Monday, 19 December 2016

GUINEA: Israeli police put Beny Steinmetz under house arrest

This week we start in Israel with the news that police have put mining magnate Beny Steinmetz under house arrest in connection with a probe into contracts for Guinea's gargantuan Simandou iron ore deposit. In Kinshasa tensions rise with the deadline for President Joseph Kabila's exit due at midnight tonight (19 December). In the wake of Ghana's successful multi-party elections on 7 December and growing calls for a review of questionable resource contracts, the World Bank is stepping up its commitment to a much-criticised gas production project. Finally, Zimbabwe's ruling party has voted again to back Robert Mugabe as its presidential candidate in the next elections.

GUINEA: Israeli police put Beny Steinmetz under house arrest
The latest twist in the tortuous investigations and tit-for-tat legal cases surrounding the multi-billion dollar Simandou iron-ore project has put Beny Steinmetz under house arrest in Israel on bail of 100 million shekels (US$25 million). Most remarkable is the location of the arrest; Steinmetz is regarded as one of the best-connected businessmen in Israel, having nurtured a close relationship to Prime Minister Benjamin Netanyahu.

After a probe involving investigators from Guinea, Switzerland, the United States and Israel, Steinmetz was detained on suspicion of having bribed Guinean officials. His company, Beny Steinmetz Group Resources (BSGR), secured the rights to mine two of the four blocks at Simandou in 2008. The blocks had been transferred from international mining conglomerate Rio Tinto by the Guinea government as a penalty for non-compliance with national mining law.

Two years later, BSGR sold 51% of the rights to Brazil's Vale for $2.5 billion in what industry insiders called the 'deal of a lifetime'. Since then the negotiations over the development of Simandou have been blocked by a plethora of law suits, launched by the companies against their rivals, and anti-corruption investigations in multiple jurisdictions.

CONGO-KINSHASA: Kabila digs in as his exit deadline passes
As the United States and the European Union mull tougher measures such as imposing further sanctions against senior members of President Joseph Kabila's government for attacks on opposition activists, tensions are mounting and the Roman Catholic church is trying to broker a peaceful resolution to the deepening crisis. Talks between the government and some factions in the opposition – mediated by the Church – are due to restart on Wednesday (21 December).

Although 19 December – the constitutional deadline for President Kabila to hand over power to his successor – appears to be passing without mass protests (official deadline is midnight tonight), in Kinshasa, civic groups speak of growing pressures across the country. There were small groups of students in Kinshasa waving red cards urging President Kabila to leave office immediately.

But generally the capital was extremely quiet amid a heavy security presence, particularly in opposition strongholds. At least seven people were killed in clashes in eastern Congo today (19 December) and the government has closed down the operations of social media platforms.

With recent investigations in Africa Confidential and Bloomberg News showing the growing power of the Kabila family's business empire, the stakes for the political battle ahead are rising fast. Without the sort of determined intervention and mediation from regional organisations which secured an end to the serial conflicts from 1997-2002, Congo-K risks being drawn into another round of deadly confrontations.

GHANA: World Bank extends guarantees on ENI-Vitol gas deal
A week after Ghanaians elected a new government pledged to review poorly negotiated contracts, the World Bank is to provide another $517 mn. in guarantees in backing for the widely-criticised $7.7 bn. Sankofa project by Italy's ENI and the Dutch-based Vitol oil-trading outfit.

The Bank's private sector affiliate, the International Finance Corporation, is lending $235 mn. to Vitol and is arranging another $65 mn. of debt. The latest guarantee from the Bank takes its commitment to Sankofa up to $1.2 bn. despite continuing questions about the project’s benefits for Ghana.

A former top official in Ghana's oil industry described the terms of ENI and Vitol's contract with the outgoing government of President John Dramani Mahama as 'ruinous'. In terms of international comparisons, he added: 'ENI and Vitol are selling Ghana its own gas for a price tariff that is 30% higher than Japan is paying to transport and receive liquefied natural gas from Qatar…'

Several independent civic groups and the New Patriotic Party, which won the recent elections, have called for the government to suspend the deal until its terms can be evaluated by independent experts. In response, President Mahama's government has argued that the Sankofa deal was fully endorsed by the World Bank. This could put the World Bank and the IFC in an extremely awkward position: trying to defend a contract whose terms are widely condemned as injurious to Ghana's national interests.

ZIMBABWE: At 92, Robert Mugabe selected again as ruling party’s presidential candidate
Although the economy is staggering under the weight of unsustainable debt and shortages of foreign exchange and the country's political class has been ripped apart by factionalism, the Zimbabwe African National Union-Patriotic Front has decided to nominate the 92-year-old Robert Mugabe again as its candidate in presidential elections due in 2018.

At a special conference in Masvingo of the ruling ZANU-PF delegates voted for Mugabe but failed to hold substantive debate on how to address the worsening economic situation. The government’s attempts to introduce bond notes, described by Mugabe as a surrogate currency, have sparked widening protests.

Former Vice-President Joice Mujuru, who was pushed out of the government and the ruling party with Mugabe’s backing, now leads an opposition party. Since then the party has factionalised further with groups pushing the credentials of Vice-President Emmerson Mnangagwa and First Lady Grace Mugabe as candidates for the succession. Grace Mugabe's group is fronting for several young ambitious party officials but Mnangagwa's group remains closer to the military establishment.
For now, neither of them has the courage or mass support to tell Mugabe to go. In fact, the ZANU-PF Youth League proposed that term limits should be abolished and Mugabe be declared President for life.

Thursday, 15 December 2016

See you in court

After a year of credible elections in Ghana and South Africa but rigged ones in Uganda, Gabon and Zambia, together with a raft of political and corporate corruption scandals, there will be a new focus on judicial systems. It was the independence of court decisions over election management and access to data that allowed Ghana's main opposition party to set up its own results reporting system in what could become a template for opposition parties across the continent.

Similarly, it was South Africa's independent judiciary that backed Public Protector Thuli Madonsela's investigation into President Jacob Zuma's use of US$20 million of public funds to refurbish his extensive homestead in Nkandla, KwaZulu-Natal, as well as her probe into the business ties between the wealthy Gupta family and the presidency. Madonsela then called for a detailed judicial investigation into those links. And as Zuma's support base ebbs, he faces another 680 charges relating to the misuse of public funds.

A big legal fight is also coming over Mozambique’s $2 billion of secret debts. Ratings agencies say that the banks, Crédit Suisse and Russia's VTB, involved in marketing $750 mn. of the 'tuna bonds' failed to do serious due diligence on the deal. Still more legal brickbats are  flying in Guinea, following the arrest of former Mines Minister Mahmoud Thiam on charges that he laundered a bribe payment from a Chinese company through the New York banking system. Thiam denies all wrongdoing.

Monday, 12 December 2016

GHANA: Jobs for youth are top priority says victorious Akufo-Addo

We start in Ghana where last week's well-run elections brought Nana Akufo-Addo the presidency and an orderly transition is under way. Much less orderly is Gambia where Yahya Jammeh has changed his mind about accepting electoral defeat and has triggered a security and political crisis. Outrage is growing in Nigeria after over 160 worshippers died after a church collapsed in the south-east. Tricky negotiations lie ahead to shore up the United Nations' operations in South Sudan and Libya. And there is yet another delay to the indirect presidential elections in Somalia.

GHANA: Jobs for youth are top priority says victorious Akufo-Addo
Political rivalries were put to one side temporarily as a smiling President John Mahama met President-elect Nana Akufo-Addo on 11 December to inaugurate their transition teams at International Conference Centre in Accra. Two days earlier Charlotte Osei, Chairwoman of the Electoral Commission, had proclaimed Akufo-Addo victor with 53.8% of the votes. Akufo-Addo's New Patriotic Party also won a majority of over 70 seats in the national parliament.

Akufo-Addo has signalled that creating jobs for the nation's youth and stabilising the economy will be the top priorities for his government. He repeated his pledge to appoint an independent State Prosecutor's office which would be run by an official with broad national support. There would be no partisan witch-hunts, he insisted.

However, it is likely that several oil, gas, electric power and infrastructure contracts will come under scrutiny. Senior officials in the incoming government have said they are poor value for money.
The transition teams of the outgoing National Democratic Congress and the incoming NPP will be led respectively by Julius Debrah, Mahama’s chief of staff, and Yaw Osafo-Maafo, a former finance minister. They will preside over an audit of state assets, negotiation of end-of-service benefits for retiring state functionaries and the detailed mechanisms – ministry by ministry – of the handover process. Akufo-Addo is due to be sworn in on 7 January.


GAMBIA: Jammeh rejects election defeat and appeals to Supreme Court
The country has been thrown into confusion following Yahya Jammeh's rejection of his defeat in the 1 December national elections. Although Jammeh had initially accepted his defeat, on 9 December he announced – without any supporting evidence – that the elections had been tarnished with irregularities.

