Greetings to our second episode of Week in Review and a quick summary of what we are tracking in the Sahel and in North Africa. Today is Saturday, the 7th of January 2023. This past week was somewhat subdued in the region largely due to the year-end holiday season and the shift to 2023. But events don’t stop simply because it is new year. Arezki Daoud of MEA RIsk LLC presents to you the big stories of the week, which include that of an unfolding emigration crisis in the Mediterranean Sea.
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Greetings to our second episode of ‘Week in Review’, a quick summary of what we are tracking in the Sahel and in North Africa. Today is Saturday, the 7th of January 2023.
This past week was somewhat subdued in the region largely due to the year-end holiday season and the shift to 2023. But events don’t stop simply because it is new year. The big stories of the week include that of an unfolding emigration crisis in the Mediterranean Sea.
The migration crisis in the region continues, with a substantial percentage of North Africans wishing to flee their country for the obvious reasons based on a number of surveys, namely due to lack of economic prospects, regimes that favor repression and lack of personal freedoms. The saddest event this week was that of the recovery of the bodies of 13 Moroccans who failed to reach Spain’s Canary Islands in an attempted sea crossing. Their ill-fated boat carried 45 would-be-migrants, with 24 of them eventually rescued.
Also this week in the north of Morocco, dozens of people breached the border and entered into Melilla, an enclave under the control of Spain. And within Spain, the police arrested a criminal gang of 43 people in Malaga, who allegedly used and abused undocumented migrant workers employed in the agricultural sector, who are also mainly from Morocco. The gang was involved in selling false documents.
In 2022, a little more than 31,000 people entered Spain illegally and most arrived by boat from Morocco, a number, that has to be said, was down by more than 25 percent over 2021, according to the Moroccan government. My personal concern is not necessarily related to the legality or documentation aspects of the migrants, that’s a government enforcement affair, but it is more about the risks that exist during the sea crossings and then when they get to Spain or elsewhere, the migrants are facing forced labor and abuse. In late June, at least 23 people died trying to reach Spain. Many of whom were Sub-Saharan nationals, including Sudanese.
Caminando Fronteras, a Spanish NGO that tracks migrant movements, calculated that more than 11,200 migrants have died or gone missing while trying to reach Spain since 2018, an average of six per day, says AFP news agency.
Obviously, the migrant crisis is not just a Moroccan problem. Algeria has also been a growing source of would-be migrants, mostly headed to Spain due to the proximity of the country’s northwestern coast to the Spanish coast. Caminando Fronteras puts the number of deaths and disappeared originating from Algeria and headed to Spain at 1,526.
It is the same problem with Tunisia, where would-be-migrants target southern Italy instead, in particular the island of Lampedusa. Nearly 23,000 migrants had been intercepted from January to October 2022. Libya has certainly been a huge source of illegal migrants, as well. Recently, the Libyan navy intercepted a fishing boat carrying more than 650 migrants of different nationality, including Bangladeshis, Syrians and Egyptians. Some 14,000 migrants had been intercepted and returned to Libya from January to October 2022.
North African governments have had rather ambiguous positions on how to deal with people leaving to Europe without proper documents. Positions that go from using illegal migrants to advance their respective regional interests to punishing them. Morocco and Algeria have been using these waves of migrants headed to Europe as a foreign policy tool to pressure European nations on issues such as the Western Sahara conflict. In this case, they have weaponized illegal immigration to convince them to support their respective positions. But the regimes in North Africa have also established laws that are highly punitive to the migrants. Morocco has handed dozens of migrants sentences of up to three years’ imprisonment on charges including illegal entry and violence against law enforcement officers over the June 24 tragedy, according to AFP. Amnesty International said the Moroccans, but also the Spanish authorities used excessive force during the June incident. Algeria has also been issuing prison sentences against migrants. Libya is also accused by human rights groups for its ill-treatment of migrants, and placing them inside awful detention centers.
So as we look at 2023, we should not expect a major easing in the migrant crisis. Governments in the region continue to harden their policies on the human rights front and their economies will remain challenged in the foreseeable future, forcing people young and old, to look for better horizons on the other side of the Mediterranean Sea.
Speaking of human rights abuses, an Egyptian court sentenced this week popular Egyptian actor Menna Shalabi to a one-year prison sentence after it found her guilty of cannabis possession. Shalabi was arrested in November at Cairo airport with cannabis-infused products found in her luggage while returning from the United States. These products include lollipops and snacks, according to AFP. From my perspective, the whole affair is laughable, even though I recognize that people should know that they must comply with local laws, no matter how outdated or ridiculous they may be. For those who know Egypt well, must know that while Cannabis is illegal it is widely used there. Of course that’s not an excuse to break the law.
