Thursday, 30 March 2017

The reversed revolution

The verdict from the Tahrir Square generation that took to the streets in January 2011 to such dramatic effect was clear and concise. 'Mubarak is on the asphalt, the youths are in prison,' an activist known as 'Mohamed 303' tweeted on hearing the news that ousted former President Hosni Mubarak had been released. He was referring to the 60,000 political prisoners in detention under the current government of President Abdel Fatah el Sisi.

There is a strong sense that the events between 2011 and 2017 have turned full circle. Indeed, many say that conditions under President El Sisi are substantially more repressive than under Mubarak while the armed forces enjoy a greater level of impunity. Mubarak's appearance in an iron cage in court like any other defendant had seemed to be a seminal moment. But the moment passed, and seven years later Mubarak has been exonerated from all charges of murder.

That sends a strong political message to the Tahrir Square generation and their successors. If Mubarak, who ruled as an autocratic president, cannot be held responsible for giving the orders to kill 239 demonstrators and to torture and detain thousands more, what prospect is there that President El Sisi and his fellow officers will ever be brought to account for the massacre of at least 900 people on 14 August 2013 in the coup against President Mohamed Mursi's government? Neither does it offer much respite for the legions of political detainees.

Monday, 27 March 2017

SOUTH AFRICA: Reshuffle could become reality as Zuma recalls Finance Minister from investment tour

We start in Pretoria, from where South Africa's Finance Minister Pravin Gordhan has just been summoned to return from London, sparking more speculation that President Jacob Zuma is about to sack him. And then to Zimbabwe which is, despite the political ructions in South Africa, considering adopting the rand as its currency. And in neighbouring Zambia, the plumbers of the International Monetary Fund are due in Lusaka to start negotiations on a new stabilisation programme. Financial matters are also to the fore in Ghana, where the Governor of the central bank has to make an important decision on interest rates but faces growing opposition from officials in the new government. And finally to the Confederation of African Football, where the compelling defeat of its long-time President, Issa Hayatou, is likely to presage reform and more opportunities for the continent's young footballing talents.

SOUTH AFRICA: Reshuffle could become reality as Zuma recalls Finance Minister from investment tour
A cabinet reshuffle could be in preparation following the confirmation by a Treasury official on 27 March that President  Zuma has rescinded permission for Finance Minister Gordhan to host investment roadshows in Europe and the United States. It is an open secret in the top echelons of the governing African National Congress that Zuma wants to push Gordhan and his deputy, Mcebisi Jonas, out from the Treasury. Treasury Director General Lungiza Fuzile, also seen as a Gordhan ally, has also been ordered to return from London.

Political insiders have been predicting that Zuma might choose the second half of March for his long-mooted reshuffle. Various pieces in the jigsaw are now in place. Zuma's close ally Brian Molefe, the disgraced Chief Executive Officer of state utility Eskom, has been sworn in as an ANC member of parliament. Many expect him to be given a top economic ministry to run.

Zuma's ex-wife and favoured candidate for the ANC presidency in party elections at the end of this year, Nkosazana Dlamini-Zuma, finally left her position as Chairwoman of the African Union Commission in Addis Ababa on 14 March. Dlamini-Zuma is also expected to be given a top ministry in an effort to boost her credentials in what is increasingly looking to be a very bruising competition with Deputy President Cyril Ramaphosa for the top job in the ANC.

ZIMBABWE: Adopt the rand and drop the dollar, says top bank official
Whatever the political ructions in South Africa's Treasury department, neighbouring Zimbabwe still sees the country – especially its currency, the rand – as an anchor in uncertain times. That seems to have informed the call from Kupukile Mlambo, Deputy Governor of Zimbabwe's Reserve Bank, for his country to adopt the rand rather than the US dollar as its main currency.

Mlambo's argument is economically convincing. Most of Zimbabwe's imports come through South Africa and are originally priced in rand. But because of its weakness against the US dollar, the price of these imports rises sharply when their prices are converted into US dollars.

