Monday, 14 August 2017

KENYA: Questions remain over election but opposition challenge to Kenyatta win loses steam

We start this week with the smouldering aftermath of Kenya's elections last week, and then to moves by President Jacob Zuma and his allies in South Africa to hit back at dissidents in the governing party. A lethal attack on a restaurant in the capital of Burkina Faso is seen by some as a response to the G5 regional anti-terror force and Ethiopia's parliament has voted to lift its State of Emergency although few expect any easing of other constraints on the opposition.

KENYA: Questions remain over election but opposition challenge to Kenyatta win loses steamAfter a weekend of clashes between protestors and police, in which more than 25 people lost their lives, opposition leaders are struggling to mobilise their supporters for mass action against the disputed election result. A general strike called for today (14 August) has been greeted with a half-hearted response in the country's major cities, including the capital, Nairobi.

There are signs that opposition candidate Raila Odinga is losing the support of allies over his unyielding rejection of the official result, which gave President Uhuru Kenyatta a winning margin of about 11%. Opposition legal expert James Orengo says there would be no point in taking the commission to court over the results but said there were plenty of other constitutional options to pursue. Odinga is due to set out his strategy tomorrow (15 August).

Many activists and electoral experts have concerns about the official results and management of the poll, as well as the vulnerability of the electoral commission's database to hacking, and recommend an independent investigation. A parallel voter tabulation by the local independent Elections Observation Group (Elog) produced figures close to the officials results released on Friday.

There are also questions about the government's investigation into the torture and murder of Chris Msando, the top expert in information technology at the electoral commission. Kenyatta's government quickly rejected offers of help in the investigation from Britain and the United States and called on Kenyans not to speculate about the motives or identities of the killers.

SOUTH AFRICA: ANC dissidents face revenge after Zuma survives no-confidence vote but the Guptas could be dumpedSome of the strongest voices in the African National Congress against President Jacob Zuma will face disciplinary action after he defeated an embarrassing motion of no-confidence on 8 August. The most conspicuous rebels include former ministers of finance and agriculture Pravin Gordhan and Derek Hanekom as well as the outspoken Makhosi Khoza from KwaZulu-Natal.

After Zuma demanded the ANC dissidents face disciplinary action, his ex-wife and a candidate to succeed him as party president, Nkosazana Dlamini-Zuma, and ANC Women's League President Bathabile Dlamini, backed his call, even though their position is likely to exacerbate party divisions.
Over the weekend Deputy President Cyril Ramaphosa, Dlamini-Zuma's closest rival in this year's presidential race, said there should be far tougher action against corporate interests trying to capture the South African state. That is code for taking on the Gupta family, who have been Zuma's closest business allies.

As more details leak out about the relationship between Zuma and the Guptas, his ties to this wealthy Indian family have become one of the president's biggest political liabilities. Many business analysts think that he is looking for a way to sever all ties with the family in a bid to shut down further state investigations into his personal finances.

BURKINA FASO: 18 killed in suspected jihadist attack on restaurant in capitalThree men armed with machine-guns killed 18 people at a Turkish restaurant in Ouagadougou on Sunday evening (13 August) in the country's worst terror attack for a year and a half. No group has yet claimed responsibility but the tactics resemble those of jihadist attacks in the region.
The shootings may an attempt to weaken Burkina Faso's resolve to step up counter-terror operations as part of its membership of the French-backed G5 alliance with Mali, Niger, Chad and Mauritania, all of which have been targeted by Islamist militants.

ETHIOPIA: State of emergency lifted but grievances increasing over rights and resourcesThe vote by Ethiopia's parliament on 4 August to end the country's State of Emergency does not presage political liberalisation or the easing of restrictions on opposition groupings, according to local and international human rights organisations. After clashes with security forces last year, thousands of oppositionists remain in detention and none of their grievances have been addressed, according to the New York-based Human Rights Watch.

This formal vote to end the emergency by the parliament, which has no opposition members, could make it easier for the government to secure investment and trade deals with companies concerned about reputational and political risk.

Despite scepticism about its official economic data, Ethiopia is still one of Africa's fastest growing economies and biggest markets after Nigeria. Apart from a threat by Aliko Dangote's cement conglomerate to pull out of Ethiopia as a protest against bureaucratic constraints imposed by the regional government in Oromia, few big companies have responded publicly to political developments in the country.

IN VERY BRIEF

LIBYA: Oil exports fall dramatically after threats on Sharara fields and strikes close Zueitina oil port

EGYPT: Saudi Arabia's Prince Al Waleed bin Talal is to invest $800 million in tourism at Sharm el Sheikh amid rapid expansion of Cairo's stock market

AFRICA: Over 300 financial technology (fintech) companies have raised over $180 mn. in the past two years, says 'Disrupt Africa' report


Tuesday, 8 August 2017

KENYA: Family rivalries and a high-stakes election will test institutions and technology

We start this week with a couple of high-stakes votes – one in Kenya and one in South Africa. Then we have some insight on an impromptu secret meeting in Zimbabwe, some reservations about the grand pipeline plans in Uganda and Tanzania, and a look at economic arguments in Nigeria, pending President Muhammadu Buhari's return, expected later this month. The next edition of Africa Confidential will be published on 25 August but we will be posting major stories on Kenya's elections, migration and South Africa's leadership race in the meantime.

KENYA: Family rivalries and a high-stakes election will test institutions and technology
National elections today (8 August) will be the last episode – for this generation at least – in the historic struggle between the Kenyatta and Odinga dynasties for the country's presidency. Five decades ago, it was the fathers of today's rivals – President Uhuru Kenyatta and challenger Raila Odinga – who were battling it out for the right to lead Kenya.

Odinga has dramatically cut Kenyatta's lead in the opinion polls over the last month, and some reckon he is now ahead. That sense of a very tight race has ratcheted up tensions between rival bands of supporters. The torture and murder of Chris Msando, head of information technology at the electoral commission, and a companion a week ago pointed to just how high the electoral stakes had become (AC Vol 58 No 16, Murder most foul). It also sounded alarm bells about the possibility of a repeat of the post-election political violence in 2008 should either side feel cheated by the result.

The tangible ideological differences between the conservative pro-West Kenyatta family and the leftist traditions of the Odinga family of the 1960s have worn thin. Now, both families control vast business empires, although Kenyatta's is far larger than his rival's. Much of this election is about cash, resources and control of the tens of billions of dollars that the country is spending on roads, railways, airports and power stations.

It's also about state spending further down the food chain: the tens of millions of dollars that the 47 counties share out under the new constitution which devolves economic and political power. The idea behind the new constitution is that it would lessen the fierce competition for power at the centre by distributing power more evenly across the country. Yet the rivalries at the centre seem as fierce as ever while there is a new layer of political combat in the counties separate from the national issues.

At every level technology has played a far bigger role in these elections. Kenya is one of Africa's leaders in information technology and a global pioneer in mobile money systems. Telecoms companies say 90% of Kenyans have mobile phones, about half of which have internet access. Both sides have rushed to get their political messages across on social media, and have hired their own United States-based political technology companies to boost their campaigns.

Kenyatta's team hired Cambridge Analytica, which worked on Donald Trump's presidential run as well as the Brexit campaign in Britain. Odinga's team recruited advisers from Ghana, where the opposition's technological savvy helped it to defeat an incumbent president last year; and they hired the veteran campaign advisors, Aristotle in Washington DC.


SOUTH AFRICA: ANC divisions are set to deepen whatever happens to Zuma in the no-confidence vote but the economy will enjoy a fillip if he loses
The markets seem more excited than the public about Speaker Baleka Mbete's surprise decision to allow a secret ballot in the no-confidence motion on President Jacob Zuma today (8 August) in parliament. That's because many traders forecast a boost for the rand and inward flows of portfolio capital should Zuma be toppled and replaced with a more pro-business successor such as Deputy President Cyril Ramaphosa.

It is a big political risk for Mbete. If Zuma wins, he will try to purge the party and the cabinet of his foes, worsening the current rifts. If Zuma loses, Mbete would be interim President until the African National Congress chooses a successor while his supporters will demand vengeance on those they have already called traitors.

Some insiders suspect Mbete may have cut a deal with Ramaphosa or the ANC's National Treasurer Zweli Mkhize which would give her the party's deputy presidency. Seen as a close ally of Zuma's, Mbete was expected to protect her political mentor. But she may have calculated that Zuma will be in no position to make any guarantees by the end of this year, when he has to stand down as party president.

Zuma had already said that a secret ballot would give the opposition parties – who need the votes of just 50 ANC dissidents in parliament to win – an unfair advantage. The failure of efforts in the ANC's National Executive Committee to sack Zuma shows he still maintains majority support amongst the party's top officials.

