s leading trading partner. The total volume of two-way trade between China in Africa currently exceeds USD 200 billion while investment from China to Africa doubled between 2010 and 2016. As a show of further commitment to the continent, in September 2018, President Xi Jinping pledged an additional USD 60 billion in broad and diverse financing. Its key focus in this regard has been its Belt and Road Initiative.
In comparison to these other actors, Russian influence in Africa appears relatively weak and poses a limited threat to more established players. However, instead of competing head to head in terms of military or economic might, Russia is likely playing a more subtle game in which it establishes itself in less popular destinations, sows seeds of discontent with the West, helps up prop up long-term leaders and secures access to natural resources.
SEE COUNTRY OUTLOOK: SOUTH-AFRICA, CENTRAL AFRICAN REPUBLIC, SOUTH-SUDAN, SUDAN, MADAGASCAR, CHAD, ZAMBIA, GUINEA, UGANDA, EQUATORIAL-GUINEA, DEMOCRATIC REPUBLIC OF CONGO, ETHIOPIA, EGYPT, MALI, LIBYA, ZIMBABWE
Ongoing security, political, and humanitarian challenges in the Great Lakes have prompted a series of meetings among regional heads over the past few months with the most recent being a summit between Angola, the DRC, Rwanda and Uganda in July. We examine the issues that likely prompted this recent gathering and the wider impact they are having on the region.
On 12 July 2019, the heads of state of Angola, the Democratic Republic of Congo (DRC), Rwanda, and Uganda attended a one-day Quadripartite Summit in Luanda. The purpose of this meeting was to address “security along the borders between the three countries [DRC, Rwanda and Uganda] and relations between Rwanda and Uganda,” according to Angolan President João Lourenço. Following a closed-door session that lasted roughly three hours, a joint communiqué was released that indicated the four presidents would “prioritise the resolution of any dispute between their respective countries by peaceful means,” and that Angola and the DRC had been mandated to help solve the Kampala-Kigali impasse. Little further information has since been provided.
The meeting itself was nevertheless significant, as it comes at a time when the Great Lakes is facing major security, political, and humanitarian challenges. We explore the main concerns that could have prompted this summit and their impact on businesses and civilians in the region, with a specific focus on border closures.
The proliferation of armed groups in the DRC
One of the key areas of discussion focused around armed non-state actors. Just a few weeks prior to the summit, Congolese President Félix Tshisekedi hosted two important gatherings aimed at addressing this issue. In Kinshasa in May, Lourenço, Tshisekedi, and Rwandan President Paul Kagame held their first-ever tripartite meeting to discuss security in the region with a particular aim of uprooting non-state armed groups in the DRC, under their so-called ‘Congo-Angola-Rwanda’ axis. Thereafter, in June, Tshisekedi hosted a meeting of the Chiefs of the Intelligence and Security Services from the DRC, Rwanda, Uganda, and Tanzania to develop an understanding of the security situation in eastern DRC and to agree on actions to neutralise these groups.
Violence and the proliferation of armed groups in eastern DRC is a major concern for all regional players. According to Human Rights Watch, more than 140-armed groups were active in Congo’s North Kivu and South Kivu provinces, which border Rwanda and Uganda, last year. Assailants – including security forces – reportedly killed more than 883 civilians, abducted nearly 1,400 others and displaced tens of thousands in the region over this period. Such violence has also had an enormous ripple effect across the border as well: Rwanda and Uganda are estimated to have hosted 75,740 and 312,691 refugees and asylum seekers respectively from the DRC over the course of 2018.
The ADF and P5 militant groups
The local militant groups known as the Allied Democratic Forces (ADF) and Platform Five (P5) would have been key talking points at the Quadripartite Summit (See DRC/UGANDA: ISLAMIST INSURGENCY POSES A GROWING RISK OF COMMERCIAL DISRUPTION).
The ADF, established over 20 years ago as a merger of Ugandan rebel groups, is believed to have carried out close to 100 attacks around Beni in 2018 in which over 200 people were killed, earning it the title of the deadliest armed group in the DRC. Moreover, the ADF reportedly relies on a sophisticated recruiting network that sources fighters from Uganda, Burundi, Tanzania, and even South Africa and further managed to establish tentative links with Islamic State (IS) in the Middle East in 2019. In response to a wave of attacks in the DRC by the ADF last year, Uganda announced the deployment of approximately 4,000 troops along its border to prevent infiltration. Both the DRC and Uganda have also previously both decried the links between ADF and IS and have attempted to shore up US counterterrorism support in the fight against the group (See DRC: REVIEWING THE EVIDENCE FOR AN ISLAMIC STATE CALIPHATE PROVINCE IN THE CONGO).
