Wednesday, 27 October 2010

CONFIDENTIAL AGENDA (Week ending 31 October)

Guinea, Côte d'Ivoire and Tanzania: Africa's 'Super Sunday' of elections
The announcement late on 26 October that the second round of Guinea's presidential elections will be held on 31 October means that three national elections will be held in Africa on that date. The choice of this new date follows three days of political violence and ethnic clashes in Conakry and some of the big towns last week.

Already, Cellou Dalein Diallou, who was the favourite to win the run-off, has criticised the date, arguing that his supporters, displaced by recent political violence, will be unable to return in time to the areas in which they registered to vote. The other candidate in the run-off, veteran oppositionist Alpha Condé, has pronounced himself happy with the new date.

Although the election date was proposed by the new President of the election commission, General Siaka Toumany Sangaré, it will have to be ratified by the head of the ruling military junta, General Sekouba Konaté. At least one of the international organisations monitoring the vote, the International Federation for Electoral Systems, has spoken in support of the new date.

Given that the five times-postponed elections in Côte d'Ivoire are also due on 31 October, regional and international election observers in West Africa will be busy on that date. So far, the campaign in Côte d'Ivoire between the three political veterans – incumbent President Laurent Gbagbo, ex-Prime Minister Alassane Ouattara and ex-President Henri Konan-Bédié – has been relatively quiet, in stark contrast to the era of political violence that followed the last national elections a decade ago. Some in Abidjan fear that this is just the lull before the storm, should serious questions be raised about the validity of the vote.

Certainly the concerns about the elections in Guinea and Côte d'Ivoire, will divert attention from the national elections in Tanzania, where the governing Chama Cha Mapinduzi party faces its toughest challenge in decades from the opposition Chadema and the Civic United Front parties. Although incumbent President Jakaya Kikwete is unlikely to lose, the CCM could see its position in Parliament much weakened.

Africa Confidential will have detailed analysis of all three elections – in Guinea, Côte d'Ivoire and Tanzania – in its next edition on 5 November, but of course only for its subscribers.

Ghana: A mystery over the $5 billion bash
All the main players – the Ghana National Petroleum Corporation, United States' Kosmos Energy and China National Offshore Oil Corporation – are officially refusing to comment on a wire story datelined from Hong Kong claiming that Ghana and CNOOC have teamed up to offer Kosmos US$5billion for its stake in the Jubilee oil fields in deepwater off Ghana's Western region. A source close to GNPC told Africa Confidential in Accra that the $5 bn. bid story was 'less than half right': the main problem was that the offer made by GNPC was just over $4 bn.

The source confirmed that a 'Chinese institution' has made available 'bridging finance' to allow the GNPC to purchase Kosmos's 23.5% stake in Jubilee. But the GNPC was making an offer in its own right and intended to increase its own stake in Jubilee by about 3%. The source insisted that the Chinese oil corporation had no direct involvement in the arrangement of the finance but said one of the new investors in Jubilee, taking perhaps a 10% stake, was likely to be a Chinese oil company such as Sinopec or CNOOC.

For its part, Kosmos has remained quiet about the deal, although one of its associates in Accra has suggested that even $5 bn. falls far short of 'the market value' of the company's stake in Jubilee. In August, a Kosmos official told Africa Confidential that the value of its stake in Jubilee was between $5-6 bn. An independent analyst in Accra said Kosmos would be 'insane' to walk away from an offer of $5 bn. for the Jubilee stake.

The wire story about the $5 bn. follows weeks of speculation fuelled by Kosmos's private equity backers, Blackstone and Warburg Pincus, that the company would be launching an Initial Public Offering in New York to finance its continuing operations. Many believe that – like the planting of the $5 bn. offer story in Hong Kong, it was an attempt to talk up the value of Kosmos' stake. More information should emerge this week with officials from Blackstone due to arrive in Accra to discuss 'financing issues'.

Uganda: A plunge into Somalia
President Yoweri Museveni wants to escalate his fight with the Islamist militia Al Shabaab in Somalia. The African Union's request to the United Nations to impose a naval and air blockade on Somalia to deter piracy, as well as fighters and supplies reaching Al Shabab, raises the stakes in the 20-year conflict. It is no coincidence that Uganda currently chairs the UN Security Council which has been asked to consider the request.

