Monday, 27 February 2017

NIGERIA/SOUTH AFRICA: Bilateral relations under pressure as protests mount

This week, we start with the fraying relations between Africa's two biggest economies, Nigeria and South Africa. Then to Matebeleland in Zimbabwe, where President Robert Mugabe has been celebrating his 93rd birthday. We have a series of tough economic reports from Ghana, Gambia and Zambia. And finally, Morocco's King Mohammed VI tries to win over the new head of the United Nations on the Western Sahara question and Pope Francis announces that he is planning a joint trip to South Sudan with his Anglican counterpart, the Archbishop of Canterbury, Justin Welby.

NIGERIA/SOUTH AFRICA: Bilateral relations under pressure as protests mount
After a week of street protests, there are calls for action by the Nigerian and South African authorities to dampen down the growing nationalist rivalries between their two countries. On 24 February, a group called the Mamelodi Concerned Residents organised a march in Pretoria against illegal immigration, blaming Nigerians, Zimbabweans and Pakistanis for deteriorating conditions in the country.

In a scary echo of current United States' politics, an activist known as Mario Khumalo claims to have registered a 'South Africa First' party with the Independent Electoral Commission, claiming – quite falsely – that there are 13 million foreign nationals in the country. Malusi Gigaba, Home Affairs Minister and an ally of President Jacob Zuma, told Parliament on 23 February that the government would crack down on companies hiring illegal workers.

There have been counter-demonstrations in Nigeria with protestors targeting South African firms, especially the telecommunications company MTN and vandalising one of its offices in Abuja. Last week, MTN Chairman Phuthuma Nhleko was in Nigeria to meet Vice-President Yemi Osinbajo. This comes after Nhleko resolved a dispute with the Nigerian authorities over the company's failure to disconnect unregistered telephone SIM cards.

Nhleko negotiated a cut in the fine from US$5.6 billion to $1.7 bn. but that deal has provoked criticism in both countries. Members of Nigeria's National Assembly have called for an investigation into the negotiating procedures, given widespread suspicion that MTN may have made illegal payments to officials, as it had been accused of doing to secure a licence in Turkey.

At the same time, we hear that intelligence officers linked to President Zuma have launched an internal investigation into MTN's operations in Nigeria to evaluate those accusations. There may be a political motive behind this. Zuma's rival and Deputy President, Cyril Ramaphosa, was formerly Chairman of MTN, during a period when it was accused of moving revenue out of Nigeria (its biggest market globally), Ghana, Côte d'Ivoire and Uganda to Mauritius and Dubai to avoid local tax obligations.

ZIMBABWE: At a surrealistic party, Mugabe marks his93rd birthday with hour long speech dismissing calls to quit
The ruling party is desperately factionalised, unemployment is rising fast and the economy is chronically short of dollars, yet an upbeat President Robert Mugabe held an extravagant birthday party on 25 February, reiterating his plans to stand again in national elections due next year.

Party officials lined up to offer Mugabe presents, as did some foreign dignitaries, while a local baker produced a 200-pound birthday cake in the shape of the country. The party was held in the Matobo Hills, close to Bulawayo, a long time opposition stronghold.

Mugabe's Deputy President and probable successor, Emmerson Mnangagwa, told the bystanders that the ruling Zimbabwe African National Union-Patriotic Front would rule for ever. Mugabe's wife, Grace, who heads a faction in the party which opposes Mnangagwa, argues that her husband, living or dead, could defeat any rival candidate in the elections.

GHANA: Finance Minister Ofori-Atta's maiden budget to follow tough economic report
After a hard-hitting state-of-the-nation address on the nation's economic woes from President Nana Addo Dankwa Akufo-Addo on 21 February, Finance Minister Ken Ofori-Atta is due read the 2017/2018 budget this week. His priority will be dealing with the country's indebtedness: its debt stock had grown to 122 bn. cedis ($26.2 bn.) from C9.5 bn. under the previous government, according to Akufo-Addo's figures.