There is another issue at stake: is the right to see how all the MPs vote in a parliamentary debate more important than seizing the chance to get rid of an unpopular President?  A bigger question is what difference all this manoeuvring at the top will make to the millions of jobless South Africans dealing with growing corruption and poor public services.


ZIMBABWE/SOUTH AFRICA: Financial backing from Pretoria mooted in Mbeki's secret talks with Mugabe
Former South African president Thabo Mbeki took a short break last weekend from his own country's political intrigues to discuss economic and political travails in neighbouring Zimbabwe. Top of the agenda in Mbeki's talks with President Robert Mugabe was a plan to shore up Zimbabwe's economy, which is gripped in a foreign exchange crisis.

Mbeki's plan, we hear, involves trying to bring Zimbabwe into the clearing system for South Africa's rand currency. Although the rand, like the US dollar, is legal tender in Zimbabwe, most of the country's formal trade with South Africa is still routed via the US dollar. With a strengthening US dollar and a weakening rand, that gives Zimbabwe the worst of both worlds.

If the rand became more widely used in Zimbabwe, that would lower the cost of trade between the two countries but it would give South Africa what some in Harare would see as an unacceptable level of control over its neighbour's economy.

South Africa, which is owed tens of millions of rand by Zimbabwe, may have a better chance of getting repaid if the two countries' currencies were more closely linked. Botswana's pula and Namibia's dollar offer a model that Zimbabwe could adopt.

But it is highly contentious politically. Vice-President Emmerson Mnangagwa, who is said to be close to Mbeki, favours such a deal, as does Finance Minister Patrick Chinamasa. But the generals in Harare and Mnangagwa's rivals, grouped around Grace Mugabe, are dead against it. President Mugabe is said to be wavering between the two camps.


UGANDA/TANZANIA: Work to start on $3.5 billion oil pipeline
In a grand ceremony, the foundation stone has been laid on the world's longest and most expensive heated oil pipeline – some 1,500 kilometres from Uganda's oilfields in its western region near Lake Albert to the port of Tanga on Tanzania's coast – with a completion deadline of 2020. Uganda has about 6 billion barrels of heavy crude oil in its reserves.

The pipeline deal has sealed the friendship between Presidents John Magufuli and Yoweri Museveni, who were both at the ceremony. They share an authoritarian governance style and resource nationalist views. Magufuli is also close to Kenya's presidential challenger Raila Odinga, much to the irritation of Uhuru Kenyatta's government.

But the success of the project, which includes Magufuli's insistence that the pipeline should be operating within three years, will depend critically on the two countries' ability to raise the necessary finance. Banks will carefully examine the commercial logic of the pipeline – initially planned to cross Kenya – and the policy record of both countries. Currently, Magufuli is embroiled in a battle with multinational companies over his proposed tougher mining laws.


NIGERIA: Growth edges upwards but IMF warns on rising debt, shaky banks and the forex system
The latest word from Abuja insiders is that President Muhammadu Buhari will return to Nigeria from his medical treatment in London by the end of this month. Local business people are debating how this will affect the economy.

For Buhari, the biggest concerns have been the rate of inflation and the strength of the naira. He staunchly opposed the hefty currency devaluations tried by other oil producers such as Egypt and Kazakhstan. During his absence, the rival factions in the government – the reformers under Vice-President Yemi Osinbajo and the exchange rate stalwarts under central bank governor Godwin Emefiele – have concocted a messy compromise between a fixed rate and a free float. The result is a multiplicity of rates.

The latest modification allows investors to quote the so-called Nafex rate, which more closely reflects the market demand for the naira than the central bank's official rate. The initial effect of the measure was a weakening of the naira but its proponents say it will encourage more capital to return to what is still Africa's biggest economy. Alongside these policy arguments, a visiting IMF team has warned there is a dangerous level of bad and doubtful debt in the banking sector. It also concluded that there was lack of political will or consensus to push through a plan to boost the country's economy as it recovers from its first recession for two decades.




THE WEEK AHEAD IN VERY BRIEF


EGYPT: El-Sisi target of $10 billion in fresh investments is working as he opens economy and clamps down on politics


GHANA: Record cocoa crop this year as Accra talks to Côte d'Ivoire about joint investments in chocolate manufacturing


SOUTH AFRICA/BRITAIN: MTN and Vodacom in bidding war for Japan's NTT internet operations in Africa


RWANDA: After 98.6% vote, Kagame will focus on slowing economy, navigating crises in Burundi and Congo-Kinshasa

Thursday, 3 August 2017

An August full of elections

As Americans and Europeans prepare for their holidays, tens of millions of Africans prepare for elections this month while hundreds of millions more watch closely. Without prejudging the outcomes, democrats and civil rights activists are coming under heavier fire.

The Senegalese voted in parliamentary elections on 30 July, in polls that were distinguished by a leading opposition figure, the Mayor of Dakar, Khalifa Sall, running his party's campaign from his gaol cell. Sall has been held without charge for six months. Senegal's stellar record for political pluralism, akin to Ghana's, is now in the balance.

Next up on 4 August is Rwanda's presidential election where Paul Kagame is assured of victory after another eerily quiet campaign. After last year's constitutional referendum, Kagame could stay in power, punctuated by sporadic elections, until 2034.

Angola's elections on 23 August, also fall into the category of a victory foretold: this time for the MPLA's presidential candidate João Lourenço, the armed service chiefs, and the family of outgoing President José Eduardo dos Santos, who will retain a grip over some most lucrative commercial operations in the land.

But for most political observers, Kenya's elections on 8 August are the most portentous. A clear margin of victory for either party in a contest generally judged free and fair would give progressive forces a huge boost. But as our reports suggest, that is increasingly unlikely.

Monday, 31 July 2017

KENYA: Security threats growing ahead of next week's election

We start in election land – namely Kenya and Rwanda, which are holding elections in the coming week, and Senegal, which held parliamentary elections on 30 July. Then to Ghana where the newish government of President Nana Addo Akufo-Addo has been chalking up some economic successes, and Tanzania where the dispute between President John Magufuli and the gold mining companies is escalating. Finally, to South Africa where Finance Minister Malusi Gigaba has been expressing some doubts about the Gupta family, close allies of his boss, President Jacob Zuma.

KENYA: Security threats growing ahead of next week's election
The discovery today (31 July) of the corpse of Christopher Chege Msando, a senior manager in information technology at the Independent Electoral and Boundaries Commission (IEBC), has shocked a country already apprehensive about possible interference in the 8 August elections. Msando had apparently been tortured before he died, people who saw the body said. He is thought to have had critical information about the mechanics of the IEBC’s plan to relay results across the country.

Earlier, Raila Odinga, NASA's presidential candidate, released what he said were secret documents detailing plans for a coup d'état by a section of the military if the IEBC announces an opposition victory. Jubilee has rubbished these claims, saying the documents are standard military contingency plans. Yesterday (30 July), a man wielding a machete injured a police officer guarding the home of Vice President William Ruto in Eldoret, in the Rift Valley before holing up in an outbuilding and being shot dead by police. Ruto was not in the house at the time and police are still trying to establish a motive for the attack.

RWANDA: Political focus goes elsewhere as forecast landslide due this week
In contrast to Kenya, preparations for the presidential election in Rwanda have been eerily calm apart from criticisms, mainly from international human rights organisations, of a what they call a climate of fear. Neither of the opposition candidates – Frank Habineza of the Democratic Green Party ticket and the independent Philippe Mpayimana – look set for more than 5% of the vote in next Friday's poll (4 August).

Foreign diplomats and international financial institutions are uneasy about the political process in Rwanda but unwilling to express their doubts in public. Beyond cursory tours of polling stations by diplomats there will be no formal international election monitoring effort.

President Paul Kagame, who is preparing for his third successive election win, has made it clear that he regards criticism of the country's political system as 'unwarranted foreign interference'.

SENEGAL: Messy parliamentary elections raise questions over detention of popular opposition leader
Voting in yesterday's (30 July) parliamentary elections was marred by poor organisation and widespread disqualification of people whose biometric identity cards were not recognised. Claims the government is responsible are mounting. Historically, elections in Senegal have been extremely well-run with defeated candidates accepting defeat gracefully.

Yet this time former President Abdoulaye Wade, now 91 and leading one of the main opposition groupings, accused President Macky Sall's government of interfering in the electoral process. Supporters of Khalifa Sall (no relation to the President), the Mayor of Dakar who was detained on corruption charges, accused the government of jailing its opponents to avoid a catastrophic electoral defeat.

President Sall's Benno Bokk Yakaar grouping is among the 47 rival parties vying for 165 elected seats in the national assembly. It currently holds 119 seats but could lose control of the assembly given rising grievances about economic hardship. These elections are critically important for President Sall's government, which faces national elections in two years' time and is proud of its reputation with international organisations for running an open, pluralistic political system.

