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.