Ofori-Atta also faces pressure to cut some of the utility tariffs raised by the preceding government and end what people call 'nuisance taxes'. He is also likely to extend the agreement with the International Monetary Fund, due to end in April 2018, to December 2018.

The government is also pushing ahead with its anti-corruption strategy. Last week, the Economic and Organised Crime Office froze bank accounts belonging to Stephen Kwabena Opuni, the former Chief Executive of the state's Ghana Cocoa Board (Cocobod), whom workers accused of using its resources to help the former governing party, the National Democratic Congress.

ZAMBIA: Government seeks $1 billion from IMF and debt refinancing deal
Finance Minister Felix Mutati is trying to win support from the African Development Bank (AfDB), World Bank and International Monetary Fund to raise about $1.3 bn. in budget support this year.

Mutati, who is yet to open formal talks with the IMF, says he hopes to agree a deal before the middle of the year. Financial sources say the government is seeking around $1 bn. from the Fund and the remainder from the AfDB.

The country is cash-strapped after a spending spree in the run-up to last year's elections and lower copper export prices. After resolving short-term financial matters, Mutati has said he would seek to refinance some $3 bn. of sovereign bonds.

GAMBIA: New government to get $60 million emergency finance from World Bank
Visiting Banjul on 25 February, the World Bank's Vice-President for Africa, Makhtar Diop, pledged short-term financing of $60 million for new President Adama Barrow's government. This follows revelations that the outgoing government under Yahya Jammeh looted many state institutions.

Barrow's officials are due to meet with a range of international financial institutions in the coming weeks to put together a plan for economic recovery. The political glitch triggered by Jammeh's refusal to leave power after losing December's elections has cut deeply into tourist earnings.

Finance Minister Amadou Sanneh, formerly a political prisoner under Jammeh, said state companies managing water, power, transport and telecoms had been bankrupted by the former regime. Jammeh is now living in Equatorial Guinea but some of his key security officials have been detained in Banjul.

MOROCCO: King Mohammed sounds alarm to UN as tensions rise again over Western Sahara
After clashing with former United Nations Secretary General Ban Ki-moon over the Western Sahara dispute last year, Morocco is trying to win over his successor António Guterres in its strategy of pushing back against the Polisario Front. Coming a month after Morocco's readmission to the African Union, which it also wants to win over to its position, there are signs of a coordinated diplomatic push on the issue.

In a phone call, King Mohammed VI complained directly to Guterres about what he described as “repeated incursions” by Polisario fighters around Guerguerat, an area in Western Sahara near the border with Mauritania. Its is next to a buffer zone patrolled by UN peacekeepers; Polisario accuses Morocco of trying to build a road into the UN area, a breach of the 1991 agreement.

SOUTH SUDAN: Pope Francis plans visit with Anglican leaders as famine and security crisis worsen
In a ground-breaking show of ecumenism, Pope Francis proposed on 26 February that the Archbishop of Canterbury, Justin Welby, should join him on a planned trip to South Sudan this year. The joint trip had been suggested, the Pope said, by local religious leaders in South Sudan who visited Rome last year and called for Roman Catholic, Anglican and Presbyterian leaders to visit their country together to have the maximum influence.

Speaking of the need to draw attention to the terrible conditions in the country, Pope Francis described the local religious leaders in South Sudan as working for peace. As the death toll in the fighting between rival militaries and parties has risen, religious leaders have emerged with far more credibility among the wider population than their political counterparts.

Tuesday, 21 February 2017

SOUTH AFRICA: Zuma positions his money man ahead of budget speech

This week we start in Cape Town with renewed speculation about a cabinet reshuffle as Finance Minister Pravin Gordhan prepares to read his budget and then to Somalia where the IMF has promised the new government it will back a debt relief scheme. In Gambia, jubilation at President Adama Barrow's inauguration was tinged with some concern about the stability of the transition and a third high-ranking member of the South Sudan government has quit in a week, alleging ethnic bias. Finally, Nigeria's government gets a vote of confidence from investors despite the month-long absence of President Muhammadu Buhari.

