Thursday, 22 March 2018

Africa's common market

The build-up was as impressive as the goal is ambitious. After three years of talks, Africa is to form a Free Trade area for 54 countries and over 1.2 billion people. All signatory countries are to cut tariffs and import quotas. That is to be followed by a customs union where each country has the same tariffs and then a common market where all trade among members is free of tariffs and quotas. It would be the biggest economic union since the foundation of the World Trade Organisation. And all at a time when the United States has raised tariffs to protect its steel industry and China is styling itself as a crusader for free trade and globalisation.

The script became reality in Kigali on 21 March when the leaders of 44 countries turned up to sign the Free Trade Agreement. African Union Chairman Moussa Faki Mahamat called it a 'glorious challenge' which demanded 'the courage to achieve.' That's all true. Trade within Africa makes up some 19% of the continent's commerce, and trade between countries in Asia is about 50% of the region's commerce. The UN's Economic Commission for Africa reckons the Kigali agreement could help double intra-African trade.

 But there are still powerful sceptics in Africa. Nigeria pulled out from the signing in Kigali, citing concerns by local companies about dumping and trade unions about jobs. Uganda's President Yoweri Museveni stayed away too, but it's uncertain whether that was for diplomatic or economic motives.

Tuesday, 20 March 2018

SOUTH AFRICA: Ramaphosa reforms take off with Zuma's trial, Moyane suspended from tax authority and purge of state firms

This week we start with the prospects for President Cyril Ramaphosa's reforms in South Africa and then the chances of a deal between Mozambique and its commercial creditors. Still in Southern Africa, President Emmerson Mnangagwa's financial amnesty is proving a success ahead of elections in July and Angola's former President, José Eduardo Dos Santos, is trying to extend his term as head of the ruling party.

SOUTH AFRICA: Ramaphosa reforms take off with Zuma's trial, Moyane suspended from tax authority and purge of state firms
Step by step President Cyril Ramaphosa and his economic team – the Ministers for Finance and State Enterprises, respectively Nhlanhla Nene and Pravin Gordhan – are remaking the government and its administration. The decision last Friday (16 March) by Shaun Abrahams, Director of the National Prosecuting Authority, to prosecute ex-President Jacob Zuma on 16 charges of corruption, racketeering and money-laundering sends a powerful signal about the seriousness of the new order.
Although Abrahams, who is contesting a judicial order that he is unfit to run the NPA, had little choice in the matter, his decision is seen by the ex-President's allies as a betrayal. Other allies of Zuma are threatening to cause mayhem in the African National Congress in revenge but their power is waning.

The more robust Zuma supporters warn that South Africa could follow the example of Brazil, where the fall of a corruption-plagued leftist government led to the rise of a right-wing president implementing tough neo-liberal reforms. So far in South Africa, the centre-right Democratic Alliance has benefited little from the fall of Zuma.

This is where Ramaphosa's political skills come in. His strategy is to pull more supporters into the ANC from both right and left: with a combination of anti-corruption policies and sympathy for the landless and unemployed. His decision on 19 March to suspend Tom Moyane as director of the South African Revenue Services sent another powerful signal. Lambasted for sacking some of SARS's most effective officials, Moyane had refused all entreaties to resign. He is already under investigation.

State revenues are likely to grow sharply if some of the top professionals who sacked by Moyane are reinstated. That will help Nene who is trying to balance the budget as credit ratings agencies make their assessments of the early effects of the Ramaphosa era.

However, the most significant changes will follow Gordhan's efforts to restructure the state companies that have proved such a political and economic drain on the ANC government. Starting with the power utility Eskom and South African Airways, Gordhan is working his way through the companies that served as a political patronage machine for Zuma and allies.

MOZAMBIQUE: Secret loan saga to cast shadow over government meeting with creditors
Expectations of an agreement on debt-restructuring between Maputo and its commercial creditors were low ahead of today's talks (20 March). Banking sources say that the government had not proposed a new plan ahead of the meeting and that the creditors were divided in their approach.

According to the IMF, Mozambique's foreign debt was US$13.3 billion at the end of 2017 and its arrears are now over $700 million Most of the country's financing problems have been traced back to some $2 bn. in secret loans, organised in deals with Credit Suisse and Russia's VTB which are now under international scrutiny.