Politically, adopting the rand could prove more problematic for President Robert Mugabe's government. It would mean that South Africa's economic policies – on interest rates, inflation and money supply – would directly affect policy-making in Zimbabwe.

For now, that might not seem to matter much as the South African government does not appear to be very exercised about Zimbabwe's internal politics. But should that stance change with new leadership at the top of the governing ANC, South Africa's influence on its northern neighbour could prove decisive.

ZAMBIA: Slow growth and ballooning debts prompt Lungu to call in the IMF
After the high-octane spending spree in the run-up to elections last August, it had seemed likely that President Edgar Lungu's government would bring in the IMF to help stabilise the economy. It was his plan to delay bringing in the Fund that allowed him to turn on the spending taps and tell electors that his government represented high economic growth and investment. His opponent Hakainde Hichilema, the businessman who leads the United Party for National Development, argued that many of Lungu's pre-election contracts were terribly over-priced or awarded to bogus companies. If the IMF demands, as many activists hope, forensic audits of state procurement over the last couple of years, it may be possible to work out whether Lungu or Hichilema is right.

Lungu's government says it will reach agreement with the IMF by mid-year, which will involve reining in state spending and cutting the budget deficit. Despite a boom in the price of copper and cobalt, among Zambia's main exports, the Fund forecasts that economic growth will rise about half a point to 3.5% this year.

GHANA: Central bank may cut rates as Governor fights off pressure over job
Although many senior officials in President Nana Addo Akufo-Addo's government are keen to see the exit of Central bank Governor Abdul-Nashiru Issahaku, regarded as a close ally of defeated President John Mahama, he is showing considerable tenacity as he hangs on to his job.

According to the constitution, Issahaku has tenure and could be dismissed only by a special vote in Parliament or if the Attorney General authorised criminal charges against him. For now, it seems the new government's economic departments have chosen to work closely with the Governor on key policy matters.

A case in point is this week's decision on interest rates. Local banking analysts argue that Governor Issahaku should cut rates on 27 March by at least 1%. The cedi has gained over 6% against the dollar since Finance Minister Ken Ofori-Atta's well received budget on 2 March, which set out plans to promote private sector growth, cut some taxes and cap state spending.

But Governor Issahaku will remain haunted by what is known at the Bank of Ghana as the 'Sibton Switch Affair'. That is the award of a contract, which would have been worth US$1.4 billion over 20 years, to a little known local company to set up an 'inter-operable’ electronic payments system. That means that the system would allow people to make transfers on their mobile phones and on the internet to all banks participating in the scheme.

The size of the contract award astonished the incoming government, particularly when it discovered the competing bids, from more established local companies, were priced at $8-$15 million to provide essentially the same service. Although we understand the Sibton Switch contract has now been suspended, questions are being asked about Issahaku's role and why he didn't act sooner.

AFRICAN FOOTBALL: What changes after the fall of Hayatou?
The defeat of Issa Hayatou, the long-time head of the Confederation of African Football, at the elections in Addis Ababa last week was something of a metaphor for the continent's politics and it presages sweeping changes in Africa's most important sport. Hayatou was also seen as a key ally of the disgraced President of the Fédération Internationale de Football Association, Sepp Blatter, who has now been barred from holding any office in FIFA after dominating the organisation for three decades.

Together, Blatter and Hayatou reinforced each other's dominance of international football organisations and their courting of political support in Africa as a key part of their modus operandi. With Blatter and now Hayatou out of the way, that era has finally gone.

The victory of the head of Madagascar's Football Association, Ahmad (who is known by this single name), was convincing enough – he won by 34 votes to 20 – to represent a mandate for reform of the financing of the continent's national soccer organisations.

It could also mean an end to the weight of corruption that has stolen resources from much-needed efforts to promote training and development on the continent of some of its talented youth, many of whom are snapped up by European and Asian football teams.

That has led to the phenomenon known as 'football trafficking', which apart from the suffering it may inflict on individual players, also undermines efforts to establish a much stronger culture of sporting skills development within Africa.

