#EarlySignals - February 2022

17 February 2022


Our monthly selection of news, quotes and figures that slipped through the radar but could have significant implications


Signature of an agreement facilitating trade between Mali and Mauritania

Since ECOWAS imposed economic sanctions against the Malian junta on 9 January, Malian representatives and delegations from the regional bloc have made numerous diplomatic visits to Nouakchott to obtain the support of President Ghazouani. A trade agreement signed on 14 February between Malian and Mauritanian trade ministers ended this diplomatic competition, to the junta's advantage. While the supply chains through the ports of Abidjan and Dakar are disrupted, access to the port of Nouakchott is crucial for Mali. After defaulting on its debt for the first time in February, Mali is facing high inflation and the risk of shortages. The agreement, which covers basic and essential food products, does not run counter to ECOWAS sanctions, but is nevertheless at odds with regional geopolitics. For Mauritania, the challenge is not to close the door to Mali, given the constant trade carried out by nomadic populations.  


"We are gravely concerned about what appears to be an institutionalized bias against African economies in this aspect... with little consideration for the negative impact on the cost and access to finance for African countries." Ken Ofori-Atta, Ghana's Minister of Finance
Following the downgrade of Ghana's sovereign rating by the US rating agency Moody's, Ghana's Finance Minister Ken Ofori-Atta accused the rating agency of using incomplete information in its rating process, a systematic bias against African countries, according to him. This is the country's second downgrade in three weeks, following Fitch Ratings' adjustment on 14 January. Despite the country's difficulties in issuing bonds this year, notably because of its high level of public debt, Ghana joins Nigeria, Namibia, Tanzania and Zambia, which have either rejected or appealed the rating agencies' decisions in recent years. Moody's, which has just announced the acquisition of the leading Africa-based rating company, Global Credit Rating Company Investors Service, will continue to expand its reach and impact in Africa.  


EUR 1.6 billion - amount invested by the EU in Moroccan infrastructures

Along with Senegal, Morocco is one of the first countries to benefit from the European Union's "Global Gateway" programme, an investment plan worth EUR 300 billion over 6 years, 50% of which will be used to finance infrastructure in Africa. In Morocco, the EU is betting on digital and energy infrastructures. What is at stake in this ambitious programme for Europe? To compete with the "Belt and Road Initiative" launched by China in 2013, with EUR 1,000 billion in funding announced since then. In this war of economic influence, in which the United States is participating with the Building Back Better World (B3W) initiative, China has therefore taken the lead. The sixth EU-US summit, scheduled for 17-18 February, will be an opportunity for Europe to unveil the details of its new trade partnership.