Some creditors, one banker said, may have been prepared to accept some form of write-down but others would refuse any such offer, preferring to wait for full repayment until gas exports start up around 2023.

ZIMBABWE: President Mnangagwa sets July as date for national elections as fresh investments arrive
A succession of announcements about fresh foreign investments are feeding a more optimistic view of the country under President Emmerson Mnangagwa's reshuffled government. Some $590 mn. in foreign exchange has been repatriated to Zimbabwe under Mnangagwa's financial amnesty programme. But officials say that at least another $800 mn. is due.

Emboldened by the flow of both new and old money coming in, Mnangagwa has announced that national elections will be held in July.

He added that election-monitoring organisations from across Africa and the European Union would be accredited for the vote. This is despite ousted President Robert Mugabe complaining at a press conference at his mansion in Harare in the week ending 17 March that he had been the victim of a coup d'état.

Insiders suggest that Mugabe's press conference may have badly misfired, partly because it showed the considerable luxury in which his family still live – despite his claims of persecution by the new government.

ANGOLA: Ex-President Dos Santos tries to control the ruling party for another year as his family face growing challenges
Contrary to expectations, the last six months have seen the family of President José Eduardo dos Santos lose power, influence and money at a dizzying rate as new President João Lourenço consolidates power. Dos Santos's daughter has been ousted as head of the state oil company and his son sacked as head of the sovereign wealth fund. Other children have lost lucrative state contracts and are said to be under investigation.

Yet ex-President Dos Santos has retained his position as head of the governing MPLA. That is about to change if many of the party militants have their way. They want to see Dos Santos out of the party leadership in the next few weeks, at most months.

Pushing back against this, Dos Santos says he wants to stay until December, if not April 2019. Some suspect that he wants to use that position as a shield against further investigations. The party politburo meets again next month.

News in very brief

NIGERIA: Row over super-salaries for Senators will be a campaigning issue in next year's election
EGYPT: Government cracks down harder on media but President El Sisi faces no serious challenger in the 26-28 March elections

BURUNDI: President Nkurunziza to hold referendum on 17 May which could give him another decade in power

CONGO-KINSHASA: Government stands firm on higher resource taxes against big mining companies as demand grows sharply for its cobalt

Tuesday, 13 March 2018

AFRICA/UNITED STATES: After security talks and a bout of illness, Secretary Tillerson returns early to Washington DC to be sacked

As the week opens United States Secretary of State Rex Tillerson's diplomatic career seems to have ended after a brief swing through Africa. Partisans on both sides of the divide in Kenya are asking who got what at last week's summit at State House. Nigeria's President Muhammadu Buhari opts for negotiations, not military force, to try to rescue the students abducted at Dapchi and pressure mounts on South Africa's President Cyril Ramaphosa to sack his predecessor's security allies.

AFRICA/UNITED STATES: After security talks and a bout of illness, Secretary Tillerson returns early to Washington DC to be sacked
Billed as an 'apology tour' – in the wake of President Donald Trump's derogatory references to the region – Secretary of State Rex Tillerson's trip to Africa last week must rank as one of the most ill-starred diplomatic missions in recent history. Tillerson's schedule of difficult talks on regional security in Addis Ababa, Djibouti, Nairobi, Chad and Nigeria was cut short, first by his illness in Kenya, and then by the news that Trump was about to sack him.

Hours after Tillerson arrived back in Washington late yesterday (12 March), Trump announced via Twitter that he was appointing Mike Pompeo, the head of the Central Intelligence Agency, to succeed Tillerson as he thanked Tillerson 'for his service'. Only the timing was surprising.

Relations publicly soured between Tillerson and Trump last year after the Secretary of State declined to disavow press reports that he described the President as a 'moron'. Trump then chose to launch two of his biggest foreign policy initiatives – new tariffs on iron and steel and opening direct talks with North Korean leader Kim Jong Un – while Tillerson was in Africa, 10,000 kilometres from Washington DC.

Apart from all that, Tillerson's diplomatic efforts in Africa were less than stellar. He launched his tour with a sweeping criticism of China's policy in Africa, accusing Beijing of presiding over an unsustainable build-up of debt in the region and signing opaque and poor-value contracts. For many African politicians, this was a bizarre line of argument when the US was cutting funding to its core Africa projects by more than a third.