SOUTH AFRICA: Zuma positions his money man ahead of budget speechFor political insiders the news that Brian Molefe, the disgraced former head of the state power company Eskom, has been 'deployed to parliament' could mean only one thing: President Jacob Zuma wants to appoint his friend as a minister or deputy minister.

Under the country's proportional representation system, party leaders can choose whom they send to parliament as MPs at will. The word for months has been that President Zuma wants to sack Finance Minister Pravin Gordhan, who is due to read the budget tomorrow (22 February), and replace him with someone more pliable, or to find a way to rein him in.

Molefe fits the bill. He wept at a briefing at Eskom after he was named in a report on state capture by Public Protector Thuli Madonsela. She had revealed that there were 58 phone calls between Molefe and the Gupta family when their company Tegeta was buying the Optimum Coal mine, which had a lucrative supply contract with the state utility.

Molefe's defenders say at least he had the decency to resign after Madonsela had pointed to the conflict of interest. Now, he is back in the game, courtesy of Zuma's plans for another cabinet reshuffle.

Although Zuma has the constitutional right to sack Gordhan and replace him directly with Molefe such a move could provoke strong opposition from other senior ministers and figures in the African National Congress.

A plausible alternative for Zuma would be to replace the current Deputy Finance Minister, Mcebisi Jonas, with Molefe, who could act as a brake on Gordhan or at least report on what he is doing. Jonas could then be moved to the currently vacant spot of Deputy Trade Minister. That could still panic the markets, pushing down the rand against the dollar again and forcing up interest rates – to say nothing of prompting a ratings downgrade later this year.

In terms of economic rationality, this makes no sense when Finance Minister Gordhan is due to read the budget under some of the toughest financial conditions for more than a decade. Yet according to the dictates of the power game now being played at the top levels of government it is just part of the political calculus.

SOMALIA: The IMF talks debt relief and new currency notesAfter his surprise selection by parliament, new President Mohamed Abdullah Mohamed 'Farmajo' has received another endorsement from a more unexpected quarter – the International Monetary Fund. Not only is the IMF willing to back the introduction of new Somali shilling notes, due to come into circulation this year alongside the US dollar, it is also willing to help the country negotiate a deal to get relief on some of the US$5.3 billion it owes to major creditors.

Remonetising the national currency – almost all the Somali banknotes in circulation are counterfeit – would be an important step towards economic normalisation for President Mohamed's new government. The Kenya Commercial Bank has already applied to set up in Mogadishu. Somalia currently receives about $2.5 billion a year in remittances from its highly entrepreneurial diaspora, dotted around Africa, Europe and North America.

THE GAMBIA: Mass arrests of Jammeh supportersThe formal inauguration of President Adama Barrow at Banjul's Independence Stadium last Saturday (18 February) to popular acclaim has not calmed concerns about the stability of the regime and its relations with its neighbours. The guest of honour was Senegal's President Macky Sall, who has been asked to keep some of his soldiers in Gambia to consolidate the transition after the departure of defeated President Yahya Jammeh.

The European Union has already announced an aid package worth $80 million for Barrow's government; some French officials have long suggested that a closer union between Senegal and Gambia would make sense. Yet four days before Barrow's inauguration, Britain's passionately anti-EU Foreign Minister Boris Johnson turned up in Banjul to fete the new government. Johnson said Britain would fast-track Gambia's return to the Commonwealth; Jammeh had taken Gambia out of the organisation labelling it 'colonialist'.

And there are residual supporters of Jammeh and his Alliance for Patriotic Reorientation and Construction. Police arrested about 50 of Jammeh's supporters in Kafenda, one of his strongholds, after violent arguments with a contingent returning from the inauguration.