Monday, 20 March 2017

AFRICA/G-20 FINANCE MINISTERS: Germany's investment compact plan wins wider support

This week we start in the spa town of Baden-Baden, Germany, where the finance ministers of the world's 20 richest countries have been meeting. They spent part of their time discussing a set of investment deals in Africa. Then to Pretoria, the political capital of South Africa, where speculation is rife about a mysterious break-in at the offices of the Chief Justice. To the north-east in Kenya, President Uhuru Kenyatta has sent troops to quell growing violence in the drought-hit Rift Valley ahead of this year's elections.

And finally, there is a new gust of interest by banks and energy companies in the prospects for relaunching Nigeria's economy. Mostly, they agree that the government's new plan makes much sense but they want assurance that there is political agreement over the imposition of some key foreign exchange and security measures.

AFRICA/G-20 FINANCE MINISTERS: Germany's investment compact plan wins wider support
The G-20 finance ministers meeting under Germany's leadership in Baden-Baden took time off from the global rows over economic nationalism and protectionism last Friday (17 March) to push forward the Compact for Africa, which is aimed at steering more private investment into the continent.
This year, Germany will have one of the biggest allocations for development aid in the world but its officials say they want to use much more of this funding to back sustainable businesses in Africa. Their argument is that well-run businesses should generate a much bigger domestic base which would boost the region's economic independence.

Endorsing the plan to push private capital into Africa, Wolfgang Schäuble, Germany's finance minister, told the meeting, 'We may not leave Africa's potential unused.'  Schäuble envisaged an activist campaign by G-20 governments to corral international organisations and corporations to raise capital for commercial projects in Africa. Such measures could include backing for risk insurance in less stable countries and special incentives from rich economies to persuade companies to look more seriously at Africa's economic potential.

On this model, Germany has launched several bilateral investment partnerships with African countries such as Côte d'IvoireRwandaSenegal and Tunisia. Each is implementing an agreed package of measures to cut the risks of investment in their economies.

Alongside the ethical issues of global inequities, Schäuble argued that the 20 biggest economies had a strong self-interest to act on the lack of investment capital in Africa saying, 'Beyond the moral question of raising Africans' living standards, the continent's development is crucial to reducing geopolitical risks …investment in Africa is still low, depriving people in African countries of opportunities to improve their lives.'

Morocco's finance minister, Mohamed Boussaïd, a special invitee to the summit, said that the initiative was the first time there had been a coordinated effort by the world's biggest economies to address the demand for investment.

Much of the resulting capital, he argued, be would be likely to be channelled through the continent's most dynamic economies. Morocco would almost certainly be one of them; it raised its African profile through a heavy diplomatic campaign over the past year which culminated in the kingdom's re-admission to the African Union.

SOUTH AFRICA: Mysterious computer thefts at the Chief Justice's offices follow a string of anti-government rulings
Human rights activists say last weekend's (18-19 March) burglary at the offices of Chief Justice Mogoeng Mogoeng in which at least 15 computers were stolen raises serious suspicions. Although campaigners have produced no direct evidence of political complicity, the raids follow last Friday's High Court ruling that the appointment of Berning Ntlemeza as head of the Hawks, the elite police investigation unit, was unlawful.

Nathi Mncube, a spokesman for the Chief Justice, said the computers held the personal records of 250 judges and the theft represented 'a huge setback for the administration of justice' in the country. The computers also contained important information about cases on which the Chief Justice and the Constitutional Court are expected to rule. The raid came almost exactly a year after a similar break-in at the Helen Suzman Foundation three days after it filed an application with the Pretoria High Court to suspend Ntlemeza's directorship of the Hawks (AC Vol 57 No 7, Night of the generals).

On 17 March, the Constitutional Court, the country's highest judicial body, ordered the government to pay all social grants due to some 17 million South Africans on 1 April despite the chaos in the country's social welfare department under Minister Bathabile Dlamini. The court lambasted Dlamini's stewardship of the department, saying that she should pay the social grants from her own pocket if the department was unable to do it.