The P5 rebel group would have been another hotly contested topic at the summit. The P5 is a coalition of Rwandan opposition political organizations including the Amahoro People’s Congress (AMAHORO-PC), the Forces démocratiques unifées-Inkingi (FDUINKINGI), the People’s Defence Pact-Imzani (PDP-IMANZI), the Social Party-Imberakuri (PSIMBERAKURI) and the Rwanda National Congress (RNC).
In December 2018, a UN Group of Experts Report found that the military wing of a coalition of Rwandan opposition groups, known as the P5, had amassed 400 recruits under the leadership of former Ugandan senior officer and Rwandan Army Chief of Staff, General Kayumba Nyamwasa – currently exiled to South Africa. In 2011, Nyamwasa, a former head of the Rwandan military, was sentenced in absentia to 24 years in prison after he was convicted of multiple charges including terrorism, genocidal denial and crimes against humanity.
The stated aim of the P5 is to “liberate Rwanda” and Nyamwasa is staunchly anti-Kagame. Moreover, reports have indicated that the P5 receives support (weapons, ammunition, food, medicine, boots and uniforms) from Burundi and Uganda. In response to these developments, as well as the continued threat posed by the Democratic Forces for the Liberation of Rwanda (FDLR) that is also operational in eastern DRC, Rwanda has reportedly deployed its own Special Forces to South Kivu. In doing so, it allegedly supports local Mai-Mai militia as well as an anti-Burundian rebel group, known as the Red Tabara, in incursions against the P5. Such inter-state meddling on all sides widens the potential for conflict not just in the DRC but the Great Lakes region as a whole.
Rwanda and Uganda stalemate
Another major discussion point at the Quadripartite Summit would have been the ongoing stalemate between Rwanda and Uganda, which is linked to instability in eastern DRC. Formerly close allies, tensions between Kagame and Museveni have escalated once again over the past six months. The aforementioned UN Group of Experts Report in which it was revealed that regional actors – notably Burundi and Rwanda – were propping up the P5 helped trigger this stalemate.
Following the release of the report, Rwanda decided to unilaterally close its Gatuna Border Post with Uganda in February 2019, accusing Ugandan President Yoweri Museveni of harbouring fighters associated with the P5 and of detaining and torturing its citizens. Uganda has repeatedly denied the claims but it, in turn, alleges that Rwanda has deployed spies to the country to undermine Museveni’s government. Rwanda has also responded by issuing a travel advisory warning its citizens not to travel to Uganda where it claims that 900 Rwandans have been deported without consular support or due process and that 106 individuals remain in detention. Just prior to the latest summit the border was re-opened in June; however, it was shut again after 12 days and remained closed at the time of writing.
In response to the ongoing dispute, three civil society groups on behalf of communities along the border filed a complaint with the East African Court of Justice demanding repatriations from Uganda and Rwanda for their losses on 21 June. The lawsuit asks the court to issue a permanent injunction against both governments to keep them from closing the border and preventing the free movement of people and trade. The Ugandan government has not responded to the lawsuit but has advised locals to find alternative routes. However, as recently noted by the Minister of Trade and Industry, while routes via the DRC were previously proposed, “now there is the challenge of Ebola”.
Ebola likely featured as an additional talking point at the summit in Luanda. The outbreak, first confirmed in the DRC in August 2018, has claimed around 1,604 lives and is centred on the North Kivu and Ituri provinces, which border Rwanda, Uganda, and South Sudan. Outside of the DRC, around two dozen ‘active cases’ have been caught at border points since the outbreak began and there were three fatal cases reported in Uganda in June. Rumours of a recent case in Rwanda have been denied (See DRC: RESHUFFLING THE POLITICAL CARDS).
The local situation escalated on 14 July, when the first confirmed case was reported in Goma – a major urban centre through which tens of thousands of people travel daily. In response to the geographic spread of the disease, the World Health Organisation (WHO) declared the epidemic a public health emergency of international concern (PHEIC). The WHO noted the declaration was in recognition of “possible increased national and regional risks and the need for intensified and coordinated action to manage them”. The WHO concluded that national and regional risk levels remain “high”.
