Thursday, 25 August 2016

Zuma emboldened

Predictions that President Jacob Zuma will redouble efforts to regain control over policy and patronage after the African National Congress's losses in the municipal elections (see Feature, Zuma carries on regardless) are fast proving accurate. On 22 August, Zuma loyalists said they had expected him to announce a ministerial reshuffle, well ahead of the ANC's special conference to pick its presidential candidate for 2019. Finance Minister Pravin Gordhan and Higher Education Minister Blade Nzimande were said to be in danger. Both have clashed with Zuma.

Zuma's allies expect him to use a special committee to reassert executive control over the management and budgets of state-owned companies. This would allow him to overrule Gordhan's opposition to a financing deal for South African Airways proposed by Dudu Myeni, a Zuma ally who chairs the airline's Board.

There are bigger projects at stake in this contest, such as Zuma's support for multi-billion dollar contracts with Russian contractors to build nuclear power stations. However improbable it looked in the wake of the ANC election losses, Zuma and allies are pressing ahead. The Hawks, the police investigative unit close to Zuma, summoned Gordhan on 25 August and told journalists they were about to arrest him for setting up an illegal surveillance unit when he ran the tax authority. As news spread, the rand nosedived and talk of a financial ratings downgrade revived. Duelling with Gordhan could prove Zuma's biggest gamble.

Wednesday, 24 August 2016

SOUTH AFRICA: In the cities, ANC starts a new life in opposition

This week elections dominate our list of things to watch: the recent past, in the case of South Africa, where the ANC comes to terms with its loss of power in the big cities; the present, in Ghana, where the governing National Democratic Congress has just launched its campaign ahead of the national elections on 7 December; and the perhaps indeterminate future in Congo-Kinshasa where President Joseph Kabila is trying to delay elections due in November. And then, for the optimists, there are a few green shoots of recovery in Nigeria where some foreign investors are returning and there are hopes of oil production and prices going back up.

SOUTH AFRICA: In the cities, ANC starts a new life in opposition
Post-election bargaining has enabled the Democratic Alliance to win control of the country’s three main municipalities – Johannesburg, Tshwane/Pretoria, and Nelson Mandela Bay (which includes Port Elizabeth) – where no party won an absolute majority.

Along with its continuing control of Cape Town, the DA now runs four out of the five biggest cities in South Africa, with the African National Congress in charge in Durban, capital of KwaZulu-Natal. The DA won the most votes in Nelson Mandela Bay and the ANC quickly conceded control. But the post-election jockeying in Johannesburg and Tshwane/Pretoria and adjacent municipalities has taken much longer, with ANC politicians putting up more of a fight.

In particular, the ANC’s Parks Tau, who has been mayor of Johannesburg since 2011, battled hard to make a deal to give him a second term. The decisive factor was the Economic Freedom Fighters, in third place with 8% of the vote, which used its position to back the DA as the ‘lesser evil’ against the ANC.

CONGO-KINSHASA: Opposition strike echoes anti-Mobutu campaign of the 1990s
The opposition alliance launched its national strike with some success on 23 August as the next step in its campaign to force President Joseph Kabila to step down at the end of his second term in November, as set out in the constitution. Discreet support for this campaign from several Western countries including the United States and France has given the opposition a fillip.

Older Congolese say the opposition’s campaign resembles the tortuous efforts to depose the long-time late dictator Mobutu Sese Seko in the 1990s. A leading figure then and now, Etienne Tshisekedi, has returned to the political stage, after a long respite in Belgium, to mobilise his loyal supporters.

But this time much will depend on how much support the strike gets across the country. If it extends to the economically critical copper and cobalt mining industry, the campaign could start to put real pressure on the Kabila government. If that happens, the government’s response could become much tougher. After the strike was launched police fired tear-gas in the Limité area of Kinshasa, where many of Tshisekedi’s followers live.

NIGERIA: Come on in! The devalued water is lovely, say investors
As US Secretary of State John Kerry was meeting President Muhammadu Buhari in Abuja on 23 August on regional security matters, some glimmers of economic hope started to filter in.
Prior to the meeting with Buhari, Kerry had used a speech at the palace of the Sultan of Sokoto to call for better international coordination in the fight against political and religious extremism, but added critically that all governments had to do more to promote social inclusion, and educational and economic opportunities.

Kerry was speaking as Nigeria grapples with its worst recession for two decades and the Buhari government faces criticism from Western officials for its reluctance to end fuel subsidies and allow the naira to depreciate.