GHANA: Growth up and prices down as government calls for end of IMF deal
When a team from the International Monetary Fund arrives in Accra next week to assess the government's implementation of its US$900 million programme, it will be walking into a noisy debate about the country's economic strategy.

Although the IMF has been advising the government to extend its economic adjustment programme until December 2018, President Nana Addo Akufo-Addo has said the programme should end, as scheduled, in April 2018. Several government officials, including Finance Minister Ken Ofori Atta, have echoed this view.

Behind what appears to be a narrow dispute over scheduling, there are bigger differences over economic strategy and the government's ability to enforce tough budgetary discipline. On 24 July, the Bank of Ghana cut its key interest rate to 21% from 22.5%. the biggest reduction for two years.
This follows the Bank's report that inflation had fallen to 12% in June and the cedi had strengthened by 7% since March to become Africa's best-performing currency. The wider economy has been growing too, expanding by 6.6% in the first quarter, boosted by higher oil and agricultural production.

TANZANIA: War of words escalates between President Magafuli and the gold miners
After a senior manager from the Acacia mining company was held on departure from Dar es Salaam airport on 24 July, a government official denied the company was being singled out. The company has just received a $190 billion tax demand from the government.

President John Magufuli has been leading a campaign to pressure the company to process minerals within the country and to meet what a government-appointed committee says are huge arrears in taxes and royalties. Last week Magufuli said he would close all the gold mines if mining companies delayed discussions on monies the government claims are owed.

The companies want to take the matter to international arbitration. Shares in Acacia, which is majority-owned by Canada's Barrick Gold, have lost more than half their value because of this dispute.

SOUTH AFRICA: Finance Minister Gigaba shares 'concerns' over influence of Gupta companies on the state
Although Finance Minister Malusi Gigaba was meant to have been a loyal ally of President Jacob Zuma and the Gupta family, he is beginning to stray from the script. Gigaba's acknowledgement of legitimate criticism of the Gupta family is another sign of Zuma's waning political power and his declining ability to protect his friends.

On 28 July, Gigaba told the Cape Talk radio station that he shared South Africans' concerns about the Guptas' influence over the government. He backed calls for a judicial commission of inquiry into allegations that the family had been using its influence improperly. 'I think we need to establish fact from allegation,' he told the station. '…the allegations are quite damaging to the investor perceptions, as well as the ratings agencies, of the governance of our state-owned companies.'

IN VERY BRIEF
NIGERIA: Big new developments expected soon in investigation of President Goodluck Jonathan's government and business allies
ANGOLA/CONGO-KINSHASA: More claims against Halliburton and Glencore in multi-million dollar natural resource deals
WORLD BANK: New report warns that robots will cause jobs losses in Africa's fragile manufacturing sector
ZIMBABWE: Mugabe says his ZANU-PF colleagues don't have the right stuff to fight the opposition

Monday, 24 July 2017

NIGERIA: Buhari is 'set to return home' after appearing in new pictures with State governors

This week we start in Abuja House – the one in London where President Muhammadu Buhari has been staying for the past two months. Then to Kinshasa where Congo's opposition is planning to step up protests against sit-tight President Joseph Kabila. And in Cape Town we take the temperature ahead of next month's confidence vote in President Jacob Zuma. This week Paris hosts key talks between Libya's Prime Minister Faiez el Serraj and rogue general Khalifa Haftar and the dispute between Tanzania's President John Magufuli and foreign mining companies shows sign of escalating. We round off with our In Very Brief section – three flashpoints for the week.

NIGERIA: Buhari is 'set to return home' after appearing in new pictures with State governorsA smiling President Muhammadu Buhari was pictured lunching with State governors in London yesterday (23 July). He will return to Nigeria as soon as 'the doctors give him the green light', said Presidential spokesman Femi Adesina.

The release of the picture may dampen down some of the more extreme speculation about Buhari's health but the lack of a precise date for his return will prompt his critics to demand more information about his condition. Although Vice-President Yemi Osinbajo has assumed the constitutional powers of Acting President in Buhari's absence, some insiders say that some areas of government remain off-limits.

Two major personnel decisions – the appointment of the Secretary to the Government and the director of the National Intelligence Agency – appear to be on hold pending Buhari's return (AC Vol 58 No 11, A date with destiny).

The photo of Buhari released by the Presidency, the first in over two months, shows him at a dining table chatting with top officials from the governing All Progressives Congress, including Imo State Governor Rochas Okorocha.

CONGO-KINSHASA: Opposition plans protests to oust Kabila as claims of grand corruption multiplyOn 8 August opposition leader Felix Tshisekedi launches a campaign of street protests and national strikes against President Joseph Kabila's rule. The opposition accuses him of reneging on his agreement to hold national elections this year and trying to extend his time in office illegally (AC Vol 58 No 11, Kabila thriving on chaos).

The protests are meant to culminate in mass demonstrations in Kinshasa and all 25 provinces on 20 August. A leading spokesman for the opposition alliance, François Muamba, says that unless President Kabila sets a date for the next presidential elections, he will cease to be recognised as head of state after 1 October.

After that date opposition activists will campaign for citizens to stop all payments to the state. Tshisekedi has also called on citizens not to accept 'bad orders' from the police and armed forces, especially from those groups that have been 'killing Congolese people'. This latest wave of opposition activism coincides with the release of several detailed reports accusing the Kabila family of gross enrichment through its grip on state power:
  • New York University's Center on International Cooperation, backed by the Pulitzer Center on Crisis Reporting, says the Kabila family owns – wholly or partially – 80 companies in Congo. President Kabila and his family now own, it says, more than 81,000 hectares of farmland in the country.
  • President Kabila's sister Jaynet has a stake in the country's biggest cellphone company.
  • Zoe Kabila, the President's brother, has extensive stakes in big mining ventures including a highly lucrative partnership with Robert Friedland's Ivanhoe company, according to a lengthy investigation by Bloomberg News. Both Jaynet and Zoe are members of parliament and senior members of the President's political alliance.
  • More than US$750 million of the country's mining revenue has gone missing in the last three years, according to a new report from the London-based Global Witness anti-corruption lobby, and is being distributed through political and business networks close to the Presidential family.
The Kabila family denies all wrongdoing and Ivanhoe's Friedland says it will be issuing a riposte to the Bloomberg investigation. However, these latest claims of grand corruption at the top will loom large in the opposition campaign in the coming weeks.
SOUTH AFRICA: Opposition divided over chance of  Zuma's defeat in confidence vote next monthWith parliamentary speaker Baleka Mbete yet to rule on whether the vote on the no-confidence motion on President Jacob Zuma due on 8 August will be by secret ballot or not, pressure is growing on African National Congress MPs (AC Vol 58 No 12,Zuma's chaos theory). Allies of Zuma in the intelligence services have stepped up surveillance on MPs they consider 'problematic'; some MPs say they are being threatened to vote in Zuma's favour while others claim they are being offered inducements.
Julius Malema, leader of the Economic Freedom Fighters and former President of the ANC's Youth League, forecasts that at least 60 of the governing party's MPs will vote against Zuma. That would mean a resounding defeat for the President if, as many suspect, all the opposition MPs vote against him.
Yet John Steenhuisen, Chief Whip of the Democratic Alliance, which filed the no-confidence motion in April, doubts it will pass. The ANC controls 62% of the seats in parliament and, unlike Malema, he thinks it would be expecting too much for so many ANC MPs to turn against Zuma. Steenhuisen believes the financial interests behind Zuma, who faces public attacks on probity from his own party and the opposition, are too entrenched to allow their man to be pushed out.

LIBYA: Rogue general Haftar to meet Premier Serraj in Paris this weekFrench officials are to broker a critical meeting in Paris tomorrow (25 July) between Prime Minister Faiez el Serraj, head of the United Nations-recognised government in Tripoli, and rogue general Khalifa Haftar, whose forces have been fighting along the coast towards Tripoli (AC Vol 58 No 12, States of failure). Haftar, who last month claimed to have won control of the eastern city of Benghazi, has the backing of regional powers Egypt and the United Arab Emirates.

Haftar, who does not recognise the legitimacy of the Tripoli government, has not met El Serraj for 18 months. France's President Emmanuel Macron wants to show his country's support for the UN's political strategy in Libya but also to push for a deal between Serraj and Haftar.

Given the Mediterranean crossing from Libya is the main route illegal migrants take into southern Europe, trying to shore up the Tripoli government has become a priority for French, German and Italian politicians. Even if there is some agreement between Serraj and Haftar, it could prove much tougher to broker some deals between the disparate militias fighting for control around the Tripoli and the rich oil reserves.

TANZANIA: Government's dispute with Acacia mining to drag on ahead of critical negotiationsAt a rally on 21 July, President John Magufuli upped the stakes in his battle with mining companies, threating to shut all gold mines in the country if he judges them to be delaying negotiations about the payment of back taxes.

