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This week, we’re covering Africa’s trade relations with the US, new anti-corruption laws in Canada, and the growing gap in adaptation finance.

Top news

Trade winds: Last week, 38 African countries met with US officials in Johannesburg to discuss boosting trade. The forum focused on a review of the US African Growth and Opportunity Act (AGOA). Signed into law by President Bill Clinton in 2000, the legislation allows eligible countries to export to the US tax free, making their products cheaper for US consumers to buy. 1,800 products — from cars assembled in South Africa to Kenyan flowers — are covered. Through the programme, South Africa last year generated US$2.7 billion in revenue from the sale of vehicles, jewellery, and metals. Nigeria earned US$1.4 billion and Kenya earned US$523 million. The act supports hundreds of thousands of jobs in Africa and 120,000 in the US. But it expires in 2025. The forum ended on a high note, with agreements on investment promotion and alignment with the African Union’s Continental Free Trade Agreement (AfCFTA), though some questioned country eligibility requirements. Disclosure: The ONE Campaign helped get AGOA over the line in 2000.

Struck off: AGOA is a two-sided deal. The US reserves the right to withdraw countries if they contravene human rights violations and governance standards. Ethiopia, Mali, and Guinea were struck off the list in 2022, as was Burkina Faso in 2023. And last week, Niger and Gabon joined those excluded following military coups, as did Uganda and the Central African Republic for human rights violations. This approach contrasts with China’s no-questions-asked approach to investment. Critics say that external sanctions have limited impact on autocratic leaders’ behaviour — especially when they have other options; but they punish ordinary citizens for the sins of their leaders.

Full disclosure: Canada approved a law on the public disclosure of beneficial ownership information. Secretive shell companies are the getaway car for the perpetrators of grand corruption. They have been implicated in everything from sanctions-busting to the theft of billions from African governments. The requirement to disclose the true owners of companies makes it easier for investigators and journalists to uncover wrongdoing. This is the successful conclusion of six years of campaigning on behalf of End Snow Washing, Transparency International, Publish What you Pay, and Citizens for Tax Justice in Canada. ONE helped out behind the scenes and previously worked to secure similar legislation in the UK and the EU as part of its Trillion Dollar Scandal campaign.

Green corruption?: One of the world’s largest forest conservation initiatives — a carbon offset project in Zimbabwe called Kariba — could collapse after the Swiss carbon consultancy South Pole pulled out. Guernsey-registered Carbon Green Investments owns the Kariba project, which covers 2 million acres of forest. Those involved have faced allegations of exaggerating climate claims. The project has generated nearly US$100 million by selling credits for more than 23 million tons of carbon to companies like L’Oreal, Gucci, Nestlé, and Volkswagen. As more and more money flows into the green economy, the need for watch dogs will also increase. This week Portuguese Prime Minister Antonio Costa resigned over a corruption probe into lithium and hydrogen projects. Major corruption scandals in the oil and gas sector sparked the creation of the Publish What You Pay network in 2002, which now comprises 1,000 member organisations and more than 50 national coalitions.

Loss and damage: Negotiators finalised a blueprint for a loss and damages fund. After three long days (and very few hours of sleep), negotiators preparing for next month’s COP climate conference agreed on a “take it or leave it” proposal to operationalize the fund. The goal? Offering vulnerable countries compensation for damage caused by climate change. NGOs objected to the fund being housed at the World Bank, saying the bank is too slow and its overhead costs are too high. The United Arab Emirates will now seek to get all 199 parties onboard as host of the conference. There’s an initial capitalisation target of US$500 million.