Fresh elections would have to be organised with a 'god-fearing' head of the electoral commission, Jammeh insisted. However, Adama Barrow, the announced winner of the elections, has said the country would not accept Jammeh's plan.

Pressure is mounting on Jammeh following condemnation of his latest move from the African Union Commission and United Nations Secretary General Ban Ki-moon. The latest news from Banjul is that Jammeh will appeal against his defeat in the elections to the Supreme Court, a body of which he has exercised strong political control during his 22-year-rule.


NIGERIA: Calls for full investigation after over 160 die in church collapse
Angry survivors and relatives of the more than 160 people killed after the collapse of the roof of the Reigners Bible Church in Uyo, south-eastern Nigeria are calling for a full investigation into the disaster on 10 December. They had gathered to attend the consecration of the church’s founder, Akan Weeks, as a bishop. The local press has claimed Weeks ignored safety warnings. Weeks and Akwa Ibom state governor Udom Emmanuel escaped without serious injury.

In December 2014, 116 died when a guest house owned by Pastor T B Joshua's Synagogue of All Nations collapsed. State officials have been trying to prosecute Joshua, one of the richest and most influential church leaders in Africa, and his trustees for negligence but their efforts have been snared in a tortuous legal battle.


SOUTH SUDAN: UN force struggles to get support despite warnings of risk of genocide
Although the United Nations Security Council is set to renew the mandate of the UN peacekeeping force in South Sudan before its expiry on 15 December, it is struggling to get financial and military backing for a more robust mission. The force has been much criticised after its failures to prevent killings and rapes by government soldiers earlier this year. Governments in the region are either distracted by their own or other crises, and the leadership transitions in train at the UN and African Union seemed to have weakened their response. Added to this, President Salva Kiir's government in South Sudan has been trying hard to block a more effective Regional Protection Force. The force urgently needs another 1,000 soldiers. Kenya is pulling out of the UN Mission in South Sudan (UNMISS) following the dismissal for incompetence of its general commanding the mission. Ethiopia, which has been pulling back troops from Somalia because of its own domestic pressures, may be unwilling to fill the vacuum in South Sudan.


LIBYA: UN role in question as fighting continuesThis month the United Nations Security Council is also due to debate the renewal the mandate of the UN Support Mission in Libya (UNSMIL) led by Martin Kobler, the former head of the UN’s mission in Congo-Kinshasa. Although UNSC members are likely to extend the mission's mandate, which is due to expire on 31 December, they have grave reservations about its chances of success. Although Kobler was effective in Congo-Kinshasa getting substantial diplomatic support for his role there, in Libya he has been outflanked by the regional rivalries which have undermined the UN efforts to support the Government of National Accord.

With Egypt and the United Arab Emirates backing the nationalist forces of General Khalifa Haftar in the east, and Qatar and others backing sundry Islamist militias, the UN efforts have often been sidelined. The UN may lose yet more relevance after Donald Trump, a strong backer of President Abdel Fatah el Sisi's goverment in Egypt, takes over as United States President in January.


SOMALIA: Presidential election could be delayed until January
The latest developments in Mogadishu, including partisan ructions and a spate of deadly suicide bomber attacks, look likely to hold up the emergence of a new President in Somalia until 10 January at the earliest. It will be the indirectly-elected new parliament in Mogadishu which will choose the President. The lower house of parliament is likely to elect its Speaker by the end of this month. And members of the Upper House of the parliament are yet to be elected.

Despite this drawn-out and cumbersome process, the favourite to win the Presidency, through the support of the new parliament, is incumbent, President Hassan Sheikh Mohamud. At the end of it, however, he will claim more formal legitimacy than any of his predecessors.

Monday, 5 December 2016

GHANA: Peace pact signed ahead of polling day as opinion polls send mixed messages

This week we hit the election trail: first to Ghana where over 15 million citizens are due to vote in presidential and parliamentary elections on Wednesday (7 December), and then to Gambia for the aftermath of the shock election defeat of President Yahya Jammeh. Another exit is on the cards, this time in Angola, with President José Eduardo dos Santos due to hand over power to the MPLA Vice-President, João Lourenço. On the economic front, Nigeria is due to announce another mega-budget on Thursday (8 December). South Africa has just avoided a ratings downgrade, and Kenya is talking to bankers about floating another bond.


GHANA: Peace pact signed ahead of polling day as opinion polls send mixed messages
Pundits and pollsters are offering wildly differing forecasts for the outcomes of presidential and parliamentary votes on 7 December, suggesting the result is likely to be close. Campaigning is due to end at midnight today (5 December) as most of the parties plan their final rallies in Accra.
In a strongly-worded assessment of the risk of clashes during the elections, the African Union election observer mission in Ghana warned that much more should be done by political leaders to dissuade their supporters from resorting to political violence.


Franklin Cudjoe, executive director of the Imani Centre, an Accra think tank, said the governing National Democratic Congress (NDC) has regained substantial ground against the opposition New Patriotic Party (NPP) over the past month. 'In early November, I would have put the opposition well ahead,” Cudjoe told Africa Confidential, 'but the NDC's campaign of pointing to big infrastructure projects as signs of government success is beginning to pay off.' Other polls conducted by the University of Ghana and the Centre for Democratic Development still give a clear lead to the opposition. Other commentators point to the NPP gaining ground in NDC strongholds such as northern Volta and parts of the Northern region.

The surprise defeat of Gambia's President Yahya Jammeh in the 1 December elections could also put more wind in the sails of Ghana's opposition.

The closer the vote, the more pressure on Charlotte Osei, Chairwoman of the Electoral Commission. Osei has pledged to improve scrutiny of the vote and has encouraged Parallel Vote Tabulation by the Imani Centre and other groups. She also promised that the verified results for each polling station would be posted immediately after the count. It is up to the party agents to raise any objections before they sign the results sheet. The results should be out on Friday (9 December).


GAMBIA: Jammeh concedes election defeat and the nation holds its breath
For the past few days supporters of Adama Barrow, who defeated the incumbent President Yahya Jammeh, have careered through the streets of Banjul celebrating the shock victory in the 1 December elections.

It seems divisions within the army and security services over the value of Jammeh continuing as president are what led him to make his dramatic and unexpected televised concession of defeat on 2 December. Jammeh has said he intends to stay in State House until January when he is due to hand over to Barrow. Jammeh has bought a property in Cape Town, suggesting that he intends to spend more time outside his own country after January, our South Africa correspondent reports.

The next four weeks could be extremely tense unless there is some clear commitment from the military's top brass, who are extremely close to Jammeh, to making the transition work.

Barrow told journalists on 2 December that his priority is bringing the country together and assembling a strong team of ministers who could relaunch the national economy. He said he was committed to re-establishing the rule of law in the country after 22 years of Jammeh's dictatorship.

In an interview with Jeune Afrique, the Paris-based weekly, Barrow said he did not want a witch-hunt against former members of the Jammeh regime but added that everyone would have to be accountable before the law.


ANGOLA: President Dos Santos to hand baton to Joao Lourenço after parliamentary elections next year
João Lourenço, Defence Minister and Vice-President of the Movimento Popular de Libertação de Angola (MPLA), is to take over the leadership of the country after next year's parliamentary elections, the party decided on 2 December, ending President José Eduardo dos Santos's 37-year rule. The succession plan assumes the MPLA, which currently controls over two-thirds of parliament, will win next year's elections. It seems that Dos Santos and party leaders have agreed that Lourenço should be in place at the head of the party well ahead of the election campaign. Known and trusted in the MPLA as an effective administrator, Lourenço, who said he was 'surprised' at his selection, would take over at a time of mounting economic problems as oil and gas revenues remain at their lowest for nearly two decades.


NIGERIA: President Buhari is to announce another mega-budget aimed at kick-starting growth
President Muhammadu Buhari is due to announce a record budget of 7.3 trillion naira (US$23.3 billion) in parliament on Thursday (8 December) after a cabinet meeting on the country's continuing recession. Output and jobs have been falling for a year.

Although this year's budget was an estimated N6.1 trn., actual spending has fallen far short of that level due to chronic shortfalls in oil and gas revenues. There has been some improvement in earnings in recent months and officials hope that the latest cut in production by the Organisation of Petroleum Exporting Countries (OPEC) will help boost oil prices.

If production can rise to full capacity of 2.2 million barrels a day, even at current world oil prices, Nigeria would have over 2% growth, according to Moody's, the credit ratings agency.


SOUTH AFRICA: Zuma dodges the downgrade but tries to set aside critical report on his ties with Gupta companies
The decision by Standard & Poor's Global Ratings to maintain its assessment of South Africa's sovereign credit-worthiness at BBB-, one notch above junk status, is a conditional reprieve for the crisis-torn economy. It vindicates the diplomatic efforts of Finance Minister Pravin Gordhan, who has been personally briefing the ratings agencies on the government's commitment to steady the economy.

S&P was the third of the big ratings agencies, after Fitch and Moody's, to pass judgement on the country's creditworthiness in the past month and none have called for an international downgrade yet. Junk status would trigger an investment exodus from South Africa's bonds and stock market, and a pullback by private equity funds.

