Tuesday, 28 July 2015

The week ahead - Tuesday 28th July

The week ahead will be dominated by reflections on President Barack Obama’s historic visit to East Africa, President Buhari’s radical action over oil, and the repercussions of the Burundian President’s insistence that he has a right to govern for a third term after his election.

NIGERIA: President Buhari to launch radical reform of state oil company

A week after President Muhammadu Buhari asked President Barack Obama in Washington to help repatriate some of the $150 billion in oil and gas revenues stolen over the past decade, he is to split the state oil company Nigerian National Petroleum Corporation into two parts. One part will be an independent oil and gas regulatory authority with oversight over the entire sector, and the other would be restructured into what presidential spokesman Femi Adesina described as 'an investor vehicle'.

This suggests the government may revive the core ideas behind the much-delayed Petroleum Industry Bill – that the NNPC's joint ventures with international oil companies be incorporated, properly audited and managed with the capacity to raise investment on the international and local markets.

SOUTH SUDAN/US: Warring parties risk sanctions

Tough measures – such as an arms embargo, freezes on individuals' assets and travel bans – await South Sudan's warring parties should they fail to accept the latest peace proposal 
by 17 August.

US officials, noting that Uganda is supporting President Salva Kiir's forces in Juba and Sudan is covertly backing sacked Deputy President's Riek Machar rebel forces, said they were not optimistic that the latest deadline would produce a breakthrough. President Barack Obama’s delegation was with the African Union in Addis Ababa yesterday and tougher measures to pressure Salva and Riek into an agreement were on the agenda. “The parties have shown themselves to be utterly indifferent to their country and their people, and that is a hard thing to rectify,” said a US officials quoted by Reuters.

BURUNDI: Overwhelming rejection of Nkurunziza’s election

The country's political crisis looks set toescalate with the main opposition party, Front pour la démocratie au Burundi (Frodebu) rejecting President Pierre Nkurunziza's claimed victory in the 21 July elections with 69.41% of the votes. The European Union and the United States are threatening further aid cuts and sanctions against the Nkurunziza government. The African Union, which had previously discussed sanctions against Nkurunziza, is to announce its position this week.

ZAMBIA/GHANA: Investors buy into bonds despite growing risks

Ghana and Zambia, both resource-based economies with substantial budget deficits, are going ahead with major new sovereign bondissues despite financial analysts' warnings over the unsustainability of the strategy. Last week Zambia floated a US$1.25 billion bond offering a yield of 9.4% and Ghana announced it would shortly float a $1.5 bn bond, $500 mn. more than previously announced, as its government struggles with budget overruns and falling commodity prices.

MOBILE PHONES: e-money’s boundaries expand

Two of the biggest mobile phone companies in Africa – South Africa's MTN and Britain's Vodafone – are launching a plan this month to allow their subscribers in East and Central Africa to send money across borders and from one network to another. The deal will boost trade and consolidate Africa as a leader in the mobile money systems, pioneered by Mpesa in Kenya more than a decade ago.

Don't forget to check www.africa-confidential.com for our latest stories.

Yours confidentially,

Patrick Smith

Thursday, 23 July 2015

On trial

After two decades of obstruction, the trial of Chad’s ex-President, Hissène Habré, for crimes against humanity got under way this week in Dakar. The Special Court, jointly set up by the government of Senegal and the African Union, offers another forum for the prosecution of leaders accused of atrocities. It comes as several AU leaders, including South Africa’s Jacob Zuma, criticise the International Criminal Court for ‘targeting Africa’.

In fact, setting up Special Courts and working in parallel with African justice systems is well within the remit of the ICC, which was meant to reinforce, not replace them. Some argue that the ICC should set up an adjunct or Special Court in South Africa or another state with a credible judiciary.

Without the matchless determination of Chadian lawyer Jacqueline Moudeina, herself a victim of a grenade attack in 2001, the trial might never have happened. Habré used his close relations with Cold War leaders such as Ronald Reagan and François Mitterrand in the 1980s to give him cover to obliterate his guerrilla opponents and civilian allies. It helped that some of them were backed by Reagan’s arch enemy Colonel Gadaffi.

Chad’s current President, Idris Déby Itno, came to power by overthrowing Habré with backing from Sudan. But until he seized power, Déby was Habré’s head of military intelligence and a key part of his security apparatus. Habré’s defence team must be tempted to call Déby as a witness, if only to embarrass him.

Thursday, 9 July 2015

Keeping up relations

This month, two Western powers, the United States and France, are trying to remind Africa that it hasn’t been totally left out of their calculations. On 20 July, US President Barack Obama is to welcome Nigeria’s President Muhammadu Buhari to Washington DC (see Pointer, The clock ticks faster) and just days later, he jets off to Addis Ababa and Nairobi, where he will meet Prime Minister Hailemariam Desalegn and President Uhuru Kenyatta. Growing insecurity is on the agenda but Obama also wants to address longer-term growth.

US oil and gas imports from Africa have almost stopped due to its use of fracking technology to produce more energy locally. China, the world’s biggest market for oil and gas, pushed up its trade with Africa to US$222 billion last year. That’s over three times the level of US-Africa trade. The more adventurous US officials and companies are looking for ways into Africa’s retail and agricultural markets but few have found ways to build on the unexpectedly popular Africa summit that Obama hosted in Washington a year ago.

France, whose President François Hollande swung through Benin, Angola and Cameroon last week, looks equally stuck in the past. The Parisian daily l’Opinion described the mini-tour as ‘La nouvelle Françafrique de Hollande’. France’s economy still benefits critically from its skewed trading relations with its former colonies in Africa and its backing for the two CFA currency zones there which compel the member governments to keep a substantial part of their foreign reserves in Paris.