After brief discussions on regional security in Ethiopia and Djibouti, which both have extremely close ties to China, Tillerson's stopover in Nairobi started with a partial success. He tried to claim some credit for a conciliatory meeting between President Uhuru Kenyatta and opposition leader Raila Odinga on 9 March.

In fact, the rapprochement had followed mounting local and international pressure on the two leaders. Shortly after, Tillerson fell ill and was out of action for two days. He rounded up the trip with the briefest of meetings with Chad's President Idris Déby Itno (the two knew each other from Tillerson's time at ExxonMobil) and Nigeria's President Muhammadu Buhari.

Although his African interlocutors may have had some sympathy with Tillerson, given Trump's peremptory treatment of him, the management of his trip seems to reinforce the lack of importance that the current President attaches to Africa.

KENYA: Questions about a deal as opposition suspend its People's Assemblies in wake of Odinga-Kenyatta talks
More details are set to emerge this week of what was agreed on 9 March at the first face-to-face talks between President Uhuru Kenyatta and Raila Odinga, leader of the National Super Alliance (Nasa) since last year's disputed elections.

Little about the substance of the negotiations has emerged since the meeting. But Odinga's side has suspended its call for People's Assemblies to be set up across the country as a rival power centre to Kenyatta's Jubilee government.

It is also unclear where this leaves the political alliance that underpins Nasa. In recent weeks, there were signs that Odinga's partners – Stephen Kalonzo Musyoka and Musalia Mudavadi – had strong misgivings about Nasa's direction of travel. Neither Musyoka nor Mudavadi attended Odinga's 'inauguration' as 'People's President' in Nairobi's Uhuru Park last month.

Equally intriguing is what an Odinga-Kenyatta deal might mean for the power dynamics of the Jubilee government, in which Vice-President William Ruto is playing an increasingly assertive role. Some of Ruto's allies regard Kenyatta as a lame-duck president given their man's position as presidential frontrunner in 2022.

Should Kenyatta offer posts in the government to Odinga and allies, that could upset the current balance of forces that favours Ruto so strongly.

NIGERIA: President Buhari chooses negotiations – not military action – for return of kidnapped students
Nigerians were quick to show their outrage at the kidnapping by Boko Haram fighters of 110 girl students in Dapchi, Yobe State, last month and demanded rapid action from their government. Certainly, some of the action was rapid – President Muhammadu Buhari despatched three security ministers to the state within two days of the first reports. Then, the recriminations between rival wings of the security system started to complicate matters.

Buhari's announcement yesterday (12 March), after his meeting with US Secretary of State Rex Tillerson, that he would negotiate for the release of the students illustrates the government's lack of options less than a month after the abductions. It appears that negotiations, apparently involving payments and prisoner releases, have helped secure the release of other hostages held by Boko Haram, more than 18 months after their abduction.

This time, with the government acting more promptly, the negotiating track could yield better results. But it points to Boko Haram's ability, or at least that faction run by Abubakar Shekau, to evade surveillance or military action, particularly in the border area between Yobe state and the southern region of the Republic of Niger.

This latest major abduction is already having political repercussions. The #Bringbackourgirls campaign quickly organised solidarity rallies with the victims and their families. That awoke bad memories of the kidnapping of over 250 schoolgirls by Boko Haram from Chibok in Borno State in 2014, a year before national elections.

Whatever Boko Haram's motives – propaganda, recruitment or fund-raising – the Dapchi kidnappings could damage Buhari's electoral chances in the same way that the Chibok attacks undermined Goodluck Jonathan. Aware of these risks, Buhari has been more pro-active on the issue and has announced a presidential trip to the region.

All but Buhari's sternest critics concede that on his watch the military effort against the Boko Haram insurgents has cleared out the militants as an occupying force in the north-east and has been better coordinated with neighbouring states. But there are important provisos, such as doubts about the ability of Nigeria's military to counter Boko Haram as an insurgent, hit-and-run, terrorist force. The Dapchi attack has also shown the danger of inter-service rivalries in Nigeria, as well as the potential consequences of rights violations against civilians by military personnel. Anger at such incidents could bolster support for the insurgents.