Efforts to address the outbreak, however, have been hampered by what aid officials describe as a “perfect storm” of regional insecurity in eastern DRC. Not only do local armed groups pose a challenge to aid workers in all affected areas – prompting medical teams to travel with armed escorts and reinforce clinics with sandbags – but widespread false narratives have even prompted locals to attack centres as well. In June, for example, a driver working with the Ebola response team in Beni was left in a critical condition after angry crowds hurled rocks at him and set his vehicle on fire.
The issues that likely prompted the summit – and the gatherings just prior – together pose an unprecedented challenge to both regional governments and, indeed, civilians and businesses in the Great Lakes. While there is a high risk of injury and death to all entities in eastern DRC as a result of armed rebel groups, we explore the far-reaching and even deadly impact of border closures as a result of these issues. We explored similar issues in our Threats To African Borders analysis series (See THREATS TO BORDERS: AFRICAN MILITANCY AND TERRORISM).
The ongoing stalemate between Ugandan and Rwanda has already significantly-impacted the economies in both countries. Uganda’s Ministry of Trade and Industry recently noted that its exports to Rwanda decreased from about USD 660 million prior to the closure to around USD 203 million in June. Rwanda, in turn, has reported a loss of USD 104 million over the same period. Notably, the main route for Rwandan exports – along with goods from eastern DRC and Burundi – is through Uganda towards the Kenyan port of Mombasa. Our recent special report on supply chain risks in Africa mentions further commercial implications (See SPECIAL FEATURE: SUPPLY CHAIN RISK IN AFRICA).
The border closure has also severely impacted the movement of people. Indicative of this, several Ugandan schools reported a drastic decrease in its student numbers at the start of the second term, as Rwandan learners were prevented from crossing the border. Similarly, an estimated 30,000 Ugandans work and study in Rwanda. Locals have further been caught in the crosshairs. In May, Rwandan soldiers crossed the border and shot dead an alleged Rwandan clothes trader and a Ugandan civilian who tried to intervene on his behalf. This was the second such incident since February in which locals have been killed for crossing the border, highlighting the vulnerability of the situation.
At the time of writing, the borders into eastern DRC remained open and businesses were operational despite severe security and health threats. In response to the geographic spread of Ebola, the African Union Centre for Disease Control and Prevention recently appealed to the international community and member states in Africa not to impose restrictions on travel to anyone going in or out of the DRC, claiming this would hamper their efforts to administer aid. While free movement still stands, Rwanda has nevertheless warned its citizens not to travel to any areas affected by the outbreak across the border, including Goma. Should the outbreak continue to escalate or expand in reach, some restrictions on movement in and out of the east is expected.
SEE COUNTRY OUTLOOK: DEMOCRATIC REPUBLIC OF CONGO, ANGOLA, UGANDA, RWANDA
While rival political leaders are preoccupied reshuffling the cabinet and the board of the important state mining company, Congo’s volatile northeast experiences a resurgence of violence that has triggered cross-border military deployments from Uganda and Rwanda, while frustrating efforts to contain the ongoing Ebola outbreak that has now spilled over into Uganda and threatens wider contagion.
Transport logistics are a vital and promising sector for business in Africa. However, traversing land, sea, and air routes across the continent comes with a plethora of political and security risks. EXX Africa explores the key concerns in this regard, their manifestation, impact, and outlook.
Doing business in Africa is beset with a number of political and security risks. Recent research by Aon reveals that 70 percent of countries in sub Saharan African are currently at risk from strikes, riots, and other types of civil unrest while 25 percent are at risk from sabotage and terrorism. Although government assets are most frequently targeted during such events, these risks ultimately affect the viability and profitability of private entities and investments as well.
The latest Emerging Markets Logistics Index, which ranks 50 emerging economies across the world, places these concerns in the transport logistics sector. Agility Logistics produces this index. Rankings are pulled from data from institutions such as the IMF, the OECD, the World Bank, the UN, and the WEF, among others, and is supported by a survey of trade and logistics industry professionals. Findings from the 2018 Index reveal that many of the top supply chain risks in sub Saharan Africa relate to political and economic concerns, with industry professionals citing corruption (23 percent), government instability (18.3 percent), terrorism (9 percent), and piracy (4.1 percent) as major risks. In North Africa, terrorism (43.8 percent) and government instability (19.9 percent) together represent almost two thirds of the primary concerns.
