Hello. This week it is all about barriers - AES rebuilding trade barriers and the high cost of tourist visas for African countries.

•  🚪👋 Western Afrexit

• 🏖️ Africa’s Tourism Problem

• 📰 News Recap

Trade & Finance

🚪👋 Western Afrexit

This Week Reuters labelled the AES (Alliance of Sahel States: Mali, Burkina Faso & Niger ) exit from the ECOWAS (Economic Community of West African States) the Afrexit. Not quite the Brexit and certainly not in the same context but nevertheless an exit with the same spirit: that of regaining national sovereignty.

Why? This time though, these African countries are saying they are regaining their sovereignty from France in particular. They state that the ECOWAS caters solely to European countries’ interests for which France 🇫🇷 controls the currency the CFA.

What’s the alternative? They’re building their own financial system:

• A new central bank

• An investment fund

• A new currency backed by gold and uranium, not euros 💰

• Plans to trade in local currency, not dollars or CFA

This is all about economic sovereignty—Africans controlling African money and African resources.

It is not without risks though as 25% of Niger’s exports go to ECOWAS countries. If economic ties weaken, these countries could face trade disruptions and loss of income—especially if ECOWAS retaliates with barriers or pressure (highly unlikely).

Collective A-Frexit

Even more surprising, Togo—a longtime ally of the West—is signaling support for the AES and offering access to its deep-sea port 🚢. That could make the formerly landlocked countries key trade players in the region.

🇷🇺 The Russian Game

Sadly this is not all about African Sovereignty though ☹️ . The “Western Afrexit” has Russia’s hands all over it. Russia has been financing the military coups in Western Africa. France is not only Nations that are losing their foothold in Africa but surprisingly China too. Niger expelled three Chinese companies from its mining sector citing violation of mining codes. Recent reports suggest that Russia’s arm exports has fallen significantly in recent years. An end to the Ukraine War would further strengthen Russia’s hand in Western Africa, which would explain why France remains vested in the War.

🥼 Economic Experiment

Creating new mini-regional financial institutions backed by local mineral resources might sound like a brilliant idea. Niger is one of the largest Uranium exporter - mainly to the EU. Mali is rich in gold and Burkina Faso has gold, manganese and zinc in abundance. On paper, they’ll be able to pull their resources together via the investment fund to dedicate to large scale development projects.

However, currencies do not rely solely on resource richness. Their intrinsic value relies on confidence in the system. Strong institutions, transparency and government frameworks form the basis of that confidence. The region, though, is fraught with political instability and security concerns.

The outcome of that economic experiment revolves sadly around geopolitics. How easy would it be for Russia’s “enemies” to destabilise the system. Any sign of instability and the value of the currency will plummet.

This paper in the BRICS Journal of Economics summarises the situation well. It proposes the creation of a regional currency named the SHL and a two tier system:

• A regional currency (SHL) backed by a fixed basket of resources.

• National currencies pegged at 1:1 to the SHL, backed 50% by the regional currency and 50% by domestic securities or reserves.

• Resource Basket Example:

  • Gold (50%), Lithium + Uranium (25%), Cotton + Maize (25%).

  • Fully collateralized currency issued against warehouse-certified reserves.

• Structure:

  • A regional commodities bank issues currency, manages reserves, and ensures transparency.

  • Warehouses store physical commodities in each country, plus possibly in a coastal nation (e.g., Morocco) for export security. (In this case Togo might be the chosen country).

• Use of Currency:

  • SHL for large transactions, savings, and trade (even internationally).

  • National currencies for everyday use.

Tourism

🙋 Africa’s Tourism Problem

In 2024 an estimated 74 million tourists visited African countries. While this represents an increase compared to pre-covid levels, it remains nevertheless far from below the continent’s potential. The vast majority visited Egypt, Morocco, Tunisia and South Africa which represent more than 50% of tourist visits. By contrast, France welcomed more than 90 million in 2019 and more than 80 million visited Spain. Brazil and Argentina each welcome more than 7 million tourists annually.