Quadrillion dollar mistake: The UN’s Environment Program published its “adaptation gap” report, and the results were... not great. The gap between climate adaptation needs and funding is 50% higher than previous estimates. It’s now an estimated US$194 billion to US$366 billion per year. That’s 10 to18 times as great as existing adaptation finance flows to vulnerable countries (which are, by the way, more likely to face debt distress). The Climate Policy Initiative estimates that total climate finance flows (adaptation and mitigation) in 2021-2022 were US$1.3 trillion. That contrasts with the US$7 trillion in annual fossil fuel subsidies: the big spenders are China (US$2.2 trillion), US (US$757 billion), Russia (US$421 billion), India (US$346 billion), and Japan (US$310 billion). The financing needs are highly dependent on the climate scenario we face. Cumulative losses in the next 75 years are an eye-watering US$1,062 trillion in a 1.5 degree world. That rises to US$2,328 trillion in a 2 degree world. That’s 2 quadrillion dollars (roughly 20 times current global GDP). Last week scientists said the likelihood of staying within 1.5 degrees is now less than 33% to 50%.

Horror: The war between Israel and Hamas has killed over 11,000 people — 1,400 people in Hamas’ terror attack on 7 October and over 10,000 people in Gaza, 40% of whom are children. As calls for a ceasefire increase (including from African leaders), questions about the aftershocks of the war are being asked. The war risks escalating throughout the region and shifting attention and resources from other urgent challenges. Gas prices soared last week as Egypt — which imports gas from Israel and sells it on to Europe — reported zero imports. Following Russia’s invasion of Ukraine, energy and food prices skyrocketed, and 15% of ODA was diverted towards in-country refugee costs. There’s a similar fear that the impacts of this conflict will reverberate and mean less attention on other challenges such as hunger and climate change. In 2021, trade between Israel and sub-Saharan African countries reached over US$750 million, dominated by machinery, electronics, and chemicals trade with South Africa. Israel also provided US$569 million in ODA in 2021, most of it to the West Bank and Jordan. But Israel’s relations in Africa are complicated: South Africa and Algeria, for example, blocked Israel’s effort to obtain observer status at the African Union in 2021.

Open or closed?: Kenya and Rwanda announced they will remove visa requirements for African nationals. The 2022 Africa Visa Openness report highlights that between 2016 and 2022, the number of African countries offering e-visas increased from nine to 24. In contrast, the European Union has recently further tightened restrictions. The 2019 Schengen Visa Code amendments led to stricter visa review measures that have increased the cost of European visas. Even before the implementation of the amendments, the number of rejections had increased with African applicants receiving the highest proportion of those rejections.

In focus: The Africa FotoFair opened in Côte d'Ivoire this week, showcasing the world class work of African photographers. The brainchild of Ethiopian artist, Aïda Muluneh, the goal is to increase the visibility of Africa through the eyes of Africans. For too long, the continent has been seen through the eyes of outsiders. Aïda’s work has been exhibited at MOMA, the Nobel Peace Center, and is regularly featured in the New York Times.

From the ONE Team

• David McNair’s 10 tips for writing a great essay.
• Read David’s message to European central bankers meeting in Dublin this week.
• Anne Paisley on why climate change is a health crisis.
• David McNair, Micaela Iveson, and Luca Picci on the 188 million people facing food crisis.

The numbers

• 39 million people were living with HIV in 2022. 53% were women and girls.
• 1.3 million people were newly infected with HIV in 2022.
• 619,000 people died from malaria in 2021. 96% were in Africa. 80% were children.
• 68,000: the increase in deaths from malaria in Africa between 2019 and 2020.
• 32.4% of Africans have been fully vaccinated against COVID-19.

Quote of the week

"Africa is on the precipice of an unprecedented demographic boom. The timely reauthorization of AGOA is important to provide business certainty and show the United States’ continued support towards Africa’s economic growth."

–Rep. Michael McCaul, US House Foreign Affairs Committee Chairman

What you should read, watch, and listen to:

• A Tale of 3 Nations: Debt Restructuring in Ghana, Zambia, and Sri Lanka (The Diplomat)
• ‘Catastrophe’ Bond Market Headed for Major Surge in Issuance (Bloomberg)
• US interest rates add to ‘silent debt crisis’ in developing countries (FT)
• It’s time to admit that our health and climate crises are one (FT)
• Why small is not beautiful when it comes to development (FT)
• Does overseas aid reduce migration? (Devex)

The ONE Campaign’s data.one.org provides cutting edge data and analysis on the economic, political, and social changes impacting Africa. Check it out HERE.

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