It would also complicate the government's efforts to raise some $12 bn. to finance next year's projected budget deficit. However, S&P downgraded local debt by one notch to BBB reflecting concerns about the low growth in production and employment.

President Jacob Zuma, who has been desperately trying to replace Gordhan with a more pliable politician, told investors last week that his country would remain a 'strategic partner' in the region. Later, he also called on parliament to set aside the report by outgoing Public Protector Thuli Madonsela on links between the presidency and the Gupta family. The report was flawed and should be returned to the new Public Protector for review, he argued.


KENYA: Kenyatta's economic team to return to the markets to raise funds to sustain growth spurt
In a bid to sustain growth rates at over 6%, among Africa's highest, Kenya's government is talking to international banks about floating a $1.5 bn. bond next year. Ostensibly the money would be used to boost foreign reserves and to finance the projected budget deficit. The government is keen to maintain the economic tempo ahead of national elections due next August.

However, the move to float another bond is likely to attract barbs from the opposition which argued that the proceeds from a $2.8 bn. bond issued in 2014 were misused and that there was no proper accounting of the transactions involved. Kamau Thugge, Principal Secretary at the Treasury, has said publicly that the government would need to raise $1.5 bn. next year but did not elaborate on its borrowing strategy.

Thursday, 1 December 2016

Fidel's African legacy

The funeral of Fidel Castro on 4 December is stirring up fiercely partisan reactions. But in Africa there is almost universal praise for the Cuban leader, especially his support for anti-colonial struggles and his despatch of some 50,000 doctors across the continent. Castro told the South African Parliament in 1998 that at least 380,000 Cuban troops had fought 'hand-in-hand with African soldiers for national independence and against foreign aggression'. Cuba’s casualty rate in its Africa wars was proportionately much higher than that of United States forces in Vietnam.

The difference was that Cuba's intervention worked in Angola. After Cuban troops helped their Angolan counterparts win the battle of Cuito Cuanavale in 1987-88 against Jonas Savimbi's rebels and South African special forces, the apartheid regime pulled back from its regional military ambitions almost immediately. Angola negotiated a peace deal, Namibia secured Independence and South Africa started negotiations for free elections.

Cuba's backing for the national liberation struggles in Cape Verde and Guinea Bissau in the 1970s is also celebrated, as is its support for Algeria's Front de libération nationale against France. It was in its interventions in the Horn of Africa that Cuba's policy went badly wrong. In Ethiopia and Somalia, Cuba was seen as the Soviet catspaw changing sides in the war between those two countries on Moscow's orders and then unsuccessfully trying to prop up Mengistu's brutal regime.

Monday, 28 November 2016

NIGERIA: After a divisive campaign, governing party candidate wins in Ondo State

This week we start with Nigeria's governorship elections and South Africa's President Jacob Zuma facing yet another vote of confidence. Elections in Gambia and Somalia are also due conclude this week as the United States signals greater interest in military action in the Horn.


NIGERIA: After a divisive campaign, governing party candidate wins in Ondo State
Veteran lawyer Rotimi Akeredolu, the candidate for the All Progressives' Congress (APC), has won the crucial Ondo State governorship election held on 26 November. It was the most serious test of the APC's support since it won national elections in March last year.


Despite the victory, the election campaign showed the governing party facing new pressures, with its leading members in the south-west – Bola Tinubu and allies such as Lagos governor Akinwunmi Ambode – refusing to campaign for Akeredolu. The APC's standing has been hit badly in the south-west, which is suffering from the country's worst recession for 25 years.


Akeredolu secured 244,842 votes with the People's Democratic Party's Eyitayo Jegede coming second with 150,380, and Olusola Alexander Oke of the Alliance for Democracy taking third place with 126,889 votes. Tinubu and Ambode's support seemed to swell Oke's vote. Jegede's candidacy for the PDP was confirmed just three days before the elections by the Independent National Electoral Commission but his calls for a postponement of the election fell on deaf ears.


SOUTH AFRICA: Zuma faces no-confidence vote in the ANC's top committee
The African National Congress has extended a meeting of its top decision-making body, the National Executive Committee, until today (28 November) to debate a motion of no-confidence in President Jacob Zuma.

This is far more significant than the parliamentary no-confidence motion that Zuma faced two weeks ago. It exposes deep internal divisions in the ANC. The committee is the only body in the party that has the power to force Zuma out.

Tourism Minister Derek Hanekom originally proposed the motion on 26 November. Several committee wanted a secret ballot so as to avoid possible retribution from Zuma supporters. Party support for Zuma has been hit by successive corruption scandals, especially the report by outgoing Public Protector Thuli Madonsela on 'State Capture', on relations between Zuma and the wealthy Gupta family, and her call for a judicial investigation.


GAMBIA: Opposition alliance challenges Yahya Jammeh at the polls
Businessman Adamu Barrow, backed by eight opposition parties, is taking on President Yahya Jammeh in national elections on Thursday (1 December) after months of state repression. About 50 opposition activists have been arrested in the run up to the elections, including Ousainu Darboe, who leads the opposition United Democratic Party.


Two activists have died in detention and Darboe has been sentenced to three years in gaol for participating in an unauthorised demonstration. On 27 November Jammeh, who seized power in 1994, said that anyone involved in election violence would be dealt with harshly. Jammeh, widely-criticised by pro-democracy and human rights organisations for brutality and corruption, announced last month he would be taking his country out of the International Criminal Court although the current court prosecutor is respected Gambian lawyer Fatou Bensouda.

Jammeh has barred election observers from the European Union but allowed in a delegation from the African Union. Jammeh is expected to declare a comfortable victory although there are signs of opposition to him in the military and opposition parties have mounted a more coordinated campaign this time.


SOMALIA: Lengthy electoral process to conclude as Obama takes action
The voting process to pick a parliament and president is due to end formally on Wednesday (30 November) but has been marred by persistent disruption by the Islamist militia, Al Shabaab. The African Union force, Amisom, has been stretched to the limit defending sites used for voting. The force is currently 4,000 under strength and suffers from poor morale and logistical problems. While Ethiopia has withdrawn troops from Somalia which were not assigned to Amisom, and Kenya and Uganda have questioned their commitment, President Barack Obama has authorised increased US military involvement in the anti-Shabaab campaign, according to a report in yesterday's New York Times.

Obama has deemed Al Shabaab to be part of the armed conflict that Congress authorised military response to after 9 September, 2001. As well as legally underpinning the US military's already expanding role in Somalia, the move lays the groundwork for President-elect Donald Trump to take yet more military action in Somalia and the region.

Monday, 21 November 2016

NIGERIA: Oil and inflation up and politics wobbling

We start in Nigeria where the central bank is holding critical meetings on interest rates and foreign exchange policy. After its budget last week, Zambian officials continue talks with the International Monetary Fund and political tensions rise in neighbouring Congo-Kinshasa. Officials from the Central African Republic are to discuss spending plans after raising pledges worth $1.5 billion at a donor conference in Brussels last week and member states of the International Criminal Court, meeting in the Hague, wind up discussions about the body’s future on Thursday (24 November). Gambia's President Yahya Jammeh, facing a more determined opposition in national elections due on 1 December, has banned European observers.


NIGERIA: Oil and inflation up and politics wobbling
There is a strong possibility of a hike in Nigeria’s base or policy interest rates – to 15% or 16% from the current rate of 14% – after the Central Bank of Nigeria's monetary policy committee meets today (21 November) and tomorrow.


This comes against the backdrop of 'stagflation', weak economic performance but with steadily rising prices. Inflation was 18.3% last month, more than double the central bank's target. CBN directors are to seek the prosecution of people hoarding dollars as part of its plans to step up capital controls.

On the more positive side, the ratings agency Moody's forecasts that Nigeria's economy will grow by at least 2.5% next year if the recent improvements in oil output are maintained. The latest figures from Deputy Oil Minister Emmanuel Kachikwu show that production is back up to 2.1 million barrels a day. This follows a meeting on 1 November between President Muhammadu Buhari and several leaders from the Niger Delta led by veteran politician Edwin Clark.

Further meetings between presidency officials and Delta groups are likely this week. But there is still no sign that the Niger Delta Avengers, the most active militant group this year, will be joining the talks. So far, the talks have discussed extra subventions and investments in the Delta, which have been heavily criticised by the Avengers, who argue that the cash gets diverted by corrupt officials.
There are also signs that the partisan battles in the Delta between supporters of President Buhari and his predecessor Goodluck Jonathan are still raging. Rivers State governor Ezenwo Nyesom Wike has been a particularly fierce critic of Buhari and is seen as a frontrunner to lead the opposition People’s Democratic Party.


ZAMBIA: Will copper boom bail out government in tough talks with IMF?
More discussions between the government and the IMF are likely this week in the wake of the Finance Minister Felix Mutati's budget, announced on 11 November. The IMF is said to want tougher curbs on spending and more accountability on public finances. If these measures are agreed, the two sides would be on course to announce a new IMF programme in January.