By contrast major African countries such as Cameroon, Kenya, Ethiopia and Ghana each welcome less than 1.5 million countries per year each. Only Tanzania has a proper tourism policy whereby more than 5 million tourists visit each year.

The potential is clear. The gap for growth is there and while political instability may play a major role in those low figures, the high prices of single entry tourist visas also plays a role. As the graph above shows, the South American average is $20 mostly explained by the free entry in numerous of those countries. The Asian average is still lower than most African countries at $40.

The low tourist numbers also explains the lack of investment in that sector. FDI in the tourism sector in Africa represented only 3.6% of GDP while in Asia FDI has been increasing rapidly due.

The implications are clear. A coherent tourism strategy will bring more tourists to the continent creating jobs and improving lives. The World Travel & Tourism Council estimates that tourism could boost African GDP by $168 billion over the next ten years while creating 18 million jobs.

The policy recommendations are clear. Visa pricing has to be reviewed with the right strategies balancing foreign investment and local employment. Moreover, African countries could create regional tourist visas with packages to allow tourists to visit a few countries at once.

Number

🔢 This Week’s Number

 2

• =🇿🇦 The President of South Africa, Cyril Ramaphosa, caused a stir when he suggested closing down schools for two years to reeducate educators an reform the schooling system.

News

📰 Policy News

• 🇮🇩 The Indonesian currency hit its lowest value since the Asian Financial Crisis in 1998. This comes amid uncertainty around the economy and the constitutional change which would grant the military more say in the country’s affairs. The uncertainty around tariffs and lower exports are also playing a role in the loss of value. The Central Bank of Indonesia has been heavily intervening in the market to prompt up the value of the Rupiah.

  

• 🇸🇦 🇮🇩 Saudi Arabia and Indonesia have signed an agreement for more than 600,000 Indonesians to take jobs in Saudi Arabia. This comes after a 10 year ban which was in place preventing Indonesians from working in Saudi Arabia. In 2015, Indonesia banned its citizens from working in gulf countries due to concerns on labour protections and abuses. The ban has given rise, over the years, to an illegal flow of migrants going to gulf countries.

• 🇧🇫 Burkina Faso’s President Traoré rejected Saudi Arabia’s offer to build 200 mosques, urging investment instead in schools, hospitals, and job-creating projects. He emphasized infrastructure and economic development as priorities over religious construction to support national self-reliance.

• 🇰🇪 Kenya has recognised Kosovo as an independent state resulting in Serbia severing all ties with Kenya. The reasons for the Kenyan move remains blurred. Possible reasons is the new treaty giving access to Kenyan goods to the EU and Kenya’s possible agreement to send workers to the Kosovo. The EU has a growing interest in the Balkans and have speculated about Kosovo joining the EU.

• 🇦🇪 🇺🇬 The UAE is expanding its interests on the African continent not only in acquiring rights to natural resources but also by using its technology to build refineries. This week the UAE and Uganda signed an agreement to build an oil facility.

• 🇦🇪The UAE has granted mothers three years leave from their jobs to take care of their children.

Goodreads

📖 This Week’s interesting articles around the web

• Uncover how Abu Dhabi has strategically supported secessionist movements across the Middle East, aiming to bolster its regional influence. This in-depth analysis reveals the UAE's covert operations and alliances that have reshaped power dynamics in Yemen and Libya. Article

• In Ignorance and Bliss, Mark Lilla explores why we often choose not to know uncomfortable truths. Blending history, philosophy, and cultural critique, he reveals how willful ignorance shapes our personal lives and politics. A sharp, thought-provoking read that asks: what truths are we avoiding—and at what cost?

• If you want to understand the philosophical lobbies behind Trump; read this fascinating article by Le Monde. It helps understand when the wheels will come off.