Wednesday, 4 November 2015

No third term in Congo-K, just a very long second one

This week there is a warning of more trouble to come as Congolese officials suggest national elections be postponed, while the dispute between Nigerian officials and South Africa's MTN over a US$5 billion bill might escalate further. President Alassane Ouattara and Filipe Nyusi of Côte d'Ivoire and Mozambique respectively are on a roll with some good economic news while Tunisia tries to bring in more dollars. And Pope Francis may cancel a planned visit to Bangui on his coming Africa tour.

CONGO-KINSHASA: No third term, just a very long second one
The announcement by one of President Joseph Kabila's close aides that 'conditions' could force the postponement of next year's national elections must count as one of the biggest non-surprises of the week. But it does presage a deepening crisis in a country whose economy has been badly damaged by crashing copper and cobalt prices.

A year ago, an advisor to Prime Minister Augustin Matata Ponyo told Africa Confidential that there was 'virtually no possibility' of his boss seeking to change the constitution so as to permit a third term. Indeed, we were told, Ponyo would immediately resign if that happened. But Ponyo's advisor could conceive of a scenario in which Kabila was 'compelled' to extend his term in power by a few months to complete some important projects and ensure that conditions were right for a credible election in which Congolese would vote for his successor.

Now the plan is out publicly with the trial balloon being launched by André Alain Atundu, the top spokesman for Kabila's party in the national parliament. The Congolese people should grant Kabila 'two to four years', proposed Atundu.

But the opposition parties are unlikely to grant such an indulgence. They are already crying foul at goings on inside the electoral commission. Over the last month both the President and the Vice-President of the electoral commission have resigned for health reasons. The Constitutional Court ordered the suspension of provincial elections on 25 October because financial and logistical constraints.

It started off as a lack of cellphone diplomacy. Now it has escalated into a $5.2 billion trade dispute. For over a decade, many Nigerians have regarded South Africa's MTN cellphone giant as something of an ingrate. Although MTN gambled on success in the Nigerian mega-market when other international operators doubted the profitability of the move, its operations in the West African economic giant are now bigger than any of its other affiliates.

Yet Nigerian business people and MTN subscribers argue they have seen few benefits from MTN's hugely successful bet. There are claims that the MTN service is overpriced and unreliable and the South African owners have been slow to appoint Nigerians to senior positions.

But the Nigerian Communications Commission's decision to fine MTN US$5.2 billion for failing to disconnect customers who have not registered their SIM cards has shocked the company. It amounts to about $1,000 for every non-registered MTN SIM card still operating.

As MTN tries to negotiate a lower penalty, the regulators and ratings agencies are making their own judgements. Moodys has downgraded its rating for MTN to negative from stable, and the Johannesburg Stock Exchange is investigating why MTN failed to inform its shareholders immediately of the hefty fine in Nigeria.

CÔTE D'IVOIRE: Ouattara's grand growth plan
Undoubtedly, it's been a good week for Alassanne Ouattara. As soon as the electoral commission announced his landslide win in the presidential elections of 25 October, this former deputy chief of the IMF announced the optimistic economic goals for his second term.

If Ouattara keeps up the pace – he forecasts average annual economic growth of 9% over the next five years – Côte d'Ivoire will become one of Africa's top-ranking economies. Ouattara's forecasts that his country will be producing more than half of the world’s cocoa may prompt some raised eyebrows in neighbouring Ghana, which was the second biggest cocoa producer in the world for many years.

But Ouattara's incentives make it far more profitable to be a cocoa farmer in Côte d'Ivoire than Ghana. He has also pushed through giant railway and road-building schemes far faster than Ghana. Most of the remaining doubts are political: it is hoped Ouattara will use his overwhelming win to proceed with serious national reconciliation, five years after the clashes after the 2010 elections which cost over 3,000 lives. We report from Abdijan in the next issue.

MOZAMBIQUE: As prices slide – an oil and gas surprise
At last some good news for President Filipe Nyusi as he tries to juggle rival political interests and consolidate power. Against the global trend of falling oil and gas investments, Mozambique is bringing in ExxonMobil, Rosneft, ENI SpA, Statoil, Sasol and Delonex to invest some $700 million in six blocks, half of them offshore.

Optimists in Maputo say this round of investment could turn the country into the world's third biggest exporter of liquefied natural gas within a decade. Geography – Mozambique's position on the rim of the Indian Ocean facing the hyper-economies of Asia – gives it a distinct advantage over its West African counterparts.

CENTRAL AFRICAN REPUBLIC: Peacemaking pontiff postpones… perhaps
It is a mark of how fragile the situation is in Central African Republic that the redoubtable Pope Francis may have to cancel his visit to the country, planned for 28-29 November, owing to continuing violence between Christians and Muslims.

Last week, eleven people died in clashes in the capital as community representatives prepared for negotiations and it emerged that national elections would be postponed. It had been Pope Francis's plan to go to Bangui after visiting Kenya and Uganda. He was due to visit a mosque in Bangui at the centre of some of the recent violence. It had been Pope Francis's aim to encourage dialogue between the increasingly polarised communities

TUNISIA: New scheme to bring in the dollars
Trying to resuscitate the national economy in a turbulent region, Tunisian Prime Minister Habbib Essid has bought off some of the most powerful trades unions and launched a massive investment drive. It will be heralded by a new investment law due to be passed early next year which is meant to cut the bureaucracy for incoming companies and offer big incentives for those wanting to use Tunisia as base for production for export.

Officials in Tunis expect the new rules will attract big motor manufacturing companies who could see the country's location as ideal, both for exporting across the Mediterranean to Europe and to the rest of Africa. Development Minister Yassine Brahim said the government wants to bring in some $2.8 bn. worth of investments next year, and aims for an annual inflow of some $5 bn. by 2020.

The government also hopes it may have pre-empted another round of labour unrest. Last month it agreed to raise wage levels for the 800,000 trades unionists in state companies. That hike was said to have cost the government some $1.2 bn.

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