Yet the current boom in the world copper price, at its highest level for six years with futures jumping 20% in New York last week, could complicate the talks. President Edgar Lungu may see the prospect of higher revenues from copper and cobalt as a way to avoid the unpopular spending cuts insisted on by the IMF. At the same time, the government is boosting spending on the police in anticipation of protests over the withdrawal of food and fuel subsidies.


Traders differ on how long the copper price boom will last but most say it will not maintain its current momentum. Asian copper buyers have been stepping up purchases, mainly because of plans to increase production of electric cars whose components use substantial quantities of copper and cobalt.


CONGO-KINSHASA: Political crisis deepens as Kabila plans to stay put until 2018
Like neighbouring Zambia, Congo-Kinshasa should benefit from a global copper boom but the country remains mired in its worst political crisis for two decades. Pressure will mount on President Joseph Kabila as the official deadline for the end of his second term of office on 19 December approaches.

Security forces cracked down on an attempt by the opposition alliance, known as the Rassemblement, to organise demonstrations in Kinshasa on 19 November. Police also blocked all routes to the home of opposition leader Etienne Tshisekedi.

These latest attempts to launch street protests follow Kabila's appointment on 17 November of Samy Badibanga, a former ally of Tshisekedi, as Prime Minister. The Rassemblement called Badibanga's appointment a 'non-event'. Opposition activists are expected to regroup this week to plot a more effective plan to force out Kabila, mobilising local support and getting backing from international organisations and foreign governments. 


CENTRAL AFRICAN REPUBLIC: After aid conference, government told to focus on crisis relief measures
This week officials are working on plans for the management of the US$1.5 billion pledged following President Faustin Archange Touadéra's presentation on 17 November of his five-year plan for the country. 


Touadéra was speaking at a special conference convened by the European Union and the United Nations and several non-governmental organisations in Brussels. Reflecting the strong concerns which remain in the wake of recent clashes, several NGOs urged the President to prioritise short-term humanitarian projects.


INTERNATIONAL CRIMINAL COURT: Fight intensifies for the court's future
The United Nations and human rights organisations are urging member countries of the International Criminal Court to stand firm on Article 27 – that is the provision that allows the court prosecutor to issue charges against everyone from ordinary citizens to the President.

Some African countries attending the court's Assembly of State Parties Conference in the Hague, which ends on Thursday (24 November), have been lobbying for immunity for sitting heads of state. This year's Assembly of State parties could prove critical for the court's future.


Botswana, Côte d’Ivoire, Nigeria, Malawi, Senegal, Tanzania, Zambia and Sierra Leone have pledged support for the Court. Burundi, Gambia and South Africa have promised to leave. Many other African countries are sitting on the fence. Last week Russia added its voice to opponents by stating that it would not ratify the 1998 Rome Statute, which established the Court. The United States has still to ratify the Rome Statute, which looks unlikely under Donald Trump's presidency.


GAMBIA: Yahya Jammeh blocks international observers ahead of 1 December elections
Facing businessman Adama Barrow, who is back by eight opposition parties, in national elections on 1 December, President Yahya Jammeh has barred election observers from the European Union. This suggests the election could be much closer than previous contests and that the opposition has a better strategy. But there are also growing fears about violence and rigging in the election. Two opposition politicians have died in state custody this year.

Earlier, the Banjul government had said it would allow in foreign observers and has accredited a team from the African Union. The EU had sent an observer team to the 2011 elections although the regional organisation, the Economic Community of West African States declined to send a team on the grounds that their work would be obstructed.

Thursday, 17 November 2016

Cash calls

African treasuries, cash-strapped after the commodity price crash, are trying to recoup their losses by launching law suits against multinational companies. The most sensational is a court ruling in Chad on 5 October that a consortium led by Exxon Mobil should pay the government a fine of US$73.4 billion for non-payment of royalties.

According to the court, the royalties amounted to 44 trillion CFA francs ($808 million) but Exxon Mobil disputed the payments. Exxon Mobil and Malaysia's Petronas, also in the consortium, have appealed the judgement and are now negotiating with President Idriss Déby Itno's government.

The ambitions of Zambia's state-owned ZCCM Investments are more modest: it is suing Canada's First Quantum for $1.4 bn., claiming the company took an unauthorised loan of $2.3 bn. at below market rates from the Kansanshi copper mine and underpaid its tax bills. First Quantum, which started negotiating with the government after its share price started falling on the Toronto exchange, said the claims were 'inflammatory, vexatious and untrue'.

Uncharacteristically, Nigeria's legal claims are the most modest in the current round of law suits. It is suing Total and Chevron for undeclared oil shipments amounting to over $600 mn. in 2011-14. And it is seeking a further $400 mn. from ENI, Petrobras and Shell for undeclared shipments in the same period.

Tuesday, 15 November 2016

UNITED STATES/AFRICA: Tougher trade deals and isolationism threaten after Trump's win

This week we start again in the United States in search of the implications, direct and indirect, of Donald Trump's shock victory in the presidential election. In South Africa the African National Congress starts its run-up this week to picking its presidential candidate for the 2019 elections.
The legal battle over Guinea's iron ore reserves takes a new turn after it emerged that Rio Tinto has suspended its top executive working on the project. Akinwunmi Ambode, the governor of Lagos, is making himself unpopular with the denizens of Nigeria's commercial capital, just as his ally and political godfather Bola Tinubu appears to be breaking ties with President Muhammadu Buhari.
Although Kenya's economy looks relatively strong as President Uhuru Kenyatta prepares for elections next year, he is pulling the country out of regional security missions in South Sudan and Somalia. Any downgrading of Kenya's security role, amid signs that Uganda might follow suit, poses a serious challenge to the military balance in East Africa and the Horn.

UNITED STATES/AFRICA: Tougher trade deals and isolationism threaten after Trump's winAs the first shockwaves after Donald Trump's presidential election victory on 8 November subside, African policy-makers are looking at three areas of possible disruption this week: capital flows and trade, security, and climate change. Expectations of any economic gains for Africa from a Trump presidency are almost universally low. Africa was scarcely mentioned during the election campaign.

After a period of strong economic growth from 2005-2015, Africa has been slipping down the league table of US commercial interests over the past year. In a world of oversupply of oil and gas and historically low commodity prices, there is unlikely to be any upturn in US investment in Africa, which lags behind that of China and Europe.

Some US economists predict that Trump's planned corporate tax changes and trade protectionism will spook the US markets leading to a crisis as bad as the 2008 financial slowdown. If Trump sharply cuts imports of Chinese and Indian manufactures, that will mean lower demand for the African metals and ores that feed Asia's factories.

African officials fear that Trump will restrict or abolish the African Growth and Opportunity Act (AGOA), the US-Africa trade deal which offers duty-free access to the US market for about US$4 billion of African exports each year. There might also be a review of the Power Africa programme, which is meant to encourage US investment in Africa's electricity industry. However, those big US corporations which benefit from these arrangements will lobby for their survival. African exports to the US are a fraction of the volume of Asian exports, and have little effect on US jobs. But organisations such as the US Agency for International Development will worry about cuts in their programmes to meet Trump's ambitious targets to limit state spending.

There are also concerns that a Trump administration might launch heavy-handed military interventions in Africa – in a new phase of the USA's war on terror – that could exacerbate Africa's mounting security problems.

More effective US diplomatic engagement in Africa looks unlikely if cuts continue in the State Department, which has been losing out to the Department of Defense in recent years. The same can be said of most Western governments whose diplomatic profile in Africa is in retreat in relation to countries such as China, India, Russia and Turkey.

Finally, Trump's rubbishing of the science behind climate change has big implications for Africa. He has pledged to pull the US out of last year's climate change treaty in Paris; that will substantially cut the pot of money available to those countries, many in Africa, hardest hit by global warming.

SOUTH AFRICA: ANC prepares for the post-Zuma worldDespite the storm of corruption allegations, the African National Congress circled the wagons and fought off yet another no-confidence motion against President Jacob Zuma in Parliament on 9 November. Zuma's top aides are resigned to their man facing months of legal battles following outgoing Public Protector Thuli Madonsela's report on improper corporate influence on government.*

This week, at least one state-owned company plans to launch a judicial review of the Madonsela report as part of Zuma's fightback. There are also efforts by opposition parties and civic groups to reinstate the 783 corruption charges against Zuma which were dropped in 2009. In the coming weeks, the government will focus mainly on shoring up economic policy and boosting growth to stop South Africa's creditworthiness being downgraded to junk status by the ratings agencies – a move that would trigger substantial outflows of capital.

And this week ANC will start preparing for a policy conference due in six months and its elective conference to be held before the end of 2017. Given the ANC's continued political dominance in South Africa, the choice of leaders at that conference will be of critical importance. There are at least five contenders to succeed Jacob Zuma, and discreet electioneering is already under way.