The row over Dlamini's future is yet another issue dividing the African National Congress. Although ANC MPs say the social development ministry is in chaos, President Jacob Zuma has strongly defended her throughout the crisis.

Many in the ANC and the opposition want Zuma to sack Dlamini but she has emerged as one of his strongest allies over the past year. She is also President of the ANC Women's League and is spearheading the campaign to elect Zuma's ex-wife, Nkosazana Dlamini-Zuma, as the ANC's next President. Archbishop Desmond Tutu has called Zuma's defence of Dlamini as 'incomprehensible'.

KENYA: Kenyatta sends in troops against armed cattle-rustlers
To the latest worries grow about the timetable and the credibility of national elections due in August can be added concerns about a succession of raids by armed herders in the Rift Valley and neighbouring regions (See AC Vol 57 No 6, Bye-election fever).

On 17 March, President Uhuru Kenyatta sent troops to Baringo, Elgeyo Marakwet, Pokot and Laikipia to confront and disarm the herders. The political base of Deputy President William Ruto, the Rift Valley has long been some of the most heavily-contested political terrain in Kenya. It saw some of the most horrific violence in the aftermath of the disputed elections in 2007. Should the violence worsen it could delay or affect the outcome of the national elections.

There is no apparent partisan link to the latest violence but it reflects growing frustration with deteriorating economic and environmental conditions in areas of the country that used to have some of its most productive agricultural lands. The drought is the worst in over a decade.

Interior Minister Joseph Nkaissery says that at least 380 people have been arrested since the beginning of the month in Baringo and Laikipia in connection with the violence.

NIGERIA: Policy and security questions cast shadow over economic relaunch plan
As discussion continues in Abuja about the implementation of the government's plan to relaunch the economy, several banks and energy companies are assessing the feasibility of Nigeria's mooted expansion of its oil and gas companies. The biggest barrier to those ambitious plans remains political: both arguments over the liberalisation of foreign exchange policy and the regulation of financial institutions as well as continuing concerns about security of oil production facilities and personnel in the Niger Delta.
On 17 March, Standard & Poor's ratings agency said it was extremely bullish on the prospects for a strong recovery in Nigeria's economy over the next three years. But it added that it wouldn't forecast an early fix to the country's chronic foreign exchange crisis. The government's plan envisages ramping up oil production to 2.5 million barrels a day and building two more world-scale plants to export liquefied natural gas.

A report by Ecobank, the pan-African commercial and investment bank, forecasts a substantial boost to gas production in Nigeria, which has the ninth biggest reserves in the world. Ecobank says Nigeria will have to expand gas production for local use: at the moment, just 16.25% of the country's gas is utilised locally, compared with 43.75% for export and 31.25% for re-injection into local oil and gas fields. The rest is flared.

At the beginning of the month, Vice President Yemi Osibanjo attended the grand launch of a project backed by South Korean and Dubai-based investors, to build a Gas Industrial Park near Warri, in the Niger Delta. The park which would include factories making fertilisers, petrochemicals and aluminium.

The latest plan to expand production at the Nigerian Liquefied Natural Gas Company's plant on Bonny Island would go a long way to meeting the government's aim of winning 10% of the global market for LNG (see AC Vol 58 No 6, Mega-projects await reforms).

Thursday, 16 March 2017

Africa's food price woes

The announcement this week by the United Nations that over 13 million people in Africa face starvation in what it calls the biggest humanitarian crisis since the Second World War is a reminder of continuing failures in food production across the continent. The UN's warning focuses on the war-torn areas of north-east Nigeria, Somalia and South Sudan but Africa's food crisis extends way beyond those borders. In fact, in many African countries food prices are driving up the inflation rate and pushing down living standards to a politically dangerous level, according to an important new monograph from the London-based Africa Research Institute.

Many government statisticians omit food and fuel prices from their 'core' inflation data because they are so volatile. This means the problem of spiralling food prices is gravely under-reported.

