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2017

July 2017

04 July 2017

How can Africa's electricity sector become more efficient and affordable?

By Moin Siddiqi, economist

Today, about three-fifths of sub-Saharan Africa's population of 1bn live without power, often resorting to using kerosene or spending hours in darkness, which imposes ‘colossal’ socio-economic losses upon an energy-rich region. Whilst those connected to grid electricity supply, crippling power outages are widespread, as cash-strapped utilities (mostly state-owned) are unable to provide reliable services due to under-investment in infrastructure during the past decades.

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2017

June 2017

29 June 2017

Private Infrastructure Development Group catalyses private investment in sub-Saharan Africa

The Private Infrastructure Development Group opened up access to life-changing infrastructure designed to boost economies and combat poverty for 31 million people, last year.

The group’s success was in part down to its focus on building power plants, which account for up 50% of its work, according to PIDG’s Annual Report 2016: infrastructure, transforming economies, changing lives.

PIDG chief executive Philippe Valahu said: “Energy is key to unlocking barriers to improving people’s lives.

“By providing reliable, affordable power in remote places, hospitals, schools and small businesses, PIDG is having a strong transformative effect.”

The organisation, which catalyses private investment in infrastructure in the frontier markets of sub-Saharan Africa and south and south-east Asia by blending it with public finance, raised $23 for every $1 donated from its eight members.

That money is then invested, through PIDG’s companies, in projects including renewable energy farms, telecoms, transport, industrial infrastructure, agriculture, housing and waterworks.

PIDG’s ability to leverage the funds it gets from seven countries and the World Bank means its impact is felt by people living in the most fragile areas.

Among other key achievements in 2016 PIDG saw:

  • $2.6bn mobilised from private sector investors and DFIs
  • 18 projects reach financial close, 13 of which are in fragile and conflict-affected states
  • 7,404 long-term jobs created.

To view PIDG’s Annual Report 2016 go to www.annualreport.PIDG.org.

2017

June 2017

21 June 2017

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

By Patrick Smith
Editor of Africa Confidential 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Don't forget to check www.africa-confidential.com for our latest stories.

2017

June 2017

20 June 2017

Emerging Africa Infrastructure Fund Invest in Senegal and Mozambique

Emerging Africa Infrastructure Fund backs better future for Senegal with €6.6 million loan to expand power station

In a boost to the independent power sector in Senegal, the Emerging Africa Infrastructure Fund (EAIF) is increasing its lending to Melec PowerGen (Matelec Group), the owner and operator of the Tobene power station in Senegal. The new B loan of €6.6 million is part of the financing of an expansion of the plant. The first phase, which EAIF also lent to, was completed on time and within budget. It began producing power in 2016. “Tobene ll” involves adding a new 19MW generating set to the existing 96MW facility. Installed capacity will
increase to 115MW. Loans provided by EAIF now total €31.6 million. The new €6.6 million tranche has a term (tenor) of 13 years.

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Emerging Africa Infrastructure Fund backs US$76 million 40MW solar farm in Mozambique 

Project is key to development strategy for SMEs in rural Mocuba region The Emerging Africa Infrastructure Fund (EAIF / the Fund), which is part of the Private Infrastructure Development Group, has signed a Participation Agreement with the International Finance Corporation (IFC) to provide a
US$16.9 million B Loan, with a +16-year term, to Central Solar de Mocuba (CESOM), the private sector developer of the Mocuba solar farm in Northern Mozambique. In addition, EAIF is directly providing a US$7m Viability Gap Funding Grant for the Project raised from the Technical Assistance Facility (TAF) of the PIDG. The US$76 million plant is due to be completed in mid-2018. It will be a core element in the Mozambique government’s strategy of incentivising the creation of small and medium-sized businesses in the mainly rural Mocuba area. EAIF’s umbrella organisation is the Private Infrastructure Development Group (PIDG). Seven governments (and merging Africa Infrastructure Fund backs US$76 million 40MW solar farm in Mozambique. 

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2017

June 2017

13 June 2017

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

By Patrick Smith
Editor of Africa Confidential 

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

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

The immediate winners in these diplomatic shifts are the centrist governments that are running Germany and France. Both Chancellor Angela Merkel and newly-elected French President Emmanuel Macron are espousing a more robust and internationalist approach, which they contrast to the more nationalist and inward-looking ideas espoused in the United States under President Donald Trump and Britain under Theresa May.
 