A similar long-term study by Willis Towers Watson echoes these findings. Its 2016 Transportation Risk Index, compiled from data and insights derived from 350 interviews with executives in the sector, noted that the number one long-term (up to ten years) megatrend for logistics across the continent concerned geopolitical instability and regulatory uncertainty.
Such political and security risks tend to affect transport logistics across the continent in three ways: border closures or delays, the targeting of state assets, or the targeting of private assets. We explore each of these manifestations, identifying their major trends, impact and outlook below.
Border closures and delays
Government and geopolitical instability frequently result in the planned or unexpected closure of land, sea and air routes, affecting the movement of goods and services. Such closures most often arise as a result of a change in government – whether by democratic or undemocratic means – or as a result of bilateral tensions between neighbours.
Election periods pose one of the primary threats in this regard. Even votes deemed free and fair, and organised by democratically elected governments can cause disruption. During the General Elections in Nigeria in February 2019, for example, the government announced the closure of all borders and implemented various restrictions on vehicular movements for the voting weekend. A similar elections-related border closure took place in December 2018 when the Democratic Republic of Congo (DRC) closed its borders with its nine neighbours as it held its long-awaited polls.
Unexpected changes of power, such as via an insurrection, coup, revolution or rebellion, further results in risks to the logistics sector and induces high levels of uncertainty. During the successful removal of President Omar Al-Bashir in Sudan in April 2011, following weeks of anti-government protests, the transitional military council closed the country’s airspace for 24 hours as well as all border crossings until further notice.
Unsuccessful attempts at regime change can also result in panic, as witnessed in January 2019 when Gabon suddenly closed its border with Cameroon following an attempted coup against President Ali Bongo. All cross-border trade ground to a halt forcing local businesses to divert their goods to Equatorial Guinea.
Poor bilateral relations can further limit the flow of goods and services. While there are some known long-standing tensions between neighbours that have resulted in border closures, such as between Morocco and Algeria (ongoing for 25 years) and Ethiopia and Eritrea (borders have closed again despite a peace deal in July 2018), emergent socio-political developments can cause abrupt stoppages to cross-border commerce as well. In February 2019, Rwanda unilaterally decided to close its busiest border with Uganda over mutual allegations of threats to national security. The decision not only affected bilateral trade but impacted trade to Burundi, the DRC and Zambia as well. One month later, borders were again closed in Southern Africa, this time between South Africa and Mozambique following xenophobic attacks in Kwa-Zulu Natal province. During this incident, a crowd of around 200-300 Mozambicans barricaded the N4 and began targeting trucks with South African license plates.
Targeting of state assets
Beyond broader political threats and the closure of borders, the logistics sector is often impacted by security-related incidents in which non-state actors target key state infrastructure assets. Such incidents may emerge during acts of militancy, labour unrest or sabotage.
The strategic importance of a country’s infrastructure – particularly its ports – often renders these assets prime targets for militant attacks and activity. This has been demonstrated repeatedly in conflict zones over the past 12 months, with attacks reported against sea and air ports in Somaliland (Bosaso Port), Somalia (Mogadishu International Airport), Libya (Ras Lanuf and Es Sider Ports, and Mitiga International Airport), Niger (Diffa Airport), and Mali (Sevare Airport). Militants may even attempt to seize such assets for political leverage. In March 2019 in the Central African Republic, a local rebel group stationed at the border post with Cameroon blocked cargo to impede commercial traffic in an attempt to force the government to include them in the newly formed government.
The economic importance of logistical infrastructure further incentivises established worker unions to target such assets during labour disputes and negotiations. In this instance however, disruptive events are not limited to conflict zones but can be found across all countries, including the major economies. In a 2019 survey on supply chain risk management in South Africa, all 20 participants identified socio economic factors, such as labour unrest, as a key source of vulnerability. South Africa has also been impacted by frequent incidents of sabotage within the logistics sector, with arson and derailment attacks having recently been carried out against both its passenger and cargo rail services.
Targeting of private entities
Political and security risks may also affect private commercial entities and their assets directly as well. One of the primary security threats in this regard is posed by piracy. While this threat is location and sector specific, its impact is significant – particularly considering that 90 percent of African imports and exports are moved by sea. According to the 2018 Oceans Beyond Piracy report, in East Africa alone, the annual cost of maritime piracy was estimated at USD 1.4 billion in 2017 (down from USD 7 billion in 2010) while in West Africa it was estimated at USD 818 million (up from USD 719.6 million in 2015).