Yet two months after the government allowed the naira to float, two major financial institutions – Standard Bank and Exotix – are advising their clients to start buying naira assets again. After falling to a record US$1=N320 in mid-August, the naira has started to strengthen again. Other banks and financial advisors are said to be cautiously following suit. Two unconnected pieces of good news might also tempt investors: global oil prices are edging upwards again and, after many conflicting signals, the Niger Delta Avengers militant groups appear to be ready to talk to, if not negotiate with, the government.

GHANA: IMF passes judgement on government in midst of election campaign
With Ghana facing one of its most closely-fought elections on 7 December, the International Monetary Fund has been dragged into the middle of the campaign which will focus on the government’s economic record. An IMF report in June had already recommended deep cuts in state spending to reduce the fiscal deficit; a tough demand for Finance Minister Seth Terkper in the run up to elections.

When President John Mahama launched his re-election campaign in Cape Coast, one of the key swing areas, on 21 August, he talked up his government’s investments in education, healthcare, transport and electricity.

His opponent, Nana Addo Akufo Addo, flagbearer for the opposition New Patriotic Party accuses Mahama of mishandling the economy, allowing debt to grow to 71% of the country’s gross domestic product, and presiding over a regime of wasteful and sometimes corrupt state procurement. Mahama insists the country’s electricity crisis has been addressed but Akufo Addo says any improvements in supply have been achieved by short-term and over-priced projects. Although most voters will not delve into the technicalities of these issues, the main interest is the country’s economic direction: up or down. That gives a huge political importance to the IMF’s verdict.

On 22 August, IMF officials announced that following discussions with the Ghana authorities on the country’s fiscal outlook for the rest of the year it will present a review to their executive board in mid-September. Under IMF procedures, this is will be made public and is likely to be dragged into the election campaign by both sides.

Insiders expect the IMF report to be broadly positive after its board delayed a fourth disbursement of some $115 million, out of a multi-year loan of $918 mn., in June and demanded further cuts to public spending.

Wednesday, 17 August 2016

ZAMBIA: Lungu wins by a whisker as opposition cries foul

This week we consider the recent elections in Zambia and South Africa and a new opposition alliance in Ethiopia, while President Salva Kiir changes his mind again about the prospect of more foreign troops to keep the peace in South Sudan.

ZAMBIA: Lungu wins by a whisker as opposition cries foul
Backers of President Edgar Lungu rejoiced and waved party banners after the electoral commission announced on 15 August that he had held the presidency with 50.35% of the votes, and won himself a full, four-year term in State House. Supporters of challenger Hakainde Hichilema, who polled 47.63% of the votes, took to the streets to protest at what they called an 'electoral coup'.

International dignitaries called for calm while police said in Lusaka that they had arrested over 150 protestors across the country, mainly from Hichilema's United Party for National Development, after clashes over alleged rigging on 16 August. On 13 August, observers from the European Union were excluded from the counting process which, they pointed out diplomatically, may have reduced confidence in the results.

The next step is for Hichilema to file a formal complaint to the Constitutional Court detailing his vote-rigging claims but it's not clear whether that will delay plans for Lungu's presidential inauguration. Meanwhile, the government negotiates with the International Monetary Fund for desperately-needed finance to compensate for falling export revenues.

SOUTH SUDAN: Salva drops opposition to bigger UN force
After fiercely opposing 'interference' by foreign forces in South Sudan, and hastily convening demonstrations in Juba to back his stance, President Salva Kiir has now said he no longer opposes the United Nations Security Council decision to send an additional 4,000 troops to bolster the UN Mission in South Sudan (UNMISS). But he claimed the right to discuss the UN plan for an unspecified period before the government makes a formal response.

Some senior figures in the government army are strongly opposed to a bigger and stronger UN force, not least because the sacked Vice-President, Riek Machar, says he and his allies will not return to Juba in its absence. Salva is coming under increasing international pressure since detailed reports emerged of widespread atrocities by government soldiers during the shoot-out last month with Riek's forces and in the aftermath. Human Rights Watch this week released a devastating report on murders and rapes it says were committed by soldiers under the command of General Paul Malong Awan and President Salva which will be hard to ignore.

ETHIOPIA: Formerly divided opposition faces lethal force in Addis demonstration
When protestors representing the Oromo and Amhara, the ethnic groups which make up some 60% of Ethiopia's 100 million people, took to the streets of Addis Ababa in protest last Friday, it was a milestone for the long-fragmented opposition. Police killed many, Amnesty International has claimed, as they quickly broke up the demonstration.

If this show of strength is repeated it could be a serious challenge to Prime Minister Hailemariam Desalegn's government. Hailemariam labelled the protests a security threat. Many see the unrest as the result of pent-up frustration in an opposition that has failed to win even a single seat in parliament. Until now the sometimes violent protests in Oromo, which exploded last November, and in Amhara, where the state also used maximum force, had been seen as local issues. The protestors' agenda appears to be widening to include demands for sweeping reforms of the land laws and of the political system.