Last week's national election and political meltdown in Britain after the governing Conservative Party lost its majority in Parliament is likely to reinforce this trend. With Prime Minister Theresa May's position gravely weakened, there is still more confusion about the government's plans for leaving the European Union and promised reformulation of its trade and diplomatic strategy.

By contrast, Germany is leading a new generation of trade and investment pacts which Côte d'Ivoire, Morocco, Rwanda, Senegal and Tunisia have already signed. Chancellor Merkel is calling for a Marshall Fund to accelerate economic growth and development in Africa. Her Development Minister Gerd Mueller is calling on the United Nations this week to establish a €10 billion (US $11.2 bn.) fund to respond to the chronic food shortages and crop failures, which have worsened as a result of climate change.
 
France's President Macron, further strengthened by the victory of his En Marche! party in the first round of legislative elections on 11 June, has already signaled his strong support for a stronger European security policy in the Sahel, where French special forces have been deployed to fight jihadist groups. Some big funding battles loom over how the regional security budgets are divided: France and Germany have concentrated funding and projects in the Sahel; Britain has focused its efforts in Somalia.

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

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

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

NIGERIA: Why the signature on the 2017 budget is so politically important
Will he or won't he? That's the unresolved question in Nigeria about whether President Muhammadu Buhari, on medical leave in London since 7 May, will make it back to Abuja to sign this year's budget. Some staffers in Aso Rock started talking up the President's imminent return.
 
Such speculation about Buhari has now been formally squashed with one of his aides telling journalists that he was undergoing further tests on 12 June; the results of which would determine the date of his return to Nigeria.

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

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

KENYA: Fears mount after Odinga warns on election trickery and violence
There is a worrying sense of déjà vu about national elections in August with politicians making public condemnations of violence but saying they will not be able to hold back their supporters if there is provocation. That was the line both sides adopted in the 2007 elections and their violent aftermath. Politicians generally reined in the rhetoric in 2013 because the horror of the 2007 elections was fresh in people's minds.
 
Political speeches have been far less constrained this year. The latest top politician to sound such harrowing warnings is Raila Odinga, presidential candidate of the opposition National Super Alliance. In a series of press briefings, Odinga has said he thought something sinister was afoot at the Independent Electoral and Boundaries Commission where two senior officials were dismissed this month.
 
One of them headed the procurement office which organises the production of some 130 million ballot papers for national, provincial and local government elections.

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

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

Don't forget to check www.africa-confidential.com for our latest stories.

2017

June 2017

05 June 2017

After global protests over Washington’s withdrawal from the Paris climate treaty, how will Africa react? | Africa Confidential

By Patrick Smith, Editor of Africa Confidential

We start with the aftermath of the United States' withdrawal from the Paris climate accord and its implications for Africa. Then we go to Morocco, where protests are spreading. In South Africa, the relentless drip of information and claims about President Jacob Zuma's relations with the Gupta family continues while there are some glimmers of positive economic news in Nigeria. Finally, there's more news on the prospects for testing negotiations between Tanzanian President John Magufuli's team and the country's biggest gold miner.

AFRICA/UNITED STATES: After global protests over Washington's withdrawal from the Paris climate treaty, how will Africa react?
European and Asian countries responded quickly and critically to US President Donald Trump's pull-out from the 2015 climate treaty on 2 June but the African response has been muted so far. This is despite the fact that seven of the ten countries most damaged by global warming are in Africa.

Africa produces just 3.8% of the world's greenhouse gas emissions, mainly from its oil and coal industries. This compares with China's production of 23% emissions, while the US produces 19%. China now leads the global solar power industry in terms of units produced and is matching the US research effort. Africa is a key market for solar power projects from both Chinese and US companies – regardless of the politics over the Paris deal.

Some African politicians say discreet lobbying to persuade the USA to contribute to the proposed US$100 billion climate change adaptation fund would be of more use than joining the public criticism of the Trump government over its pull-out from the COP22 treaty. They say that they could get backing from US green energy companies.

