Afro-Arab Cooperation

by Assad Bhuglah

The Afro-Arab relations can be traced back thousands of years ago when the African and Arab coasts of the Indian Ocean served an important platform of interaction between the two regions. Mauritius, which was initially known as Dina Arabi, had been one of the transit points of the maritime trade route used by Arab mariners. Due to the strategic and economic importance of Africa and the Arab lands, both of them have suffered same experience from the colonial and imperialist forces. Geographical proximity, history and cultural links have helped the peoples of the two regions to forge solidarity and common front against colonial exploitation, dependence and backwardness.

At institutional level the Arab League and the African Union have established official relations since 1977. They have both agreed to cooperate in financial, political and economic issues. In fact, nine of the members of the Arab League also belong to the African Union and together they constitute one third of the population of the entire African continent. The Arab-African relationship is a model of solidarity based on strategic depth and trust.

Following the decision of the Arab summit in Algeria in 1973, the member-states of Arab League agreed to establish and fund the Arab Bank for Economic Development in Africa (BADEA). This financial institution was created for the purpose of strengthening economic, financial and technical cooperation between the Arab world and Africa. The Bank participates in financing economic development in African countries and stimulates the contribution of Arab capital to African development.

Beset by prejudices and ill-will generally manifested against the Arab world, there has been little publicity on the activities of BADEA in Africa. Since 1975, the Bank has been playing a key role in the overall development of African countries. Its activities have steadily multiplied on the African continent and it may be recognised as one of the world’s most successful economic collaborations. The shares of the Arab states in BADEA have increased from $23 millions since its inception to $3.48 billions by the end of 2011. The Bank occupies a prominent status among financial institutions across Africa. It is working closely with strategic partners like African Development Bank (ADB), the World Bank, the Islamic Development Bank, the Abu Dhabi Fund for Development, the Kuwait Fund for Arab Economic Development and the Saudi Fund for Development. Today, BADEA’s total commitments are valued at $3.9 billions where 43 African countries have so far benefitted across all development areas.

BADEA’s main focus has been on infrastructure development, poverty alleviation, food security, healthcare and education. Taking into account the difficult circumstances of African countries, the Bank provides funding to beneficiary countries at flexible lending terms and conditions. For example, in the loan agreements signed with Burkina Faso, Benin, Cote d’Ivoire, Mozambique, DR Congo and Chad in 2012, the re-imbursement period varies from 20 to 30 years with grace period of 5 to 10 years and with an annual interest rate varying from 1% to 3%. Similar terms and conditions were applied to BADEA’s loans extended to Botswana, Cap Verde, Sierra Leone, Seychelles, Mauritius and Namibia in 2008. These funding covered a wide range of projects such as road developments, construction and rehabilitation of bridges, setting up of micro-hydroelectric plants, building/ renovation of hospitals, upgrading of airport, irrigation, protection of environment, waste management, combating malaria, cholera and other diseases, rural electrification, repair of coastal areas, agricultural development amongst others.

The magnitude of the Arab involvement in Africa will look even greater if the technical assistance of individual Arab government and private Arab investment would be taken into account. Apart from the big investment companies owned by Arab notables, such Kingdom Holding, Fernvale Investment pvt Ltd, Dubai Holding, there are thousands of business establishments and investment flows into Africa from private Arab sources that are rarely captured in the official statistics. It is a known fact that the Lebaneses and the Morrocans are highly visible in economic activities in Western Africa, where as the Omanis and Yemenis are strongly present in Eastern Africa. The Algerians and the Libyans are quite active in Central Africa, while the Egyptians have the clout to develop business network all over the African continent. However, such private initiatives are not taken into account when making an overall assessment of Afro-Arab cooperation which is generally based on official sources of data.

Mauritius is one of the beneficiaries of Arab funding. Although it has not been possible to trace data about BADEA’s involvement in earlier projects, the information publicly available dates as from 2002. In the capital Budget 2002/2003, it is reported that both the BADEA and the Kuwait Fund for Arab Economic Development financed jointly, with the participation of the Mauritian Government, the CEB Transmission Line project estimated at Rs 520 million. In 2004, BADEA extended to Mauritius a loan of US $ 5.5 million to help finance the Northern Plains Irrigation project (Phase II). At the end of 2005, BADEA’s assistance to Mauritius had already reached US$102.13 million, participating in the financing of 14 development projects, according to Mr Medhat S. Lofty, BADEA’s Director General who visited Mauritius on 2 February 2006. In June 2006, the Mare aux Vacoas water supplies project was financed by BADEA (48%), Kuwait Fund (36%) and Mauritian Government (16%). On 17 November 2008, BADEA extended a loan of US$10 million to Mauritius to finance Terre Rouge – Verdun-Iban Road project (Phase II).

Afro-Arab cooperation is based on complementary and mutually supportive objectives. It is different from other prevailing models of cooperation which are, most of the time, tinted with the legacies of colonialistic and imperialistic hegemony. The Afro-Arab relations must be placed in the context of South-South cooperation aimed at enhancing the development goals.

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Century Welfare Association

Let Our Deeds Speak For Us.

Founded January 1969