SOUTH AFRICA: Hard bargaining as the ANC cedes power in post-election deals
The spectacular performance by Wayde van Niekerk, winning a gold medal in the 400 metres at the Olympic Games, among other stellar performances by South African athletes, was a welcome boost for a country battered by a weakening economy and concerns for its political future. Senior ANC figures are talking about the need for dramatic changes after the party's disastrous performance in the 3 August local elections and diminishing confidence in President Jacob Zuma.

Now, the ANC faces tough negotiations behind closed doors with its political opponents to form coalition governments in the 27 – out of 278 – municipalities where no party won an outright majority. The ANC's share of the vote fell to 53% from an average of 62% five years ago in national elections. Its nearest challenger is the centre-right Democratic Alliance whose leader Mmusi Maimane has won over substantial numbers of black voters.

In many of the most contested municipalities, the radical Economic Freedom Fighters, which scored an average national vote of about 8%, could play a kingmaker role. It's not clear how far the EFF and the DA can work together. Both parties announce their plans this week. But translating those into practical terms to share power in over 20 municipalities, whose total budgets are worth more than $10 billion, could take weeks and months of negotiations.

Wednesday, 10 August 2016

ZAMBIA: Presidential candidates trade claims on violence and vote-rigging as gap narrows in 11 August elections

This week we have important election stories – before and after – in Zambia, South Africa and Congo-Kinshasa. And there are new international efforts to get the two sides in South Sudan to implement their peace agreement ,while Nigeria's finance officials prepare to launch a big fundraising campaign.

ZAMBIA: Presidential candidates trade claims on violence and vote-rigging as gap narrows in 11 August elections
The two main rivals are accusing each other's parties of using violence as political tensions ratchet up before the presidential and parliamentary elections on 11 August. As the race tightens, the outcome this week could be as significant as Zambia's pioneering multi-party election which unseated founding President Kenneth Kaunda in 1991.

Presidential challenger Hakainde Hichilema of the United Party for National Development (UPND) has slammed the governing Patriotic Front (PF), claiming that it is using the state apparatus to ban opposition rallies and its party supporters to intimidate Zambians (AC Vol 57 No 16, Racing to the finish). Hichilema told Africa Confidential last month that a student wearing an opposition T-shirt had been beaten to death by PF activists.

Countering such claims, President Edgar Lungu told a local radio station on 1 August that opposition supporters were running riot and threatening national security. He added that he would be willing to take 'draconian measures' – including the suspension of some democratic rights – to restore order.

Some of the most serious clashes between government and opposition supporters have been on the Copperbelt, a mining region that has strongly supported the PF in recent elections. But there are signs that some voters there may switch to the Hichilema's UPND because of falling living standards. Mining companies have cut 10,000 jobs and ministers have been struggling to convince sceptics about the benefits of President's infrastructure investments.

The PF is using its well-financed election campaign machine to mobilise support in the biggest cities. After Lungu won by just 27,000 votes against Hichilema in January 2015 many activists believe the result could be even closer on 11 August.

SOUTH AFRICA: ANC mulls coalitions and falling city votes after local election losses
Top officials in the African National Congress face tough decisions about its loss of control over some of the richest and politically important local authorities in the country. Last week's local election results confirmed the ANC's declining support in towns and cities, which was identified over six months ago in an electoral report commissioned by the party's national executive committee (AC Vol 57 No 4, The ANC heads for the hills). The report warned of the dangers of the party abandoning the black middle class and urban youth and becoming too reliant on the rural vote.

After municipal elections on 3 August, the ANC controls just three of the country's eight biggest metropolitan areas.  Critically, it lost its majority in the commercial capital Johannesburg, the political capital Tshwane (Pretoria) and the Nelson Mandela Bay metropolitan authority which includes Port Elizabeth in Eastern Cape. Along with the erosion of its political support and networks, the ANC will lose control of important sources of patronage, such as appointments to local authorities and the award of service and procurement contracts. Now the ANC controls just over 150 local authorities in smaller towns and the countryside, and is the biggest party in another 50 authorities.

Although the ANC has worked in coalitions alongside the centre-right Democratic Alliance (DA) in Cape Town, similar deals are unlikely now. Senior ANC officials have said they are open to working in coalitions but the offer looks unlikely to be reciprocated.

Before the 3 August elections, the Economic Freedom Fighters, which is led by Julius Malema and got an average of 10% of the vote, said it would not go into coalition with the ANC. The liberal and pro-business DA has little in common with the radical EFF beyond a visceral distrust of the ANC and its leader Jacob Zuma (AC Vol 57 No 15, ANC unruffled by DA surge).