Most concerning, according to the latest statistics released by the International Maritime Bureau, the threat from piracy is increasing in West Africa. Since 2014, there have been approximately 250 actual and attempted attacks in the Gulf of Guinea, with a 70 percent increase in incidents being reported between 2017 and 2018 alone. This surge is expected to result in associated rises in the cost of maritime business, particularly with regard to insurance. In 2017, the total costs of additional premiums incurred by ships transiting the Gulf was calculated at USD 18.5 million. Moreover, it was estimated that 35 percent of all ships now take out Kidnap & Ransom insurance, totalling USD 20.7 million.
Companies operating in the transport logistics sector are also frequently targeted by corrupt individuals. The sector remains particularly vulnerable to corruption given its close engagement with customs officials who are often underpaid and look to increase their wages through opportunistic facilitation payments. Extensive red tape and delays further amplifies this risk: according to the African Development Bank, the average customs transaction across the continent could involve 30-40 different parties. In addition to increasing commercial operating costs and affecting intraregional and international trade, such corruption at ports of entry and exit frequently facilities a range of illicit activities as well, such as the smuggling of people and goods, and tax evasion.
Despite these challenges, there remain sound opportunities for transport logistics in Africa. Egypt, Morocco, Algeria, Tunisia, Libya, South Africa, Nigeria, Ethiopia, Ghana, Tanzania, Uganda, Kenya, Mozambique, and Angola all featured within the Emerging Markets Top 50 Logistics Index last year.
Looking more closely at the data, Egypt and Ethiopia were identified as having made significant strides in the logistics sector. The improvement in business conditions in Egypt, including the reduction in business costs associated with crime, violence and terrorism, has been identified as one of the primary reasons for it jumping six places in the index last year – the most of any country. Similarly, Ethiopia’s goal to become a low-cost manufacturing and textiles hub along with the opening of Africa’s largest cargo terminal in Addis Ababa has attracted much attention. However, ongoing security concerns, especially the threats posed from ethnic conflicts and terrorism along border areas with Somalia and Kenya, were identified as setbacks.
In another promising development, South Africa, Nigeria, Egypt, and Kenya were identified within the pool of countries that have the most potential to grow as logistics markets within the next five years. However, sub Saharan Africa’s two largest economies – South Africa and Nigeria – each fell down the index, with Nigeria falling seven spots. Both countries were nevertheless identified as turning a corner, particularly with regard to corruption and political instability and uncertainty in 2019.
As demonstrated above, supply chain risks vary wildly from country to country across Africa. From isolated events that cause single points of impact (such as a militant attack), to ongoing events that generate a localised yet sustained impact (such as strikes), to all-encompassing events (such as a coup), companies in the transport logistics sector are advised to stay abreast of political and security dynamics to navigate and forecast their threat environment. In addition, transport logistics should consider using political risk insurance to insulate their operations against disruption.
SEE COUNTRY OUTLOOK: ALL COUNTRIES
Four months into his presidency, Félix Tshisekedi has at last agreed to appoint a prime minister loyal to his predecessor and main political rival Joseph Kabila. As a result, the incoming government will ensure that all key policy decisions will remain with Kabila. But Tshisekedi seems to have secured the return from exile of one of Congo’s most dynamic and powerful opposition leaders whose political support will be crucial to build up his own political constituency. If the power-sharing agreement holds, Congo’s thriving mining sector is set to improve the country’s economic outlook.
A recent claim by the Islamic State claiming the establishment of a ‘Central Province of the Caliphate’ in the DRC has confirmed reports of intranational jihadist support for Congolese militant group, the Allied Democratic Forces. However, upon reviewing local, regional, and international political and security dynamics, these links remain tenuous.
Former president Kabila will need to retain control over mining revenues and avoid a deterioration of insecurity in eastern provinces, while keeping Rwanda on-side, to ensure he can stave off an emerging challenge from his successor who seeks to dilute Kabila’s dominance over Congo’s political, military, and economic spheres.
The Allied Democratic Forces (ADF), an enigmatic and insular Islamic militant group in the eastern DRC, has risen in prominence with civilian massacres and large-scale attacks on government troops and UN peacekeepers in Beni territory since 2016. With the group now infamously known as the deadliest armed group in the country, following the deaths of over 200 people in 2018, we explore the threat to commercial operations in the region.
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