SOUTH SUDAN: More senior officers quit Salva's government claiming discriminationThe resignation of Khalid Ono Loki claiming ethnic bias is the third top-level departure from President Salva Kiir's government in the past week. It follows the resignations of General Thomas Cirillo Swaka and Minister of Labour Gabriel Duop Lam. Their common complaint is that Salva's government is blatantly biased in favour of his own Dinka people. Khalid Ono, who headed the military court system, extended this criticism to the head of South Sudan's army, General Paul Malong, accusing him of covering up crimes such as murder, rape and theft.

This comes at a time of chronic economic difficulties for the Juba government: it has lost almost all its oil revenues due to the resurgence of conflict last June. Drought and war have hit food supply and the UN has officially declared famine in parts of the country. Inflation was reckoned to have hit over 800% last year.

More than three mn. of the country's 11 mn. people were forced from their homes by fighting last year; 100,000 face starvation and 1 mn. are on the brink of famine, says the World Food Programme. Up to 400,000 have fled across the border to Uganda whose government says it's struggling to cope.

NIGERIA: Vice-President Osinbajo reaches out as Buhari's health worries continueSeveral investors who last week snapped up a billion-dollar Eurobond launched by Nigeria told Africa Confidential last Friday (17 February) that they were unfazed by the month-long absence of President Muhammadu Buhari from his country on medical grounds. They pointed to the orderly transfer of power, during Buhari's absence, to Vice-President Yemi Osinbajo.

A consummate technocrat and part-time pastor with no independent political base, Osinbajo has pressed ahead with the business of government. Last week his team was preparing the launch of an economic recovery plan and he led a delegation to the Niger Delta to reinforce a government agreement with local militant groups.

However, Osinbajo is treading a fine line between assuring Nigerians and outsiders that there is no power vacuum during Buhari's absence and overplaying his hand politically. Some investors say the financial team launching the bond had suggested that further exchange rate reforms were likely to be announced later in the month, probably as part of the recovery plan. So far, President Buhari has shown no sign of resiling from his long-held opposition to a sharp devaluation of depreciation of the Naira.

Thursday, 16 February 2017

Fake news from nowhere

A distinguished political analyst in Nigeria lamented last month that the country had probably invented the Fake News phenomenon, closely linked to Donald Trump's presidential election campaign in the United States and a lucrative business model. As if to buttress this claim, some Nigerian bloggers and commentators were last month assuring us that President Muhammadu Buhari had died of a mystery illness. Days earlier, his office had announced that he would be staying in London for medical tests.

When the death story petered out, it was replaced by reports of Vice-President Yemi Osinbajo being held hostage by several state governors as well as Senate President Bukola Saraki until he agreed to stand down and transfer his powers, as head of state in Buhari's absence, to one of their number. For Nigerians of a nervous disposition, this is a reworking of the plot around the ailing President Umaru Musa Yar'Adua in 2010. The planned trip on 16 February by Saraki and the Speaker of the House of Representatives, Yakubu Dogara, to see Buhari in London may dispel some of the myth-making. The scarcity of information so far about Buhari's ailments has given Nigeria's Fake News industry a shot in the arm.

Curiously, investors in Nigeria's billion-dollar Eurobond seem unbothered by the President's indisposition. The bond issue was eight times over-subscribed and with an interest rate several percentage points lower than those of other economies in the region.

Monday, 13 February 2017

NIGERIA: Anti-corruption campaign claims victory with collection of US$170 million of stolen funds

This week we start in Nigeria, where anti-corruption investigators can finally claim some success. Then we go on to Washington where President Donald Trump's top advisor on African security issues has just been blocked by the Central Intelligence Agency. In South Africa, President Jacob Zuma insists he is determined to continue with his policy relaunch despite the violent clashes inside and outside Parliament last week. In Kigali, three candidates have announced they are preparing to stand against Paul Kagame in presidential elections in August and in South Sudan, a senior general has walked out of President Salva Kiir's government accusing it of running ethnic militias and torture camps.

