Monday, 5 December 2011

Congo-Kinshasa: money, mines and votes

This week, popular opposition to political and commercial fraud in Congo-Kinshasa could precipitate a new national crisis following disputed national elections on 28 November (AC Vol 52 No 23). Increasingly credible claims of widespread vote rigging against a backdrop of reports that some US$5 billion of the state's mining assets have been sold for a fraction of their market value to close associates of President Joseph Kabila could fire up divisions in the country almost a decade after its civil war formally ended (AC Vol 52 No 24, AC Vol 52 No 16 & passim).

Pressure will mount on the UN Security Council which is fearful of being drawn into another African election dispute; UN forces played a lead role in Côte d'Ivoire's imbroglio this year. It contented itself with calls for restraint to all sides in Congo after meeting on 2 December.

Insiders say the council is divided with South Africa, Russia and China sympathetic to incumbent President Kabila, while France and Britain are belatedly beginning to sound some alarms. UN peacekeepers would be expected to act in the event of widespread violence should the election crisis escalate but most council members are concentrating on Syria's crisis not Congo's.

For now, the African Union's observer team insists there is no evidence of systematic fraud and hasn't backed calls by Congolese civil society groups for greater transparency in the tabulation of votes. The AU's position and that of the regional Southern African Development Community could prove critical in the coming days.

In Congo, widespread scepticism greeted the release of early election results by Reverend Daniel Ngoy Mulunda, President of the Commission électorale nationale indépendante (CENI) showing a substantial lead for President Kabila.

According to CENI, Kabila had polled 51% with his nearest rival Etienne Tshisekedi wa Mulumba on 35% and Vital Kamerhe had just 5% in results released on 3 December from about a third of the country's over 63,000 polling stations. The counting and selective publication of results raise serious questions about the credibility of the elections. Few results have been released so far from Tshisekedi's strongholds in the capital Kinshasa and in the diamond rich provinces of Kasai.

CENI's Mulunda, widely seen as an ally of President Kabila, claims to have the authority to annul packages of votes without offering reasons. So far CENI has ruled out votes from areas in the capital and the centre of the country known to be hostile to Kabila. Local observer groups and the Catholic church, which had widespread coverage on the ground, have been compiling a parallel vote counting by adding up the votes announced in each polling station.

The appearance of clusters of 'phantom' polling stations has made an accurate tabulation of votes much harder. The UN-backed Radio Okapi reported that CENI's list of polling stations included 107 phantom stations, opposition parties claim many more than this in Kinshasa and Kasai-Orientale. Mulunda insists there are no 'phantom' stations just those whose 'location is not well established'. A confidential European Union report lists widespread voter registration abuses.

More serious still are reports from diplomats and civic activists that three planeloads of election materials from South Africa landed at Kinshasa's Nd'jili airport on 29 and 30 November although voting had ended in most parts of the country. Foreign observers, especially the AU and SADC, are reluctant to conclude that all these incidents amount to a stolen election.

Opposition candidates such as Tshisekedi, who at 78 is making what is likely to be his last run for the presidency, and Kamhere harbour no such doubts and are preparing mass protests after the official declaration of results on 6 December.

Anger at electoral fraud in Congo will be compounded by outrage at the systematic theft of state assets over the past decade. In 2002, a UN investigation concluded that some $3billion of state assets had been sold at knock down prices to political and military allies of the Kabila regime. After the report was published, Kabila sacked several senior figures including minister in the presidency Katumba Mwanke.

Today Mwanke is back as a top advisor, skilfully juggling his political and commercial duties. And there has been a deafening silence from the UN, the World Bank and the IMF as the government has presided of the sale of key mining assets to opaque companies registered in the British Virgin Islands, several of which are linked to President Kabila's associate and Israeli magnate, Dan Gertler.

Detailed reports about these sales have been sent to the EU, the IMF and the World Bank by Congolese civic groups and British MP Eric Joyce (ericjoyce.co.ukwho chairs the All Party African Great Lakes Group (africangreatlakes.com). As well as this the Bank and the IMF have conducted their own probes into systematic corruption in Congo's mining sector, the results of which they have so far declined to publish.

The evidence suggests, as Eric Joyce argues, that the Congolese government has flouted most of the key provisions of its agreement with the IMF for a $550 million loan. The IMF's conditions included ensuring public and transparent competitive tenders for all sales of state assets, publication of the 2007-2010 national mining contract renegotiation, establishment of an independent anti-corruption authority and the implementation of procedures to properly account for state mining revenues under the auspices of the Extractive Industries Transparency Initiative, now headed by former British Development Minister Clare Short.

For Congo's 70 million people the economic and the political stakes in the coming days could hardly be higher.

Monday, 26 September 2011

Wangari Maathai, environmentalist and campaigner for women's rights, 1940-2011

Wangari Maathai was the first African woman to receive the Nobel Peace Prize. Born in the Central Highlands of Kenya in 1940, it was Maathai’s academic prowess that initially gained her recognition. During a period in which the majority of Kenyan girls had no access to education, Maathai excelled. After attending Loreto Girls’ High School, she was selected as part of the 'Kennedy airlift', an initiative of the Kennedy family and United States government, to study for a bachelor’s degree in biological sciences at Mount St. Scholastica in Kansas. She went on to take a master’s degree from the University of Pittsburgh.


After returning to Kenya in 1966, she joined the University of Nairobi’s School of Veterinary Medicine and became the first woman in central and east Africa to receive a Ph.D. There she began a career in academia, and continued on her pioneering route to become the first woman to be appointed professor and again the first woman to chair a department within the University of Nairobi.


During her involvement with the National Council of Women in Kenya, Maathai decided to combine her passions for equality and environmental conservation via the establishment of the Green Belt Movement. The Movement, which has assisted in the planting of approximately 45 million trees in Kenya, combines conservation with social and economic empowerment for women. Her influence quickly spread to other countries via the establishment of the Pan African Green Belt Network.


Maathai continued her work on environmental conservation and when the country moved towards multiparty politics in 2002, she was elected as a member of parliament and in 2003 became Deputy Minister for Environment, Natural Resources and Wildlife.


Her career has not been without controversy. As a vehement opponent of former President Daniel arap Moi, Maathai was arrested on multiple occasions after successful campaigns to stop further construction on public land and a year-long vigil to free political prisoners. In spite of such arrests, her commitment to both the environment and democratic freedoms within Kenya remained strong. As recently as 2008, she was sprayed with tear gas while protesting against a government plan to enhance the number of ministers in cabinet.


Maathai died on 25 September, aged 71. A true pioneer for women's rights and for the environment, her death from cancer is a loss both to Kenya and to the wider continent. Maathai leaves behind three children – Waweru, Wanjira and Muta – and one granddaughter, Ruth.

Friday, 8 July 2011

South Sudan independence: what does it mean?

D Deng Gach Pal, MPA Postgraduate student (Chevening Scholar), University of Exeter

I’m writing to usher in the independence of South Sudan on 9 July 2011, when it will formally be declared a nation-state. This follows a referendum on 9 January 2011, in which 98.8% (against 1.7%) of South Sudanese people opted for secession from the North. What does this mean? For me it is my desired outcome to be free not only from socio-economic marginalisation but also from oppression, marking the end of ingrained inequality and second-class citizenship inflicted by successive northern governments since independence in 1956. Casting my ballot on the referendum day in January was a significant milestone in exercising my democratic rights and having my say on the future of Sudan. I prayed that God may make my dream come true. Now it has come true.


A child soldier in the SPLA
Seeking refuge in Ethiopia, my father brought the whole family to a refugee camp in 1985 when I was ten. My father had been a veteran Anya-Nya 1 fighter until the signing of the Addis Ababa Agreement in 1972, after which he became one of those forcefully retired by the northern government; they were called ‘’left-hands,’’ meaning that they still held anti-north ideas, and were deemed harmful by the Nimeri regime in Khartoum.

In 1988, I moved to a military camp called 'Tharpaam' in Itang Refugee Camp in Ethiopia, where nearly 1,500 children between eight and 13 years of age were being trained in preparation for recruitment into the Sudan People’s Liberation Army’s Jiec El Amer (Red Army). We were told that we were brought there to study, but soon realised this was just a pretext; we were nothing more than child soldiers. It didn’t take long for me to become motivated to be an SPLA soldier, though.

Dr John Garang, the SPLA chairman and commander-in-chief of the Sudan People’s Liberation Army/Movement, would lecture on the concept of new Sudan. We stood on parade, dressed in white uniform and cape, singing songs of liberation. We slept in grass-thatched huts, infested with cockroaches and jigger fleas. Diseases like dysentery, malaria, and typhoid were commonplace, with funerals almost every day.