CONGO-KINSHASA: Tshisekedi and opposition alliance step up calls for elections this year
President Joseph Kabila faces growing pressure to hold elections this year after veteran Etienne Tshisekedi wa Mulumba and the new opposition alliance threatened to organise strikes and boycotts at a mass rally on 1 August. Tshisekedi returned to Congo-Kinshasa at the end of July after a long absence in Belgium.

He immediately called on the government to convene the Commission électorale nationale indépendante on 19 September and ensure that elections are held on time to ensure that President will leave office this year, as scheduled on 20 December.

The call for mass action across the country was no idle threat according to veteran oppositions Tshisekedi who said that his Union pour la démocratie et le progrès social (UDPS) was starting to mobilise on the issue across the country. The UDPS led a determined campaign against the late dictator Mobutu Sese Seko.

Opposition activists are also calling on the African Union to replace its facilitator, Edem Kodjo, the former prime minister of Togo, because they claim he is too close to President Kabila. The next big event could be the return to Congo-Kinshasa of Moïse Katumbi Chapwe, the former governor of Katanga province who is now part of the opposition alliance. After some government officials charges against Katumbi on financial and security offences, there are concerns that police may try to arrest him on return. However, in an interview with Africa Confidential last month, Katumbi insisted he was undaunted and would return to Congo-Kinshasa imminently (AC Vol 57 No 15, A gathering storm).

SOUTH SUDAN: US pushes tougher intervention force and sanctions against rivals factions
Regional and international officials are going ahead with plans for a strong intervention force and sanctions despite President Salva Kiir Mayardit's latest changes in the Juba government designed to isolate his rival and former Vice-President Riek Machar Teny Dhurgon.

On 7 August, the United States circulated a draft resolution for the UN Security Council to authorise a 4,000-strong intervention force and an arms embargo on Salva's and Riek's factions. The African Union has also voted in favour of an intervention force but no clear details have emerged about how it will be organised and its relations with the UN force.

Meanwhile, Riek refuses to recognise his replacement as Vice-President by his former chief negotiator with the government, Taban Deng Gai, on 23 July. Riek also insists that he will not return to Juba until an international intervention force is in place (AC Vol 57 No 16, Riek rival boosts Salva).

NIGERIA: Treasury team eye bond markets and development banks for funds
A team from Abuja under Minister of Finance Kemi Adeosun is preparing to raise at least US$4 billion over the next three months with $1 bn. coming from a new eurobond issue and $3 bn. of new loans from the African Development Bank and the World Bank. Negotiations are expected to be easier following the government's removal of the peg fixing the exchange rate at 197 naira to the dollar and the effective end of fuel subsidies.

Businesses complain that the new flexibility in exchange rate policy is yet to produce inward investment from Nigerians with funds overseas or foreign companies. Adeosun's fundraising campaign could begin to change that picture. Last week in London, Babatunde Fashola, the Power, Works and Housing Minister, told Africa Confidential that the government was paying off arrears on public sector contracts which would bring some money back into the system.

For the government, the priority is restore growth, held back by crashing oil prices and attacks on oil and gas production. The priority will be a N1.75 trillion (US$5.6 bn.) plan for investments in roads, water and power stations this year in a bid both to improve services for people and companies and create much-needed economic dynamism (AC Vol 57 No 16, Juicier carrots, heavier sticks).

Thursday, 4 August 2016

Angola: promise or problem?

A year before next year's general elections, Angola is balanced between a 'promising' and a 'problematic state', according to Abel Chivukuvuku, leader of an opposition coalition which claims to be the country's fastest growing political movement, the Convergência Ampla de Salvação de Angola-Coligação Eleitoral. A former lieutenant of long-time rebel leader Jonas Savimbi, who was killed in 2002, Chivukuvuku founded CASA-CE in 2012 in a bid to break Angola's political logjam.

As economic pressures mount, the governing MPLA lacks the money to win over the electors, said Chivukuvuku at London's Chatham House think-tank on 1 August. Recent clashes between supporters of the MPLA and UNITA point to a resurgence of rivalries as the political payola machine grinds to a halt. In Benguela, UNITA activists disarmed the police and used their weapons against them. Nonetheless, UNITA has been coopted into the post-war political system and is unlikely to revert to military opposition, Chivukuvuku says.

Halting the economic slide is the problem for the MPLA, adds Chivukuvuku, and its congress on 17-20 August will see fresh demands for a more equitable share-out of state resources. Some of that pressure will be directed towards President José Eduardo dos Santos and family, after he announced this year his plans to retire from politics in 2018, just after the elections. The problem with that, says Chivukuvuku, is there is no trusted successor in waiting.