The AU also asked the UNSC to support an increase in the AU force now in Somalia from 7,200 to 20,000. Given the funding, Museveni has told the UN that Uganda is willing to provide up to 20,000 Ugandan soldiers for the mission. The weak, UN-supported government in Mogadishu under President Sharif Sheikh Ahmed backs the AU call. Museveni's determination stems at least in part from the 11 July bombings in Kampala, which were claimed by Al Shabab as revenge for Uganda's military role in Somalia.

Whether or not the UN heeds the AU call, and whether the AU does indeed more than double its force in Somalia, Museveni may be pondering the wisdom of taking on yet another insurrectionary force. For now, it might look like good politics in the run-up to next year's national elections with Museveni styling himself as the security candidate.

However, civil society groups in Kenya are fiercely critical of the extradition – 'rendition', say some – from Nairobi to Kampala of 13 suspects in the July bombing. A Kenya High Court judge lambasted the Nairobi authorities for going along with the extraditions, which some local lawyers think may have been prompted by demands from the USA, in search of militants with links to Al Qaida as well as Al Shabaab. We hear that FBI agents have been sitting in on some of the interrogations in Nairobi. Groups such as Human Rights Watch and Amnesty International are taking a close interest.

Mauritania: Nouakchott sentences militants to death
Three militants from Al Qaida in the Islamic Maghreb have recently been sentenced to death in Nouakchott over a shootout which claimed the life of a police officer two years ago. AQIM came south from Algeria, partly because of an offensive launched by Algeria's security forces. The group is said to have earned over $50 million from kidnaps in the last five years and Algeria remains a key political focus for AQIM.

Mauritania's military rulers want to put down a marker about their toughness towards jihadists, but no one sentenced to death has been executed since 1984.

In neighbouring Niger, where seven uranium workers were kidnapped by AQIM in late September, poor security seems to have encouraged kidnappers. In 2008 the Tuareg nationalist Mouvement des Nigériens pour le Justice (MNJ) kidnapped four Areva workers, but they were later released unharmed without any ransoms or demands having been met.

It was not the first time MNJ had carried out a non-fatal kidnap, which may help explain why security was so bad at the camp. But the last time AQIM took a hostage, the elderly Frenchman Michel Germaneau, he was murdered (according to AQIM) or simply died of a pre-existing condition (according to the French government) during a rescue attempt by a Franco-Mauritanian force, which killed several AQIM men. The politically besieged French President Nicolas Sarkozy has set his face against paying ransoms, so he may choose to deploy his locally-based special forces and specialist aircraft for another rescue attempt.

Tanzania: Aglow over uranium prospects
As voters prepare to mark their ballots in national elections on 31 October, mining corporations are eyeing Tanzania's estimated 54 million pound reserves of uranium oxide. Areva, some of whose employees were kidnapped in Niger, is one of the companies interested. Tanzania is fairly stable politically, like uranium producers Namibia and South Africa, but nuclear power generators want a diversity of uranium sources. Britain and several other industrialised countries are looking to increase their nuclear-generation output significantly, so as to be able to meet greenhouse-gas emission-reduction targets, meaning demand should rise strongly.

Tanzania's deposits are in Dodoma and Ruvuma, and production is expected to start next year. Amid all the enthusiasm about another source of taxable earnings, there have been government announcements speculating about Tanzania getting its own reactors, but these are judged in the industry to be in the realm of fantasy. Not everyone is enthusiastic. Critics point to the environmental damage caused by open-cast mining, pollution, heavy use of water, and scepticism that the tax take will trickle down.

Sudan: Embarrassing shell-casings for Beijing and Khartoum
The discovery of Chinese-manufactured shell-casings at the scene of attacks against UN forces in Darfur has prompted a defensive diplomatic campaign from Beijing. The controversy will not go away in the coming weeks as Sudan remains high on the agenda of the UN Security Council. There is a UN embargo on all shipments of weapons and ammunition to Darfur,

Beijing called the detail in the UN report insufficient and labelling its publication as 'inappropriate' and 'irresponsible'. China is a leading arms supplier to Sudan major arms supplier but says it has assurances from the Khartoum regime that none of these arms and ammunition would be used in Darfur.