NIGERIA: Anti-corruption campaign claims victory with collection of US$170 million of stolen funds
After 18 months of investigations and missteps, Nigeria's anti-corruption campaign is recovering hundreds of millions of dollars and building prosecution cases against some leading figures in the last government, said officials in Abuja on 12 February. More stolen government cash is likely to be found in the coming weeks, they add.

These developments come amid concern about President Muhammadu Buhari's health and efforts by the government's economic team to raise funds for an ambitious public investment programme.
Over US$170 million of stolen state funds have been recovered in the last two months, according to Information Minister Lai Mohammed. Investigators have linked some of the funds to three individuals, including $9.6 mn. in cash found in a safe in the house of Andrew Yakubu, the former head of the state oil company. The largest block of cash – some $131 mn. – was found in a secret account in a local commercial bank, Mohammed said.

This week, Africa Confidential will publish a detailed account of investigations by the Economic and Financial Crimes Commission into the management of the oil and gas industry over the past decade. There are signs that the probe is gathering pace after several missteps.
Ex-Oil Minister Diezani Allison-Madueke, now in London, furiously denied any wrongdoing last month after the Nigerian authorities froze three local bank accounts, holding some $153 mn., which investigators had linked to her.

AFRICA/UNITED STATES: CIA blocks security clearance for Africa Advisor to National Security Council as turf war heats up
The Central Intelligence Agency's blocking of high-level security clearance for former United States Marine Corps Sergeant Robin Townley, the proposed Africa Advisor on the National Security Council, points to growing differences over policy and staff. Intelligence sources in Washington say the move was authorised by new CIA Director Mike Pompeo and is also a blow against General Michael Flynn, National Security Advisor to President Donald Trump.

Townley, who has extensive experience as a counter-intelligence officer and interrogator in Africa and the Middle East, was particularly close to Flynn. Politico, the specialist news website in Washington which broke the news of the blocking, quoted security sources as saying that Townley's request for 'sensitive compartmentalised information' was rejected because of his scepticism about the CIA's methods. It added that Flynn's ties to Russia are under close scrutiny by the CIA.

These ructions could affect policy in some critical areas such as Libya, where Flynn and Townley are said to support US backing for Gen. Khalifa Haftar, leader of the Libyan National Army, who is trying to topple the internationally recognised government in Tripoli. Haftar, who is closely allied with Egypt, the United Arab Emirates and Russia, sent an envoy to meet senior members of Trump's foreign policy team last December.

Another ruction over Libya policy has surfaced, this time at the United Nations. The UN Secretary General, António Guterres, has endorsed the choice of Salam Fayyad, a former Prime Minister of Palestine, as his Special Envoy to Libya. This is against the objections of the US Ambassador to the UN, Nikki Haley, who said the UN was too biased in favour of Palestine.

In fact, Fayyad's role will focus exclusively on national and regional developments around Libya and will have no connection with the Palestine-Israel dispute. However, his appointment could add a new energy to political negotiations in Libya and perhaps boost the UN-backed government in Tripoli under Prime Minister Faiez el Serraj, which has become increasingly reliant for its survival on a group of local militias.

RWANDA: Three opposition contenders to challenge Kagame in this year's presidential polls
Philippe Mpayimana, a journalist and civic activist who has lived mainly in exile in Belgium and France since the 1994 genocide, is the latest contender to announce that he will challenge Paul Kagame in this year's presidential election. How this band of opposition candidates fare in the run-up to the election in August will indicate how far the government is willing to make any concessions to its critics.

Few in Kigali think an opposition candidate has any chance of success against Kagame. In recent elections, there hasn't been even a semblance of a campaign and opposition contenders have been quickly shut down by state agencies.

