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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.

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

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. 

Click the icon below to read the full article

 

 

 

2017

May 2017

05 May 2017

Port and infrastructure expansion in Djibouti

Djibouti is making investments in excess of $15 billion in new infrastructure, including four new ports.

The ports – together with projects to build a Liquefied Natural Gas facility, an oil terminal, and two brand new airports – will dramatically expand Djibouti’s ability to serve as a platform and trade hub for East African countries and African countries beyond the region.

The ports target several different sectors, from minerals to livestock. Two are already operational – the ports of Tadjourah and Goubet. The ultra-modern Doraleh Multi-Purpose Port (DMP) is due to be inaugurated in May 2017.

The present Port of Djibouti is administered and managed by the Djibouti Ports and Free Zones Authority (DPFZA). DPFZA has responsibility for all the country’s port development.

The port is a gateway to one of the fastest growing regions of the world with 30,000 ships transiting the port each year. Goods from Asia represent 59%, with 21% coming from Europe and 16% from elsewhere in Africa. In 2015, overall traffic to Djibouti increased by nearly 20%, reaching approximately 5.7 million tonnes.

The first of the four new ports being built is for the export of potassium for Ethiopia. The second is dedicated to livestock export. Djibouti currently exports two million head of cattle to the Middle East - the new port will export ten million.

The third port – a joint venture with a Chinese company – is for the export of salt from Lake Assal, the largest salt deposit in the world. The fourth - the Doraleh Multi-Purpose Port (DMP) – will replace the current multipurpose port. 

Aboubaker Omar Hadi, Chairman of the DPFZA comments: “Modern transport links are vital to national and global prosperity. Without quick and reliable routes to move goods – and the facilities needed to handle them – Africa’s development will be held back”.

 For more information please contact Patrick Orr at Patrick@raittorr.co.uk

2017

May 2017

02 May 2017

Africa Confidential | SOUTH AFRICA: President Zuma chased from May Day rally as no-confidence vote looms

By Patrick Smith
Editor of Africa Confidential 

It was a harsh May Day for South Africa's beleaguered President Jacob Zuma, who was chased off the podium by an angry crowd in the Free State. From the UN in New York, there are signs of movement in the deadlocked Western Sahara dispute. In Zambia, President Edgar Lungu faces a raft of political and economic problems. The still ailing President Muhammadu Buhari in Abuja hopes to push his budget through the National Assembly this week. Finally, the formal end of the search for Uganda's veteran warlord Joseph Kony raises major questions about responsibility for the more than 100,000 killed in this brutal conflict.

SOUTH AFRICA: President Zuma chased from May Day rally as no-confidence vote looms
Another humiliation has hit President Jacob Zuma at a May Day rally just days before he is due to face a motion of no-confidence in parliament. After an angry crowd booed and heckled Zuma at a Congress of South African Trades Unions (Cosatu) rally in Bloemfontein, he and his entourage were rushed from the stage before he could speak. Zuma's key allies – parliamentary speaker Baleka Mbete and deputy Secretary General of the African National Congress, Jesse Duarte, were also booed off May Day podiums in Durban and Limpopo.

It was especially humiliating that Zuma should suffer this blow in Bloemfontein, capital of the Free State, which is meant to be one of his strongest areas of support outside KwaZulu-Natal. As a sign of Zuma's falling popularity, the debacle in Bloemfontein is far more significant than the mass public rallies against him in the major cities last month.

Zuma's latest setback follows the South African Communist Party's and Cosatu's call for his immediate resignation. As Deputy President Cyril Ramaphosa is ramping up his campaign for the ANC Presidency, another party veteran, Matthews Phosa, has announced his candidacy for the post. We also hear that support is building for a bid for the presidency by Lindiwe Sisulu, daughter of the late, much-revered, Walter Sisulu, a long-time friend of Nelson Mandela.

Meanwhile, Nkosazana Dlamini-Zuma, Zuma's ex-wife and his preferred candidate to succeed him, has disappeared from public view. Zuma's granting of a state security detail and government vehicles to her – apparently on security grounds – has been criticised as an abuse of state resources.