Ahead of talks between the government and Acacia mining – which is accused of owing billions of dollars in back taxes – there are reports that senior managers of the company have been pulled in for questioning by state officials. Top officials at Acacia have told Africa Confidential that they are committed to cooperate with the government's investigations into their operations. The company wants to refer the tax dispute to independent arbitration although it's unclear whether the government wants to go that route.

Magufuli's latest statements show that the mining issue now tops the government's agenda, and may help boost his political base. It follows parliament's passing of a natural resources law this month which grants the government stakes of 16% in mining companies operating in the country and an option to buy up to 50%. It would also allow the state to renegotiate contracts with mining and energy companies (AC Vol 58 No 15, Magufuli's law).

IN VERY BRIEF:

SENEGAL: Government keeps leading oppositionist and Mayor of Dakar Khalifa Sall in gaol ahead of parliamentary elections  on 30 July.

ZAMBIA: Fitch ratings agency warns on growing political risk after President Edgar Lungu declares state of emergency.

ANGOLA: Security chiefs entrench position ahead of elections and the handover to new President.

Thursday, 20 July 2017

Holding companies to account

The list of international companies getting snarled in battles about fraud and politics in Africa has lengthened this year to include hitherto more pristine names, such as McKinsey, KPMG and Germany's SAP software company. They have all been named in the widening probes into the Gupta family's relations with South Africa's President Jacob Zuma.

Remarkably, the companies continued to work on Gupta-linked projects long after the family started attracting intense scrutiny from the media. At a minimum, the companies will have to review their due diligence procedures which seem, in many cases, elaborate box-ticking exercise. All three risk reputational damage, most seriously for McKinseys, which advises companies and governments on how to avoid such problems.

Other companies such as Credit Suisse and Russia's state bank VTB are in denial about corporate failings, such as their role in structuring the notorious tuna bond deals as part of a package of some US$2 billion of secret loans that nearly bankrupted Mozambique.

So what are the prospects of tougher government measures to hold companies to account in Africa and elsewhere? Not high, according to Hui Chen, who has resigned from a top fraud-busting post in the Department of Justice in Washington. She was going, she said, partly because of the 'cognitive dissonance' of 'trying to hold companies to standards that our current administration is not living up to'.

Monday, 17 July 2017

NIGERIA/UNITED STATES: US prosecutors accuse ex-oil minister of taking bribes for fraudulent contracts

Our tour this week starts in Houston, where an assets seizure case could invigorate Nigeria's anti-corruption investigations. Still on anti-corruption, the International Monetary Fund has arrived in Mozambique to assess the damage caused by the US$2 billion secret loan scheme; and in neighbouring South Africa, veteran anti-apartheid campaigner Lindiwe Sisulu joins the race to become leader of the governing African National Congress (ANC). In Bamako, protestors show what they think of President Ibrahim Boubacar Keïta's reform plans and the IMF makes a politically-charged reply to a loan request from Kinshasa.

NIGERIA/UNITED STATES: US prosecutors accuse ex-oil minister of taking bribes for fraudulent contracts
A bid by the United States' authorities to seize a $50 million apartment in Manhattan and an $80 mn. luxury yacht signals some critical advances in the investigations into about $30 bn. of swap deals backed by Nigeria's former Oil Minister, Diezani Allison-Madueke.

Last week, Ibrahim Magu, Acting Chairman of Nigeria's Economic and Financial Crimes Commission, told Africa Confidential that he expected to see substantial progress in the case against Allison-Madueke in the coming weeks. She has been in London since British police arrested her in October 2015, seizing her passport and over £30,000 ($39,000) in cash. Under English law, police have until October this year to charge her; if they fail to, they will have return her cash and papers and allow her to leave the country (AC Vol 58 No 7, The great oil chase).

The US Department of Justice's Kleptocracy Asset Recovery Initiative filed a suit in Houston, Texas, on 14 July claiming that oil traders Kolawole Akanni Aluko and Olajide Omokore paid substantial bribes to Allison-Madueke to approve their highly profitable deals, which swapped crude oil exports for imports of refined products. Some of the evidence cited includes covertly recorded conversations between Aluko and Allison-Madueke.

For now, the case is solely about the US authorities seizing control of the flat and the boat, which are held by companies linked to Aluko. But those involved in the case say the next stage will be to target individuals named in the asset recovery case for further investigation.

Much interest surrounds reports that some of Allison-Madueke's former associates have been cooperating with foreign prosecutors to identify corporate entities into which hundreds of millions of dollars from fraudulent deals were paid.

MOZAMBIQUE: IMF delegation arrives in Maputo as Russian state bank offers to restructure secret loan deal
Inch by inch, investigators are discovering the true cost to Mozambique of the $2 bn. of secret loans ostensibly extended for a tuna fishing fleet and maritime security. Sources close to an audit of the deal have told Africa Confidential that the overpricing could be more than $1bn. (AC Vol 58 No 14, Rock and Kroll).

A senior Swiss financial official described the role of foreign banks in the deal – Credit Suisse and Russian state bank VTB Group – as 'scandalous' and requiring 'full investigation'. This follows revelations in the audit that the two banks had extracted some $200 mn. in fees from Mozambique for structuring the deal.

Britain's Financial Conduct Authority would have to take a major role in this probe because the secret deal was structured by the VTB and Credit Suisse operations in London.

The IMF, whose officials arrived in Maputo last week, demanded an internationally credible audit of the $2 bn. deal.

The banks are questioning the audit's figures but VTB said last week that it was prepared to review Mozambique's financial obligations: 'We have proposed several different restructuring options to Mozambique. Currently the involved parties are waiting for IMF debt sustainability assessment.'
Any progress between the IMF and the Maputo government on fresh financing would depend on prising open many more secrets linked to the tuna bond scandal.

SOUTH AFRICA: Sisulu joins leadership race as the standing of Zuma and his wife heads downhillThe entry of a third heavyweight politician, Human Settlements Minister Lindiwe Sisulu, into the African National Congress leadership race complicates everybody's calculations. It may also prompt more public criticism of President Jacob Zuma, accused of damaging the ANC's standing.
Sisulu told the independent eNCA television channel that she wanted to undertake the 'daunting task' of restoring the 'dignity' of the ANC, an indirect criticism of Zuma's tenure under which corruption scandals have proliferated.

Until now the contest, to be decided at the party's elective conference in December, looked like a two-horse race between Deputy President Cyril Ramaphosa and the former Chairwoman of the African Union Commission, Nkosazana Dlamini-Zuma.

Party insiders say that President Zuma's efforts to back his ex-wife, Dlamini-Zuma, have proved counter-productive, partly because she is suspected of wanting to protect him from the numerous corruption charges he faces.

MALI: President Keïta looks weaker after mass protests against his bid to boost his powers and counter separatists
The standing of President Ibrahim Boubacar Keïta (IBK) suffered another blow on 15 July when thousands of Malians joined a demonstration in Bamako against his reform plan to strengthen the executive and establish new regions in the north.

Rattled by widespread opposition to his proposed constitutional reforms, IBK has abandoned plans for a referendum on them this month but his office says there will still be a constitutional referendum later this year.

The proposed reforms and redrawing of regional boundaries were part of peace talks with Tuareg separatists in the north two years ago but many in the south oppose any concessions on the issue. These proposed reforms and the stalling of the national peace process are understood to have been raised in talks between Keïta and France's President Emmanuel Macron last month.

SOMALIA: Communication crisis continues a month after Swiss-owned ship cuts underwater internet cableOfficials in Mogadishu says the country's businesses are daily losing more than a $10 mn. after MSC Alice, a Swiss-owned container ship, dropped anchor last month and cut the country's main underwater cable linking it to the internet. Now only the small group of Somalis who have access to satellite connections have been able to get out their messages.

Indeed, Africa Confidential's correspondents in the country have had to find new ways to file their stories. Most importantly, the internet crash is hampering the effort to provide relief to those Somalis hit by drought, food shortages and cholera.

CONGO-KINSHASA: IMF to set tough conditions for loans as political crisis worsens
Financial pressures are mounting on President Joseph Kabila's government as he seeks to extend his time in office. Despite his rhetoric against outside interference in the country's politics, his government is desperately seeking foreign aid after export earnings crashed and the Congolese franc lost 40% of its value this year.

After Prime Minister Bruno Tshibala wrote to the IMF last month, the Washington-based organisation said the government would have to show greater accountability in its financial operations and that it had established 'a credible path towards political stability'. That last comment is as overtly political as the IMF gets.

Relations between Kabila's government and most of the IMF's biggest shareholders are at an all-time low. In 2012, the Fund suspended a $560 mn. lending programme because of secret and highly lucrative deals in the mining sector.