Food was never enough. I was entitled to only 1 kg of white beans and quarter of a litre of oil a month food ration; this lasted only a few days. Many died of hunger and diseases, and the norm was for roommates to bury the dead. I buried seven of my 33 roommates, four of whom died of malnutrition and three of dysentery. The army officer reminded us often: 'We are starving because of the North. They
make us suffer and die… this is the reason why we are fighting them.' Education, the original purpose that brought me to the camp, was never discussed. The priority for the SPLA was to get soldiers to fight. When I asked about school, the officer would say: 'You will go to school when we defeat the North.'

This dreadful situation continued until the downfall of the Mengistu regime in Ethiopia in May 1991, and the subsequent dislodging of SPLA from Ethiopia as well as the splintering of SPLA/M into two.
Consequently, all Sudanese refugees fled back into southern Sudan. Not long after that, I returned to a refugee camp called Dimma in Ethiopia, where I pursued my primary and secondary education until 1996.


My sleepless night in Qadarif
I went to Khartoum in 1997 and enrolled in the University of Juba after completing secondary high school in Ethiopia. Now, with my family scattered by war, my siblings in Ethiopia and parents somewhere in southern Sudan, hiding from the enemy, I decided to reunite the family. In doing so, I went to Ethiopia in April 2004 to bring my siblings who were living in a refugee camp. Things went well in Ethiopia, but in Sudan my sister was refused a room because sharia law banned hotel
accommodation for girls. So my nine-year-old sister and I devastatingly spent the night outside the police station in Al Qadarif, despite hotels having rooms available and the fact that I was carrying enough
money to afford a separate room for each of us. No one came to our help. We were like foreigners. Police looked at us with contempt. We lay at the gate, sleepless, until dawn.

Sudan that night became to me a place where the vast majority of citizens had no legal rights while a minority enjoyed unlimited liberty. I hated being Sudanese, preferring living as a refugee in a
foreign land to being a second-class citizen without rights and freedoms. That night my sister and I spent outside the gate, chilly like no other, determined the box into which we cast our votes during the referendum early this year. On the voting day, my sister, living in Kenya said: 'I can’t forget that sleepless night in Qadarif, brother; so I will vote wisely.'

She confirmed to me afterwards that she had done so; independence is the solution.

My roles in the government and reason for studying MPA
Before joining the University of Exeter I have, since 2006, been diligently serving in the government of South Sudan. I work in the Ministry of Parliamentary Affairs, which is given clear mandate to build the capacity of legislatures both at national and subnational levels. The ministry is charged with the responsibility of building and nurturing democratic governance in nascent South Sudan.

I am involved in planning and implementing capacity-building training programmes for the ten southern states legislative assemblies and civil society organisations. The capacity-building programmes offered training in parliamentary principles and practices, and democratic governance.

I also became the coordinator of government civic voter education programmes, designed and implemented, ahead of general elections in April 2010, to teach the southern populace their citizenship duties, responsibilities, and rights of democratic participation.

In addition, I’ve worked as assistant editor-in-chief of the government-run newsletter, The Parliamentarian, which is oriented towards educating parliamentarians and government officials on managing legislative affairs and promoting good governance.

However, with prospects of independence and the challenges associated with a new nation-state, I decided to seek opportunities for further studies in Public Administration so that I may contribute even more to the development of an independent South Sudan. Consequently, I gratefully joined the Exeter MPA programme, and must give many thanks to the Foreign and Commonwealth Office and Chevening Scholarship Programme for sponsoring my postgraduate studies in the UK. The qualifications and knowledge I have attained will help me make significant impact in South Sudan, making me professionally competent in discharging my duties and responsibilities in the civil service, particularly in analysing, formulating, and administering public policies.

Finally, eventual separation from the North is, I believe, the best thing that South Sudanese people have ever attained, though lots of formidable challenges lie ahead of us in our nation-building efforts. These include combating corruption, eradicating tribalism, building the economy, making effective policies in all sectors. South Sudan’s new government will need further policy advice and help in establishing its own higher education programmes if we are to achieve our goals: perhaps the University of Exeter will be able to help us on our journey into independence even more in the future.

http://blogs.exeter.ac.uk/exeterblog/blog/2011/07/05/south-sudan-independence-what-does-it-mean/

Monday, 13 June 2011

After staying out of the IMF battle, Africa should run for the World Bank Presidency

Lisbon, 13 June


Much of the chatter at the annual meeting of the African Development Bank in Lisbon last week focussed on the African role in another financial institution: the troubled International Monetary Fund. Specifically, whether there would be an African candidate in the race for the IMF managing director's position after the resignation of France's Dominique Strauss Kahn who faces trial for sexual assault in New York.

There is no shortage of eminently qualified African candidates – central bankers, investment bankers or academic economists – but none were prepared to throw their hats in the ring. I asked AfDB President Donald Kaberuka in Lisbon whether he would consider running for the IMF job and he laughed off the idea, insisting he was far too busy at the African Bank to contemplate a change at this point.

No whispers of interest from other possible candidates such as Nigeria's reforming central bank governor Lamido Sanusi or Côte d'Ivoire's Tidiane Thiam, who is currently chief executive of Prudential, one of Europe's biggest insurance companies.

The most credible claims about an African candidacy for the fund came from further South, from Tshwane, aka Pretoria, where there was a buzz about former Finance Minister Trevor Manuel launching a campaign on 11 June. South Africa's incumbent Finance Minister, Pravin Gordhan, gave an elliptical response to questions about Manuel's candidacy on the previous day.

Then, excitement grew with reports of South Africa's President Jacob Zuma lobbying several developing country governments to back a Manuel candidacy. But as the deadline of midnight on 11 June loomed, Manuel took to the stage himself and told journalists in South Africa that he would not be a candidate for the IMF: 'My adrenaline is flowing about South Africa right now. It's where my focus is.'

End of story? Not quite, as Manuel's statement circulated among African officials and bankers in Lisbon, the AfDB's Kaberuka was welcoming France's leading contender for the IMF job, Christine Lagarde, to the conference. Fresh from a lobbying tour of Brazil, India and China, Lagarde had touched down in Lisbon on Friday to state her case to the African shareholders of the IMF.

It was a good day's work for Lagarde for she emerged with strong African support after addressing a special luncheon meeting. Chairman of the African caucus at the IMF and Congo-Kinshasa's Finance Minister Matata Ponyo Mapon told reporters there was 'massive' African support for Lagarde. Then, Lagarde rushed to the airport where she took a flight to London en route to Egypt and Saudi Arabia.

Despite – or perhaps because of – her training as a lawyer rather than as an economist or a banker, Lagarde has held the finance portfolio in France longer any of her predecessors. And she is streets ahead of her nearest rival for the IMF job, Mexico's central bank governor Agustin Carstens.

And few believe that the late candidacy of former top IMF official and current central bank governor of Israel, Stanley Fischer, will upset Lagarde's campaign. Given his birth and early upbringing in Zambia, Fischer might have been able to win over some African support were he to have joined the race earlier.

Now, the final hurdle Lagarde faces is a French row over a €285 million compensation payment to the colourful ex-chairman of Olympique de Marseille, Bernard Tapie, after a boardroom row over the sale of shares in the sports equipment company Adidas.

Largarde endorsed the French courts' award to Tapie, arguing that most of it would be returned to the French taxpayers. However, Tapie diverted the award to an offshore fund and has paid less then €30 mn. in taxes. The court which is reviewing Lagarde's role in the affair will not, however, reach its conclusions until after the IMF board has decided on whom to appoint as its next managing director.

Just as Lagarde was addressing African finance ministers in Lisbon, more speculation started – about whether her friend and United States Secretary of State Hillary Clinton might run for the Presidency of the World Bank. The tenure of the incumbent, Robert Zoellick, who had previously served in President George Bush's Republican administration, expires next year. It seems likely that President Barack Obama will be looking for a new candidate for the post: appointing Clinton to the World Bank would allow Obama to move her out of the State Department without causing undue offence.

It would send the message that Washington is determined to maintain the unwritten deal between Europe and the USA: that Europe takes the top job at the IMF, and the USA takes the presidency of the World Bank. An African banker in Lisbon suggested that appointing women to both jobs could be a blow against gender discrimination as well as a way of allowing the West to keep hold of both positions.

He joked it might look as though western men were no longer suitable candidates to run international financial institutions. But many in Lisbon argued that Africa should target the World Bank presidency next year – and try to break the Europe-USA stranglehold on the top positions.