Mpayimana worked for Radio Agatashya, which was set up after 1994 to help Rwandans who fled to Congo-Kinshasa after Kagame's Rwandan Patriotic Front (RPF) took power in 1994.
Some Rwandan commentators have accused Mpayimana of 'trivialising' the genocide, a charge which in Kigali has the resonance of Holocaust denial, but there have been no substantiated allegations against him.

Mpayimana's bid follows announcements by Frank Habineza, leader of the Democratic Green Party, and Catholic priest Thomas Nahimana, who have both been staunch opponents of Kagame and the RPF.

SOUTH AFRICA: After parliamentary rumpus, policy shifts and a mooted cabinet reshuffle
The fist-fights in Parliament and the more serious clashes outside it wrecked President Jacob Zuma's bid to relaunch the policies of the African National Congress in his State of the Nation address on 9 February. But top ANC officials insist they will press on with their new agenda – dubbed radical socio-economic transformation – before the party's policy conference in June and leadership elections in December.

The policies flagged by Zuma in his speech, which was delayed by interruptions for 90 minutes, reworked plans for speedier land redistribution, measures to rein in the corporate banking, retail and telecommunications monopolies, and more backing for black entrepreneurs. Yet his speech was thin on detail. Deputy President Cyril Ramaphosa announced a minimum wage on the eve of Zuma's address but the country's biggest trades union federation has declined to support it so far.

More information about economic strategy should emerge in Finance Minister Pravin Gordhan's budget speech, due on 22 February. Rumours continue to swirl about Zuma's plans for a cabinet reshuffle in the coming months, which could mean the appointment of a new Finance Minister. Gordhan and Zuma have been at odds for many months over the activities of the Gupta family, who have nurtured close ties with the President and his family.

Some bankers at the Mining Indaba in Cape Town last week confidentially said the markets had 'already discounted' the effects of Zuma sacking Gordhan but opinion was sharply divided over the President's next moves.

One view is that Zuma would leave Gordhan in place but appoint a close ally, such as Brian Molefe, as the Deputy Minister to influence policy and decision-making. Others believe that Zuma would seek a credible successor to Gordhan who would be better disposed towards the Guptas, such as Tito Mboweni, a former Governor of the Reserve Bank who has tempered his criticism of the government in recent weeks.

SOUTH SUDAN: Dissident general quits government over claims of pro-Dinka bias
The resignation note from Lieutenant General Thomas Cirillo Swaka, the most senior officer to resign from the Juba government side since the then Vice-President, Riek Machar, fled in July, makes very serious claims against the military of ethnic bias and serial human rights abuses. It also raises questions about the viability of regional peacemaking efforts in the country.

Several of Riek's allies fled alongside him and President Salva Kiir reshuffled the government. He has been struggling to consolidate military and economic control ever since.

Thomas Cirillo, an Equatorian, stayed in Juba, number two in military logistics, after the reshuffle but his claims back up the findings of reports by United Nations' investigators and non-governmental organisations on atrocities in South Sudan's civil war. His accusations will have the added weight of coming from a top military officer. However, Cirillo, long seen as non-political, has not spelt out what his next move may be.

'President Kiir and his Dinka leadership clique have tactically and systematically transformed the SPLA [Sudan People's Liberation Army] into a partisan and tribal army,' Cirillo's statement said.
He added that government forces had murdered and raped civilians, and allowed local ethnic militias to do the same. 'Terrorising their opponents, real or perceived, has become a preoccupation of the government.' Cirillo also claimed that the government was running secret detention camps where inmates were routinely tortured.

Monday, 6 February 2017

SOUTH AFRICA: As Zuma readies State of the Nation speech, his would-be successors launch their campaigns

This week we start in Cape Town, which has temporarily become the crucible for South Africa's political fights as well as host to an international mining conference. Then we look at the warnings about Africa's growing indebtedness, the jitters in Nigeria about the President's health and we ask whether United States' President Donald Trump is preparing to back Russia's favoured rebel general in Libya. Finally, President José Eduardo dos Santos tells Angolans that he really is leaving after the August elections.

