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.

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