Kofi Annan, the former Secretary General of the United Nations, has called for much more determined action by African governments to promote the continent's 'Energy for all' campaign which aims for a 'low carbon' transition to a power sector that provides economical and sustainable electricity for most of the continent. With its 1.1 billion people and the fast rising demand for power, Africa's plans for a green electricity industry should become a showcase for the Paris accords, says Annan.

But little of the climate adaptation funding has been released to Africa so far, says Annan. This is due mainly to a lack of integrated plans and policies for the rapid expansion of energy provision on the continent, he adds. Those countries that have pressed ahead with sustainable energy projects – such as Côte d'Ivoire, Ethiopia, Morocco and South Africa – are already bringing in substantial outside finance.

A big weakness is the paucity of regional and cross-border power projects, says Annan. Less than 8% of power is currently traded across borders in Africa. That, he argues, means a big boost to regional transmission lines, new power trading accords and a harmonisation of national grids.a

MOROCCO: Escalating street protests test King Mohammed VI's resolve a week after the arrest of dissident in El Hoceima
The protestors are not going away in El Hoceima in the northern Rif region, a week after the arrest of activist Nasser Zefzafi. This dissident mobilisation, extremely rare in Morocco, represents a growing challenge to the new Prime Minister and the Makhzen, the royal establishment around King Mohammed VI.

It was the death of a fishmonger, Mouhcine Fikri, in clashes with security forces last October that triggered the latest round of mass protests in the area. Then the government stepped up security but made some concessions to local people.

Dissident leader Zefzafi and his allies have been lambasting the regional authorities for poor services and corruption. People were enraged when the government failed to address the complaints and instead sent in security forces to put down the protests and arrest Zefzafi. In neighbouring Imzouren, police fired water cannon to break up fresh protests.

SOUTH AFRICA: Deluge of leaked emails points to the huge influence of the Gupta businesses over President Zuma and his ministers
A week ago, President Jacob Zuma survived yet another bid by the National Executive Committee of the governing African National Congress (ANC) to sack him over his family's ties to the Gupta family's conglomerates. This week, the campaign to oust him continues, with the release of some 200,000 emails from the Guptas' companies purporting to show their influence on Zuma and other top politicians.

This deluge of secret emails from the company, uncovered by the amaBhungane Centre for Investigative Journalism and the Daily Maverick, adds more weight to claims of impropriety at the highest levels of government. The Johannesburg Sunday Times, one of the best-selling papers in the country, says it has evidence that the Gupta family has bought Zuma a US$25 million mansion in the United Arab Emirates. It said the story had been corroborated by local business people and senior officials in the ANC.

It follows allegations last week that the Guptas were arranging UAE nationality for the Zuma family. This claim about the Dubai mansion elicited a rare response from the Presidency, which comprehensively denied the allegation, insisting that Zuma owns no properties outside South Africa. But the ANC has called for an investigation into the credibility and origins of the leaked emails.

All of this material could become legally important if the call for a judicial probe into relations between the Guptas and government officials is heeded. The Public Protector, the country's top anti-corruption body, demanded the probe but Zuma has challenged the proposal in court. He may be fighting a losing battle. Although the NEC declined to debate a call for his removal, it agreed that there should be a judicial enquiry into links between the Guptas and his family and senior officials.

NIGERIA: New data signals some economic respite as President extends London medical trip
Vice-President Yemi Osinbajo is making halting progress on the economic front while President Muhammadu Buhari stays on in London for medical attention. At the end of May, the National Assembly passed the 2017 budget, after long delays, and the Senate passed a new version of the Petroleum Industry Bill. After Nigeria's share index rose 12% over the past month, local bankers forecast that it could be the start of a stronger recovery.

The next key step is for the Presidency to sign the budget and trigger the distribution of ministerial and state allocations. It's unclear whether Osinbajo will do so this week or wait until Buhari's return. Meanwhile, the National Statistics Agency is due to release key figures on exports, imports and unemployment on 6 June which should give a clearer picture of economic progress.

TANZANIA: Mining company talks with top government officials will wait for report on second presidential probe
Critical negotiations between Acacia Mining, majority owned by Barrick Gold, and top state officials over tax levels, royalties and local processing will not start before the release of a second presidential report into the industry. The first presidential report accused Acacia of massively under-declaring its production, a claim that pushed down the value of its shares by 30%. Due to the robust resource nationalist position of President John Magufuli, the dispute with Acacia has taken on strong political overtones.