WESTERN SAHARA/MOROCCO: Fresh talks over the conflict are likely after UN extends mission there
Hopes for a fresh round of negotiations between the Polisario Front and Morocco are looking up after the UN Security Council passed a resolution on 28 April extending the UN peacekeeping mission in Western Sahara for another year. The cleverly-crafted resolution refers both to Polisario's proposal, a referendum on the status of the territory, and Rabat's, which is to grant it political autonomy under Moroccan sovereignty.

The new Secretary General of the UN, Antonio Guterres, last month called for the two sides to reopen talks. There has been no serious movement on the crisis since 1991, but Morocco's withdrawal of forces from a buffer zone and Polisario's matching pullback of fighters last week is a positive sign. A statement from Algeria's Foreign Minister Ramtane Lamamra backing the UN resolution also augurs well. Algeria has been the principal backer of Polisario. The issue has caused a cold war between Algiers and Rabat for three decades.

ZAMBIA: Opposition leader's detention continues as the IMF is due in Lusaka for difficult talks
Hakainde Hichilema, leader of the opposition United Party for National Development (UPND), remains in custody and is expected to appear in court again on Thursday (4 May) while prosecutors work on the charge of treason against him. Hichilema was arrested on 11 April after his motorcade clashed with President Edgar Lungu's en route to a Lozi traditional ceremony three days before.

Lungu claims he wants to let ‘the law take its course' although he is widely believed to have inspired the prosecution. The controversy complicates the already difficult negotiations between the government and the International Monetary Fund over a US$1.6 billion loan.

Finance Minister Felix Mutati says the government needs the funds to bolster foreign reserves which have shrunk following an expensive election campaign last year, ballooning budget deficits and undulating prices for the country's copper and cobalt exports. The economy is growing at its lowest rate since 1998.

NIGERIA: National Assembly to debate record $23 billion budget after government liberalises forex rules
The 2017 budget – which plans record spending of N23 trillion (US$23 billion) – could be approved this week by the National Assembly after a tortuous review which was almost derailed when police raided the home of Senator Danjuma Goje, chairman of the Appropriations Committee last week. Goje is subject of a corruption investigation, which he says has been orchestrated by his enemies. The budget includes plans to borrow $7 billion from China's Eximbank, the African Development Bank and the World Bank over the next year.

Relations between the Senate and the presidency oscillate between very difficult and utterly poisonous. The Senate has rejected several government nominations in recent months, the most important being its candidate to chair the Economic and Financial Crimes Commission, Ibrahim Magu. The presidency won't back down, so Magu is likely to remain acting chairman of the EFCC for the remainder of Buhari's presidency. The fact that Magu has been investigating several top politicians, including Senate President Bukola Saraki, has not endeared him to powerful members of the National Assembly.

Ahead of the budget debate, the government has announced a new foreign exchange regime. It is another partial liberalisation of exchange controls through a complex system of new rules. Known as the Investors' and Exporters' FX window, it should allow traders more access to foreign exchange at competitive prices through the official market. Central bank governor Godwin Emefiele thinks the new system will bring enough dollars in to the system without forcing a full-scale devaluation, and all its inflationary consequences.

It should work like this: each morning, authorised foreign exchange dealers are to submit bids through a system backed by the central bank known as the Nigerian Autonomous Foreign Exchange Rate Fixing (Nafex). Then, at midday, the trading exchange rate would be announced for the day. That would be the benchmark for all future trading contracts agreed that day.

For now, the formal exchange rate would stay at US$1=N315, and the central bank would release foreign exchange at that highly preferential rate for specific transactions. The lack of transparency from the central bank over who gets access to foreign exchange at that rate suggests to some analysts that it could be open to major abuse.

UGANDA: The US abandons the hunt for warlord Joseph Kony in face of President Museveni's indifference
This month, the mission to capture veteran warlord Joseph Kony is effectively being called off. The United States is to speed up the withdrawal of the 250 Special Forces troops and Air Force personnel it had deployed to hunt for Kony, after reportedly spending US$780 million on the mission, according to security experts AC Vol 58 No 9, Concealing disappointment). Uganda has long given up any serious effort to find and arrest Kony, leader of the Lord's Resistance Army.