Top officials will be talking to the ANC's branches in the provinces, perhaps to influence their choices but also to limit the factionalism that has been scarring the party in recent months. That's a tall order given the high stakes in the coming leadership contest.

GUINEA/MINING: Steinmetz cheered by disarray at rivals in Rio TintoRio Tinto's sale of its 46.6% stake in the giant Simandou iron ore mine to Chinalco for an estimated US$1.3 billion, reported last week, may have looked like a skilful exit from Guinea's troubled mining industry by the world's second biggest mining company. But it hasn't ended the four-sided legal wrangling over the mine's future.

Beny Steinmetz, whose Swiss-based company has been hit by law suits from corporate rivals Rio Tinto and Brazil's Vale, told Bloomberg News last week that the suspension of Alan Davies, who ran Rio's operations in Guinea, would have serious implications. Rio made payments of $10.5 million to consultant François de Combret, a former employee of Lazard Bank in Paris.

'We are the good guys,' Steinmetz told Bloomberg News after hearing of Davies' suspension. So far, neither Rio nor the Guinea government, which stripped Beny Steinmetz's company of its stake in Simandou, has made any public comments about these latest developments in the saga.

NIGERIA: Lagos Governor Ambode makes more enemies as rumblings of discontent grow louder in the south-westThe rumbustious mega-city of Lagos, home to over 20 million people, has been hit by the worsening recession in the country which has brought much of the business in the commercial capital to a grinding halt. Another reason for the malaise in Lagos is the fractious politics. The godfather of the south-west, Bola Tinubu, has been struggling to shore up his influence since Muhammadu Buhari won the national presidency on the ticket of the All Progressives Congress last April.

Although Tinubu's patronage extended to the appointment of some top officials such as the Governor of Lagos State, Akinwunmi Ambode, he is at odds with stars from the south-west such as Power Minister Babatunde Fashola and Mines Minister Kayode Fayemi. Tinubu's relations with President Buhari are also said to be nearing breaking point.

But Tinubu's protégé in Lagos, Ambode, is proving extremely unpopular in the city. Compared with Fashola, the previous Lagos Governor, Ambode's record on service delivery and security is well below standard. At the same time, Ambode has a predilection for bulldozing what he defines as 'illegal structures'. Having ordered the demolition of several buildings housing small businesses and cafés in Ikoyi, Ambode is now targeting the slum areas around the Lagos lagoon which house as many as 300,000 people. Ambode's programme to demolish these areas started last month but is now gathering momentum and could hit serious opposition in the coming weeks.

KENYA: Military starts to withdraw from regional forces ahead of next year's tough electionEast Africa's biggest economy, Kenya, is defying the negative growth trends of much of the rest of the continent – it is projected to grow at an average of 6-8% over the next three years – but it is reining in its military forces in the region. Last month, President Uhuru Kenyatta's government announced it would be pulling Kenyan troops out of neighbouring Somalia as part of a review of the country's security strategy.

And then in the wake of the stern criticism last week of the Kenyan commander of the United Nations peacekeeping force in Juba, Kenyatta's government has announced that it is pulling its troops out of South Sudan.

UN Secretary General Ban Ki-moon had called for the immediate replacement of Lieutenant General Johnson Mogoa Kimani Ondieki, the Kenyan officer who had been commanding the UN peacekeeping force in South Sudan, following a devastating report on the soldiers' failures to protect civilians from attack by rampaging government soldiers.

In a series of attacks in July by soldiers loyal to the South Sudan government, two Chinese peacekeepers were killed and several wounded, several aid workers were raped and a South Sudanese journalist was shot dead. Over 180 buildings in the United Nations compound were hit by shells and rocket-propelled grenades fired by forces loyal to President Salva Kiir. Those targeted by these attacks said the Kenyan-led UN force was missing in action.

Kenya rejected the criticism of Lt Gen Ondieki, arguing that there were organisational problems with the mission beyond the control of the force commander. The troops from China, Ethiopia, Nepal and India were not operating under a unified command.

Monday, 7 November 2016

UNITED STATES ELECTION: What's in it for Africa?

We start off with a look at the increasingly bizarre United States elections tomorrow (8 November), quickly followed by a report on President Jacob Zuma's tough week ahead in South Africa. Then there are fresh doubts about the strategy and money for the African Union mission in Somalia while disqualified presidential contenders get a reprieve in Ghana. Fresh proposals in the talks between the Frelimo government and Renamo opposition are due on 10 November, and many Zimbabweans have already made plain their opposition to the government's plans to start issuing bond notes this week.


UNITED STATES ELECTION: What's in it for Africa?
The lack of enthusiasm in Africa for the US presidential election is palpable: partly because of the candidates, partly because of the lack of attention to Africa, or indeed any foreign policy matters apart from migration and terrorism, in the campaign.

That said, opinion in Africa's media and among political activists overwhelmingly favours Hillary Clinton against Donald Trump. Zimbabwe's former Finance Minister, Tendai Biti, pointed out that Trump's claims of rigging in the US elections gives succour to autocrats everywhere who want to undermine democratic principles. After a year of bad and highly-contested elections in Africa, there is waning enthusiasm for political competition.

African businesspeople interviewed by Africa Confidential share activists' misgivings about Trump for more pragmatic reasons: that he would be likely to cut Africa's quota-free access to the US market and ramp up immigration restrictions.


SOUTH AFRICA: Madonsela's report shakes up the President
The damning findings of newly-retired Public Protector, Thuli Madonsela, in her 355-page report on President Zuma's relations with the Gupta family will reverberate across the political scene this week.
First off, the opposition Democratic Alliance has tabled a motion of no-confidence in parliament on 10 November. There is growing pressure for that vote to be held under secret ballot – as such votes are held in Germany — to allow MPs from the governing African National Congress to vote according their consciences, not party diktat. Given the number of senior ANC officials and supporters who have called for President Zuma's resignation in recent weeks, the vote could be a closer this time. It may also reinforce pressure for Zuma to stand down voluntarily and hand over to Deputy President Cyril Ramaphosa before the ANC's elective conference, due before the end of next year.

Zuma is yet to react publicly to Madonsela's report, other than when speaking to his base in KwaZuluNatal over the weekend he remarked that the courts were undermining democracy in the country.

But Zuma's office will have to respond to Madonsela's recommendations to him and Chief Justice Moegoeng Moegoeng that a Judicial Commission should be set up to examine in detail the claims that Zuma's relations with the Guptas have contravened the law. Moegoeng will need little encouragement: after the Constitutional Court ruled in March that Zuma would have to repay part of the costs borne by the state for the upgrade of his homestead in Nkandla, Moegoeng commented: 'Public office bearers ignore their constitutional obligations at their peril.'

In attempt to prevent the matter dragging on, Madonsela proposed the judicial commission should complete its report within 180 days. The next move is Zuma's but it is difficult to see how he could reject the call for a judicial probe, given his personal involvement in the matter.


SOMALIA: Jihadist attacks derail election timetable and raise questions on future of peacekeeping units
Regional governments with troops in Somalia – Ethiopia, Kenya and Uganda – together with Western powers are reviewing their options following the brief seizure of Qandala in Puntland by Islamic State, or Da'ish, in the week ending 5 November. This follows wider concerns about cuts in European Union funding for the African Union Mission in Somalia (Amisom) and pressure on Britain (which is due to leave the EU after this year's referendum) to step its funding for the mission. Britain will be hosting another international conference on Somalia in the first quarter of next year, its Minister for Africa, Tobias Ellwood, told Africa Confidential.

This week strategists will decide whether to co-ordinate an offensive against the Da'ish contingent in Somalia, which is also at loggerheads with the Al Qaida-affiliated Al Shabaab. We hear that the options US airstrikes against the Da'ish positions, a ground offensive, or both. Puntland President Abdiweli Mohamed Ali Gas has 'declared war' on ISIS. Morale in Amisom is low partly due to financial constraints as the European Union cuts funding, and partly due to a series of deadly attacks launched by Al Shabaab to derail the elections.

Ethiopia has been withdrawing some of its troops in Somalia to help deal with its internal crisis but it insists it will not withdraw the troops assigned to Amisom for now.

This comes a particularly bad time for the elections for a new legislature and president which are running several weeks behind schedule. It's now looking unlikely that there will be a new parliament in place to elect a new President on 30 November as the current timetable dictates.


GHANA: Disqualified presidential candidates given a second chance
The High Court in Accra ruled today that 12 of the 13 presidential candidates who had been disqualified due to errors in their nomination forms are to be given another two days to correct them. Speaking in London on 4 November, Charlotte Osei, Chairwoman of the Electoral Commission, said she didn't think that a short extension of the nomination period would mean a postponement of the presidential elections due on 7 December.

Timing of the presidential election could prove a sensitive matter, especially given the opposition candidates' shortage of funds and their problems in sustaining a longer campaign.


MOZAMBIQUE: As economy stutters, another round of political talks
Despite the 8 October assassination of Jeremias Pondeca, a member of the Renamo negotiating team with Frelimo, the efforts of the mediators continue. On 10 November, they present their plans for some form of regional powers for Renamo, to the joint commission.