SOUTH AFRICA: Pressure builds for a purge of police, prosecutors and spies as key suspects escape
Activists are pushing President Cyril Ramaphosa to launch the next phase of his fightback against corruption and 'state capture' by pushing out some of his predecessor Jacob Zuma's top security and financial officials.  Ramaphosa's campaign needs a shot in the arm if public reaction on the popular talk radio stations in Johannesburg, Durban and Cape Town is any measure.

News reports suggest that far from being cowed, those accused of wrongdoing such as Zuma's son, Duduzane, and some of the Gupta family are due to appear in parliament this week defending themselves at the Commission of Inquiry into State Capture.

After a show of prosecutorial enthusiasm as Ramaphosa replaced Zuma as President, police efforts against malefactors seem to be running out of energy. Although Police Minister Bheki Cele is regarded as an effective 'hard man', he is battling against legions of Zuma appointees.

He and the other Ramaphosa reformers would be greatly helped by the exit of a band of top officials, widely regarded as Zuma stooges: National Director of Public Prosecutions Shaun Abrahams (Ramaphosa is said to have opened discussions with Glynis Breytenbach for the job); Tom Moyane as commissioner for the South Africa Revenue Service; and Arthur Fraser, Director General of the State Security Authority. As pressure mounts on the system, insiders expect to see some big changes in the coming weeks.

SIERRA LEONE: Opposition's Maada Bio has narrow lead in presidential election but second round likely
GHANA: Government borrowing under pressure as cocoa harvest falls short of 850,000 tonne target
SOMALIA: Government and opposition launch joint protest over claims of UAE's 'political interference' in region
CONGO-KINSHASA: Opposition leader Katumbi launches a new anti-Kabila front ahead of polls due in December

Thursday, 8 March 2018

Tough talking Tillerson's tour

Rex Tillerson, Washington's Secretary of State, started his swing on 6 March through Africa – Ethiopia, Djibouti, Kenya, Nigeria and Chad – with a bellicose warning to China over its regional policy. Despite the billions of dollars from China that has been sluicing through Africa, Beijing was simply building up a coterie of client states according to Tillerson. Many of the Chinese loans would create dependency rather than development, he insisted. As a show of United States goodwill, Tillerson announced a US$533 million contribution towards famine relief in East Africa as he set off for Addis Ababa.

The real stakes of the Tillerson tour are security: strategic rivalry with China but also to boost regional counter-terrorism operations. Djibouti is the sharpest edge of the Washington-Beijing rivalry. Djibouti, which hosts US, Chinese, French, German and Japanese military bases, irritated Washington four years ago when it more than doubled the rent for the base. Djibouti's break with United Arab Emirates and its port company, DP World, further annoys Washington as President Omar Guelleh's government may hand over DP World's terminal at Doraleh to a Chinese company, according to speakers in Congress in Washington on 6 March.

Marine General Thomas Waldhauser told Congress that if China controls Doraleh, that would affect US capacity to run its base in Djibouti and resupply its ships. Washington was now far behind in a strategic race with Beijing in Africa, he added.

Tuesday, 6 March 2018

SIERRA LEONE: Will Candidate Yumkella break the duopoly in the elections on 7 March?

This week it's the Sierra Leone elections, the Tillerson tour, choosing Ethiopia's new prime minister and progress in fixing Ghana's spat with the International Monetary Fund.

SIERRA LEONE: Will Candidate Yumkella break the duopoly in the elections on 7 March?For the first time in decades, voters tomorrow (7 March) have a credible alternative candidate outside the two-party system – between the Sierra Leone People's Party and the All People's Congress ‒ that has dominated the country since independence. The pioneer candidate is Kandeh Yumkella, a former United Nations Under Secretary General and specialist in economic development, who has put together what he calls the National Grand Coalition.

Yumkella appeals to the many voters who seem unenthused by the two main parties. The SLPP and APC are considered part of the Sierra Leonean political establishment, and their two candidates, Julius Maada Bio (SLPP) and Samura Kamara (APC), have worked together in the past and are seen as deeply embedded in old power structures. Aside from Yumkella's NGC, none of the other 13 parties looks able to affect the outcome of the polls.