The case is straightforward: more than half the projects funded by the Bank's soft-loan affiliate, the International Development Association, are in Africa, the majority of the world's 15 fastest growing economies are in Africa, and most of them are using World Bank resources. Former African finance ministers – such as Manuel and Kaberuka – have presided over impressive economic recoveries.

More than most, they know the practical effects of the Bank's policies and how they could be changed for the better. For the first time, the Bank could be led by someone who has steered a developing economy through treacherous waters. If Africa is going to have a chance for the Bank presidency next year, now is the time to start the campaign. It could make sense for Africa to make its support for Lagarde contingent on a guarantee of a fair and open contest for the World Bank presidency next year based purely on merit,and the final abandonment of the Europe-USA deal.

Monday, 9 May 2011

ZANU-PF's unforced errors help Zimbabwe's opposition

Loyalists in the ruling Zimbabwe African National Union-Patriotic Front party, especially its chief spin doctor and strategist Professor Jonathan Moyo, are looking desperate after a
series of political disasters in April. It's clear that many of the leaders in the Southern African Development Community (SADC) have lost patience with President Robert Mugabe and ZANU-PF and, for once, the Prime Minister and leader of the Movement for Democratic Change,
Morgan Tsvangirai, has been able to capitalise on the situation.

After his botched attempt to fix the election of the Speaker in Parliament, Moyo chose All Fools Day to launch a blistering campaign in the state media on South Africa's President Jacob Zuma and other SADC leaders, including the current Chairman, President Rupiah Banda of
Zambia.

The casus belli was the deliberations of SADC's Troika of Presidents – hosted by President Banda in Livingstone, chaired by Namibia’s Hifikepunye Pohamba and attended by Mozambique’s Armando Guebuza – on President Zuma's progress report of South Africa's efforts at facilitating political reform in Zimbabwe. The discussion neatly coincided with Prime Minister Tsvangirai’s briefing of SADC leaders.

When Zimbabwe came up on the agenda, the Troika went into closed session and a stunned Mugabe had to leave the meeting room. Less mobile these days, he was left to tour the venue on a golf cart. It took the Troika just 90 minutes to agree a communiqué expressing concern at the general lack of progress, the continued political violence and harassment and the need for a roadmap before any credible election. In short, it was almost unprecedented criticism of Mugabe and ZANU-PF.

Back in Harare, Mugabe told a ZANU-PF Central Committee meeting that SADC could ‘go to hell’ and that the facilitator should facilitate not dictate to a sovereign country. The state-owned newspapers papers took up the cry – arguing that Zuma was a disgrace to Africa for having
backed intervention in Libya and Côte d'Ivoire. They made abusive personal attacks on Zuma’s personal life and politics.

In return, Zuma’s office coldly pointed out that there were other channels than the media for Mugabe to raise his concerns. A few days later, ZANU-PF apparatchiks realised that Moyo had gone altogether too far. A damage limitation exercise was launched but this too descended into farce. Unusually, the Foreign Affairs Department hastily convened a briefing for the diplomatic corps at which Foreign Minister Simbarashe Mumbengegwi insisted that Zimbabwe had an absolutely free press where even state-owned newspapers did not always reflect government policy.

This was almost an insult to the assembled ambassadors. Any diplomat in Harare knows that Moyo is a constant presence in the newsroom, rewriting news stories and editorials in the state-owned Herald to reflect the ZANU-PF line. Moyo was then summoned for a roasting by Vice President Joice Mujuru, who told him he was neither the Presidential spokesman, the President or even the Foreign Minister and should stop meddling in delicate matters of foreign policy.

Mujuru may have wondered about the motives for Moyo's bizarre and undiplomatic methods: he is currently aligned to her rival in the succession race, Defence Minister Emmerson Mnangagwa. In the independent press, Moyo is caricatured as Prof Flip-Flop or Dr Yo-Yo
for his seamless ability to change political allegiance.

Yet if Moyo's and ZANU-PF's political peregrinations baffle Zimbabweans, South Africans find them still more confusing. At Zimbabwe's Independence Day celebrations on 18 April, Mugabe was heaping praise on Zuma as though the fall-out had never happened.

But doubtless Messrs Mugabe and Moyo would have been seething again when Prime Minister Tsvangirai was invited as a star speaker to the World Economic Forum in Cape Town on 4 May and used the opportunity to repeat the SADC view that Zimbabwe was far from ready for credible elections. After describing the rise of political violence and the failure of the power-sharing government to agree on substantive political reforms, Tsvangirai forecast that Zimbabwe would have to wait until next year for elections.

For the barons of ZANU-PF, including Jonathan Moyo and the ailing Mugabe, the prospect of trying to tough it out for another year before elections looks extremely dismal. And for those South African officials frustrated with ZANU-PF tactics, Tsvangirai would have struck exactly the right tone.

Friday, 1 April 2011

From our Niger Delta correspondent: Warning signs on the coast

Ahead of Nigeria’s Presidential elections from 9 April, militants are auditioning for money from the government amnesty programme. President Jonathan has bought a short-term calm before the national vote. The long-term cost may be greater insecurity in West Africa’s gas and oil-rich Atlantic waters.

Nigeria’s 2011 elections are already marred by bombings and pre-emptive allegations of vote-rigging. Yet there is also a sense that this is make or break; that for the first time since a turn back to democracy from military rule in 1998, Nigerian voters are presented with real choices in candidates and policies.

Jonathan is expected to return as President but it may be a proper contest this time. Governorships – the other public offices where real money and power reside – may not go the way his ruling People’s Democratic Party would like.





View Gulf of Guinea 2011 in a larger map

Some of the most hotly contested seats are in the President’s oil producing Delta homeland, where thousands of armed youths wait around in camps. Since they were deployed to fix 2003’s elections, these young men have taken part in a prolonged mass uprising against the Federal government and oil companies like Shell.

Though officially 'stood down', they’re armed. The money for rations and weapons comes from government coffers and militant godfathers, who run illegal oil refining operations as well as having lucrative, legitimate pipeline building, maintenance and 'security' contracts.

To remain relevant, and demonstrate how they’re still part of the big political equation a Nigerian President must make, militants – mainly the loose network trading as the MEND ideology – continue to issue threats and set off bombs, the most recent targeting Agip’s flow stations on 17 March.

More bombings in Nigeria are bound to add to concern in world oil markets and to a renewed cycle of speculation. The loss of 1 million barrels per day (bpd) of oil production in Libya earlier in March had already refocused attention on the stability of supplies from the Niger Delta, Nigeria’s main oil-producing region. Bonny crude is sweet and light, making a good substitute for the highly naturally refined Libyan oil.

In early March, the price of Brent crude for April hovered around $115 a barrel on expectations that OPEC countries would see further cuts in production. In late February the price had peaked at $119.79, the highest since the record $147.50 in 2008.

'The real risk is that the remaining spare capacity cannot accommodate an escalation in disruption right now,' a Goldman Sachs report said. All major energy consumers – especially the United States, China and Europe – watched the fluctuations in the cost of petroleum with growing concern.

Every major world recession of recent years has been presaged by a spike in oil prices, as happened in 2008 prior to the collapse of Lehman Brothers and the banking crisis. A new price spike could kill off the fragile recovery in Asia, on which the broader hopes of global recovery depend.

The return to 'business as usual' in the Gulf of Guinea mirrors many of the pre-crash conditions in 2008. Nigeria has eight of largest oil reserves in the world, approximately 37 billion barrels, and the fifth largest untapped gas deposits by some estimates. Nigeria is the major oil economy in the region, and the fifth biggest producer in OPEC, in many ways setting the conditions for the rest of West Africa.

As in 2008, an apparent period of calm in the usually fractious relations between Nigerian Federal government forces, oil companies and armed militant groups breeds confidence that production from the Delta – currently estimated at between 60 – 75 per cent of full capacity – can be boosted.

In February, Nigeria's oil ministry said combined oil and condensate output was around 2.4 mn. bpd, but that the country had production capacity of around 3 mn. bpd. Speaking for the state oil company, NNPC, Levi Ajuonoma said, 'We will do whatever OPEC asks its members to do. Whatever is needed under OPEC directives.'

Analysts agreed that there is a slim margin for increased production but doubted the government estimates. 'They can probably go slightly higher, maybe by around 200,000 barrels per day but even that would help to stabilise the oil market,' Bismarck Rewane, head of Lagos-based consultancy Financial Derivatives, told Reuters.

Another factor that will contribute to a drop in output is scheduled maintenance on Shell's Bonga offshore facility. Exports from the facility have dropped from 184,000 bpd in January, to 32,000 bpd in March.