SOUTH AFRICA: As Zuma readies State of the Nation speech, his would-be successors launch their campaigns
The country's big political battles come to Cape Town this week as some of the world's biggest resource companies descend on the city for the annual Mining Indaba in search of new deals amid global economic wobbles.

Nkosazana Dlamini-Zuma, outgoing chairperson of the African Union Commission, kicked it off yesterday (5 February) at a church service organised by the Faith Ministry and the Women's League of the African National Congress which backs her campaign for the presidency. On Wednesday (8 February), she and former President Thabo Mbeki are due to talk to a select group of investors in Cape Town about South Africa's political future. Dlamini-Zuma was one of Mbeki's most trusted ministers when he ran the government.

Earlier that day, Mmusi Maimane, leader of the opposition Democratic Alliance, is due to speak to the media, outlining his 'Rescue mission for a lost generation' which is being billed as an alternative State of the Nation speech. Also speaking that day will be Sipho Pityana, chairman of AngloGold mining and the leader of the Save South Africa campaign, which is calling for President Jacob Zuma's exit.

Deputy President Cyril Ramaphosa, Dlamini-Zuma's chief rival for the top job, is to address the Progress Business Forum in Cape Town on Wednesday as part of his slow-motion election campaign. In recent weeks, Ramaphosa has become more critical of President Zuma's leadership of the government and party, which has been shaken by factional rivalries.

Zuma will be in the headlines on Thursday (9 February), when he makes his State of the Nation Address in parliament where he is likely to face a barracking from the opposition Economic Freedom Fighters (EFF). Indeed the ANC and the EFF seem to be spoiling for a test of strength on the streets of Cape Town. Zuma's aides have installed huge video screen on the city's Grand Parade and called the party faithful to a rally there.

After he finishes his speech in parliament, Zuma is due to address the rally in what is being seen as a direct appeal to the streets. Security is likely to be heavy, at least around the President and the party's top officials. That is unlikely to dissuade the militants of the EFF, led by Julius Malema, who have made it an annual ritual to disrupt Zuma's State of the Nation speech.

AFRICA'S DEBTS: Bankers sound alarms on the Mozambique syndrome
After Mozambique missed a US$60 million interest payment on its $727 million bonds last month, bankers are trying to work out whether it is a tactical move to press them to renegotiate or if it presages a deepening financial crisis across the region. The bonds are now trading on the secondary market for about half their face value.

But so far the bondholders have refused to renegotiate with Maputo until it publishes an independent audit of all its secret debts and reaches a deal with the International Monetary Fund. But the bondholders may be overtaken by events, such as tougher financial conditions in several other African economies.

John Ashbourne of London-based Capital Economics is quoted by Bloomberg News warning about repayment difficulties in several economies hit by falling prices for their commodity exports. Bloomberg labelled four countries – Senegal, Tunisia, Ghana and Zambia – as higher-risk economies, according to its own financial modelling.

Other economists and banks, such as Standard Chartered and Citi group, argue that the risks of default are being exaggerated. Although the ratio of debt to gross domestic product in all these economies has grown sharply over the past four years, two of the countries – Senegal and Ghana – are following programmes backed by the International Monetary Fund while Zambia has reopened negotiations with the Fund.

Perhaps the most vulnerable is Tunisia, given the high level of political risk it has as a neighbour of war-torn Libya. A string of terrorist attacks in Tunisia have badly damaged its tourism industry and youth unemployment is rising sharply despite government public commitments to economic reform.
Last week Ghana's new Finance Minister Ken Ofori-Atta saw the power of the markets after he announced that the outgoing government had left a US$1.6 billion hole in state finances which would push the country's budget deficit close to 10%, more than double its target. That pushed the yield on Ghana's 2023 bonds four basis points to 8.48%.

An IMF delegation is due in Accra this to discuss the country's $918 million programme and is expected to respond to Ofori-Atta's comment that the terms might require some adjustment. Because it approved the previous government's management of the programme, the IMF will be under pressure to offer some concessions to the new government.