Staying on the issue of human rights, in Tunisia, the presidency of Kais Saied appears to be in a permanent state of crisis. Some analysts even say that Tunisia is Algerianizing itself. By that they mean the president is replicating the repressive policies of the Algerian regime toward the opposition, with their zero-tolerance to criticism. This week, President Saied said Tuesday his administration was using the judiciary to close down opposition to his rule, after several inquiries were opened against its members. Already four leaders of the opposition group the National Salvation Front, including its president, have been summoned for an investigation. Chebbi had last month called for Saied to step down, after a December legislative election that ended with a record low turnout of less than 11 percent.
Also a lawyer who is defending a group of judges fired by Kais Saied has also said he is under investigation for allegedly spreading false rumors “in order to undermine public security”, according to AFP. Ayachi Hammami said his summons was based on a controversial decree Saied issued in September, which provides for prison sentences for anyone spreading “false information or false rumours” in the media or online, just as the regime did.
In Morocco, the big story was about an EU parliament worker and boyfriend of arrested Greek MEP implicating the kingdom in corruption scandal. The story did not make it into the Moroccan media and the government there made no statement about the allegation. Allegations against Morocco and Qatar as having bribed Members of the European Parliament to influence them, surfaced a few weeks ago when Belgian police raided several sites used by MEPs and their networks of lobbyists. Some 1.5 million euros were recovered in what authorities alleged to be pay-offs made by foreign nations to influence decisions in the European Parliament. Qatar was mentioned front and center, resulting in the arrest of four suspects, including Greek MEP, Eva Kaili. AFP says her Italian boyfriend, Francesco Giorgi, a parliamentary aide, has reportedly made a confession to Belgian prosecutors, implicating Morocco in the corruption case, essentially indicating that MEPs received money from Morocco to help advance its policies.
Now shifting gear, for those of you who want to travel to Morocco from China or vis-versa, you are out of luck. Morocco began banning entry to all travellers from China, where cases of Covid-19 have exploded. The move is a bit more severe than what France, Britain, the US and Spain did and that is to require negative Covid tests for all travellers from mainland China. Obviously, the weak trade between China and Morocco and the low tourism inflow of Chinese in Morocco are perfect reasons for Morocco not to worry about banning travelers coming from China.
In the Sahel, the situation was generally quiet also, although we note an important but expected event and that is the pardoning by Mali’s junta leader of all the 49 Ivorian soldiers who were sentenced last week by a Malian court to 20 years in prison after they were accused of being mercenaries. Their arrest resulted in a diplomatic conflict that risked worsening had Mali kept them in prison. Instead, junta chief, Colonel Assimi Goita granted a pardon with full remission of sentences to all the Ivorians soldiers.
The sequencing of events suggest that the Mali leadership may have been looking to score points with both Ivory Coast and the West African group of nations called ECOWAS. There is no doubt in my mind that Colonel Goita could have prevented the trial from taking place, but he allowed it to happen so that at the end he appears as the one who solved the crisis and therefore scoring points among the regional powers. It is now unclear what kind of concessions Mali obtained from ECOWAS, but I am confident that Colonel Goita got something out of it, at least some pledges not to blockage Mali as its relations with ECOWAS had already been severely strained over the toppling of elected president Ibrahim Boubacar Keita in August 2020.
On the security front, there has been some worrying development with a Jihadist attack in the southeast Mali. Two firefighters and three civilians were killed on Monday night in an attack on the Civil Protection Road Rescue Post of Marka-coungo, in the Bamako-Segou road. The bad news about this event is that it took place just less than 70 kilometers from Bamako, that’s less than 44 miles from the nation’s capital, a move that confirms ongoing efforts by the Jihadists to take over Bamako.
Perhaps one of the biggest issues facing the region as we start 2023 is the state of the economy. Possibly the most vulnerable nations are Tunisia and Egypt, to a lesser extent Morocco, while Algeria is breathing a sigh of relief, as it will likely see its foreign currency reserves expand with the global demand for natural gas. The money it generates will buy social peace, but in other nations, the situation spans from moderate to severe difficulty.
For Morocco, this year is expected to be another tough year on the economic front. Global trade and business trends point to an outlook of poor performance for Morocco in 2023, as a result of exports likely to fall by at least 1.1%, in addition to a contraction in the prices of phosphate and derivatives. The forecast comes from the Board of the country’s central bank, Bank Al-Maghrib (BAM) in its third quarterly meeting held recently, also indicating that imports would decrease by 4.6% in 2023. In a press release following the board meeting, the central bank has also forecast an increase of 34.5% in the value of imports by the end of 2022, as the country’s energy bill is to rise to 135.1 billion dirhams. Spending on semi-products is also expected to rise to 167 billion dirhams.
