September 2024

China reaffirmed its commitment to African development in early September at the Forum on China-Africa Cooperation (FOCAC). African heads of state convened in Beijing where China pledged US$51 billion in fresh funding and promised to create one million jobs across the continent in the coming years, though stopping short of offering comprehensive debt relief, a pressing concern for many African nations. Notably, China became the first major developing country to give 33 African countries zero-tariff treatment for 100% tariff lines in boosting Africa-China trade. Off the back of the forum, Nigeria and China inked economic and nuclear energy pacts, signalling a deepening of strategic partnerships, while nations such as Chad, Malawi, Morocco, Senegal and Zambia welcomed fresh agriculture, energy, infrastructure, telecommunications and transport initiatives. FOCAC signalled China’s strategic push to strengthen its influence in Africa, focusing on economic cooperation and infrastructure development while cautiously navigating the complex issue of debt relief.

The latest edition of FOCAC was represented by all but one African country, Eswatini. Image courtesy: GovernmentZA/Flickr

One of Africa’s largest oil exporters made moves over the past quarter to attract investment, strengthen the energy sector, and bolster its oil and gas industries for the future. In late July, Angola introduced a new tax regime that reduces oil income taxes, establishing guidelines for the costs of carrying out hydrocarbon research and development activities, and legislating a reduction in the rate of oil production tax from 20% to 15%. This development aligns with the upcoming Angola Oil and Gas Conference set for October, as the West African country gears up to secure foreign investment for the energy transition and highlights its push towards low-carbon technologies. Concurrently, the US, as part of its strategic interest in countering Russian and Chinese influence, announced US$1.6 billion in funding for solar mini-grids and water access projects in Angola  ̶ granted under the China and Transformational Exports Programme.

Nigeria introduced the Digital Economy and E-Governance Bill in July 2024, positioning the nation at the forefront of Africa’s digital revolution. The bill, aimed at boosting digital transactions and fostering a robust digital economy, marks a significant step towards modernising governance and economic operations in Nigeria. The legislation underscored the government’s commitment to enhancing transparency, efficiency, and accessibility through digital platforms, particularly by promoting various e-governance frameworks – including the electronic filing of documents and the acceptance of payments through electronic means. By establishing regulatory oversight and streamlining digital transaction processes, the bill seeks to create a secure, inclusive digital environment conducive to innovation and growth. One notable aspect is the creation of ICT units within all public institutions to drive this digital transformation and ensure effective service delivery.

In a similar vein to other African nations, South Africa reaffirmed its deep economic and political cooperation with China at FOCAC 2024. The two nations agreed to upgrade relations to an ‘All-Round Strategic Cooperative Partnership’ in a new era of cooperation. Discussions primarily revolved around the current trade imbalance, with China expressing support for the development of South Africa’s manufacturing capacity and to receive greater volumes of finished goods, while simultaneously enhancing investment in energy, electric vehicle (EV) manufacturing and infrastructure. South Africa is already in discussions with Chinese EV manufacturer BYD to boost the green transition of the country’s automotive sector. On a provincial level, the government of the Eastern Cape signed a collaboration agreement with Chinese Original Equipment Manufacturers aimed at advancing manufacturing and technology in the local taxi industry.

South African President Cyril Ramaphosa speaking on how to enhance South Africa-China relations at FOCAC 2024. Image courtesy: GovernmentZA/Flickr

South Africa’s long-held ambitions of becoming a regional hub for oil and gas exploration have experienced some setbacks over the past quarter. Several companies that had previously been licensed to drill in the country’s offshore blocks announced in July that they would be selling their assets, citing “operational difficulties” as the chief reason. Total Energies, Qatar Energy and Atlantic Oil & Gas had all previously expressed interest in the Brulpadda and Luiperd offshore discoveries, however, a cumbersome operating environment, limited commercial viability for the local market, and legal hurdles from local non-government organisations, all served to stymie exploration. The departures from the local upstream space are part of a broader trend, as TotalEnergies, Shell and BP have previously all either exited or downsized their stakes in South Africa’s refineries and fuel distribution over the past year.

Facebook parent company Meta has found itself caught in the crosshairs of the Nigerian government after the Federal Competition and Consumer Protection Commission (FCCPC) identified that the company had violated the country’s data and consumer protection laws. After a 38-month investigation, the FCCPC, in collaboration with Nigeria’s Data Protection Commission, said that Meta had exploited its monopoly position in the market to “[not] give users the option or opportunity to self-determine or withhold consent to the gathering, use, and sharing of personal data”. The incident is part of a wider international blowback against the tech company, in which Turkey, the European Union and South Africa launched similar investigations into Meta’s business practices. Meta, meanwhile, has publicly resolved to dispute the court’s decision.

Some positive news marked the third quarter for relations between the US and South Africa, with the latter once again becoming eligible to benefit from the Africa Growth and Opportunity Act (AGOA). The US introduced the act in 2000 to enhance market access for Sub-Saharan African countries by providing duty-free access to African products. To qualify, countries must adhere to requirements such as market liberalisation, respect for human rights, and upholding foreign relations not at odds with those of the US. Prominent US politicians have previously suggested that South Africa’s pro-Russia and pro-Palestine stances contravened this last guideline, but strategic diplomacy from a recent South African delegation to Washington appears to have won over detractors. The outcome hopes to increase national growth, considering the impact on Ethiopia in 2021 when the market was removed from the AGOA list resulting in large-scale job losses in its domestic garment industries.

Data courtesy: United States Trade Representative, Freight News, Tralac; 2023-2024

Adams.Africa Advisory comprises of an expert team with first-hand experience and knowledge, offering clients a diverse range of critical service offerings.

We can assist you with all your legal and research requirements in Africa. Contact our team of industry experts at Adams.Africa Advisory to find out more.