Bonga is of increasing importance to Shell’s long-term plan for its investments in Nigeria, which involve a progressive move offshore. This is broadly inline with predictions made by British financial and information company WAC Services Limited in 2004, which in a report to Shell stated that the oil company would be driven offshore entirely due to the deteriorating security environment.

There has been intense bidding for four onshore Oil Mining Leases (OMLs 26, 30, 34, 40 and 42) and facilities located in them, which Shell owns with its partner Italy’s ENI. The result of the bid for the fields – some of the blocks contain reserves of up to 2 bn. barrels, and are valued at between $150 mn. and $2 bn. – is due this week.

While the rest of the West African coast is experiencing a boom in finds of new deposits, shaping long-term global strategy about 'energy security', Nigeria’s workable reserves may have peaked. In 2010, Wada Andrew Obaje, Director of Department of Petroleum Resources raised the alarm over the declining rate of Nigeria’s crude reserves, saying it has dropped by 1.6 bn. barrels in just one year. Obaje told the press that the drop was due to energy companies concentrating more on drilling and production rather than exploration.

This may mirror a global trend of peak oil and declining production of reserves 'on the books'. A recent comparison of forecasts made in the journal Energy Policy gave a list of 56 countries already past peak production. The report concludes that it’s 'at best optimistic and at worst implausible' to forecast the global peak of oil production as more than a few decades away.

In the short to medium-term, parallels between the first two quarters of 2011 and 2008, when there was a flurry of exploration and speculation in West Africa, are striking. In June 2008, China’s state CNPC oil company spent a staggering $5 bn. to acquire Niger’s Agadem oil block. It hoped to link the fields by pipeline to loading platforms in blocks already acquired in the Niger Delta by China National Offshore Oil Corporation (CNOOC), which in a 2006 $2.27 bn. spending spree acquired a 45 per cent stake in Nigeria's Block 130.

Despite an official amnesty programme with militants, administered for President Jonathan personally by Kingsley Kuku and cutting state governors out of the deal, pipelines remain insecure. The new ones that CNPC and others hoped for aren’t being built.

Despite the amnesty delivering a limited period of calm for existing oil production to recover, military operations continue. In early March, the military Joint Task Force used around 100 soldiers in gunboats and helicopters to set fire to makeshift refineries in a six-hour raid on the Mbiama area, one of the largest single military operations ever in the President’s home state of Bayelsa.

Not only do illegal refining activities continue to threaten the viability of onshore production, there are other security impacts of a static level of state-endorsed criminality. While attacks on the military and oil infrastructure have lessened due to the amnesty, piracy emanating from Delta creeks threatens all shipping in the Gulf of Guinea, and so the viability of new finds of oil and gas along the entire coast.

At its height in 2009, Delta piracy was second-only to Somali waters, according to the International Maritime Bureau. Buisness analysts Risk Intelligence predict that while overall maritime attacks in the Niger Delta in 2010 fell to just 58, compared with 91 in the previous year, as Delta pirates spread out from their usual sphere of operation there will be increased risk to offshore shipping in 2011. In addition to the long-term risk to new finds, this adds an extra headache for world oil markets in the short-term (and especially if supplies are interrupted from the Persian gulf).

There are many reasons that a lasting political solution to the militancy problem is left off politician’s agenda, not least of all because of the elections. In Jonathan’s native Bayelsa, his successor as governor for the President’s People’s Democratic Party – Chief Timipre Sylva – faces a serious challenge from the Labour Party’s Ndutimi Alaibe. Alaibe is former Special Advisor to the President on Niger Delta Affairs and the previous manager of the amnesty programme.

Sylva has used a combination of militants and police to crack down on opposition ahead of the April vote. Alaibe has been the target of numerous assassination attempts. It’s expected that Alaibe has a fighting chance, but Sylva will dispute the result if he loses. The Independent National Election Committee is preparing to fast-track any legal resolution, to avoid a simmering dispute like the one over the governorship of Delta State which has lasted for more than two years.

Sylva has 'Generals' Boyloaf, Africa and others on his payroll if it comes down to a fight. Alaibe has retained money from the official amnesty in his war chest. Militant boss of bosses, High Chief Government Ekpemupolo – who has diversified from insurrection into arms trafficking and legitimate pipeline work – now acts as a guarantor of the amnesty. He deals directly with the President’s office through Kingsley Kuku. In his home state of Bayelsa, it’s felt Ekpemupolo will side with whichever candidate makes the best offer.

All the conditions are now in place for a post-election escalation of conflict like the one in 2003 between militant firebrand Asari Dokubo and gang boss Ateke Tom. Both were retained and armed to rig the elections for former Rivers State Governor Dr Peter Odili, but they fell out over who was the vote-rigger-in-chief. This dispute led to the birth of MEND, which in turn contributed to the 2008 global oil price spike.

Like the militants and gangsters, Nigeria’s military and political elite operate with deadly impunity. There has been no official investigation of last year’s JTF attack on Ayakoroma village which left 10 dead but failed to apprehend breakaway militant ‘General’ JohnTogo.

(Togo has recently resurfaced, offering to work with government but not if has to negotiate through Kuku and Ekpemupolo. Togo wants the kudos of dealing directly with the President's office, and his own lines of funding).

A military attack the previous year on Gbaramatu hasn’t been officially investigated. The JTF used 3,000 troops, two warships, 14 boats and at least four helicopter gunships to get one man, Ekpemupolo, who now works with the government. Other notorious massacres – Odi and Odiama – have become part of the mythology of the Delta people’s suffering but no judicial process – in Nigeria or internationally – has been pursued.

The violence of 2008, which in part contributed to the record $149 a barrel oil price spike, was the direct consequence of Nigeria’s 2007’s election cycle. By late 2007, money that kept armed youths on side – to act as election enforcers and as leverage with central government – was running out. The growing numbers of young militants were increasingly restive, desperate to cash in and escape the poverty and unemployment that define life for the majority in the Niger Delta.

Middle Eastern revolutions... predictions of peak oil production in existing oil producing countries... a likely re-escalation of armed violence in Bayelsa... a resultant risk of more piracy on the West African coast and hazards to shipping affecting newly found oil fields...

With all this uncertainty, it’s the perfect time for Shell to produce one of its philosophical musings on the state of the world soul.

In a new report – with the positively Baudrillardian title ‘Signs & Signposts’ - Shell says that the world faces an upcoming 'zone of uncertainty' between now and and 2050, a 'zone of extraordinary opportunity or misery'.

In the Delta, it may be both.

Saturday, 19 March 2011

African renaissance

Troubles in Libya, Tunisia, Egypt, Algeria, Morocco and who knows where next. The wave of unrest and civil uprisings sweeping across North Africa and the Middle East is a clear message from the mass populace that it is time for change. In North Africa, in particular, where the level of political stability has long surpassed that in sub-Saharan Africa, the demand for change is timely and important. It coincides with a growing sense of frustration among people across the African continent.

Africans have endured bad governance for decades. But now, in many segments of African society, the desire for improvement action is beginning to mushroom. Whether this will translate to further civil unrest in other parts of the continent is yet to be seen. Many sub-Saharan African countries would certainly benefit from a radical revamp of state governance and leadership accountability, more so than any other region of the world today.

The frustration most African citizens feel is a direct result of leadership failure across the continent. For decades Africa’s development has been hampered by ineffective leadership and endemic kleptocracy. As a result, the continent’s immense potential has remained largely untapped, certainly since the end of colonialism. However, the on-going unrest, albeit limited to the north of the continent, is the latest indication of a turning tide in Africa. Earlier signs are easy to spot if one looks closely enough. Countries like Egypt and Morocco have enjoyed the economic benefits of established apparel manufacturing and tourism sectors for a while. More recently, a few other African states have joined a slowly expanding group of regional countries making great strides in improving political stability and economic development – countries like Ghana, Lesotho, Botswana and Senegal, where economic and industrial development has evolved considerably in areas as diverse as property, hospitality, tourism, banking, ICT and call-centre outsourcing.

The advantages in structural development such African countries are starting to enjoy are sometimes astounding. Accra’s skyline, for example, is now proliferated by swanky skyscrapers and impressive architectural creations, serviced by an ever-improving utilities infrastructure. Electricity power supply is taken for granted these days, a far cry from the situation just 20 years ago when many Ghanaians still flocked to countries like South Africa and Nigeria for a better life. Now it’s the Nigerians who are heading to Ghana!

