Thursday, 21 January 2016

The missing oil money

Even in the annals of Nigerian corruption scandals, the latest revelations about the diversion of state funds under the presidencies of Goodluck Jonathan and Umaru Musa Yar'Adua are breaking records. On 18 January, Information Minister Lai Mohammed announced that 55 people had stolen 1.3 trillion naira (US$6.5 billion) in 2006-13. He said the miscreants included 15 former state governors.

Last year's audit of oil operations failed to explain how at least $10 bn. of export revenue had not been transferred to the Federation Account. Last September, Deputy Oil Minister Emmanuel Kachikwu said international oil companies had been overpaid some $10 bn. through a system of tax breaks and over-invoicing on services costs.

Arms deals were the other favoured means to divert state funds. Investigations of two parallel procurements continue: the first targets Colonel Sambo Dasuki, former National Security Advisor, who is accused of presiding over $2 bn. of fraudulent arms deals which allowed Jonathan's government to fund its 2015 election campaign. Then in another $2 bn. arms scandal, ten generals and a colonel are in the frame for running another corrupt network.

The week's revelations have raised two questions for a nearly unshockable Nigerian public: how far into the heart of the Jonathan government will these investigations go? And most pertinently for the future, where are the institutional constraints to stop the same thing happening again?

Thursday, 7 January 2016

Africa in 2016

We start 2016 with our annual forecast of political, economic and security developments over the coming year, to complement our usual look in the rear view mirror. We concur with the view of the American baseball star Yogi Berra, who died in September, that: '…it’s tough to make predictions, especially about the future.’ That said, we think it's important to look both at the emerging context and the political scenarios that could play out across the diverse 55 countries that make up Africa.

This special issue looks forward in Nigeria, Ghana, South Africa, Kenya, Mozambique and eleven others. It's another election year with important votes in Ghana, Uganda, Zambia, Congo-Kinshasa and South Africa, and fresh political challenges in many other countries. The economic backdrop will be the toughest for more than a decade: the sharp fall in commodity prices, which hits oil exporters hardest, mainly linked to China's economic slowdown but already driving finance ministers to borrow and tax more.

Harsher economic conditions have prompted some governments to revert to authoritarian tactics, reminiscent of the one-party state era. Yet now these are crashing up against far better organised and technologically savvy civic activists who are demanding far more accountability from government. Expect to see some important tests of that power in countries such as Kenya, Ghana, South Africa and Nigeria this year.