The bank blames the Covid pandemic and the Russian war on Ukraine for a deteriorating economic climate, noting the persistence of higher prices of energy and food products, as well as disruptions in global supply chains, as weighing significantly on the Moroccan economy. Domestically, the Central Bank lamented the continued drought. On the positive side, the bank anticipates an improvement in the tourism sector, which would boost tourism revenue to 79.8 billion dirhams this year.
In Tunisia, the situation is more severe and the country faces a year of low economic growth and growing inflation. With empty coffers, Tunisia is negotiating with the IMF an emergency bailout valued as $2 billion. The country is highly affected by a heavy debt accounting for almost 90 percent of its Gross Domestic Product. Just like Morocco, the Covid pandemic and Russia’s invasion of Ukraine have had a tough impact on Tunisia, a situation that worsened with the spiraling cost of commodities and energy. But as usual, the IMF is attaching conditions to any loan, including restructuring more than 100 state-owned firms, which hold monopolies over many parts of the economy and in many cases are heavily indebted.
But in Egypt the scale of the economic problems dwarf that of Tunisia. In Tunisia, the problem is political. That is the moment the Tunisian political elite find a consensus on how to govern, they can easily tackle economic issues with the help of the economic partners. The population in Tunisia is only slightly above 12 million. In Egypt, it is headed toward 110 million. This demographic difference is absolutly critical in that it is a timebomb for the Sisi military regime in Egypt. Today, repressive policies of the Egyptian military are what keep the system in place, but the economy is in such disarray, that I do not rule out social unrest to erupt this year. The country is currently facing a severe dollar crunch and out-of-control food prices. The situation is so bad that the media reported that the government is promoting chicken feet as a good source of protein. A marketing campaign is underway in Egypt with a tagline of “chicken feet, good for the body and the budget”. Of course the government of Sisi is looking for the easy way out of this crisis by raising more debt, asking the IMF to loan it another $3 billion. But for the average Egyptian, daily life is awful, with food prices doubling, tripling even quadrupling, affecting such staples as cooking oil and legumes.
So one way of dealing with the crisis has been a Sisi policy to lower the value of Egyptian pound. That has had the effect of attracting investors looking to buys assets pennies on the dollar. Just imagine a building in Cairo used to be priced at say, for the sake of simplicity, one million dollars, the devaluation of the Egypt pound meant that the same building can not be purchase perhaps of the original price. Imagine for a moment how these global investors would react when the IMF, the UAE and Saudi Arabia agree to loan Egypt billions of dollars. Investors will have no problem grabbing assets on the basis of pennies on the dollar. But over the past year, Egypt’s economy was hit hard by the effects of Russia’s invasion of Ukraine, unsettling the same global investors who were bullish about Egypt forcing them to pull billions of dollars out of Egypt. When you want to play in globalization game, you must be ready for it, but then again when a country is ruled by generals, what do you expect. Meanwhile, Egypt is now importing its wheat at premium prices while its dollar reserve has been on free fall and the value of the pound continuing to plummet. The situation is so bad that AFP reports that two state-owned banks announced one-year saving certificates with an extraordinary 25 percent interest rate.
So here is what AFP news agency said: Egypt has been looking for foreign currency where it can. Starting this month, tourists will have to pay for train tickets in dollars, and many banks have limited foreign currency withdrawals and tripled credit card charges. So what kind of money does Egypt has in reserve? What it has in its coffers amount to about USD 33 billion, but almost all of it, or 28 billion are deposits owned by the likes of Saudi Arabia and the UAE. On the other side, Egypt’s foreign debt stands at $157 billion, which tripled in just 10 years. That’s what happens when governance is controlled by the military.
Well, we can keep talking about the disastrous Egyptian economy, but we have a long year ahead to get into more details.
For our premium subscribers, a special podcast looks at Morocco as a prospect for filming location destination. As the year 2023 looks to be a difficult on the economic front, Morocco has been working to attract foreign movie studios eager to take advantage of its natural settings, low cost opportunities and tax exemptions. Industry insiders expect 2022 revenues from shooting movies and documentaries in Morocco to exceed one billion dirhams or about USD 100 million, up 25% from 2019. They are betting the current momentum could further accelerate and reach revenue of up to MAD 1.3 billion in 2023, thanks to the tax support policy recently rolled out by the government, reducing taxes from filming in Morocco by 30%. Can that be achieved? You can access the podcast at North-Africa.com/category/podcasts.