Yet, even in Nigeria, the erstwhile 'Giant of Africa' that has been blighted by corruption and fraudulent practices since the late 1980s, similar improvements can be seen. Commercial banking infrastructure in Nigeria is quietly but rapidly catching up with standards in western countries. A bank in Nigeria can send a text message notification to your mobile phone the instant a payment is made into your account; not even Barclays, NatWest or HSBC do that in England.

Savvy capital investors have obviously spotted the development trend in Africa and the financial benefits this can yield. The level of foreign direct investment has grown astronomically, as investors continue to seek new high-yield markets to counter the effects of mature western economies. Although concerns over security, fraud and infrastructure reliability remain, these investors judge the benefits of their investment returns to outweigh the risks of doing business in Africa. Investment returns in many African countries far exceed what is achievable elsewhere, even in other emerging markets. Ghana’s stock exchange had the best performing index worldwide in 2008 and has been a top performing index in emerging stock markets for several years.

Such economic growth, coupled with noticeable improvements in infrastructure, is fuelling a change in the social landscape of many African countries. Most significant is the emergence of a growing cadre of well-educated indigenous professionals, many of whom are graduates of western universities with years’ working experience in the western business world. They are Africa’s new middle-class. And the contribution they are making to the continuing development of Africa can not be overemphasised.

These are the professionals and senior executives now running the local operations of western multinationals with a strong presence on the continent, and many successful indigenous businesses. Increasingly, many such individuals opt to work for the thriving indigenous businesses; companies that are doing so well as to gain recognition even in international money markets. Oando Nigeria plc is a prime example; an indigenous oil and gas business that successfully raised capital in international markets to fund its audacious acquisition of Agip’s local operations in 2002. MTN, a Johannesburg-listed telecoms operator, is another relevant African business playing a leading role in shaping the structure of its sector, and reaping the huge benefits of the boom in mobile telecommunications across the continent.

The growth of commercial business activity in Africa over the last decade or two is phenomenal. And the expanding influence of African companies in these profitable ventures is impressive and commendable, spanning sectors historically dominated by foreign interests, such as telecommunications, pharmaceuticals, ICT, natural resources, logistics and business services. Importantly, while some successful African companies are locally-controlled businesses with foreign equity ownership, such as South Africa’s Vodacom, many are home-grown enterprises wholly-owned by indigenous parties.

Of course, a market economy has not yet fully evolved in Africa. The unique social issues and enduring problems of corruption and under-developed infrastructure remain key hindrances – issues that many African governments continue to fail to address robustly. However, what is interesting to note about the surge of economic and industrial growth in Africa is that most national governments have ceased to be the instigators and custodians of economic and social development. Instead, what we are seeing is development driven by the mass populace, through courageous risk-taking and successful commercial drive. The recent civil uprisings suggest that this may be augmented by outright revolt. Perhaps, we may even see Africa’s first revolution against an indigenous government.

African governments are not entirely asleep on the job though. The efforts to tackle corruption and mismanagement, and institutionalise effective governance, are laudable. Even countries with entrenched notoriety, like Sierra Leone and Nigeria, seem to be making headway. Admittedly, in some cases the results are yet to be seen. Another noteworthy indicator is the substantial increase in economic and financial stimulus packages to incentivise business investment, such as the creation of numerous export processing zones to attract foreign investment.

Whatever the outcomes of the on-going unrest, it is clear that Africa is undergoing a change. It may take a while yet to fully unfold. But, judging by the growth and success of economic activity in many parts of the continent, the change has definitely started. We may be witnessing the awakening of a sleeping giant – the world’s richest continent. In addition to its vast natural resources, Africa is populated by a highly skilled and educated workforce, fluent in two key languages of business – English and French. And the people are hungry, not for food or aid, but for opportunities; opportunities to stand on their own feet and fend for themselves.

The timing could not be more fortuitous. The unending search for competitive product margins by western manufacturers drives the demand for low-cost labour locations. After the move into Latin America many years ago, and more recently into Eastern Europe, the Indian subcontinent and the Far East, it seems that the obvious next port of call is Africa. Africa could provide everything that India and China currently do for low-cost labour activities, spanning all manner of off-shoring and outsourcing.

Tony Blair and George Bush, the previous leaders of Britain and the United States, respectively, did a lot to put Africa on the world stage. And African countries demonstrated their desire for a fairer playing ground in global trade and macro-economic considerations at recent WTO sessions. Those efforts were largely fruitless for the man on the street in Africa. However, considering the surge in business activity across the continent now, the benefits may be starting to come through.

Coupled together, all of these factors are re-positioning Africa on the global stage. It is already the place to be for many western investors, and yet more continue to head over there. The drive from within by indigenous peoples and the commercial success being achieved may be the first signs that the gong is about to sound, signalling Africa’s time. We may well be witnessing the dawn of an African renaissance.

Monday, 21 February 2011

Confidential Agenda 22 February

Côte d’Ivoire/South Africa/Nigeria: Zuma's warship in the Gulf of Guinea
The South African government has been making reassuring noises about the presence of its warship, the SAS Drakensberg, in the Gulf of Guinea. According to the Nigerian government, however, President Jacob Zuma is throwing his weight around over Côte d'Ivoire and should stick to his own region. Abuja may escalate the dispute this week.

Jambe Gebeho, the Secretary General of the Economic Community of West African States (Ecowas), claimed that the Drakensberg had at one point docked in Abidjan, but South Africa denies it and our correspondent hasn't seen the warship. The Drakensberg had been cruising in mid-Atlantic, acting as an escort for the Cape to Rio yacht race, when it was redeployed to the Gulf of Guinea to offer 'possible assistance to South African diplomats, designated personnel and other South African citizens in Ivory Coast,' according to the South African Naval Defence Force.

Nigerian President Goodluck Jonathan and President Zuma are on opposite sides of the Laurent Gbagbo dispute. Zuma has questioned the validity of the Ivorian elections while Jonathan had been prepared to contemplate the use of force to allow President-elect Alassane Dramane Ouattara to take office (see this week’s issue of Africa Confidential). More irksome to Nigeria, though, is the South African military presence in West Africa.

The Drakensberg is described in the latest official statement as a 'non-combatant support vessel'; most reference sources list it as a 'combat support ship'. Whatever the title, it is not capable of credible offensive action. Even with its full complement of two helicopters on board, it could do no more than defend itself as it carries nothing heavier than a 20 mm cannon. Naval experts say this ship is most suitable for an evacuation. The Drakensberg could be standing by to rescue stranded nationals – although Côte d'Ivoire is not exactly bursting with South Africans – or to host a conference of the visiting African Union head of states panel or maybe to remove Mr and Mrs Gbagbo plus dependants.

Last weekend, Zuma was due to meet the other members of the AU panel on Côte d'Ivoire, followed by a personal visit to Abidjan later in the week. Zuma's swagger (see current AC) is playing well at home and dispatching warships to distant latitudes cannot hurt his image. He should not be too surprised, though, if the Nigerian navy turns up off Cape Town.

Malawi: Bingu's birthday bashed
President Bingu wa Mutharika may soon be sharing his birthday celebrations with all of Malawi, if things go according to plan. Mutharika's 77th is on 24 February and there will be a mass gathering to celebrate it at the Civo stadium in Lilongwe with music, a friendly football match, and other events on 25 February, as it is a Friday. Having recently called on Malawians not to emulate Egypt (see current AC), the President will no doubt welcome the opportunity to demonstrate how much love Malawians have for their leader with a massive showing at the party.

The 14 May birthday of Hastings Kamuzu Banda, Malawi's leader from Independence in 1964 until 1994, is also a national holiday; Banda had designated it so himself. President Bakili Muluzi’s government abolished it in 1994 but Parliament reinstated Kamuzu Day in 2007. The plan to make Mutharika's birthday a holiday was leaked to the Nyasa Times, perhaps to test public reaction. If any of the comments on Malawi's online media are representative, the idea is not too popular.

Nigeria/Gambia/Iran: Gambian-Iranian imbroglio playing out in Lagos
Hopes of courtroom revelations were dashed this week with the adjournment of the trial of Iranian Revolutionary Guard Azim Aghajani in the Federal High Court in Lagos until 7 March. State Security Service lawyers got the Abuja court proceedings against Aghajani and his co-defendant, Nigerian Ali Usman Abbas Jega, annulled. They then re-indicted him to appear in Lagos.

Both men are pleading not guilty to charges of smuggling 13 containers of infantry weapons and artillery into Nigeria that were ultimately bound for Gambia. Several reports claim that the United States had a hand in the affair. If true, the USA probably had the shipment under surveillance as it sailed out of Bandar Abbas in the Persian Gulf and, once it had reached Apapa port, called the SSS. Isolating Iran is a key US foreign policy goal.