Set up as a rebel force in the late 1980s in northern Uganda, the LRA has murdered over 100,000 civilians and abducted tens of thousands of people. At first, President Yoweri Museveni prosecuted the war against Kony and the LRA vigorously, and he became one of the strongest advocates for the International Criminal Court, whose help he wanted in capturing Kony.

Ugandan oppositionists dismissed all this as posturing and lambasted Museveni for using the war on Kony to gain credibility in the West. They argued that Museveni's forces were subjugating northern Ugandans, including holding hundreds of thousands of civilians in appalling conditions in camps 'for their own protection', and had no interest in pursuing the LRA.

By the early 1990s, Kony became a regional threat after the government of Sudan gave him arms, money and training to create mayhem in southern Sudan and the region. It was then that an unwieldy coalition of local and international non-government organisations joined with regional and western militaries to pursue Kony. Neither Kony, nor his backers in Khartoum and elsewhere, have been brought to account let alone faced any sanction for their murderous campaign.

The sole LRA fighter to be put on trial at the ICC in the Hague is Dominic Ongwen, a lieutenant of Kony's and former child soldier. This abandoning of the hunt for Kony, together with the lack of any restitution for the victims of the long war in northern Uganda, means its bitter aftermath will haunt the country for years to come.

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

2017

April 2017

10 April 2017

Africa Confidential | NIGERIA: Police raids, intercepts and careless whispers in latest twist in Shell and ENI's secret deal saga

By Patrick Smith
Editor of Africa Confidential

This week we start in Milan, Italy, where the state prosecutor is to open preliminary hearings on two multinational oil companies accused of massive corporate fraud in Nigeria's oil industry. Then to Nairobi where a committee of the opposition alliance has just recommended former Prime Minister Raila Odinga as its presidential candidate in August's elections. In South Africa, there are renewed rumblings about President Jacob Zuma's efforts to push through a mega-deal on nuclear power with Russia. In Kinshasa, the opposition is fuming at President Joseph Kabila's choice of Prime Minister and is planning a mass protest next week.

NIGERIA: Police raids, intercepts and careless whispers in latest twist in Shell and ENI's secret deal saga
The probe into how Royal Dutch Shell and Italy's ENI came to buy the OPL 245 oil concession – one of the biggest in the Gulf of Guinea – takes on a new lease of life when court hearings open in Italy this week. The companies face claims that they connived with former oil minister Dan Etete to pay bribes to secure the rights to buy the block for US$1.1 billion, seen as a bargain basement price at the time of the deal in 2011. Officials at Shell and ENI have repeatedly insisted they broke no laws.

The office of Fabio de Pasquale, the state prosecutor in Milan, set out the timetable to Africa Confidential. Preliminary hearings will consider the case against ENI and Shell this month and could continue until June.

Should Italy's prosecutors proceed against the companies, the main case will open in September and October. Although the Italian case will focus on the role of ENI and Shell, several business people and former officials are also under investigation by Nigeria's Economic and Financial Crimes Commission. Alongside these state investigations, a cache of Shell emails was leaked to the press and made headlines today (10 April) for the online news service Buzzfeed and the Italian newspaper Il Sole 24 Ore while the anti-corruption lobbying organisation Global Witness also published today a major report analysing much of the same material.

The deluge of new material raises the question as to whether the authorities in Britain and the United States – Shell and ENI are publicly listed in both countries – will launch their own investigations. Cases involving multinational companies accused of corporate fraud are rarely prosecuted in those jurisdictions. Instead, they tend to be settled by hugely costly Deferred Prosecution Agreements, essentially a corporate plea bargain. Many anti-corruption lawyers do not believe these deals deter fraud and corporations come to see them as yet another 'cost of doing business'. The fines, however, can be a substantial source of income for budget-strapped state prosecutors.