Monday, 10 July 2017

KENYA: Row between President Kenyatta and judges heats up after election ballot ruling

We start with another election ruling by Kenya's High Court which is pitting the Chief Justice David Maraga against President Uhuru Kenyatta. Then we look at the row in Zimbabwe over a US$120 million maize subsidy scheme and the latest multinational company to get embroiled in scandals around President Jacob Zuma in South Africa. Finally, to Algiers where President Abdelaziz Bouteflika is trying to garner backing for economic reforms and Kinshasa where the head of the electoral commission says he thinks it will be impossible to organise presidential elections this year.

KENYA: Row between President Kenyatta and judges heats up after election ballot ruling
The governing Jubilee party has reacted with fury after the High Court in Nairobi's decision to 7 July to nullify the electoral commission's award of 2.5 billion-shilling ($24 million) contract to print ballot papers for next month's national elections to Dubai-based firm Al Ghurair. The court said the Independent Electoral and Boundaries Commission's (IEBC)'s award broke the new rules on contract transparency.

Complaining it was not consulted about the procurement of ballot papers for the 8 August elections, Raila Odinga's opposition National Super Alliance (Nasa) launched a legal case to block the contract award. Several newspapers claim that there are business links between President Uhuru Kenyatta's family and the Al Ghurair company. Websites which carried photographs of Al Ghurair officials visiting State House were told by government lawyers to remove them.

This is the second court major legal victory for the opposition in the past month and it leaves less than a month for the electoral commission to find a new supplier to print the ballots. Officials in the Jubilee government insist there is no question about delaying the election.

This latest court ruling prompted any angry outburst from President Kenyatta: 'I want to tell those in courts, we have respected you. But do not think respect is cowardice. And we will not allow our opponents to use the courts and to intimidate the IEBC, thinking they will win using the back door.' A few hours after Kenyatta spoke on 9 July, Chief Justice David Maraga shot back with a statement on the implications of the President's remarks: 'When political leaders cast aspersions on the administration of justice based on a misinterpretation of my statements, it has the potential to impair public confidence in our courts, and this concerns me a great deal.'

ZIMBABWE: Opposition lambasts government on Command Agriculture and maize subsidy scheme
A politically-loaded plan to subsidise the country's maize farmers could cost the treasury almost US$120 million, say independent agricultural experts and opposition politicians. President Robert Mugabe, currently in Singapore for medical treatment, says the scheme will make the country self-sufficient in its key staple and boost local farmers. Mugabe faces a tough election next year against the backdrop of mounting economic woes.

Opposition politicians argue that the subsidy scheme is a blatant attempt to shore up support for the ruling Zimbabwe African National Union-Patriotic Front from small-scale farmers, its key support base in the countryside. It adds that previous subsidy schemes have been undermined by corruption and turned into mechanisms to enrich local party officials.

SOUTH AFRICA: McKinsey is latest multinational to get embroiled Gupta saga
One by one, leading multinational companies have been dragged into the growing political scandal over the business  links between President Jacob Zuma and the Gupta family.
The pattern is similar each time. At first, there is a blanket denial of any wrongdoing or any improper dealings with Gupta family or Zuma's other allies.

Then the company expresses concern about the possibility that some mistakes were made, and accordingly launches an investigation. Details of the investigation then emerge in the media after which some of the multinational company's local directors are suspended or resign.
International lobbying firm Bell Pottinger, which had a contract with the Guptas has now made a formal apology for its operations in South Africa. International auditors KPMG, which had also been hired by the Guptas, are being probed by South African regulators for failing to sound warnings over the company's management of a massive agricultural subsidy from the Free State provincial government.

The latest company going through this drama is McKinsey, one of the most high-profile global consultancy companies, which has specialised in advising governments how to boost efficiency and cut corruption and mismanagement. The matter turns on McKinsey's relationship with the Trillian group of companies, which are in turn close to the Gupta family.

Outgoing Chairman of Trillian Tokyo Sexwale appointed top South African lawyer Geoff Budlender to look at whether Trillian may have commercially benefitted from insider information about government decisions, such as President Zuma's sacking of finance minister Nhlanhla Nene in December 2015. McKinsey was advising the state power company Eskom which had been paying tens of millions of rand to Trillian without following procurement rules. After Budlender concluded that McKinsey had made misleading statements about its dealings with Trillian, the consultancy company has launched its own investigation into the matter, helped by an outside law firm, Norton Rose Fuller.

ALGERIA: President Bouteflika tries to clear way for tough economic reforms and subsidy cuts
President Abdelaziz Bouteflika used his Independence Day speech on 6 July to try to rally support for economic reforms as the government tries to adjust to an era of lower oil and gas prices. In a rare public statement, the ailing 80-year-old whose current term expires in 2019, told Algerians that the reforms were not being imposed from outside but were in the country's 'sovereign interest'.

Until now the government has been using a system of social grants to help the poorest. It fears widespread unrest if subsidies on basic consumer products are cut back. The reform plan envisages a much closer targeting of the subsidies.

Over the past three years, the country's foreign reserves have dropped to $108 billion from $178 bn. and state officials said the government's current dependence on oil and gas exports for 60% of state revenues is unsustainable. Much of the implementation work for the reforms will be carried out by a team under Prime Minister Abdelmadjid Tebboune who plans a series of consultation meetings with local people and political parties.

CONGO-KINSHASA: Presidential vote not possible this year says election chief
Opposition parties in Kinshasa have denounced as a 'declaration of war' a statement from Chairman of the electoral commission Corneille Nangaa suggesting presidential elections cannot be held this year. Nangaa's statement flies in the face of an agreement signed between President Joseph Kabila's government and the opposition on 31 December.

Should the commission be unable to organise elections this year, this will add to the climate of crisis in the country. Opposition politicians believe there is a conspiracy between the commission and the government to find a way to extend President Kabila's term in office. His second term formally expired at the end of last year.

Thursday, 6 July 2017

Unanswered questions at the African Union

It was 'noises off' that dominated the first summit of the African Union under its new Commission Chairman, Moussa Faki Mahamat, on 3-4 July. As Chad's veteran Foreign Minister, it was hoped that he would be able to make progress on the continent's multiple conflicts, but sundry external political and financial quarrels overshadowed initiatives in the Sahel and the Horn of Africa. The looming crisis in AU operations in Somalia next year, when troops from Kenya, Ethiopia and Uganda could pull out and the European Union could end funding for the regional peacekeeping operation, was barely discussed.

The real work on the Sahel conflict was done when the leaders of Mali, Chad, Burkina Faso, Niger and Mauritania met in Bamako on 1-2 July and agreed to form a five-country force to fight terrorist groups in the region. Although the United Nations and the EU are backing it, the United States' refusal to contribute prompted a new panic about financing.

Conflicts such as the Kasai rebellion and the political deadlock in Congo-Kinshasa did not make the agenda. This was despite a strong warning to the AU from Kofi Annan, former UN Secretary General, and nine African former Presidents, that Congo was in grave danger unless a political agreement to hold elections this year was respected. Instead, President Joseph Kabila got the summit to back a resolution condemning 'outside interference' in Congo-K's politics, presumably a reference to European sanctions rather than African Presidents' warnings.

Monday, 3 July 2017

AFRICAN UNION: Money and peacekeepers top summit agenda

We start this week in Addis Ababa for an important but poorly attended summit of the African Union, then take stock of a regional security summit held over the weekend in Bamako. Looking at a big real estate foreclosure linked to a Nigerian oil baron in Manhattan, we ask what this might mean for the Abuja government's anti-graft campaign. Finally, we go to Johannesburg where an African National Congress policy conference is being dominated by the coming leadership contest.

AFRICAN UNION: Money and peacekeepers top summit agenda
A lengthening list of security crises and a shortening roster of funders for peacekeeping operations greet the new African Union Commission Chairman Moussa Faki Mahamat at his first summit in the post in Addis Ababa today and tomorrow (3-4 July). He will be presiding over some important debates at the summit but several of the continent's top leaders – Nigeria's Muhammadu Buhari, Algeria's Abdelaziz Bouteflika, Egypt's Abdel Fattah el Sisi and South Africa's Jacob Zuma – will not be attending.

There are also calls for the AU to take a far more robust approach to resolving the conflicts in Congo-Kinshasa and South Sudan, as well as ensuring that rumbling conflicts like those in Congo-Brazzaville and Mozambique are put on the official AU agenda.

Although there is consensus that African member states must pay more for peacekeeping operations on the continent and the upkeep of the AU, there is still no agreement on the system to be used. Last year, Donald Kaberuka, former President of the African Development Bank, proposed a 0.2% levy on all imports from outside Africa to cover the assessed contribution of member states. That was agreed in principle and would mean member states would pay a quarter of the cost of all peacekeeping operations on the continent. The goal is for the AU to secure some $400 mn. for peacekeeping operations by 2020.