Last week, financial ratings agencies judged Mozambique to have the most unsustainable debt obligations in the world, worse even than Venezuela's.


ZIMBABWE: Detested bond notes on the streets this week
President Robert Mugabe's government is due to go ahead with the issue of $200 million worth of 'bond notes' – backed by the Reserve Bank but not convertible in international currencies – this week.
Opposition parties led by the Movement for Democratic Change are due to organise protests against the notes, describing them as a covert means of reintroducing the Zimbabwe dollar.

There are questions about the timing of the move as the supply of US dollars in the market continues to shrink. There were hopes that more use might be made of South Africa's rand as an alternative currency following a meeting between Presidents Mugabe and Jacob Zuma in Harare last week.
But there has been no official comment about a new agreement to boost the use of the rand in Zimbabwe. Currently less than a tenth of sales in Zimbabwe use the rand.

Despite its reported support for the bond notes issue, Afreximbank, an affiliate of the African Development Bank has made no public statement on the launch of the notes. Rumours of counterfeit bond notes in circulation have not increased confidence in the issue.

Thursday, 3 November 2016

Buhari's Delta plan

It was hardly a meeting of minds but President Muhammadu Buhari's discussions with Niger Delta state governors and community leaders in Abuja on 1 November marks a clear change of strategy. It was Buhari's first meeting with regional leaders since militants of the Niger Delta Avengers started attacking pipelines and production platforms in January, eventually cutting oil production by a million barrels a day. Oil ministry officials claim production is back up to around 2 mn. barrels.

The government is set to launch a new strategy of negotiations with grassroots organisations and a US$10 billion investment programme for education, health services, training and jobs. Deputy Oil Minister Emmanuel Kachikwu says much of the funding would come from outside the state treasury, mainly from local and international oil companies. But he concedes it will be difficult to raise substantial funds without getting the National Assembly to approve long delayed reforms to the oil industry.

Delta activists have told Buhari's officials there is little chance of stopping the militant attacks if military operations continue to be run by corrupt officers who benefit from various oil theft and piracy schemes. The first stage of the government's Delta strategy will be dominated by the US$200 mn. clean-up of Ogoniland, due to start in early 2017 with an initial group of projects costing $10 mn. It will be a critical test of the government's new policy in the Delta.

Monday, 31 October 2016

SOUTH AFRICA: Pressure mounts on ANC leaders as Prosecutor wobbles on case against Finance Minister

This week we start in the South African courts to watch the latest round of the proxy political battle between Finance Minister Pravin Gordhan and President Jacob Zuma; the Kenyan economy gets a vote of confidence from the World Bank; results in Côte d'Ivoire's constitutional referendum are expected early in the week; and the biggest foreign investor in Guinea's Simandou mine, Rio Tinto, is selling its 46% stake to Chinalco, one of the biggest resource companies in China. Finally, the chairwoman of Ghana's Electoral Commission, Charlotte Osei, is in Europe this week to discuss her efforts to ensure credible and peaceful elections in December.

SOUTH AFRICA: Pressure mounts on ANC leaders as Prosecutor wobbles on case against Finance Minister
The governing African National Congress faces another week of turmoil as State Prosecutor Shaun Ibrahim looks set to back down on his widely criticised attempts to lay fraud charges against Finance Minister Pravin Gordhan. Several senior ANC figures are giving strong support to Gordhan, questioning the motives behind Ibrahim's threatened prosecution.

Many political insiders believe that Ibrahim, an ally of President Jacob Zuma, is part of a campaign to stop the Finance Minister's probe into state corruption and patronage. Unless Ibrahim calls off the case, Gordhan is due in court on 2 November to face charges of fraud for approving an early retirement deal for a senior staffer at the National Revenue Service.

As the Gordhan case plays out this week, ANC leaders are mulling a new report prepared for the party's National Executive Committee which calls for President Zuma to resign. The report includes trenchant criticism from party's branches of the leadership's lack of accountability, in particular Zuma's close personal relations with corporate interests.

KENYA: Mixed signals as Kenyatta tries to boost economy ahead of next year's election
Against the trend of slowing economies in much of the rest of Africa, Kenya's farming and tourism sector are growing faster and bringing in more foreign investment. On 31 October, the World Bank announced that Kenya's economy should grow this year by 5.9% against an earlier forecast of 5.6%.
President Uhuru Kenyatta's government says the final growth figure should be 6% for this year and will rise to 7% next year. Facing a tough election next August, with veteran oppositionist Raila Odinga among the leading challengers, Kenyatta is keen to claim economic successes.

Although Kenya is Africa's fastest growing retail market and one of the region's most diversified economies, its tea production is falling short of the government target – 500 million kilograms – because of a regional drought. Kenya is the world's biggest tea exporter. Coffee production has also been hit by the drought.

And despite big investments by France's Carrefour and the United States' Walmart into Kenya's retail sector, two local supermarket chains – Nakumatt and Uchumi – are restructuring after hitting serious financial problems.

COTE D'IVOIRE: Opposition boycott undermines constitutional referendum
A proposed new constitution which dilutes the nationality qualification for presidential candidates and strengthens executive powers is likely to go through after the 30 October referendum. But the organisation of the referendum and the drafting of the new constitution have been lambasted by civic activists and opposition parties which boycotted the referendum.

They are eagerly waiting to see what percentage of the country's 6.3 million registered voters turned out on 30 October. Critics say the new constitution was rushed through – Ivorians had just two weeks to debate its provisions before the referendum – and serves the interests of President Alassane Ouattara, above all else.

The new constitution allows  a candidate with just one Ivorian parent to run for the presidency; the previous constitution of 1999 stipulated that both parents should be Ivorian. This created problems for Ouattara as his opponents claimed that at least one of his parents came from neighbouring Burkina Faso.

Opposition parties insist that Ouattara's election as President in 2010 and 2015 was illegitimate. They add that the new constitution is designed to weaken the power of parliament.

Under the new constitution Ouattara will be able to appoint a Vice-President who will succeed him should he resign. It also allows the President to appoint a third of the members in the Senate, and establishes a national house of traditional rulers which might further weaken the power of the elected chambers.

GUINEA: Rio Tinto sell stake in world's biggest ore mine to China
After two decades of political fights and lawsuits, Rio Tinto is leaving Guinea, having sold its 46.6% stake in the Simandou iron ore mines for an estimated US$1 to 1.3 billion to Chinalco, one of China's biggest resource companies.  The development of Simandou, the world's biggest iron ore mine, could double the size of Guinea's economy but investors have struggled to raise funds to build a 1,000 kilometre railway linking the site to a seaport.

The decision to quit was made by Rio's new managing director Jean-Sebastien Jacques who said his company was struggling raise money for the project. Company officials could take another six months to finalise the deal under which Rio would be able to recoup much of its estimated $1.4 bn. investment in the project.

The sale will not directly affect the complex three-way legal fight between Rio and its erstwhile partners in Guinea, Brazil's Vale and Swiss-based Beny Steinmetz Resource Group in which each side accuses the other of fraudulent practices.

GHANA: Appeals from disqualified candidates could delay presidential election due on 7 December
Charlotte Osei, the chairwoman of Ghana's Electoral Commission, is due to address a meeting of the Royal African Society in London on 2 November, as 13 opposition candidates are protesting their disqualification from the elections. The two leading candidates – President John Mahama and Nana Addo Akufo Addo of the New Patriotic Party – are the front runners in the presidential elections on 7 December and have not got involved in this latest controversy.

The Commission ruled that the 13 presidential candidates would be ineligible because of mistakes and duplications in their applications forms. The disqualified candidates include Nana Konadu Agyeman Rawlings, wife of former President Jerry Rawlings, and Paa Kwei Nduom, an Nkrumahist candidate who leads the Progressive People's Party.

Rawlings and Nduom, along with some of the other candidates are contesting their disqualification in a petition to the High Court. Although the Commission insists its decision is final, it agrees that the Court appeal process must be completed before the elections are held.

Tuesday, 25 October 2016

BURUNDI | KENYA | SOUTH AFRICA: African states start exodus from International Court

This week, top officials at the International Criminal Court are in urgent talks with the governments of South Africa, Burundi and Kenya about plans for a mass withdrawal from the Court. Reeling from targeted assassinations and a weakening economy, Egyptian President Abdel Fattah el Sisi's government is likely to crack down still harder on opposition groups as it tries to negotiate a US$12 billion loan from the International Monetary Fund. Another big economy in trouble, Nigeria, is in talks for a migration-investment pact with the European Union this week and Zimbabwe is set to continue with efforts to repay all its arrears to the international financial institutions. Finally, Burkina Faso has sent a request to the French government to make available their classified files on the 1987 coup in Ouagadougou as part of its probe into the ousting and killing of Thomas Sankara.