UNITED STATES/AFRICA: Secretary Tillerson aims to make amends and strike security deals on his five-country Africa tripFourteen months after the inauguration of Donald Trump as US President, Secretary of State Rex Tillerson has embarked on an Africa tour from 6-13 March, taking in Chad, Djibouti, Ethiopia, Kenya and Nigeria. Despite the low billing Trump has given Africa so far, Tillerson knows his way around the continent's resource-rich countries from his years as Chief Executive of ExxonMobil.

Assistant Secretary of State for Africa Donald Yamamoto told journalists that Tillerson was visiting some of Washington's most important sub-Saharan allies ‒ and biggest diplomatic centres in the region ‒ with which it has tight security relationships. Nigeria has just closed a fighter-bomber deal with the US, and President Uhuru Kenyatta's government has benefited from strong support from Washington amid post-election clashes with Raila Odinga's opposition.

NDjamena will be a particularly demanding escale for Tillerson. Although it is a key component of the multinational force fighting jihadists in the Sahel, Chad was put under a blanket immigration ban after it failed to meet some of Washington's technical criteria last year.

By contrast, Tillerson is expected to adopt a sterner tone in dealing with President Ismaïl Omar Guelleh in Djibouti. Washington's frustration with Guelleh centres on his raising of the rent for the US military bases there ‒ made worse for the Americans by his granting of basing rights near Djibouti Port to China's air force and navy.

Finally, Tillerson may try to mediate between Ethiopia and Egypt, currently one of Washington's closest regional allies, in their dispute over the Nile and the issue of Addis Ababa's ambitious Grand Ethiopian Renaissance Dam project.

ETHIOPIA: New premier due to emerge this week as ruling coalition goes into national conferenceAfter a controversy in parliament over whether enough votes were cast to endorse the government's imposition of a state of emergency ‒ some 88 MPs voted against ‒ the ruling Ethiopian Peoples' Revolutionary Democratic Front has gone into conclave to pick a successor to Prime Minister Hailemariam Desalegn. He remains in office, despite offering his resignation nearly three weeks ago, because of deep disagreements over his replacement. Unprecedented splits in the ruling party have been on show.

In his resignation statement, Hailemariam said he wanted to leave government to allow a successor to initiate a reform process.

Both the content of those reforms and the election of the new premier will dominate the ruling party's conference this week. Abiy Ahmed, leader of the Oromo People's Democratic Organisation, looks to be leading the field (AC Vol 59 No 4, The edifice cracks). The OPDO's Lemma Megersa is also fancied. But elsewhere in the party, particularly in its Tigrayan-dominated security wing, Lemma is regarded as unacceptably radical and the other parties in the Front fear the consequences of having an Oromo as leader. Securocrats may see Foreign Minister Workneh Gebeyehu, also an Oromo, as a safer choice.

Certainly, the EPRDF's final decisions on policy and top office-holders will give a clearer sense of the changing balance of power within the ruling coalition.

GHANA: Accra resolves its tetchy relationship with the IMF after differences over revenues and spending cutsAfter weeks of public debate over policy, President Nana Addo Akufo-Addo's government has come to terms with the International Monetary Fund over management of the final year of its US$1 billion extended credit facility programme. From its inauguration in January 2017, Akufo-Addo's government was lukewarm about the terms of the deal it inherited from the predecessor government under President John Mahama.

The new government argued chiefly that everything the IMF was advising it to do ‒ such as cut the debt and deficit as well as rationalise the tax system ‒ was already part of its policy programme.
There may also have been political frustration with the IMF. Some in Akufo-Addo's party criticised the Fund as having been too timid in its criticism of Mahama's economic management, which racked up the national debt to over 70% of Ghana's gross domestic product, often because of overpriced contracts with obscure foreign supplier companies.

But now the Ministry of Finance, under Ken Ofori-Atta, and the IMF team are to work on a financial plan that will boost revenues, strengthen public sector finances and rationalise the tax credit and exemption schemes. The IMF also warned about the danger from the banking sector of a 40%-plus increase in non-performing loans over the past year.

Agreement on the plan will trigger a last tranche of credit ‒ worth $190 million ‒ under the programme, to be discussed by the IMF board in April.