Last month Kaberuka told the United Nations Security Council that more needed to be done to coordinate finance for peace and security operations in Africa. There is serious concern in the UN that United States' President Donald Trump's planned budget cuts will force the winding-up of several peacekeeping operations as well as block the start-up of new ones. The US is still the biggest funder of peacekeeping operations globally as UN rules link to contributions to the size of national economies.

Such rules are now being contested by US politicians close to Trump. There are also some policy shifts among Africa's other international partners. There are questions about whether Britain will fill the gap if the European Union pulls out of financing peacekeepers in Somalia next year. China and India want to do more business in Africa and are taking a bigger diplomatic and security role in the process.

Germany has also launched a well-financed Africa strategy, albeit without much consultation on the continent. Perhaps to rectify that, Chancellor Angela Merkel last month met with several leaders including Ghana's Nana Akufo-Addo, Rwanda's Paul Kagame and Guinea's Alpha Condé.

Other countries courting the AU include Brazil, Japan, Israel and Turkey: they want rights to attend all the meetings as observers in exchange for stepping up contributions. But some member states want tougher rules on this new wave of foreign friends: Kagame suggested that outside states should attend only those sessions on issues in which they have a direct interest.

AFRICA/FRANCE: Regional security forces goes ahead but US pulls back
Five West African states met in Bamako yesterday (2 July) to plan a new regional security force Despite the US withholding diplomatic support it secured backing from France and the European Union worth around €60 million. Leaders from Mali, Burkina Faso, Niger, Chad and Mauritania said their governments would pay €10 mn. each to the force.

Also at the summit was France's President Emmanuel Macron who pledged over 70 armoured vehicles and more troops to add to the 4,000 that France already has in the region. But Mali's President Ibrahim Keïta said there was still a shortfall of around €300 mn. of funding for the force.

NIGERIA: Government's anti-corruption drive surfaces in New York
After two years of tortuous investigations into claims that the previous government had improperly awarded tens of billions of dollars' worth of oil trading contracts to its business and political friends, there are signs that some have been making progress. However, the immediate beneficiaries are likely to be financing companies and others owed money by those under investigation by the Nigerian authorities. So far there has been little information about what funds have been recovered and on what terms.

Last year, Nigeria's Federal High Court announced a global freeze on assets tied to oil trader Kola Aluko which include luxury homes in New York, Los Angeles, and London as well as a mega-yacht called Galactica Star, which has been leased out to several international celebrities.

This month a $50 mn. apartment on Manhattan's so-called 'Billionaires' Row', which had been purchased by one of Aluko’s companies, is to be sold off at a foreclosure auction in New York on 17 July.  Aluko is accused by the Nigerian authorities of benefiting to the tune of some US1.8 billion from illicit oil trading contracts.

There is still no public information on Aluko's whereabouts or any contacts that he may have had with Nigeria's investigators. The British authorities, who have been holding the passport of former Oil Minister Diezani Alison-Madueke for about a year and a half, are due to announce within three months whether they will proceed with a criminal case against her. Much of Aluko's fortune was built up during her tenure as oil minister.

SOUTH AFRICA: More revelations on Zuma-Gupta links as ANC policy conference meets
The big political news in South Africa this week was meant to be the six-day policy conference of the African National Congress in Johannesburg but it is competing with the latest allegations against President Jacob Zuma and his business friends, the Guptas.

Both the debates over policy and arguments about Zuma's relations with the Guptas will shape preparations for the ANC's leadership elections at the end of the year. The two frontrunners to lead the ANC – Deputy President Cyril Ramaphosa and the former Chairwoman of the African Union and ex-wife of Jacob Zuma, Nkosazana Dlamini-Zuma – are using the policy conference to set out their differing ideas.

Dlamini-Zuma is echoing the talk of 'radical economic transformation' such as wide-ranging land and wealth distribution being pushed rhetorically by her husband, but her rival, Ramaphosa, talks more about 'inclusive growth' and cutting out corruption. How those debates play out at the conference will influence sentiment amongst the 4,000 or so ANC delegates voting for the party's new leadership in December.

Meanwhile, two new allegations are fuelling public concern about the Zuma-Gupta relations.  Firstly, senior ANC politician Tokyo Sexwale has called for a criminal investigation into whether local finance company, Trillian Capital Partners, was given an advance warning of Zuma's plan to sack finance minister Nhlanhla Nene in late 2015.

Sexwale, who is retiring as chairman of Trillian, said an internal investigation at the company highlighted concern about collusion with government officials.

The other development prompting interest is the claim that the South African affiliate of KPMG auditors did not raise concerns when its then clients, the Gupta family, diverted some 30 mn. rand (US$3 mn.) of public money to finance a family wedding in 2013. The money is said to have come from the Guptas' Estina agricultural project which is part-financed by the Free State provincial government. Those claims by the amaBhungane team of investigative journalists are based on financial spreadsheets found amongst the over 100,000 emails leaked from the Guptas' accounts.

The Independent Regulatory Board for Auditors in South Africa has announced a probe into KPMG's work with the Gupta companies on this period. When South Africa's Public Protector announced in 2016 that she would be investigating links between the Guptas and government officials, KPMG ended its 15-year long auditing contract with the family's companies.

Monday, 26 June 2017

KENYA: Opposition applauds court ruling against right of national counting centre to change local results

This week there is some important court reporting. First from Nairobi where the Appeal Court has backed an important ruling on vote counting, to the delight of civil society and the opposition. And then to South Africa's Constitutional Court which has made a landmark ruling on the rights of Parliament to organise a secret ballot. And from Zimbabwe, comes the news that Pastor Evan Mawarire, whose patriotic #ThisFlag campaign won support from millions via the internet, has been arrested again – this time for talking to protesting medical students. On the international diplomacy front, France is at odds with the United States over who pays for a new, regional anti-terror force in West Africa. And in EthiopiaNigerian billionaire Aliko Dangote has to struggle with some home-grown resource nationalism in the Oromo region.

KENYA: Opposition applauds court ruling against right of national counting centre to change local results
In a judgement that could greatly help election monitors, the Court of Appeal ruled on 23 June that results of the presidential election announced in the counties would be final and not subject to change by the national counting centre. In previous elections, the national counting centre in Nairobi had changed tallies submitted by polling stations across in the country, provoking suspicions of foul play.

The court decision comes as concerns grow about the risks of violent clashes around national elections on 8 August as opinion surveys suggest the presidential race between President Uhuru Kenyatta and challenger Raila Odinga is tightening substantially.

Civil society groups had won the first stage of the battle at the High Court in April. But the Independent Electoral and Border Commission (IEBC), which manages the elections, had asked the Appeal Court to reverse the decision.

The three-judge panel declined to do so, arguing that the IEBC's Presiding Officers at polling centres were capable of overseeing the voting, counting, collation and publication of results before these were transmitted to the national counting centre in Nairobi. If the Appeal Court had rejected the High Court's ruling, the main opposition National Super Alliance (Nasa) said it would have pulled out of the elections. Now it is quietly celebrating the decision.

Kenya's Appeal Court ruling in favour of official IEBC results being released at constituency and county level parallels a similar ruling by Ghana's High Court ahead of national elections there in December 2016. In Ghana, that ruling allowed the New Patriotic Party to run its own fast and highly efficient vote tabulation system which released accurate results days ahead of the official Electoral Commission. Based on results verified and agreed on by party agents at the polling stations, the NPP's vote tabulation system also operated as a check on vote tampering.

With two digital data experts in each constituency, the NPP was able to release accurate results based on real voter numbers as well as monitor what was happening with the official count. We hear that Kenya's Nasa officials have taken a particular interest in tactics used by the opposition in the Ghana election.

Presiding judge William Ouko at Kenya's Appeal Court said the case for the IEBC's national counting centre to overrule the decisions of its organisation at county and constituency level didn't stand up. "It is hypocritical for the appellant [IEBC] to doubt the competence, proficiency and honesty of its staff."

SOUTH AFRICA: Supreme Court says Parliament's speaker can order secret ballot for confidence vote on Zuma
Parliamentary speaker Baleka Mbete faces the dilemma of her career this week following a ruling from the Supreme Coourt which gives her the right to organise a secret ballot for the forthcoming confidence vote on President Jacob Zuma. Mbete has batted away the opportunity once, telling MPs that it wasn't her prerogative to organise a secret ballot in parliament.

Dissident MPs took the case to the Supreme Court. Now they have their answer from Chief Justice Mogoeng Mogoeng, with the unanimous support from the rest of the Court. Justice Mogoeng said that MPs should feel free to vote without fear or favour and that Speaker Mbete should consider the interests of the country, above the governing African National Congress.

President Zuma's foes within and outside the ANC hope a secret ballot would embolden dissident MPs on the ANC benches to vote against him. Zuma has survived four no-confidence votes in parliament but the margin of victory has been getting tighter. In last November's no confidence vote, several dissident ANC MPs simply didn't turn up.