Officials at Acacia, led by its Chief Executive Officer Brad Gordon, met top government officials in Dar es Salaam last week and deny all wrongdoing. However, Gordon says the company is willing to discuss plans for increasing processing in the country and would finance a study in the commercial viability of establishing a local smelter plant. 

Don't forget to check www.africa-confidential.com for our latest stories.

05 June 2017

Business Council for Africa and Invest Africa Announce Strategic Partnership

Click the link below to read the announcement of strategic partnership: 

2017

May 2017

22 May 2017

ZAMBIA: Mixed messages on copper confrontation with First Quantum | Africa Confidential

By Patrick Smith
Editor of Africa Confidential 

This week we start in Lusaka where the dispute between the government and First Quantum Minerals is still simmering. And then to Mali, where French President Emmanuel Macron has been outlining a tougher military policy. In South Africa, President Jacob Zuma faces an ever-louder chorus of criticism over his links to the Gupta family and another key vote this week. Finally, in the new axis of nationalists Presidents Donald Trump and Abdel Fattah el Sisi hit it off at a meeting in Riyadh.

ZAMBIA: Mixed messages on copper confrontation with First Quantum
Both the government of President Edgar Lungu and the management of First Quantum Minerals have tamped down the rhetoric in their public confrontation over claims that the Canadian-listed mining company was liable for US$1.4 billion for having allegedly broken regulations governing company borrowing. The dispute went nuclear after government officials said that FQM directors could be arrested if they entered the country and be charged with fraud (AC Vol 58 No 10, Spat with FQM continues). FQM has denied any wrongdoing.

Since then President Lungu has sent out his Finance Minister, Felix Mutati, with a more conciliatory message: talks between government negotiators and the company would begin on 30 May and should be over within a week. There has been no further mention of arrest warrants.

All this comes as Zambia is also negotiating a balance of payments facility of at least $1.2 bn. from the International Monetary Fund. Last week World Bank Vice-President for Africa, Mahktar Diop, was in Lusaka and agreed new development financing of $600 million. Although the two Washington financial institutions have not commented publicly on the FQM affair, their officials and United States diplomats are known to be extremely concerned about the Lungu government's direction of travel. On 21 May, opposition leader Hakainde Hichilema's wife, Mutinta, launched an international appeal on behalf of her husband, who has been in prison for over five weeks for supposed treason. Officials say that some of Hichilema's foreign backers have also been lobbying on behalf of FQM.

AFRICA/FRANCE: President Macron draws Germany closer in anti-terror alliance
In a strong statement about his commitment to fighting terrorism, France's new President, Emmanuel Macron, flew to Mali on 19 May for talks with President Ibrahim Boubacar Keïta and to meet the 1,600 French troops stationed there. Although one of the main impediments facing the United Nations and regional forces in Mali appears to be a failure of negotiations between the Bamako government and Tuareg nationalists, little of substance emerged about the discussions between the two presidents. Keïta's officials have been increasingly critical of French policy in the Sahel under Macron's predecessor François Hollande.

Macron made much of the need to speed up the tempo of the international military operation 'to secure the Sahel' – an area bigger than Europe. Greater collaboration with Germany in that anti-terror campaign would be critical, said Macron, which would be providing more advanced attack helicopters and armoured cars.

SOUTH AFRICA: What next after ANC rejects return of Zuma ally to run state power company?
After another daring round of appointments and subterranean moves against his opponents, President Jacob Zuma faces yet more tests this week with a key vote on his presidency at the National Executive Committee of the governing African National Congress. In past debates, Zuma has circled the wagons, drawn enough loyalists from his home province of kwaZulu-Natal and from the so-called premier league of provincial premiers to see off any serious threats.

Last month, an attempt to sanction Zuma for his sacking of Finance Minister Pravin Gordhan at the ANC's National Working Committee ended in ignominy for some of his main foes as they publicly withdrew their criticism. Since then sentiment in the ANC has moved further against Zuma.