Drought is fuelling food price inflation in southern and East Africa: by 16.5% in South Africa, 26% last year in Zambia, over 40% in Angola, 18.8% in Uganda, 33% in South Sudan and 70-90% in Somalia. The exception is Ethiopia, formerly stricken by famine. Its government now has a much stronger development focus and has kept food price inflation well under 10%.

Governments could do much more to end this suffering. Apart from boosting incentives and extension services, such as supplying seeds and fertilisers to farmers, governments should cut tariffs, and greatly improve transport links and storage facilities.

Monday, 13 March 2017

NIGERIA: Buhari returns from sick leave to raging battles on economic policy

This week has more than its fair share of policy announcements as governments do battle with the effects of the sluggish global economy.  We start with the homecoming of President Muhammadu Buhari to Abuja via Kaduna air base and expectations that he will weigh in quickly on the economic policy debates. And then to Nairobi where some see a distancing between Kenya and the United States, and on to Ghana where the new government has discovered some US$1.5 billion in undisclosed liabilities left by its predecessor. Arguments have started early ahead of the June policy conference of the African National Congress in South Africa. And finally, President Paul Biya's record of corruption and repression in Cameroon may be coming under growing scrutiny but he is confident enough to call in the International Monetary Fund to help rescue the flailing economy

NIGERIA: Buhari returns from sick leave to raging battles on economic policyThe biggest policy questions – on rampant inflation, job losses, the shaky naira and new borrowing – confront President Muhammadu Buhari, who returned to Abuja on 10 March after seven weeks in London for medical reasons. There's still little clarity about how far and fast the government will go with a raft of mooted reforms.

Vice-President Yemi Osinbajo, after well-timed trips to the oil-producing Niger Delta and some incremental reforms, has won praise for his management skills in Buhari's absence. A less heralded part of Osinbajo's workload has been finalising the government's strategy to relaunch the economy, which is to be formally announced this month.

Yet the government has not reached agreement on the timing and phasing of that strategy's components such as liberalising the exchange rate and selling off some of the state's equity in oil production.

In a sign that the battle over the exchange rate is still raging, central bank governor Godwin Emefilie came out over the weekend to defend his exchange rate policy and ban on foreign currency allocations, at the official rate, for 700 imports. This strategy was already boosting local production of rice and other staples, Emefiele insisted, and would lead to nationally sustainable growth.
Comparison between Egypt, which secured a US$12 billion deal with the IMF after floating its currency, and Nigeria were not useful, according to Emefiele. Inflation was now running at over 30% in Egypt, said Emefiele, and the government was determined to avoid that in Nigeria. An average of banking and official estimates put inflation in Nigeria at around 18.5%: most sources agree it is at its highest for a decade, and has increased each month in the past year.

KENYA/UNITED STATES: Political and economic travails multiply in era of 'new nationalism'President Uhuru Kenyatta got his phone call with US President Donald J Trump on 7 March, a month after his Nigerian and South African counterparts, leading some critics in East Africa to ponder the health of Kenya-US relations. They're in poor shape was the conclusion despite Kenya's role as an economic hub in East Africa and its previously close collaboration with the US on regional counter-terrorism operations. But Kenya is threatening to pull its troops out of Somalia, the target of much of Washington's security interest, and shut down the Dadaab refugee camp, which holds over half a million Somalis.

There was no chance that Trump could match his predecessor, Barack Obama's calling card, his Kenyan father. However, the Trump administration has shown little interest in Africa in general, and Kenya in particular.

This year, Kenya faces a succession of political and economic hurdles. Violent clashes are multiplying in the Rift Valley as farms and houses are being burned down by militants whom opposition groups link to Vice President William Ruto. With an eye on the 2022 elections, Ruto wants to push his opponents out of the Rift Valley region. If Ruto can get a landslide vote in the Rift in this year's elections, he will be in pole position to succeed Uhuru Kenyatta in five years' time.
Kenya's central bank governor Patrick Njoroge, a devout Christian and former senior IMF official, has also warned that nationalism and protectionism could seriously slow investment in Kenya which promotes itself as the most business-friendly country in the region.

