🔅 Details of the Kenya-China rail deal
Today’s Issue: The Kenya-China rail deal gave China sweeping powers, and Uganda’s president criticises Europe’s stance on fossil fuels… ☕
Markets
🔺 Nigerian SE: 43,477.48 (+0.04%)
🔺 Johannesburg SE: 69,385.45 (+0.54%)
— Ghana SE: 2,460.31 (0.00%)
🔺 Nairobi SE: 127.91 (+0.43%)
🔻 US S&P 500: 3,787.13 (-1.07%)
🔻 Shanghai Composite: 3,048.17 (-0.53%)
*Data accurate as of close of markets across the continent
Global Markets:Â Meta, which owns Facebook, Instagram and WhatsApp, announced that it will cut 13% of its workforce. In total, 11,000 employees will be laid off. The news follows significant layoffs at Twitter, which cut about half its staff. In a statement, Meta chief executive Mark Zuckerberg blamed the cuts on unrealised, long-term expectations for growth based on the firm's rise in revenue during the pandemic.
South Africa:Â A South African court has overturned an earlier order halting the construction of a $260 million Amazon African headquarter in Cape Town after some descendants of the country's earliest inhabitants, the Khoi, said the land it would be built on was sacred. The court noted that the project would not cause irreparable harm to the heritage of the Khoi, a decision that they intend to appeal.
INFRASTRUCTURE
Kenya railway loan deal is released. China has sweeping powers
What Happened?
The Kenyan government finally made public details of the loan agreements it signed with the Chinese to fund its Standard Gauge Railway. At 700 km long, it is the country's most expensive infrastructure project, and the government borrowed approximately $5bn to develop it.
The project has been rocked by concerns about its economic viability, claims of inflation of project costs, corruption, and a skewed contract that allegedly put Kenya's strategic assets at risk of being seized by the Chinese government should the country default on the loan repayment.
Despite public pressure and a court order directing the government to disclose its details, former President Uhuru Kenyatta declined to make it public.
What the Agreement Says:
The deal obliges Kenyans to keep the terms confidential. It also stipulates that neither Kenya nor any of its assets (read, ports, for instance?) are entitled to any immunity from "arbitration [...] execution or any other legal process." Authorities had previously said that no assets had been attached as collateral for the loan.
Finally, China has control over dispute adjudication: arbitrations would be carried out in Beijing, and all decisions made there would be final.
Why it Matters:
The contract was signed in a record two weeks from the day a feasibility study was approved, despite the project's magnitude.
Some say Chinese infrastructure projects come with strings attached, and it remains to be seen whether or not the Kenyan government will be able to make good on its loan repayments. If it defaults, it could have severe consequences for the country, including the potential loss of strategic assets.
ACROSS THE CONTINENT
Other Headlines
🇳🇦 Namibia said at the COP27 summit that it had secured over $544 million in climate finance from the Dutch government and European Investment Bank. The funds will be used to build Namibia's green hydrogen and renewable energy projects. President Hage Geingob said the funds represented the most significant amount of concessionary finance to combat the effects of global warming that his country had secured to date.
🇺🇬 Ugandan President Yoweri Museveni has criticised Europe's return to coal-powered plants, and new conditions allowing Western investment in African fossil fuels, but only if they are exported to Europe. He said campaigns for African nations to embrace clean energy without allowing it to develop its fossil fuels "leave Africans without electricity when the wind does not blow, and the sun does not shine."
🇰🇪 After their four-day strike, pilots working for Kenya Airways were ordered back to work for Wednesday. The court also ordered Kenya Airways not to intimidate pilots who participated in the strike, which was called by their union following the failure to resolve a dispute over a retirement savings fund. Kenya Airways had threatened disciplinary action against striking pilots and even advertised vacancies. The airline estimated daily losses to be $2.4 million.
AROUND THE WORLD
De Klerk’s Nobel Peace Prize medal stolen
The Nobel Peace Prize medal of South Africa's former President FW de Klerk was stolen from his home in April, it has recently been announced. It is believed that the award was stolen during a robbery. Mr De Klerk won the prize alongside Nelson Mandela in 1993 for their efforts to end the apartheid system.
Mr De Klerk became president in 1989 but handed power to Mr Mandela five years later, marking the end of white-minority rule in South Africa and the beginning of the democratic era.
The theft of the prize is a sad reminder of the turbulent history of South Africa and is a blow to the legacy of de Klerk. It is also a reminder of the difficult road that South Africa has travelled and the country's continuing struggles with crime and violence.
De Klerk died in 2021 at the age of 85.
FOOD FOR THOUGHT
Proverb of the Day
“He who's destined for power does not have to fight for it."
— Ugandan Proverb.