NIGERIA: President Buhari's extended medical leave fuels health rumours
A lack of credible information and a storm of lurid stories on social media is turning President Muhammadu Buhari's medical leave in London into a political crisis. Claims that he had been incapacitated or worse accompanied his departure from Nigeria on 19 January for ten days' leave.

The announcement by the presidency on 5 February that Buhari was prolonging his leave in London for further tests but without setting a date for his return, seems to have further fuelled the rumours. The Presidency insists that Buhari's ailments – without naming them – are not serious.
That is convincing neither the country's feisty journalists nor the increasingly influential commentators on social media. Vice-President Yemi Osinbajo is operating as acting President until further notice.

LIBYA/UNITED STATES: Will Trump administration join Russia in backing Khalifa Haftar?
Libya's rumbling conflict offers the Trump administration a clear choice between supporting the European Union position, backing Prime Minister Fayez Mustafa al Serraj's government in Tripoli or siding with the Russian-backed rebel General Khalifa Haftar.

Meeting in Malta last Friday (3 February), European leaders reiterated their backing for the shaky Al Serraj government, which they see as key to the United Nations-backed peace process in the country. European leaders have also approved a $200 mn. scheme to pay Libya to build camps to discourage migrants from crossing the Mediterranean.

Yet Gen. Haftar has been sending envoys to Washington to win backing for his campaign to win control of the country and crush militant Islamist groups there. Egypt and United Arab Emirates are already giving Haftar military support, and we hear that Russia has found a way around the UN sanctions against arms shipments to Libyan militias.

If it chose to get behind Haftar, the US government could tilt the balance in the Libyan war, both militarily and diplomatically. Libyan activists call that policy 'Syria light'. They regard the new US government as giving tacit approval of the saturation bombing of opposition areas by the Damascus government and Russian air force. And they argue that such a policy would worsen rather than resolve Libya's civil war.

ANGOLA: No drama exit now possible for President Dos Santos this year
A quiet announcement from the Presidency in Luanda confirmed that José Eduardo dos Santos would not seek re-election in this year's polls. That leaves the field open for his preferred successor, Defence Minister João Lourenço, to become the flagbearer for the ruling MPLA. Although Dos Santos publicly endorsed Lourenço, a former soldier and Russian-trained engineer, as his successor last December, the mechanics of how that might happen remained unclear.

Now it seems likely that Dos Santos will step down after national elections planned for August. That will not immediately affect his family's substantial financial interests and role in the economy: his daughter Isabel runs the state oil company and his son Xenu runs the country's sovereign wealth fund.

Thursday, 2 February 2017

Morocco makes its move

'C'est un grand jour pour le Maroc,' Rabat's Foreign Minister Salaheddine Mezouar told journalists in Addis Ababa after his country was readmitted to the African Union on 31 January. He was speaking just minutes after Morocco's King Mohammed VI had made his inaugural address to the African Union summit as the head of a member state.

Mohammed VI's 20-minute speech was placatory, with only one reference to the dispute over the claims to Western Sahara which had prompted his country to quit the AU's predecessor, the Organisation for African Unity. 'We don't want to divide the continent,' he insisted. Although Morocco had won the support of 40 member states for its readmission, there was no discussion of the implications.

Mohamed Salem Ould Salek, Foreign Minister of the Sahrawi Arab Democratic Republic, which has been locked in dispute with Morocco for four decades, called Rabat's return a 'positive step'. He believes Morocco's AU membership will compel it to recognise the SADR as an accredited nation state. So far there has been no regional thaw over the core issue: the territory's status. Algeria, South Africa and Zimbabwe still strongly back the SADR and say they will oppose any move by Morocco to downgrade its status. That could push the issue back to the United Nations, where a stalemate between Morocco and the SADR has reigned since 1991. UN Secretary General António Guterres could be the man to break the log jam.