A key point of contention has been the state power utility Eskom's decision to reappoint Brian Molefe, a Zuma ally, as its chief executive. Molefe resigned from the post last year after a report by the Public Protector, Thuli Madonsela, suggested the close relations between Molefe and the Guptas had a hugely negative effect on Eskom's policy-making and finances.

Several senior ANC officials have called on Zuma to reverse Molefe's reappointment and the issue looks certain to be raised at the NEC. On 21 May, Vice-President Cyril Ramaphosa made a strident call for the ANC to stop South Africa being turned into a mafia state. He also called for a judicial inquiry to investigate Madonsela's reports on the influence of private business interests on the Zuma presidency.

EGYPT/UNITED STATES: Mutual admiration society on the Trump-Sisi axis
On the first foreign tour of his presidency, Donald Trump lavished praise on Egypt's President Abdel Fattah el Sisi after a meeting in Riyadh, Saudi Arabia. Telling journalists that 'safety seems to be very strong in Egypt', Trump said that he has been having 'very important talks' with President el Sisi. He also admired El Sisi's shiny black shoes.

In turn El Sisi described Trump as a 'unique personality capable of doing the impossible'. Trump shot back, 'I agree.' Last November, El Sisi was the first foreign leader to congratulate Trump on his election victory. The two men shored up US-Egypt government relations, lubricated by $1.4 bn. a year in military aid and a common opposition to militant Islamist groups in the region. There is some speculation that Trump will support Egypt's role in neighbouring Libya, where El Sisi backs the hardline nationalist leader Khalifa Haftar. But no details emerged of any policy  change.

Don't forget to check www.africa-confidential.com for our latest stories.

2017

May 2017

16 May 2017

Africa Confidential | AFRICA/UNITED NATIONS: UN’s new Africa economy chief to open international financial parley

By Patrick Smith
Editor of Africa Confidential 

This week we start in Addis Ababa for an international conference on development finance. And then to Côte d’Ivoirewhere the government is insisting the army mutiny is over. In South Africa, the African National Congress is divided over the reappointment of Brian Molefe, a presidential ally, to run the national power company. There are signs of scepticism about Western policy on Somalia as well as doubts about the ability of the new government there to deliver. Finally, Nigerian officials are to resume negotiations this week with representatives of Boko Haram to free more of the abducted Chibok schoolgirls.

AFRICA/UNITED NATIONS: UN’s new Africa economy chief to open international financial parley
Vera Songwe, the highly-regarded new executive secretary of the UN’s Economic Commission for Africa, will preside over the continent’s biggest financing conference, the Africa Regional Forum, in Addis Ababa, which starts tomorrow(17 May). Its aim is to finalise the continent’s strategy and list of priorities ahead of the UN’s High-Level Political Forum on sustainable development in September, which is to be attended by over 180 governments and funding agencies.

The starting point for the discussions in Addis Ababa will be growing inequality across Africa and the failure of its economies to generate more jobs after a decade of economic growth averaging 5%. Songwe has said one of her main concerns will be policies and projects that work for the more than 70% of Africans currently dependent on seasonal, rain-fed agriculture.

After the forum ends, many of the delegates will travel to Ahmedabad, Gujarat, India where the African Development Bank is holding its annual meeting this year on 22-25 May.

SOUTH AFRICA: Molefe returns to Eskom as Zuma tries to keep Russian nuclear deal on track
African National Congress dissidents and anti-corruption activists are railing against Public Enterprises Minister Lynne Brown’s reappointment of Brian Molefe as chief executive officer of Eskom. A group of senior figures in the party have called on Brown to reverse the decision immediately.

Molefe resigned as head of Eskom last November after a report by the office of the Public Protector, an official anti-corruption body, found mismanagement and fraud at the highest level in the company. It also pointed to the heavy influence of the Gupta family, business associates of President Jacob Zuma, on Molefe. In particular, it found that Molefe didn’t follow company’s rules when awarding a lucrative coal supply contract to the Guptas.

Last month, the High Court in the Western Cape ordered Eskom to abandon a planned US$70 billion deal with Russiato build nuclear power stations because parliament had not been consulted. The government said it won’t appeal against the ruling but it will reopen negotiations with Russian nuclear power companies. Overseeing those talks would be one of Molefe’s first tasks if he stays in the job.