BURUNDI | KENYA | SOUTH AFRICA: African states start exodus from International Court
This week the International Criminal Court (ICC) will have to start its fightback after suffering its most serious political blow after South Africa announced on 21 October that it wants to quit. The issue is likely to dominate the ICC's Assembly of States Parties meeting on 16-24 November in the Netherlands.

South Africa's announcement came three days after Burundi's President Pierre Nkurunziza, who faces an investigation by the court for war crimes, signed a decree to take Burundi out of the court.
And in Kenya, a bill that would take the country out of the ICC is slowly making its way through Parliament. It has strong backing from the governing Jubilee party of President Uhuru Kenyatta and Vice-President William Ruto, both of whom faced charges for crimes against humanity in the court. In both cases, the charges were dropped after several witnesses changed their testimony, disappeared or were found dead. Jubilee faces presidential and parliamentary elections next August; the opposition Orange Democratic Movement, led by Raila Odinga, still supports Kenya's membership of the ICC.

In all cases there is strong political opposition to what are seen as personal decisions by Presidents. The legitimacy of President Nkurunziza's election to a third term is widely contested in Burundi and beyond. More than 470 people have been killed in political clashes and targeted assassinations since Nkurunziza won a disputed election last year.

And in South Africa, the decision to quit the court is widely seen as having been taken by President Jacob Zuma and his closest political allies, a faction that is rapidly losing support within the governing African National Congress. President Zuma was embarrassed when the Pretoria High Court ordered his government to arrest Sudan's President Omer Hassan el Beshir who was in South Africa to attend the African Union summit in June 2015. President Omer, who has been charged by the ICC with genocide and crimes against humanity in Darfur, refuses to recognise the Court. South Africa's Supreme Court later upheld the High Court's arrest order and criticised the country's security agencies for allowing Sudan's President to fly back to Khartoum.

The decision to quit the ICC is likely to have been discussed when President Zuma visited President Kenyatta in Nairobi on 11-12 October. Despite the opposition to the move in all three countries, issues such as jobs, inflation and security loom much bigger on the political scene. South Africa's political weight means that Fatou Bensouda, the ICC's Prosecutor, will have to struggle to persuade the Zuma government to change its mind and to stop other countries following suit.

EGYPT: Political perils deepen in step with economic crisis
The killing of General Adal Rajaaie, the commander of an armoured division in northern Sinai, on 22 October in a Cairo suburb was the latest in a series of targeted assassinations of top officials in President Abdel Fattah el Sisi's government. A militant Islamist group called Louwaa el Thawra claimed responsibility for the attack.

Egyptian soldiers are fighting an insurgency backed by Islamic State in northern Sinai, at a time when the organisation's other bases in Libya, Iraq and Syria are facing heavy attacks from local and western forces.

National politics in Egypt are also coming under pressure. The Hasm Movement has been assassinating top state officials in what it calls revenge attacks on prosecutors and security officials following the toppling of Islamist President Mohammed Mursi in mid-2013.

Unarmed opposition groups are said to be planning a day of protest on 11 November against worsening economic conditions: inflation is over 14%, electricity prices went up by 25-40% in August, the government is introducing a 13% value added tax and there is a foreign exchange crisis.

NIGERIA | EUROPEAN UNION: New talks on migration-investment trade off
As French police start an operation on 24 October to dismantle a camp housing over 10,000 migrants near Calais, talks are due to begin In Abuja between European Union and Nigerian officials about a new migration pact.

EU officials are asking Nigerian officials to sign up to a deal that would commit them to accepting the return of all their country's nationals arriving in Europe without legal papers and who are not eligible for political asylum. Over 130,000 illegal migrants have arrived in Italy this year; most of them came from Nigeria according to Italian officials.

The trade off is that the EU would redirect some US$8 billion of development aid to road and power projects in Nigeria and neighbouring countries as part of efforts to boost economic conditions in the region and deter migrants.

ZIMBABWE: Harare pays off arrears to IMF in hope of getting fresh loans
Following its repayment of US$108 million of arrears to the International Monetary Fund on 20 October, the Zimbabwe government is edging closer to a deal to take on new international loans as the economy continues to deteriorate. More than four million people need food aid, about 80% of the working population are unemployed and there is a chronic shortage of US dollars which are country's main currency.

Mass opposition is growing to the government's plans to introduce bond notes, a state-backed non-convertible currency designed to ease the dollar shortage.

Further complicating matters, Finance Minister Patrick Chinamasa's strategy of re-engaging with international financial institutions is rejected by a rival faction within the ruling Zimbabwe African National Union-Patriotic Front.

Chinamasa still has to find ways to raise funds to repay some $600 mn. of arrears to the African Development Bank and about $1 bn. to the World Bank before substantive talks can start on new loans.

BURKINA FASO: Government demands secret files on French role in the coup that overthrew Thomas Sankara
This week the French government is to consider a request to hand over classified files on its role in the 1987 coup in Burkina Faso. The request made by President Roch Kabore's government, which is continuing with a probe into the coup, includes a list of French officials that the Burkinabe investigators want to interview.

A leading target in Burkina Faso's investigation is Blaise Compaoré, the former President who was ousted In October 2014 after tens of thousands of demonstrators mobilised in the capital to protest against his attempts to extend his term in office. Compaoré has now been given asylum in neighbouring Côte d'Ivoire.

Friday, 21 October 2016

Costs of migration

With average economic growth rates in African economies sinking to around 1.6% next year and conflict worsening, European Union officials are holding a summit on migration in Brussels on 20 October (see Pointer, Shifting borders south).

They want African governments to tighten border controls. One proposal suggests countries that cooperate with EU border restrictions and accept returned migrants would win higher levels of development aid and market access. Those which don’t would face economic penalties. The drafters of that policy will struggle to explain how further impoverishing countries with high levels of migration is going to improve regional stability.

The first deal, the Rabat Process in 2006, aimed to staunch the flow of West African migrants through Morocco en route to southern Europe. A much more-criticised deal known as the Khartoum Process was struck between the EU and the governments of the Horn of Africa in 2014. Human rights campaigners say that returning migrants to such countries especially to Sudan, could break EU human rights law.

On 10 October, German Chancellor Angela Merkel arrived in Addis Ababa to meet Ethiopia's Prime Minister Hailemariam Desalegn. The previous day, Hailemariam had announced a state of emergency following political clashes in Oromia in which more than 500 people died. Days earlier, the Ethiopian government had dropped its earlier refusal to accept the return of its nationals deported from Europe.

Tuesday, 18 October 2016

NIGERIA: Cacophony in the cabinet ahead of fund-raising trip

Some local difficulties have broken out in Abuja ahead of another investment roadshow by Nigeria and there is new and dramatic twist in the trial of strength between South Africa's President Jacob Zuma and his Finance Minister, Pravin Gordhan. The crisis in Ghana at Obuasi, one of the biggest gold mines in the world, is getting worse with over 18,000 illegal miners operating there. The UN has condemned an attempted putsch in Tripoli which it says will set back its attempts to broker the formation of a national government in Libya.


NIGERIA: Cacophony in the cabinet ahead of fund-raising trip
First Lady Aisha Buhari's criticism of her husband's government in a no holds-barred interview with the BBC on 14 October has deepened concerns over policy as Abuja's economic team continues its fund-raising tour with an investment conference in London set for Friday (21 October).

Mrs Buhari told the BBC Hausa service that unless things improved she would not campaign for a second term for him. Anonymous government officials tried to downplay the interview as a 'family affair'. That didn't work.

Then, President Muhammadu Buhari, questioned at a press conference in Berlin with German Chancellor Angela Merkel, tried to make light of it by saying, 'I don't know exactly what party my wife belongs to. Actually, she belongs in the kitchen, the living room and the other rooms in my house.' That put the President in a deeper hole. His press office passed it off as banter.

Although Nigerians have been enthusiastically debating Mrs Buhari's comments, poor economic conditions dominate much media comment. Budget Minister Udo Udoma said the government plans to sell off some $15 billion worth of state assets when he opened discussions on the 2017 budget in the National Assembly last week. Finance Minister Kemi Adeosun, who is set to address the London conference, plans to raise some $4.5 bn. in the markets over the next 18 months.


SOUTH AFRICA: Reports of the Guptas' $480 million payments raises stakes in Zuma's legal battle
The Treasury may have scored a palpable hit in the latest battle with President Jacob Zuma and his business allies in the Gupta family. On 14 October Finance Minister Pravin Gordhan filed a Financial Intelligence Report, which questioned some $480 mn. of transactions by the Guptas, with the Pretoria High Court. The affidavit, first revealed by the amaBhungane Centre for Investigative Journalism, has now obtained wider circulation (a certified copy of Gordhan's affidavit is appended here for your interest).

Gordhan is asking the court to issue an order declaring that he cannot interfere with the decision by commercial banks to close down the accounts of the Guptas' holding company. Zuma's allies, including Mineral Resources Minister Mosebenzi Zwane, have been trying to pressure Gordhan to compel the banks to reopen the Guptas' corporate accounts.