GHANA: Finance minister steps ups audits and investigations ahead of fresh talks with the IMFAn IMF team is due in Ghana in the first week of April to discuss evidence that the previous government had racked up about 7 billion cedis ($1.5 bn.) in undisclosed payments arrears which has thrown the economic stabilisation programme off course. Although the IMF had set a budget deficit target of 5.5% of GDP for 2016,  the latest figures show that the deficit was running at over 10% by December.

The question is how did the IMF miss this when it concluded in September 2016 that Ghana's programme was 'broadly on track.' This lack of an accurate economic prognosis less than three months before national elections last year has angered many officials: some are calling for a break with the IMF, others want a radical renegotiation.

However, Finance Minister Ken Ofori-Atta told Africa Confidential that the government's focus would be on 'confronting the financial realities' and working out a way to promote growth and jobs. Although this could involve a review of the performance targets on the IMF's $920 million deal due to wind-up in mid-2018 Ofori-Atta saw no need for a radical redrawing of the programme as he sees possibilities for growth in several economic sectors this year.

However, there is little enthusiasm in government for a successor IMF programme next year. Instead, top officials have been talking to the World Bank about the formalisation and digitisation of the economy, a comprehensive national identity card scheme which would bring most people into the tax system.

SOUTH AFRICA: ANC faction wants more power for president to boost economy and end party riftsAfter a year of political turmoil, factional divides and accusations of top-level corruption, policy-makers in the governing African National Congress argued for more power for the presidency. That is one of the conclusions in an internal discussion paper produced by the party ahead of its policy conference from 30 June-5 July.

'The presidency must be strengthened as the strategic centre of power in the state,' the paper argues. The presidency should also push forward 'planning and policy, resource allocation and enforcement', it adds. Although some interpret this proposal as a boost for incumbent party leader Jacob Zuma, insiders say it's unlikely to take effect before he steps down at the end of this year.

Rather, the proposals seem part of a wider trade-off between stronger central control of the party and more radical policies that will win support at the grass-roots. Many of its ideas have been floated by Deputy President Cyril Ramaphosa and ANC Secretary General Gwede Mantashe.

These included stronger checks on fraud in internal party elections; tougher regulations on monopolistic pricing practices; stronger support for apprenticeships; stepped up investment and management of social services; and launching an ethics and governance office to scrutinise all state activities.

CAMEROON: President Biya calls in the IMF and steps up repressionAfter achieving notoriety as the leader of one of the few governments to shut down the internet in the 21st century, President Paul Biya has opened negotiations for a two-year financing programme with the IMF. Under Biya's leadership, Cameroon has established a reputation as one of the most authoritarian and corrupt regimes in the region, and also as one of the poorest performing economies.
To that menu of mis-governance has been added growing attacks by Boko Haram's Islamist militants in the north-west region and a new wave of protests against the dominant use of French in courts and schools in English-speaking areas. Despite the government shutting down the internet in opposition areas, protests have continued. Now, the security services have stepped up abductions of activists they consider to be ringleaders.

Biya is due to leave office next year after 30 years in power but tensions are heating up and he has no plan for a successor.

Monday, 6 March 2017

GHANA: New government's first budget wins praise as country marks 60 years of Independence

This week we start with a 60th birthday party – its Ghana's – just a few days after a sobering state of the nation address and budget in parliament in Accra. Then across the continent in Kenya, opposition protests about the credibility of preparations for national elections due in August are rising.
In Nigeria, there are mixed messages about the prospects of the economy bouncing back and in South Africa, it looks like President Jacob Zuma has been taking a masterclass on the land question from his comrade Robert Mugabe. In Congo-Kinshasa, the latest revelation about secret payments to President Joseph Kabila's ally Dan Gertler could prompt more interest from investigators in the murky flow of resources out of the country's mining industry. Finally, another militia — the Benghazi Defence Brigade — has ousted rogue General Khalifa Haftar's troops from a couple of big refineries in the eastern Libya. That will have big political and financial consequences in the months ahead.