It would not be the first time Chinese arms have been found in Africa where they shouldn't be. The November 2009 UN Group of Experts' report on Congo-Kinshasa published evidence that the Forces Armées de la République Démocratiqu e du Congo had received shipments of weapons that had originated in China and been flown into Congo from Khartoum on planes requisitioned by the FARDC. The 2008 Experts' report said that FARDC was also probably distributing them to other armed groups in the region.

Nigeria: A currency fraud starting in Australia and Britain
Nigerians are eagerly awaiting action against former and serving officials of their central bank linked to a major currency printing fraud organised by Australian and British business people. These business people collected huge slush fund payments to bribe central bank officials in Nigeria during the tenure of Governor Charles Soludo. When asked how Nigeria's government would react to the investigation, the current Governor Lamido Sanusi told Africa Confidential that he was certain that the police authorities would respond vigorously when presented with the evidence.

Earlier this month, Britain's Serious Fraud Office arrested several people in connection with Securency International PTY Ltd's alleged bribe-paying to secure international polymer banknote contracts. Later in the month, they arrested more and raided several premises. Securency is a joint venture between the Australian central bank, the Reserve Bank of Australia, and Innovia Films, a British company. A British couple said to have links to the Conservative Party was arrested at a London airport and questioned by the SFO about $1 mn. allegedly paid to senior Nigerian officials to secure a currency contract (AC Vol 50 No 20). Polymer banknotes are non-paper notes that last much longer than the traditional kind.

Australian and Nigerian journalists been asking pointed questions about British businessmen with links to Uganda, Nigeria and Britain's Conservative Party. The murky allegations go back to 2006, at least.

British institutions are already under fire in the wake of a report by Global Witness – 'International Thief Thief' – which alleges that between 1999 and 2005, Barclays, NatWest, RBS, HSBC and UBS handled without demur vast sums from corrupt Nigerian governors. Most of the banks had been mildly reprimanded for handling General Sani Abacha's stolen state funds. Under the more business-oriented foreign policy of the Conservative-Liberal alliance, it remains unclear whether the regulators will get tougher on corporate malfeasance. Britain's new Anti-Corruption Act (enacted in April) could help if the investigators are given the resources by a government in ruthless cost-cutting mode.

Rwanda: Kigali rejects claims of press harassment
The Rwandan government is furious with the international organisation, Reporters Sans Frontières, for ranking it 169th out of 179 countries on its treatment of journalists and attitudes to press freedom. Rwanda has form with RSF after a local journalists' association accused it of 'false and baseless' reports about the country and of turning Rwanda into a 'punching bag'. The restrictions on the press during the recent election, and the murder of
the deputy editor of the private newspaper Umuvugizi, Jean-Léonard Rugambage, account for the fall in ranking, the RSF says. The information ministry called RSF charges 'totally unfounded and misleading' labelling it lazy and irresponsible.

Kigali is usually dismissive of criticism from foreign non-governmental organisations. Could the anger this time be explained by Rwanda having fallen in the rankings below even such as Somalia, Ethiopia, Côte d'Ivoire, Zimbabwe and even Congo-Kinshasa? Ethiopia's Meles Zenawi – No. 139 in the RSF rankings – also gets a bad press in the West for illiberal policies and bad treatment of the press and opposition. However, diplomats do not seem to be remotely interested in sanctions against either of them.

South Africa: Pick your fight (for shoppers everywhere)
The South African retailer Pick n Pay may well be going head to head with one of the heaviest retail hitters in the world – Wal-Mart. Wal-Mart is said to be close to acquiring Massmart, the giant South African retailer, with a beady eye on expansion elsewhere in Africa. Pick n Pay is saying it is planning new shops for Zambia, Malawi, Mauritius and Mozambique but has posted disappointing results recently and prospects in the South African market are not, post-World Cup and world recession, thought to be very smart. Analysts say that Pick n Pay should look after itself in South Africa before looking over the horizon to other countries.

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