NIGERIA: President Muhammadu Buhari to visit Dapchi in Yobe State to show solidarity with families of abducted schoolgirls

SOUTH AFRICA: Minister of State Enterprises Pravin Gordhan launches big clean-up of the public sector as economic indicators look brighter

TANZANIA: After a year of economic nationalism, President John Magufuli rejects Moody's downgrade of national debt

Monday, 26 February 2018

NIGERIA: Buhari calls new kidnapping of girl students in Yobe State a 'national disaster'

This week we reflect on an apparent replay of the 2014 tragedy in which armed militants abducted dozens of girl students in northern Nigeria. Then to South Africa, where speculation intensifies about the shape of President Cyril Ramaphosa's new cabinet. The crisis surrounding President Joseph Kabila's efforts to prolong his stay in power is deepening after police killed and wounded more anti-government protesters. A summit in Brussels has raised US$500 million for a bigger multinational force in the Sahel. And Mozambican officials will come face to face with creditors next month when they try to restructure the country's mega-debt.

NIGERIA: Buhari calls new kidnapping of girl students in Yobe State a 'national disaster'
The government is to send soldiers, police and surveillance aircraft to the north-east this week to boost security near the border with the Republic of Niger, following a mass kidnapping of students from the girls' technical school in Dapchi, Yobe State, on 19 February.

After several days of mixed messages from various officials, the government is promising determined action to find the students.

'This is a national disaster,' said President Muhammadu Buhari on 23 February. 'We are sorry that this could have happened … We pray that our gallant armed forces will locate and safely return your missing family members.'

Buhari and his colleagues are trying to avoid comparisons with their predecessor government under Goodluck Jonathan, which was widely condemned for its dilatory reaction in 2014 when Boko Haram fighters abducted more than 250 schoolgirls from a school in Chibok, Borno State. Security experts claimed that the delayed response by the Jonathan government made it far harder to track the kidnappers.

No group has yet claimed responsibility for the kidnappings and attack on the Government Girls' Science and Technical College in Dapchi, a hundred kilometres from the Yobe State capital, Damaturu. The operation, which involved several armed vehicles and fighters in military uniforms posing as government soldiers, was well planned.

By the time residents raised the alarm and state troops arrived in the town from their base 30-40 kilometres away, the attackers had escaped, probably across the border into Niger.

SOUTH AFRICA: Ramaphosa announces leaner cabinet with Nhlanhla Nene set to return as Finance Minister
Lists of candidates for President Cyril Ramaphosa's first cabinet started circulating after the latest meeting of the African National Congress executive committee. We hear there was a consensus that the number of ministerial departments should be reduced from 35 to 25.

There was talk of top ministerial roles for Mcebisi Jonas, Thoko Didiza and Lindiwe Sisulu. One report suggests that Nkosazana Dlamini-Zuma, beaten by Ramaphosa in the ANC leadership elections, might take a role as head of government business. Premier of Mpumalanga Province David Mabuza is tipped to serve as Deputy President in the new government. That role could prove critical in planning the ANC’s campaign for the 2019 elections.

Ramaphosa was still speaking from the Union Buildings in Pretoria as I was writing this briefing. The highlights so far are that Nhlanhla Nene is confirmed as Finance Minister and Pravin Gordhan will take over the Ministry of State Enterprises, a key area for reform. Malusi Gigaba has switched to Home Affairs and close Ramaphosa ally Gwede Mantashe is taking on the Mines Ministry.

Africa Confidential will carry a full analysis of the new ministerial team as soon as our correspondents get the full details.

The other big change is Ramaphosa's determination to bring state-owned companies under tighter control by the relevant ministries. Eskom, the state power company, will be answerable to the minister of energy; South African Airways and Transnet will report to the minister of transport; and Denel, the state arms manufacturer, will report to the minister of defence.

CONGO-KINSHASA: Police killing of church demonstrator sparks fresh outrage as anger with Kabila mounts
As the state crackdown on dissidents intensifies, Congo-K's churches have become a leading forum for opposition to Joseph Kabila's attempts to extend his tenure as President. From Kinshasa to Kisangani to Goma, churchgoers staged protest marches across the country after morning services on Sunday 25 February.

Although the Police Commissioner of Kinshasa, General Sylvano Kasongo, told journalists that his officers had been told not to use excessive force, demonstrators in several cities said police had used live ammunition to break up protests. Officers fired on a march near the Catholic church in Lemba, a suburb of the capital, killing one protester and seriously wounding two others. Police have shot dead over 10 demonstrators in church-led protests in the past two months.