GHANA: New government's first budget wins praise as country marks 60 years of Independence
This week's celebrations of Ghana's 60 years of Independence will eschew razzmattaz in favour of pushng the new government's message of strong economic management and education and health investments, a senior government advisor told Africa Confidential in Accra. Cities across Ghana are emblazoned in the national colours and there will be celebrations in all the regional capitals today, 6 March, but the government says it has clamped down hard on 'non-productive' spending.
The government is still basking in its post-election popularity but the honeymoon is likely to be short-lived and some tough policy choices are due in the next few months.

President Nana Addo Akufo-Addo has given a solidarity speech to visiting African leaders, diplomats and local celebrants at Black Star Square in Accra, reiterating earlier calls for an activist citizenry.

He was speaking just four days after Finance Minister Ken Ofori-Atta read his first budget to parliament. Announcing plans to almost double the country's growth to 6.3% this year from about 3.7% in 2016, Ofori-Atta said he wanted to shift the focus of the economy to production from taxation. The government is planning tough cuts on non-productive state spending: aiming to bring down the budget deficit to 6.5% of gross domestic product this year from its current level of over 10%, and inflation to 11.2% from its current level of 13.3%.

Ofori-Atta, a founder of Accra-based Databank, was heckled throughout his speech by the opposition who held up placards reading '419 [or scam] budget'. A devout Christian who has never held political office, Ofori-Atta told his fellow MPs that he took strength from the opposition placards: 'It reminded me of Philippians 4:19 in the Bible'. The verse reads: 'And my God will meet all your needs according to the riches of his Glory in Christ Jesus.'

KENYA: Louder warnings on election credibility after voter registration doubts
Opposition politicians are sounding alarms over the fairness of national elections due in August after an unexpectedly low turnout for a top-up voter registration. The Independent Electoral and Boundaries Commission has announced that only 3.8 million of an expected 6 million have registered in the latest round, a result the organisation's officials described as 'puzzling' (See AC Vol 58 No 5, Registering Interest).

However, the registration of far fewer new voters in opposition-supporting areas than those where the governing Jubilee Alliance is strongest has prompted further criticism. A closely-argued editorial by Murithi Mutiga, a leading analyst with the International Crisis Group, says the lack of transparency and influence over some of the election rules is eroding trust in the system again. He added that arguments among bidders had held up the purchase of voter verification equipment and could result in the bypassing of a competitive bidding process and more political rows ahead of the election.

NIGERIA: Green shoots of economic recovery spring up as airport closes in political capital
Conflicting signals about the health of the national economy emanate from Nigeria where key questions about the multiple exchange rates of the naira are yet to be resolved. For working Nigerians hit by inflation, foreign currency shortages and power cuts, current conditions look bleak despite higher oil prices and the government's commitment to launch a multi-billion dollar investment programme this year.

Yet visiting bankers and economists insist they are seeing the first signs of recovery after last year's recession. A team from the London-based Exotix debt trading outfit said it was 'optimistic' about the policy direction, adding that the economy was now being managed more effectively. Their view reflects some increase in output, which in turn has been helped by the greater availability of foreign exchange.

There is also some investment news about a planned US$20 billion gas processing plant and petrochemicals plant in the Niger Delta which could generate over 250,000 jobs directly and indirectly according to Vice-President Yemi Osinbajo. At the same time the investigation into the sale of Malabu oil block –  one of the most prospective concessions in the region known as OML245 –  to Royal Dutch Shell and Italy's ENI  simmers on.

Nigerian authorities are freezing assets belonging to the major oil companies pending further progress in the case. The Italian prosecutor is claiming that both companies were involved in money laundering operations to disguise the payment of kickbacks to state officials. Both Shell and ENI deny all wrongdoing in the matter.