Mbete, who has been one of Zuma's closest allies, will be under enormous pressure to turn down the request for a secret ballot on the confidence vote. Zuma has already said a secret ballot wouldn't be fair as it gives the opposition a majority it doesn't have. He knows that it would take just over a fifth of the ANC's 249 MPs to swing the no confidence vote against him.

In South Africa's current political mood, that's a risk he can't afford to take. The question now is whether Mbete herself would be prepared to heed Chief Justice Mogoeng's advice to put country ahead of party. Previous behaviour suggests she won't but South African politics has been throwing up some big surprises recently.

ZIMBABWE: Arrest of Pastor Mawarire sends harsh message ahead of fraught elections next yearIf the authorities in Harare hope that today's arrest of Pastor Evan Mawarire would deter others from protesting against President Robert Mugabe's government, they may have badly miscalculated. Strategists in the ruling Zimbabwe African National Union-Patriotic Front seem to have been rattled by some tentative steps to organising a united front among the opposition parties for next year's elections.

Previous attempts by the government to rein in Mawarire, who abjures any partisan alignment, have simply fired up Zimbabweans, eventually forcing the government to back down.

This time Mawarire was praying with a group of medical students from the University of Zimbabwe who had been protesting about heavy increases in their fees. Their predicament shines a light on the wider crisis in the country. Zimbabwe's 15 universities turn out about 30,000 graduates a year into an economy where the unemployment rate is running at over 90%, according to the Zimbabwe Congress of Trade Unions.

At the very least, Mawarire is likely to get the students on his side, quite apart from the millions of people who have been fruitlessly seeking jobs in the still-shrinking formal economy.

AFRICA/FRANCE/UNITED STATES: Washington and Paris clash over Sahel counter-terror bill
This is the diplomatic sequel to that 'trial of strength' handshake between Presidents Donald Trump of the United States and Emmanuel Macron of France last month. Now the arm-wrestling is moving to what countries pay for regional security.

Washington wants to cut its funding for United Nations peacekeeping missions, and in its sights is France's plan to boost a five-country African military force in the Sahel. A US refusal to pay its share of the bill at the UN could jeopardise the entire initiative.

It is a top priority for new President Macron. Within days of his election victory in May, he flew to Mali to meet President Ibrahim Keïta, then went to visit French soldiers serving in the current regional anti-terror force.

For now, France is the greatest contributor to that force but Macron's plan is to cut foreign troop numbers and improve training for African counter-terror forces. There is no official figure for the budget for the five-country force but the Mali operations alone, have a budget of over US$900 million.

Britain, currently embroiled in difficult negotiations to leave the European Union, has its own interests. London is one of the biggest foreign contributors to anti-terror operations in Somalia; it makes those resources available as part of an informal agreement under which France takes the lead on security operations in Mali, Niger, Burkina Faso and the wider Sahel.

It may be that Britain could act as a bridge between Paris and Washington on the Sahel force. It will be a difficult negotiation given the Trump administration's determination to cut back its US$7.9 billion a year dues for UN peacekeeping operations.

It also comes when Pentagon officials are quietly warning that the Trump administration's cuts to humanitarian and diplomatic initiatives in Africa could lead to more violence and terror on the ground. That in turn, argue the defence officials, would require still more US military spending to pursue what Washington sees as its national interests.

ETHIOPIA: Dangote could quit Oromia project after imposition of new local content rules
In the latest twist over battles between nationalist African governments and multinational companies, Nigerian billionaire Aliko Dangote is squaring off against the Oromia government in Ethiopia over demands that his cement manufacturing plant give supply contracts to local entrepreneurs.

Specifically, Oromia's East Shewa Zone administration argues that Dangote's company should buy from pumice, sand and clay mines worked by the region's young people. This follows a spate of protests last year against foreign companies in Oromia. The protestors were also demanding land and political rights.

But for now, Dangote's officials are taking a tough line, arguing that the supply chain order contravenes the terms of its mining licence in Ethiopia. Without an acceptable resolution on the matter, the officials suggest that the Dangote operation would have to close.

Thursday, 22 June 2017

Grave danger in Congo

The storm in Congo-Kinshasa has been gathering for a year and the next six months are likely to prove critical. Warning of grave danger, the former Secretary General of the United Nations, Kofi Annan, together with former presidents of South Africa and Nigeria, Thabo Mbeki and Olusegun Obasanjo, and seven other former Presidents, has called for credible elections as soon as possible.

Annan, Mbeki and Obasanjo have a special interest in Congo-K's stability: they played a key role in brokering and guaranteeing the pact in 2002 that set up a power-sharing government in Kinshasa, which was headed by Joseph Kabila. Now, he refuses to listen to them. However, African Union leaders have, so far, failed to register even mild concern about Congo's mounting chaos. Political dialogue has ground to a halt with the opposition accusing Kabila of sabotaging the election calendar.

Now there are signs that Angola's government is losing patience. Luanda's veteran foreign minister Georges Chikoti has openly criticised Kabila's handling of the rebellion in Kasai, which is driving refugees across the border into Angola. In December, Angola withdrew its military trainers from Congo, sending a signal it was no longer willing to prop up Kabila militarily. Sindika Dokolo, a Congolese businessman and President José Eduardo dos Santos's son-in-law, went further still, urging demonstrations against Kabila and openly backing Moïse Katumbi, the exiled Congolese opposition leader.

Tuesday, 20 June 2017

NIGERIA: After the budget is signed, better news about the numbers

We start in Nigeria on a rare high note – at least on the economic plane – and then go to Tanzania, where President John Magufuli's government is stepping up his campaign of resource nationalism. In South Africa, President Jacob Zuma is also playing the resource nationalist card while in Germany, Chancellor Angela Merkel sees great potential for a more constructive relationship between Europe and Africa.

NIGERIA: After the budget is signed, better news about the numbers
In stark contrast to the febrile political climate, the economic data in Nigeria are looking at their most positive since President Muhammadu Buhari came to office two years ago. Some of that is due to longer-term trends: oil prices have strengthened and production is up while investment in farming and agro-processing is beginning to pay off.

Shorter term factors are also helping. Vice-President Yemi Osinbajo signed the 7.44 trillion naira (US$23.6 billion) budget for 2017 on 12 June and that will release disbursements from the government's capital spending programme of N2.2 trn., a record figure. As those disbursements – many on roads, power stations and social investment – sluice through the system, they should create jobs and boost incomes, giving a much-needed lift to local economies across the federation. Of course, much will depend on how the spending is managed.

Both international and Lagos-based market analysts are putting out increasingly upbeat analyses of the country's economic prospects, much of them based around the combined effects of more spending on infrastructure, far higher agricultural production and the launching of Aliko Dangote's 500,000 barrel-a-day oil refinery and petrochemical plant next year. After 18 months in the doldrums, the Nigerian Stock Exchange is bouncing back, registering gains week after week.

Yet there are plenty of questions about the better data. For example, inflation fell to 16.25% in May, its lowest figure for a year. Food prices, however, remain extremely high across the country and are rising at a faster rate than the baseline inflation figure.

This matters because for many families, food is the biggest item of expenditure. Higher local food prices seem to be linked with the growing volumes of food that is being exported to Nigeria's neighbours, which has created some local shortages. In the medium term, higher food prices could encourage more people to go into farming.

Another concern is what happens to the naira-dollar exchange rate. As better economic news trickles out, along with big government disbursements, the naira has strengthened: the parallel market rate is currently N367=US$1. It remains an open question whether the strengthening of the currency reflects the more positive economic mood or is just a function of the government's releasing hundreds of millions of dollars. For now, officials in Abuja say their much criticised exchange rate policy has been vindicated.

TANZANIA: President Magufuli's new claims against Acacia Mining presage tougher resource nationalist measures
After giving full support to a committee which claims that the state has been losing hundreds of millions of dollars in mining taxes and royalties, President Magufuli is set to extend the scope of his campaign of resource nationalism to the oil and gas sector.

This follows the release of a government committee report on 12 June concluding that Acacia Mining had failed to declare some 40% of its production to the authorities. 'These people are ruthless,' Magufuli said in a live broadcast of the release of the report, '…They have taken all the gold and other minerals but revenues, taxes, they didn't pay.' The committee's conclusions extend across the entire mining sector, although Acacia is in the government's sights in the short term.

The report recommends that Acacia and the government should open arbitration on what it says are outstanding dues; this should be handled by Tanzania's courts, it adds.

For its part, Acacia denies all wrongdoing but is taking the report extremely seriously. 'Acacia remains open to further dialogue with the government regarding these issues and continues to assess all its options.' Top company officials met with Magufuli's team after the report came out last week and talks are continuing.