Aghajani's defence is that the arms shipment was a 'normal business transaction' between Iran and Gambia, but President Yahya Jammeh has broken off diplomatic relations with Iran, which had been very cordial for four years, over the affair. Also the weapons were concealed under ceramic construction tiles and the bills of lading did not say 'weapons'.

Aghajani is apparently a member of the Al Quds force, the covert arm of the Revolutionary Guards with special responsibility for overseas operations. Ali Akbar Tabatabaei, the supposed commander of Al Quds operations in Africa, escaped arrest by holing up in the Iranian Embassy in Abuja. The then Iranian Foreign Minister, Manuchehr Mottaki, made a special trip to Abuja to fetch Tabatabaei, who was then permitted to fly home. What Mottaki did to persuade Nigeria to let Tabatabaei go and why he had to come in person is another mystery.
Mottaki took the lead in expanding relations with Gambia in 2007 and has made most of the public pronouncements about their meetings. President Mahmoud Ahmadinejad sacked him on 13 December for unknown reasons.

The Iranians said this was the third of four intended shipments. If all the shipments were a similar size, that would make an eventual total of 52 containers stuffed with rifles, 107 mm shells, rocket-propelled grenades, ammo to match, and 23 mm Armour-Piercing Incendiary Tracer ammunition. Military experts say such arms would suit a conventional infantry force rather than terrorists or guerrillas. Speculation about the final destination of the weapons has been rife, with the dormant Casamance separatists touted as possible recipients. Some Casamance separatists were recently put on trial in Gambia charged with possession of weapons.

South Africa/United States: Another Walmart in the BRIC
A promise by South Africa's Minister for Economic Development Ebrahim Patel to set up a panel to review the effect of Walmart's entry into the local market and ominous threats about trade union recognition have not deterred the United States company from closing in on the acquisition of local retailer Massmart (See Confidential Agenda week ending 12 December 2010). The Competition Commission said no obstacles should be put in the way of Walmart, which is notorious for not recognising trades unions in its global operations.

Approval from the Competition Commission should be forthcoming but its open hearings are producing a courtroom-style drama. The unions are insisting that Walmart honour the current framework for negotiations with Massmart. Walmart has promised to do so but the unions still seem wary about working conditions, employment terms – and about the company sourcing its products in China rather than locally. Walmart is interested in Massmart not only for its 265 stores in South Africa but also for its outlets in 15 other African countries. The Congress of South African Trade Unions has threatened all manner of mass action if the Walmart deal goes through. Cosatu has staked a great deal on opposing the deal and the atmosphere remains tense, but no one seriously expects the take-over to fail.

Sunday, 6 February 2011

Confidential Agenda (Week ending 13 February)


SUDAN: Western deal over President Omer el Beshir's genocide charges

A deal that would grant Sudan's president an annually renewable deferral of the genocide and war crimes charges against him was mooted at the African Union summit in Addis Ababa last week, according to African and Western officials (see the lead story in the latest Africa Confidential). The purpose of the deal, these officials say, is to encourage President Omer Hassan Ahmed el Beshir to reach agreement with Southern Sudan after last month's referendum and engage in credible peace talks in Darfur.

One immediate outcome if such a deal goes ahead would be a further deterioration in relations between the International Criminal Court at the Hague and the African Union. Already, AU Chairman Jean Ping has accused ICC prosecutor Luis Moreno Ocampo of double standards and is blocking the establishment of an ICC office in Addis Ababa to liaise with the AU.

Any deal to defer the ICC case Sudan's President Omer would need backing from one of the permanent members of the UN Security Council, probably France, to agree a deferment of the charges brought by the International Criminal Court (ICC). Although Russia and China could be expected to support it, backing from Britain and the United States would be critical. Kenyan officials claim that their request for a deferral of the prosecution of six officials charged with involvement in the violence after the 2007 elections was also discussed at a high-level with Western and African diplomats in Addis Ababa. That is why, they say, the AU summit passed resolutions to request the UN Security Council to defer both the cases of Sudan's president and the six Kenyan officials at the ICC.

It was Sudanese Foreign Minister Ali Ahmed Kurti's visits to Paris and Washington that sparked the latest discussion on how Western policy towards Khartoum might change in the aftermath of a successful referendum on Southern Sudan.

LIBYA: Why US diplomatic cables could threaten Colonel Gadaffi

Like all other North African leaders, save for Mauritania's Mohamed Ould Abdel Aziz, Libya's Colonel Muammar el Gadaffi failed to attend the African Union summit in Addis Ababa on 30-31 January in case some of his many enemies decided to fan the wind of change in the direction of Tripoli.

Pressure could still be mounting on Colonel Gadaffi this week after a tsunami of State Department cables on Libya obtained via Wikileaks is zinging around the internet, having been first published by the Daily Telegraph in London on 2 February. The cables tell tales of the criminality and pettiness of the Gadaffi regime and ridicule its claims of radicalism.

Oppositionists in Tunisia have said that the Wikileaks State Department cables, with their stark depiction of impunity, arrogance, nepotism, conspicuous consumption and rampant corruption by the Ben Ali clan, was one of the factors that helped tip the country towards rebellion.

Hundreds of new cables pick apart in unprecedented detail the nature of Gadaffi's rule, his relations with the United States, Britain, BP, governance of the oil industry and the negotiations over the release of Abdel Baset Ali el Megrahi, the man convicted of bombing PanAm 103 in 1988.

Our Libya correspondent confessed to being overwhelmed by the quantity and quality of the reporting, which he said is adding hugely to the outside world's understanding of the secretive state. Libyans also will be digesting the contents this week and making their dispositions.

What the cables reveal about the inner workings of the Great Socialist Peoples Libyan Arab Jamahirya is unflattering to the Colonel Gadaffi. One cable from the US embassy in January 2009 says that in spite of Gaddafi's cultivation of his image of a “philosopher king” standing “above the fray”, little concerned with the tawdry minutiae of government and business, he is in fact, "...intimately involved in the regime's most sensitive and critical portfolios.”

The cable reveals that Gadaffi uses the General People’s Committee for People’s Inspection and Control – also known as the Raqaba Shabiya (AC Vol 51 No 24) – not, as advertised, as an organ of oversight designed to ensure maximum probity, but “…to politically vet commercial contracts involving Government Of Libya [GOL] funds and ensure that opportunities to extract rents from those contracts are distributed to key regime allies.” It added that a local source told them that Gadaffi "...personally reviewed all contracts involving GOL funds that were worth more than US$ 200 million and exercised a great deal of influence over which foreign companies were awarded contracts." In fact, it added, he frequently involves himself in contracts well below that financial threshold.

Gadaffi not only uses the Raqaba to favour regime cronies, but also to award contracts to countries he wants to thank. A number of Scottish companies have been favoured with many new Libyan contracts in the year since the release of El Megrahi, as reported in the Scottish press, but until now they supposed that no causal link between the release and the contracts could be proved.

The cables make it clear that "rewards" of this nature is standard practice for Libya and that Scotland is being showered with commercial gifts for releasing the convicted bomber. Mostly, the Raqaba has been used to punish countries, like Denmark after the Mohammed cartoons episode, and Switzerland after Gadaffi's son Hannibal was arrested there.

One cable, by the ambassador, Gene Cretz, even says that Raqaba was used by Prime Minister al-Baghdadi al-Mahmoudi, with Gadaffi's consent, to harass the Tripoli branch of Marks & Spencer because its owners included Husni Bey, an old rival. Overall, Cretz remarks, '...Libya is a kleptocracy in which the regime - either the al-Qadhafi family itself or its close political allies - has a direct stake in anything worth buying, selling or owning.'


HEALTH: The Global Fund detects global fraud

More revelations and more outrage are on the agenda in the coming weeks as the scale of the misappropriation of monies granted by the Global Fund To Fight AIDS, Tuberculosis and Malaria becomes ever clearer. Although embarrassed by revelations of false accounting, diversion of funds, slow disbursement of legitimate grants and many other scams, it was the Fund's own Office of Inspector General (OIG) which uncovered the evidence and reported extensively on it just before Christmas.

There was much breast-beating about whether revealing the scale of the problems might not result in a loss of donor confidence that would lower funding and thus harm those in need. Germany, in fact, has suspended disbursement of its planned 2011 grant of €200 mn and Sweden followed suit. But generally, the Fund has been lauded for its commitment to transparency.