COTE D’IVOIRE: Mutineers deny minister’s claim of a deal on pay arrears
There are doubts about government claims of a deal over soldiers’ pay after mutineers insisted early today (16 May) that they would continue with the protests which have shut down the commercial capital Abidjan and the northern town of Bouaké in the north since the end of last week.

The rebel soldiers, who fought for President Alassane Ouattara during his confrontation with ex-President Laurent Gbagbo, had been offered bonuses of CFA12 million (US$20,000) after protests in January. But most of them have received just CFA5 mn. because the state treasury has been hit by the precipitate fall in revenues from cocoa exports.

AFRICA/UNITED STATES: Washington’s new Africa policy chief to face critics over Somalia policy shift
One of the first tasks facing Peter Pham, who we understand has been appointed Assistant Secretary of State for African Affairs, will be to explain President Donald Trump’s more militarised policy, which has removed some safeguards designed to keep civilian casualties to a minimum.

Critics say the new rules enable US officers to kill Somalis ‘perceived’ as terrorists but without clear information that they specifically threaten Americans and this targeting would permit the killing of civilian bystanders if deemed ‘necessary and proportionate’.

Coming alongside the Trump administration’s plans to cut budgets in the US Agency for International Development, which has been financing urgent drought and famine relief, there are concerns the new policy will exacerbate Somalia’s crisis. Critics add that the combination of higher risks to civilians from military attacks and worsening social conditions is likely to strengthen Al Shabaab’s position.

SOMALIA/BRITAIN: Grave doubts despite promises over money and military at London conference
One of British Prime Minister Theresa May’s few foreign policy outings was her opening of the latest London conference on Somalia on 11 May but despite the upbeat talk, the plans to defeat the insurgency in two years and deal with the effects of drought lacked credibility.

Critical shortages of food and water amid attacks by the Al Shabaab militia have driven over one million Somalis from their homes and another 600,000 into neighbouring countries. Somalia’s new President Mohamed Abdullah Mohamed 'Farmajo' set out his goverment’s National Security Plan which is to boost the strength of the national army to 18,000 and guarantee regular pay. Al Shabaab would be defeated within two years, insisted Farmajo, and the government would restart national reconciliation efforts.

Britain’s Foreign Secretary Boris Johnson promised a boost in support for Farmajo’s government but not the extra weaponry, including attack helicopters, requested by Somalia and its neighbours in the regional intervention force against Al Shabaab.

NIGERIA: Security services push ahead with Boko Haram talks to free more abducted schoolgirls
Fresh negotiations are due this week between Abuja’s security officials and representatives of the Islamist militia Boko Haram to secure the release of more of the kidnapped Chibok schoolgirls. By most counts the militia still holds at least 150 of the girls.

Shehu Sani, a senator who has been involved in the negotiations, says the government had preferred to trade some of the militia’s captured commanders for the release of the schoolgirls rather than pay ransoms. Some government officials believe the latest round of negotiations could broaden out to other matters. Security conditions in north-eastern Nigeria remain precarious.

Getting aid to the estimated 4.7 million Nigerians in the area who are desperately in need of food and water has been complicated by military threats and bureaucracy, according to United Nations officials. Aid organisations there say they will run out of money by the end of June unless donors honour the pledges they made at a special conference in Oslo in February.

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2017

May 2017

12 May 2017

Côte d’Ivoire Country Risk Overview

Côte d’Ivoire’s President Alassane Ouattara is expected to remain in power until 2020 when his two term limit expires. This provides a solid foundation
for current investment prospects, which is particularly impressive against the backdrop of the 2010 political unrest. However, various factors developing in the run-up to the next elections have the potential to impact investment in the country. 

Opportunities

Côte d’Ivoire is an economic and transportation hub for French-speaking West Africa, with its highly developed port at Abidjan and an infrastructure network superior to most other West African countries. Many of its neighbours in the Gulf of Guinea are suffering the effects of the global commodities slump, foreign exchange constraints and challenging power supplies; Côte d’Ivoire has maintained steady economic growth over the last 5 years and
the UK’s Department for International Trade has highlighted agriculture, mining, oil and gas, and infrastructure as areas for investment. 

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