SOUTH AFRICA: Besieged on all sides, President Zuma plays the land card at last
With a call to change the constitution to allow the faster redistribution of land, President Jacob Zuma is trying to shore up his support base and outbid his critics in the radical Economic Freedom Fighters. Contradicting his senior colleagues in the governing African National Congress, Zuma said on 3 March that constitutional strictures were slowing down the pace of land reform and there should be a means to redistribute land without compensating the existing owners.

There would have to be an audit, said Zuma, of pre-colonial land ownership, use and occupation patterns. 'Once the audit has been completed, a single law should be developed to address the issue of land restitution without compensation,' Zuma told a gathering of traditional leaders in Cape Town. That would mean a changing the constitution, he said.

But Zuma's ANC colleagues disputed the need for such a change. Several MPs said the country's liberal constitution was an enabler not an obstacle to land reform.  And the ANC's Chief Whip Jackson Mthembu tweeted that blaming the constitution for slow land reform was 'disingenuous and scapegoating', adding that South Africans should take advantage of all available legal provisions.

CONGO-KINSHASA: Glencore admits $100 million payment to Kabila ally as corruption probe deepens
The admission by Glencore that it secretly paid US$100 million to Dan Gertler, the Israeli billionaire mine owner and ally of President Joseph Kabila, has sparked interest in Congo and the United States. Glencore now says it made the payments to Gertler under the instructions of Congo's state mining company, Gécamines. Yet it didn't explain why it failed to mention the payments in its corporate filings over a four year period. The admission had to be dragged out of the company by Global Witness, a London-based anti-corruption lobby.

Prosecution lawyers in New York working on the case against the Och-Ziff investment fund, which has already been fined $400 mn. in a deferred prosecution agreement, say they are taking a close look at the web of relationships around Gertler. As well as working closely with Glencore in the Congo, Gertler was Och-Ziff's main partner in the Congo.

LIBYA: Benghazi militia attacks halt oil production and embarrasses Russia ally Khalifa Haftar
Attacks on the Es Sider and Ras Linuf terminals in Eastern Libya on 3 March by a group claiming to be called the Benghazi Defence Brigade has cut oil production by over 100,000 barrels a day to around 650,000. It also raises questions about the military strength of the rogue General Khalifa Haftar and the Libyan National Army which had been controlling the facilities. Until now Haftar had been marching eastwards with a view to toppling the United Nations-backed government in Tripoli.

Haftar enjoys strong support from Egypt, United Arab Emirates and Russia but much of his income comes from a deal under which his fighters the guard oil facilities while a branch of the Libyan central bank markets and manages the revenues for the oil exports. Despite Haftar's ambitions to become the military leader who could reunify the country and a well-funded public relations campaign in Europe and the United States, he has a serious credibility problem among Libyans.
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Thursday, 2 March 2017

Transparent defiance

A vote by the United States House of Representatives to end the legal requirement that compels oil and mining companies to disclose all payments to foreign governments is a tactical defeat for anti-corruption campaigners. That's partly because of highly effective lobbying by US oil giant ExxonMobil. All this lobbying was on the watch of Rex Tillerson as Chief Executive of ExxonMobil, who is now President Donald Trump's Secretary of State.

The company’s filings with the US Securities and Exchange Commission do not reveal any direct role by Tillerson in the lobbying but evidently he didn't support the 'Publish What You Pay' law. In fact, the start of the Publish What You Pay campaign dates back to ExxonMobil's involvement in one of the most egregious examples of corporate-state collusion in diverting resources revenue in Equatorial Guinea (AC Vol 45 No 15, Private estate). The scandal was the subject of a detailed US Senate investigation, which tracked payments said to have originated from ExxonMobil, Marathon Oil and Amerada Hess to individuals representing President Teodoro Obiang and family. The funds ended up in special accounts in Riggs Bank in Washington DC. At the time, companies could make payments to foreign governments at will under US law, but Riggs Bank was found complicit in money laundering and went out of business shortly afterwards. The next target in some US politicians' sights is the groundbreaking Foreign Corrupt Practices Act of 1977.