Nevertheless, the Fund reacted angrily to an Associated Press report based on the OIG report. The Fund said it misrepresented the situation and called on people to recall that only 0.3% of the $13 billion disbursed so far by the Fund, mostly in Africa, has been stolen. Zambia, Mali, Mauritania and Djibouti had corrupt programmes and measures had been taken to try and recover a missing $34 mn. It is clearly embarrassing the Fund that such practices should be discovered when its entire raison d'etre was to cut through ponderous governmental red tape and deliver direct to those in need.

The UN Development Programme is going shortly to have to provide some answers to the Fund about its role as a 'principal recipient', passing on Fund grants to organisations down the delivery chain. The OIG found, in one African contract for which the UNDP had overall responsibility, 77% of the $3.5 mn worth of the programme they had examined had gone astray.

Much of the trouble stems from the involvement of health ministry officials and politicians in Fund programmes which run, as intended, in parallel to less efficient state-run programmes. Fund monies are outside the normal government budget streams and could be more vulnerable. 'Local Fund Agents', often accountancy outfits like PwC and KPMG, are meant to be the eyes and ears of the Fund in the countries they are responsible for and yet few were aware of the frauds that the OIG uncovered.

Although UNDP is not the only problem here we believe a major storm is brewing between the UN agency and the Fund. In addition to the countries already mentioned OIG investigations are ongoing in Kenya, Kyrgyzstan, Malawi, Mali, Nigeria, Madagascar, Sri Lanka, Swaziland and Uzbekistan. The crimes cover the whole gamut of fraud and theft, from false invoicing to organised theft of drugs shipments. The Fund appears to be tackling the corruption with some determination, despite the risks to overall funding, and has found the money for seven new staff positions in the OIG, which is carrying out 15 audits this year, and has appointed a panel of experts to help and announced 'zero tolerance' of fraud.


GABON: Ali Ben Bongo's election win challenged, 18 months later

Andre Mba Obame, a former minister in Omar Bongo Ondimba's government and a presidential candidate in the August 2009 election, suddenly announced on 25 January that it was he who had won that election, and not Ali Ben Bongo Ondimba. He then turned up at the UN Development Programme’s Libreville compound with 20 supporters in tow. He proclaimed himself President and announced a parallel cabinet.

Obame’s inspiration has three sources: the French TV documentary that recently declared his vote had simply been switched with that of Ali Ben Bongo, the internet-linked ouster of President Ben Ali in Tunisia (Obame has a Facebook page), and the presidential stand-off in Cote d’Ivoire. Perhaps Obame sees a magical connection between the similarities of the names ‘Ben Ali’ and ‘Ali Ben Bongo’.

Obame has taken to styling himself ‘AMO’, in the manner of Ivorian president-elect Alassane Ouattara’s ‘ADO’. AMO is further attempting to emulate ADO by putting himself under UN protection, refusing to leave the UN compound, and saying his life would be in danger if he did. He may not be far off the mark. The government dissolved his Union Nationale party, accused him of high treason and closed down his TV station. There was rioting by AMO supporters outside the UN compound and police fired tear gas.

The African Union is not impressed. It condemned Obame’s dramatic move, which must have been timed to coincide with the AU summit in Addis Ababa. It is the UN, though, which will be suffering headaches this week. If they expel him from the compound they might be accused of complicity in whatever the government then does to him, and if they don’t, they risk ‘copycat’ actions in the many UN offices around the world. It promises to be an interesting week in Libreville.

When Africa Confidential asked President Ali Ben Bongo at the AU summit in Addis Ababa for his views about his challenger and where the wind of democracy in North Africa was heading, the President said he didn't want to get into that game and in any case he wasn't good at making predictions.


KENYA: Constitutional liberties

The week is going to see some heated arguments in parliament and court about what belongs to parliament and what belongs to the constitution. At stake are nominations for some of the government's most important offices. President Mwai Kibaki nominated Justice Alnashir Visram as the Chief Justice, Professor Githu Muigai as Attorney-General, Kioko Kilukumi as Director of Public Prosecutions and William Kirwa as Budget Controller (see page 3, current issue).

However, Prime Minister Raila Odinga and his party are opposed to the nominations and said that there were no proper consultations over them, just the latest in a series of intra-coalition confrontations. Then, the Speaker of the National Assembly, Kenneth Marende, declared that it was unconstitutional for the government to make the nominations because the provisions for consultation and fairness had not been followed.

Marende was in an awkward position; approve the nominations and he risked the ire of the courts and Odinga; disapprove, and he risked being impeached, as one threatening letter warned. He duly declined to make a ruling but the pressure was already off, because, only hours before he stood up in the National Assembly on 3 February to announce his decision, the High Court had ridden to his rescue by striking out the nominations.

Justice Daniel Musinga said, "I am satisfied that the nominations were in breach of Article 27(3) of the Constitution that guarantees fundamental rights and freedom of women and men to equal treatment, including the right to equal opportunities in political, economic, cultural and social spheres." A group of civil society organisations, most of them bodies representing women's rights, brought the case. Kibaki's side insists that the nominations were legitimate and were properly consulted on. He has released details of horse-trading between the coalition partners over the nominations but Odinga insists the nominations are 'null and void'.

The court has said that the petition to the court by the civil society organisations must be heard. Depending on how long it takes that could cause big problems for the AU-backed move to have the ICC suspects' cases heard in Kenya. And it hardly inspires confidence that the man who formally put the presidential nominees to parliament was Francis Muthauru, who is on the list of the six ICC suspects.

Monday, 24 January 2011

Confidential Agenda (Week ending 28 January)

AFRICAN UNION: The big tests for diplomacy and democracy
Intensive rounds of negotiations and trade-offs start this week in Addis Ababa leading to the grand summit of the African Union on 30-31 January. The assorted ambassadors, foreign ministers and heads of state have to work their way through an unusually full agenda: the headline items will be the post-election crisis in Côte d'Ivoire, the post-referendum negotiations for the establishment of an independent Southern Sudan following the overwhelming vote for secession, and the rumbling crisis in Zimbabwe, where the power-sharing government is due to hold a constitutional referendum and national elections.

Côte d'Ivoire is the most serious test of the AU's commitment to uphold free and fair elections. So far both the AU and the Economic Community of West African States (Ecowas) have been united in their insistence that the results released by the UN-backed Commission Electorale Indépendante – announcing that Alassane Ouattara had won 54% of the vote and Laurent Gbagbo had won 46% in the second round of the presidential elections – must be upheld. They do not recognise a subsequent announcement by Côte d'Ivoire's Conseil Constitutionnel which reversed the electoral commission's verdict.

Already the AU and Ecowas – along with the United Nations Security Council – have called for the diplomatic isolation of Gbagbo, who refuses to vacate the presidential seat. Teams of lobbyists from both the Ouattara and Gbagbo camps are due to press their cases in Addis Ababa, as the AU comes under pressure to resolve the worsening crisis there and avert the threat of a return to war.

Although the AU recognises Ouattara as the legitimate winner of last year's presidential elections, there are differences over strategy: Nigeria and Senegal support the use of 'legitimate force' to oust Gbagbo; South Africa and Ghana want renewed mediation and negotiations; and Angola (a key supporter of Gbagbo, along with Israel and Russia) wants fresh elections.

No one is disputing that the Southern Sudanese have voted overwhelmingly for secession in the referendum held from 9 to 15 January. But there will be some hard bargaining about the division of the oil revenues and citizenship rights over the next six months in the run up to the formal declaration of the South's independence in July.

The biggest dispute and one that will drag in the AU is the status of the oil-rich enclave of Abyei which sits on the border between North and South. Initially, the people of Abyei were meant to have their own referendum, on the same day as the South, to decide whether they would stay with the North or join a newly independent South. That didn't happen because Northern and Southern negotiators couldn't agree on voting eligibility criteria there. Now there is talk of some kind of backroom deal on Abyei as tensions in the area heat up again.

Back from his annual trip to Malaysia and denying reports of ill-health and emergency operations, Zimbabwe's President Robert Mugabe says he's determined to hold fresh elections this year – regardless of whether the three sides in the power-sharing government can agree on a new constitution. Already there are reports of political violence in areas that support Prime Minister Morgan Tsvangirai's Movement for Democratic Change.

The MDC says there can be no question of national elections before a new constitution is in place and, along with many Zimbabweans, fear a repeat of the appalling political violence in the run up to the second round of presidential elections in 2008. Last week, the national election commission said that over a third of the people on the register have died, and that a full voter registration process would be necessary before credible elections could be held.

