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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