SOUTH AFRICA: Nationalist Mining Charter draws fire from the companies
With his new mining charter, Mines Minister Mosebenzi Zwane, a close ally of President Jacob Zuma, is trying out a similar blend of local politics and resource nationalism in South Africa.

Launched on 15 June, the Charter stipulates that all mining companies in the country should ensure that 30% of their shares are held by black South Africans (that's up from current threshold of 26%), and they should award 80% of their spending on services to black-owned companies and ensure that over half their top management are black. It would also end the 'once-empowered, always-empowered' principle that allows a mainly white-owned company to comply with ownership rules by selling its equity to black investors, even if they later sell it on to other white investors.

Zwane's Charter has predictably prompted loud criticism from the big mining companies, which say they will challenge it in court. No one expects it to get passed into law in the short-term but it could prove smart politics for Zuma's allies, who are under pressure to put their 'radical economic transformation' agenda into practice.

For Zuma, the spectacle of his ministers battling with big mining companies might – temporarily – distract attention from the legions of corruption allegations that he faces in connection with his own business friends. The row over the Mining Charter is surfacing just as the African National Congress prepares for its big policy conference next month.

And in December, the ANC will hold its leadership elections. The two frontrunners for the party presidency are Zuma's ex-wife, Nkosazana Dlamini-Zuma, and Deputy President Cyril Ramaphosa. And every ANC member knows that Ramaphosa made his fortune from astute investments in the mining sector during the first round of black economic empowerment, which is now seen as having done little more than enrich a small elite.

AFRICA/GERMANY: Chancellor Merkel calls for revisions to EU-Africa trade deals
The Afro-German partnership is going from strength to strength after a conference and a series of bilateral meetings in Hamburg earlier this month. As host of the Group of 20 most industrialised countries next month, Germany wants to push Africa up the agenda. In fact, only one African state, South Africa, is a member of the G-20.

Trade and investment, not aid, dominate Germany's revived relations with Africa, although by some measures, Berlin is also the biggest giver of non-tied development assistance to Africa.

The Africa push is led by Merkel, who has already established a reputation for a more open-minded view on migration than many of her European counterparts. Cynics says this is more about Germany's requirements for labour than high moral principle.

Now Merkel has joined the two issues: she is calling for more focus on trade and development in Africa as a means to reduce the numbers of people trying to navigate the perilous waters of the Mediterranean between Libya and southern Europe. Last week, Merkel told fair-trade campaigners in Hamburg that she understood their complaints about the trade treaties between the European Union and Africa. She said the EU-Africa summit due to be held later this year should discuss how to renegotiate them.

In London last week, Ghana's Finance Minister Ken Ofori-Atta said that his country had been given fast-track membership of the Germany-Africa trade partnership scheme and would be accessing over $200 million in trade development credits. He said that Germany's apprenticeship programmes for high-level technical education offered a viable solution to the skills mismatch in his country.

Monday, 12 June 2017

AFRICA/EUROPE: After political shocks, a new diplomatic order starts work

Political changes in Europe – and their effects on Africa – start the ball rolling this week. And then it's off to Lusaka where the Zambian government is about to ink a new deal with the IMF. In Nigeria, Vice-President Yemi Osinbajo's profile could rise higher still should he sign the 2017 budget while his boss, President Muhammadu Buhari, stays on medical leave. There are more warnings about election clashes in Kenya, and Ethiopia needs another billion dollars of emergency food to stave off a disaster, following the recent drought.

AFRICA/EUROPE: After political shocks, a new diplomatic order starts work
As the slings and arrows of voter sentiment hit Europe's populist movements, the continent's diplomacy is adapting, particularly in Africa. This week Germany is convening several special meetings on economic and security policy in Africa ahead of its G-20 summit.

The immediate winners in these diplomatic shifts are the centrist governments that are running Germany and France. Both Chancellor Angela Merkel and newly-elected French President Emmanuel Macron are espousing a more robust and internationalist approach, which they contrast to the more nationalist and inward-looking ideas espoused in the United States under President Donald Trump and Britain under Theresa May.

Last week's national election and political meltdown in Britain after the governing Conservative Party lost its majority in Parliament is likely to reinforce this trend. With Prime Minister Theresa May's position gravely weakened, there is still more confusion about the government's plans for leaving the European Union and promised reformulation of its trade and diplomatic strategy.

By contrast, Germany is leading a new generation of trade and investment pacts which Côte d'Ivoire, Morocco, Rwanda, Senegal and Tunisia have already signed. Chancellor Merkel is calling for a Marshall Fund to accelerate economic growth and development in Africa. Her Development Minister Gerd Mueller is calling on the United Nations this week to establish a €10 billion (US $11.2 bn.) fund to respond to the chronic food shortages and crop failures, which have worsened as a result of climate change.

France's President Macron, further strengthened by the victory of his En Marche! party in the first round of legislative elections on 11 June, has already signaled his strong support for a stronger European security policy in the Sahel, where French special forces have been deployed to fight jihadist groups. Some big funding battles loom over how the regional security budgets are divided: France and Germany have concentrated funding and projects in the Sahel; Britain has focused its efforts in Somalia.

ZAMBIA: Lusaka prepares for IMF deal after mining rows
With its financial engineers returning to Lusaka this week, the International Monetary Fund says it could conclude a US$1.3 bn. adjustment loan deal with the government in the coming days. The government has pledged to halve its budget deficit to 4% by 2019 but the deal still has to be approved formally by the IMF board in August.

These negotiations come amid continuing political turmoil, during which challenges to last year's national elections have escalated with the detention of opposition leader Hakainde Hichilema on treason charges.

Some of the political rows have spilled into the country's mining industry as the government has struck an increasingly nationalist posture as local economic pressures mount. Earlier this year a dispute over taxes and royalties prompted a public spat between President Edgar Lungu's government and the Canadian-listed First Quantum Mining. After much bluster, Lungu opted for discreet private negotiations to settle the row. But last week, local police arrested 31 Chinese citizens accused of illegal mining; Chinese mining companies, like their Western and Indian counterparts in Zambia, have been accused of financial malpractice by successive governments over the past 15 years.

NIGERIA: Why the signature on the 2017 budget is so politically important
Will he or won't he? That's the unresolved question in Nigeria about whether President Muhammadu Buhari, on medical leave in London since 7 May, will make it back to Abuja to sign this year's budget. Some staffers in Aso Rock started talking up the President's imminent return.

Such speculation about Buhari has now been formally squashed with one of his aides telling journalists that he was undergoing further tests on 12 June; the results of which would determine the date of his return to Nigeria.

Two officials in the presidency and Speaker of the House of Representatives, Yakubu Dogara, insist the 2017 budget will be signed this week, having been approved by both houses of the National Assembly after a six-month delay. This means Vice-President Yemi Osinbajo would sign the bill, a move which many would see as increasing his standing in the political system. It would also unblock most of the pipelines of government spending, both to ministries and to the politically important 36 states in the federation.

However, some of Buhari's allies are getting wary about Osinbajo's political profile. No longer seen as the apolitical technocrat, Osinbajo's role as stand-in for Buhari, deal-maker in the Delta, and now presiding over the 2017 budget, positions him clearly in the front line of politics. And that means getting into the starting blocks for the 2019 elections.

KENYA: Fears mount after Odinga warns on election trickery and violence
There is a worrying sense of déjà vu about national elections in August with politicians making public condemnations of violence but saying they will not be able to hold back their supporters if there is provocation. That was the line both sides adopted in the 2007 elections and their violent aftermath. Politicians generally reined in the rhetoric in 2013 because the horror of the 2007 elections was fresh in people's minds.

Political speeches have been far less constrained this year. The latest top politician to sound such harrowing warnings is Raila Odinga, presidential candidate of the opposition National Super Alliance. In a series of press briefings, Odinga has said he thought something sinister was afoot at the Independent Electoral and Boundaries Commission where two senior officials were dismissed this month.

One of them headed the procurement office which organises the production of some 130 million ballot papers for national, provincial and local government elections.

ETHIOPIA: Despite economic successes, desperate food shortages in drought hit areas
The government's food stocks are running dangerously low, it has warned this week, with people in the Ogaden areas neighbouring Somalia facing a 'food and nutritional' disaster next month without fresh supplies. After 15 years of high growth and talk of a long-term economic turnaround, the crisis is a blow to the government's efforts to forge a new image for the country. Officials in Addis Ababa reject any insinuation that the food crisis, which affects almost 8 million people or a tenth of the country, is in any way a replay of the famines that plagued the country in the 1980s.

Although climate change and the drought are the main causes of the current food crisis, tens of thousands of migrants trying to escape the continuing conflict in Somalia are putting added pressure on Ethiopia's state system. Mitiku Kassa, head of disaster relief in the Addis Ababa government, says the country needs at least a billion dollars worth of emergency food aid.