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.

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