CÔTE D'IVOIRE: The cocoa test
Calls on 24 January for a month long ban on the export of Ivoirian cocoa by Alassane Ouattara, the UN-recognised President of Côte d'Ivoire, is designed to add to financial pressure on his rival Laurent Gbagbo. The calls follow Ouattara's success in ousting Philippe-Henri Dacoury-Tabley, the Ivoirian governor of the Banque Centrale des États de l'Afrique de l'Ouest, who had been approving payments to Gbagbo's regime despite regional sanctions against it.

Ouattara calculates that the cocoa ban – which would mean the loss of tens of millions of dollars of taxes and tariffs paid to the Gbagbo regime – will put further pressure on his rival. Already the European Union has imposed sanctions on Côte d'Ivoire which prohibit the raising of finance to buy Ivoirian cocoa and the use of Ivoirian ports. However, we hear that most of the oil companies (such as Lukoil) , cocoa traders (Bolloré and Cargill) and service companies (Bouygues) have continued to collaborate with Gbagbo. Now Ouattara is threatening that these companies could lose their licences when he comes to power if they don't suspend cooperation with Gbagbo. A fresh idea but one that could be tremendously difficult to enforce and monitor.

The cocoa ban is a high risk strategy for Ouattara. If it doesn't work, he looks weaker internationally. If it does work, the first people to suffer will be the country's more than three million cocoa farmers. In the short term, the signs are that the Gbagbo apparatchiks will tough it out regardless.

It now looks probable that Côte d'Ivoire will not make its US$29 million payment due by the end of this month on its $2.3 billion eurobond. Last week a Gbagbo official said that the bankers would have to recognise Laurent Gbagbo as the legitimate president if they wanted payment. The non-payment will trigger a default and raise the prospects that property of the Ivoirian state could be seized around the world in lieu of the debt service.

NIGERIA: Defying the doubters

The successful flotation of Nigeria's $500 million ten year eurobond – after a 30-year absence from the international markets – shows the power of Africa's biggest oil-producer to pull in financiers almost regardless of political risk. The ten year bond with yields of 7% is priced about 1% higher than bond issues from Ghana and Gabon, some three years ago. Nigerian officials say that is due to market conditions.

Although some financiers have been complaining about poor financial controls in Nigeria that have allowed the government's excess crude account, where surplus oil revenues are deposited, to be depleted to less than $1 bn. from a high point of $20 bn., three years ago. Under the management of Central Bank Governor Lamido Sanusi and Finance Minister Segun Akanga, foreign reserves had edged up to $33 bn. by the beginning of 2011 but are still more than $10 bn. lower than a year ago.

BRITAIN/AFRICA: Business doubts over bribery law

British companies are lobbying the Conservative-Liberal Democrat coalition to dilute some of the provisions of the anti-Bribery Act due to come into force in April. They have already succeeded in getting the government to hold it back for six months.

British corporate lobbyists complain that other countries hold their companies to a lower standard and that United Kingdom PLC will be left standing by unscrupulous competition, that reporting requirements are too onerous, that the Serious Organised Crime Agency will be paralysed in the fight against real crime because its in-tray is clogged with bribery accusations, that small firms are being discriminated against, and that giving Christmas presents would become criminal etc.

PricewaterhouseCoopers warned that, under the act, a case of Champagne or a gold fountain pen could be interpreted as a bribe. It seems the government sympathise with these gripes although the law's provisions had all-party support when it was passed last year. The act was supposed to be Britain’s answer to charges of hypocrisy that it was demanding stricter anti-corruption measures in African and other countries than it had at home.

The government’s 'Growth Review will try, according to the London Daily Telegraph, to 'soften its impact'. The Ministry of Justice has been promising “guidance notes” on compliance procedures but so far no details have emerged.

In fact, as with the US Foreign & Corrupt Practices Act, a company has a defence against strict liability if 'adequate procedures' against bribery, such as a compliance code, are in place. This would leave only those with direct knowledge of the crime facing prosecution or, possibly, companies which never instituted any internal anti-bribery guidelines or didn’t take them seriously. The guidance notes will be coming out soon and will give some insight to the coalition government's attitude towards corruption.

TANZANIA: Kikwete gets tough on dissenters

Shock waves continue after the shooting of at least two people during a rally of the Chadema opposition party in Arusha on 5 January. There were many arrests, including Chadema's Freeman Mbowe and three other MPs, all of whom have now been released. Police opened fire on the marchers, supposedly because they were not sticking to the agreed route.

Even the police don't claim they were attacked or fired at, however, investigations are now under way to determine whether crimes were committed by or against the demonstrators and some protesters are being charged.

Wilbrod Slaa also addressed the rally; fiancee came away with a gashed head. The government is gambling that its heavy-handed repression of the rally, which was peaceful until the police opened fire, will cause the protesters to take fright and go home.

But Mbowe says that his party is still challenging the results in four parliamentary constituencies, not to mention the mayoralty in Arusha, and he says he will not let Kikwete's poll victory stand. Hundreds of thousands attended a rally in commemoration of the victims a week after the march, and no police were to be seen.

Even if the constituency challenges succeed, they are not going to change the government, and much as Chadema's vote increased, this was no 'stolen' election. But Chadema may well be embarking on a wide-scale civil-disobedience campaign, especially as Tanzanians look north to Kenya to see that 'impunity' is not always a permanent state of affairs.

Police Commissioner of Operations Paul Chagonja acknowledged that there is a right to protest but then told oppositionists provocatively to wait: 'those who want to get into power should wait until 2015 during another General Election'. In an effort at conciliation, the foreign minister, Bernard Membe, said that the police had used excessive force. However, there have been indications the police were going to charge Chadema leaders with criminal offences over the 5 January rally, which could well inflame matters.

SOUTH AFRICA: New BRIC member climbs the South-South ladder

Another key plank of African engagement with the global South goes ahead this month with South Africa's formal membership of the prestigious BRIC (Brazil-Russia-India-China) international club.

President Jacob Zuma's government having accepted a invitation to join the group at the end of last year. Although China had strongly backed South Africa's membership, all the other members supported it despite the much smaller size of South Africa's economy (its GDP in 2009 was $285 billion) in comparison to the other member states.

South Africa will effectively represent the African continent which has a GDP of some $1.4 trillion ranking it just above the national income of Brazil and Russia but still substantially below China and India.

South Africa alone barely qualifies in economic importance in the category of countries showing high economic growth, which were first grouped together for by a Goldman Sachs investment banker. South Korea, Indonesia, Turkey, and Mexico have weightier economies but are regarded as represented through existing members if the BRICS.

South Africa’s invitation came from China and was agreed during a regional trip by the People's Republic's Vice-President Xi Jinping last November. He was visiting South Africa, Angola and Botswana. China, already South Africa's biggest trading partner, sees the country as a gateway to other countries in the region.

Much less is known about what kind of institution BRIC is or may become since it has no legal form. Accordingly, it's hard to see what benefits South Africa can draw from membership beyond the recognition of the African continent's growing economic importance.

FRANCE/NIGER: Hostages test French policy

The killing of two young French hostages on 8 January by their captors is causing much anxiety in French security circles as the Nigerien and French governments dispute the circumstances. Defence Minister Alain Juppé cancelled a trip to Gabon to go to Niger, following the deaths.

For the second time, now, the first was French hostage Michel Germaneau also in Niger in July last year, French hostages have been killed by their captors during a rescue effort by French special forces acting in concert with government forces on the ground.

Vincent Delory and Antoine de Leocour, both 25, were kidnapped from a restaurant in Niamey, which either shows exceptional daring on the part of the kidnappers, thought with some certainty to be Al Qaida in the Islamic Maghreb (AQIM), or the possibility they can rely or local, possibly official, help. Early indications are that the men were murdered when the kidnappers saw the French helicopters homing in on their convoy, which had driven hundreds of kilometres and already crossed the border into Mali. President Nicolas Sarkozy has taken full responsibility for the rescue mission and so far is maintaining a firm stance.

There are questions about whether some Nigeriens have been working alongside AQIM. When the French forces engaged the kidnappers they killed two Nigerien gendarmes. Four AQIM were killed and two were captured; French officials say the gendarmes were operating with the AQIM force. The Nigerien authorities denied they were collaborating with the kidnappers and were in fact in pursuit, a difficult claim to sustain given the distance from Niamey.

France used to have a reputation for being a soft touch for ransom-seekers but is determined to change that. Yet after two failed rescue attempts, French forces in the Sahel are struggling against AQIM's growing presence in the region and shows of defiance. On 21 January, the Qatar-based Al Jazeera satellite channel broadcast a message from Al Qaida leader Usama bin Laden threatening still more attacks on French civilians and soldiers unless Sarkozy's government withdraws its troops from Afghanistan.