Catholics, Protestants and evangelicals are increasingly frustrated with the failure of the country's opposition parties to form a united front against Kabila.

SAHEL: G5 multinational force to get $500 million for anti-terror operations and migration policing
Pausing briefly to allow her organisation to congratulate itself for its fundraising efforts, the European Union's top diplomat, Federica Mogherini, asked member states to follow through quickly on their pledged contributions after a special summit in Brussels on 23 February.

The money was needed urgently, she said, to build the Mali-based force – known as G5 – into a multinational army of roughly 5,000 troops.

The summit was a particular success for President Emmanuel Macron of France, who has been trying to raise money for the Sahel force for the past six months. Macron has also increased France's contribution to development programmes in the region from €600 million to about €1 billion.

The prime movers behind G5 were Macron, German Chancellor Angela Merkel and Italy's Prime Minister, Paolo Gentiloni.

All three leaders have been selling support for the force as a vital way of promoting regional security and curbing migration. In recent months, Macron has sounded increasingly harsh warnings about migration, perhaps in a nod to his chief foe in last year's presidential elections, Marine Le Pen of the far-right Front National.

Spain's beleaguered Prime Minister, Mariano Rajoy, stumbled when journalists asked him to name the five countries in the force – Burkina Faso, Chad, Mali, Mauritania and Niger.

However, the United States capped its contribution to the G5 effort at $60 mn. but it is also spending $100 mn. on a heavily fortified drone base at Agadez in Niger, from which it will conduct surveillance operations across the Sahel and North Africa. Although US officials insist the base will have no offensive capacity, many security experts are sceptical of these assurances.

Recent US intelligence reports have played up the growing power of groups affiliated to Islamic State in the Sahel.

MOZAMBIQUE: Government to announce plans to restructure national debt following secret loan scandal
It is over a year since Mozambique defaulted on US$2 billion in foreign loans. Now, advised by Lazard Frères, officials from Maputo are poised to launch negotiations in London on 20 March to restructure the country's debts.

A year ago it emerged that, starting in 2013, the outgoing government of President Armando Guebuza had ratcheted up roughly $1.4 bn. in hidden loans contracted by entities linked to state companies. That money is owed to Credit Suisse, Russia's VTB and Palomar Capital Advisors, all of which are under scrutiny by the regulatory authorities in Switzerland, the United Kingdom and the United States.


DEBT AND INVESTMENTS: Private equity investments in Africa fell by 10% in 2017 and net sovereign debt will rise to US$514 billion, according to Standard & Poor's ratings agency.

KENYA: President Uhuru Kenyatta's government faces scepticism about growth targets as it floats another $2bn of Eurobonds.

AFRICA/TURKEY: Consolidating Ankara's commercial and diplomatic campaign, President Recep Tayyip Erdogan is visiting Algeria, Mali, Mauritania and Senegal from late February to 2 March.

CHINA/AFRICA: The Communist Party's proposal to abolish presidential term limits will keep Xi Jinping in power and give heart to long-term leaders in Africa.

Thursday, 22 February 2018

Let's not talk about debt

Public debt is spiralling and the International Monetary Fund is back in business in Africa. That figures. But it's not a straight rerun of the testy relationship of the 1980s and 1990s.

Now, countries such as Ghana and Zambia are lower-middle-income countries. That means no more cheap money from the Fund or the World Bank. But their imprimatur is essential for a government to issue bonds.

Ghana's government inherited a debt nightmare from its predecessor but is ploughing an independent course. It has already raised US$2.5 billion in bonds to help restructure its debt commitments. It's also talking to Germany and China about longer-term financing deals but is in no hurry to negotiate a new deal with the IMF.

Zambia, in contrast, faces an increasingly threatening debt mountain, after reports of reckless state procurement. Although the government is negotiating a $1.3 bn. loan from the IMF, it adopts a tough rhetorical position. Last week, the IMF told Zambia that it would have to get Beijing to give a state guarantee to a loan offered by a private Chinese company. No one in Lusaka wanted to talk about that. Similarly, no one in President Koroma's government in Freetown wanted to talk about the IMF's decision to stop disbursements to Sierra Leone after a free-spending and electioneering budget. Or some, like the Kenyan government, simply insist there is no problem with its IMF programme, some six months after Fund has stopped disbursements.