This follows days of tension leading up to Public Protector Thuli Madonsela's planned release on 14 October of an investigative report on the Gupta family's political and business influence in South Africa. A last-minute court application by President Zuma delayed the publication of the report. Zuma's lawyers were insisting that he should be able to question witnesses and see any evidence that might implicate him in wrongdoing.

However, several senior African National Congress figures are calling for the release of Madonsela's report as soon as possible. Over the weekend, Deputy President Cyril Ramaphosa came out with his strongest endorsement of Gordhan to date.


GHANA: Claims of election link to Obuasi gold-miners
Over 18,000 illegal gold-miners are working at the Obuasi mine in central Ghana, despite repeated requests by the owners, AngloGold Ashanti, to the government to stop them. Hundreds of illegal artisanal miners have been killed or maimed so far this year in their hazardous operations.

In May, AngloGold Ashanti registered a case against Ghana at the International Centre for Settlement of Investment Disputes in Washington after the government withdrew security guards from the mine as part of a politically-inflected dispute with company.

The Ghana Minerals Commission gave the illegal miners, known locally as galamsey, until 10 October to leave the mine. But the order was not backed up by any state security officials.

Mining industry officials say that the governing National Democratic Congress fears the potential impact of any mass eviction of miners on the national elections, which are due on 7 December. Some officials claim that the illegal miners are sponsored by senior politicians, from all parties, seeking seeking to raise money for campaigning. Yet none of the political parties have produced plans to create alternative work for the illegal miners. So the crisis, along with its injuries and deaths, drags on.


LIBYA: Would-be putschists target UN-backed government in Tripoli
The United Nations suffered another setback to its bid to broker a political settlement in Tripoli when the Government of National Accord (GNA), which it supports, was the target of an attempted coup in the capital on 14 October.

The coup-plotters, led by former premier Khalifa Ghwail, took over the Rixos Hotel in Tripoli, where the GNA's state council was meant to establish itself. Ghwail accused the GNA of forfeiting the right to rule because of its repeated failures.

For now there is a stand-off in Tripoli with some militias backing the GNA and others Ghwail. MPs elected to the parliament based in Tobruk, eastern Libya, who are expected to meet on Monday (17 October), are watching developments in the capital closely. Forces loyal to the eastern-based army commander, Khalifa Haftar, have captured most the country's oil ports in recent weeks.

Tuesday, 11 October 2016

UNITED NATIONS: Tackling migration will be top priority for Guterres after he wins Secretary General job

This week we start on the international scene with the election of a new Secretary General of the United Nations and a report from the annual meetings of the International Monetary Fund and the World Bank in Washington DC. In Ethiopia, Prime Minister Hailemariam Desalegn has announced a six month state of emergency after weeks of clashes between police and protestors. Two of Africa’s biggest economies, Egypt and Nigeria, both face intensifying pressures on their currencies. In Morocco, the main Islamist party is struggling to find other parties willing to work with it in a parliamentary coalition and in Zimbabwe, opposition leader Joice Mujuru says she can lead a grand alliance against President Robert Mugabe’s ailing government.

UNITED NATIONS: Tackling migration will be top priority for Guterres after he wins Secretary General job
The UN Security Council is due to confirm António Guterres, Portugal’s prime minister from 1995-2002, as the next Secretary General of the UN in a special session on 13 October. All 15 members of the Council have indicated their support for Guterres and will then send their recommendation to the 193-member UN General Assembly.

Diplomats in New York say that one of the main tasks for Guterres, who was UN High Commissioner of Refugees from 2002-2012, would be to lead UN strategy on tackling the biggest wave of refugees and migrants since the end of the Second World War. Last month, the UN hosted a special conference on migration but key decisions were deferred for another two years.

Meanwhile European governments are stepping up efforts to negotiate agreements with their counterparts in Africa and the Middle East to strengthen border controls and crack down on people smuggling. This week German Chancellor Angela Merkel is visiting Mali, Niger and Ethiopia to discuss ways in which her country’s development aid can be used to discourage migration.

IMF/WORLD BANK: Policy shifts urged as growth falls to 20 year low
Top officials of the International Monetary Fund and World Bank set out tough policy prescriptions for Africa’s finance ministers at their organisation’s annual meeting on 7-8 October in Washington DC. The average growth forecast for Africa has fallen to 1.6% this year, its lowest level for 20 years, but several countries with more diversified economies are bucking the trend.

Those countries include Ethiopia, Rwanda, Tanzania, Côte d’Ivoire and Senegal, according to the World Bank’s Africa economist Albert Zeufack and Vice-President for Africa Makhtar Diop. At a special session on Africa on 7 October, they argued that countries would have to toughen fiscal and monetary policies, strengthen state institutions and diversify exports in response to the global commodity slump. The Bank is forecasting a modest rebound to 2.9% growth for African economies next year.

IMF officials also had a tough message about cracking down on public spending for governments – such as Mozambique, Kenya, and Zambia – seeking fresh loans.  All three countries have been borrowing heavily from the commercial market, raising questions about the sustainability of that strategy.

ETHIOPIA: Government declares state of emergency as German Chancellor due in Addis Ababa
One of Africa’s best performing economies and widely praised by the IMF and World Bank, Ethiopia has announced a six-month state of emergency after weeks of protests which have left hundreds dead. Prime Minister Hailemariam Desalegn says his government would use the time to introduce reforms and open talks with opposition parties.

German Chancellor Angela Merkel was due in Ethiopia on 10 October. With its economic gains and its sharpening political conflicts, Ethiopia will show Merkel the complexity of the migration crisis in the Horn of Africa. Protestors have been attacking foreign-owned flower farms and factories, including one owned by Nigerian magnate, Aliko Dangote.

NIGERIA/EGYPT: Currency woes multiply and dollar shortage worsens
Two of Africa’s biggest economies are facing some common ailments – the crashing of their national currencies in the face of an acute shortage of dollars and political unrest. As their foreign reserves come under more pressure, both countries are struggling to stabilise their currencies.

Egypt’s pound fell to 14 to the US$ in the week ending 8 October. That’s 60% weaker than the official rate fixed by the central bank in March. And Nigeria’s naira was trading at N475 to the US$ on the parallel market last week, a 40% loss of value since June when the central bank allowed a managed float of the currency.

MOROCCO: After winning the most parliamentary seats, Islamists face growing hostility
After winning 125 seats in parliamentary elections, the Islamist Parti de la justice et du développement is the biggest party in the 395-seat legislature but will struggle to form a coalition because so many other parties refuse to work with it.

Second in the polls was Parti authenticité et modernité led by Mustapha Bakkoury with 102 seats, it says it is not willing to share power with the PJD and would rather go into opposition. The conservative Istiqlal (Independence) party which won 46 seats, pulled out of a coalition with the PJD in 2013 and its feisty leader Abdel Hamid Chaba doesn’t appear keen to resume the collaboration.

ZIMBABWE: Opposition leader Joice Mujuru fires up diaspora in campaigning trip to Britain
Facing a deepening national crisis, opposition parties in Zimbabwe have to work together and prepare for power, opposition leader Joice Mujuru told Africa Confidential in London on 7 October. The country was facing an economic meltdown, she said, after attempts to negotiate a settlement over payments arrears with the IMF had run into the ground in the face of a chronic shortage of foreign exchange.

As a former Vice-President of the ruling Zimbabwe African People’s Union-Patriotic Front (ZANU-PF), Mujuru faced both some cheers and hostile questioning during her trip to Britain, when she spoke at the Chatham House foreign affairs think tank and to groups of Zimbabweans around the country.

She says her party, Zimbabwe People First, should have half a million members by the end of the year. Many of them are disillusioned supporters of ZANU-PF who are desperate for economic and political change. But she added she is working with all the main opposition parties for a unity platform.

Thursday, 6 October 2016

Doubts on the data

Over the past month, the World Bank, the International Monetary Fund and McKinsey Consulting have finally junked their message of an economically rising Africa. The IMF cuts its 2017 forecast for Nigeria and South Africa to 0.6% and 0.8% respectively, their lowest level for two decades. The messy struggle for the succession in South Africa and two insurgent groups in Nigeria are exacerbating the economic woes.

The World Bank mirrors the IMF's statistical gloom about economic prospects but its newly re-elected President, Jim Yong Kim, wants a more public focus on critical health indicators such as malnutrition and stunting of children. India (47% of children are stunted), Pakistan (45%) and Congo-Kinshasa (43%) have some of the worst records in the world. McKinsey urges a new concentration on African companies, 400 of which generate more than US$1 billion a year in revenue. Investing in these companies will boost wages and taxes but also promote innovation and new technology.

However, the Mo Ibrahim Foundation sounded a sombre warning with a review of the first decade of its governance index. It records an improvement in governance in 37 countries, home to some 70% of the people on the continent. For 78% of people, participation and human rights have improved. But many measures are heading the wrong way: corruption and bureaucracy worsened by an average of 8.7% and in two-thirds of countries, there has been a marked decline in the freedom of expression.