KENYA: Which is the biggest electoral threat to President Kenyatta  – economic woes or Raila Odinga?
News that a technical committee of the opposition National Super Alliance (Nasa) has picked former Prime Minister Raila Odinga as the coalition's presidential candidate has deeply divided activists ahead of national elections on 8 August. The committee assessed the candidates' qualities and Odinga came first, but the final decision is in the hands of the leaders of the four coalition partners.

Some see the choice of Odinga, 72, as inevitable given his high national profile and long experience. Others argue that his candidacy will encourage voters in Central Province, the base of President Uhuru Kenyatta and where Odinga has many political foes, to come out strongly against him. Insiders say it is likely that Kalonzo Musyoka, another senior figure in Nasa, will become Odinga's running mate.

One problem with a Odinga-Musyoka ticket is that it leaves Musalia Mudavadi, an architect of the opposition alliance and a former Vice-President, out in the cold. In the 2013 elections, he ran his own presidential campaign, rejecting offers to join one of the rival alliances headed by Odinga and Kenyatta.

If the tricky choice of the presidential ticket puts pressure on the opposition and boosts President Kenyatta's chances of a second term, the country's economic woes could still tell against him. Bankers in Nairobi are warning about the government's rising indebtedness and criticising what they see as heavy-handed regulation of the financial sector. They also point to a 45% loss in the value of equities on the Kenya Stock Exchange over the last two years and the effects on the local economy of the appalling drought in the Horn of Africa.

The government's cap on interest rates has sharply cut the profits of Kenya Commercial Bank but, more importantly, has led to a credit squeeze and a block on growth. Should the economy suffer further hits, the opposition could benefit despite reservations about its candidates.

SOUTH AFRICA: Claims that the Russian nuclear deal is reviving follow Gordhan's sacking
After a torrid week of national protests and ratings agency downgrades in the wake of President Jacob Zuma's midnight sacking of Finance Minister Pravin Gordhan on 30 March, there are reports that the government is seeking to revive the controversial $72 billion nuclear power deal with Russia. Also, there is speculation that Zuma may be planning to bring back his close ally, Brian Molefe, the disgraced former head of state power company Eskom into government.

Last month Molefe was made a member of parliament for the African National Congress and some sources in the Treasury suggest he could be appointed Director General there after Lungisa Fuzile resigned the post following Gordhan's sacking. That could give Molefe a decisive role in the management of the nuclear deal.

The independent Johannesburg-based weekly City Press reported on Sunday (9 April) that it had seen internal documents from Eskom that indicated discussions had been reopened on the Russian deal in recent weeks. A final decision could be taken by Zuma prior to national elections scheduled for April 2019.

The role of the Treasury and new Finance Minister Malusi Gigaba would be critical in the negotiations. Gordhan strongly opposed the deal, raising questions about its value for money and financial risk. Ratings agencies Fitch and Standard & Poor's, which downgraded South Africa's debt to junk status after the sacking of Gordhan, have raised their own concerns about the financial viability of the nuclear deal.

CONGO-KINSHASA: Kabila tests opposition with unilateral appointment of new Prime Minister
President Joseph Kabila's choice of a new Prime Minister Bruno Tshibala last Friday (7 April) broke the rules agreed between the government and the political parties and looks aimed at dividing the opposition. Kabila announced his choice ten days ahead of a scheduled demonstration by the opposition against what they describe of the government's repeated violation of political agreements on the running of national elections, which are due by the end of this year.

Tshibala, formerly a top figure in the main opposition Union pour la démocratie et le progrès social (UDPS), was expelled from the party during a dispute about who would succeed its historic leader Etienne Tshisekedi, who died in February. After some manoeuvring, Tshisekedi's son Félix emerged as the new leader of the UDPS and of the national opposition coalition.

Another challenge for the opposition is the organisation of a funeral in Kinshasa for Etienne Tshisekedi. It is likely to be a massive rallying point for oppositionists but the government may again use deadly force to shut down such an event, hugely inflaming local opinion. Organising such a memorial would require cooperation and negotiation between Kabila and the UDPS: something which looks out of the question for now. Today the police banned all gatherings of more than ten people as security forces deployed in strength on the streets of the capital.

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

2017

April 2017

06 April 2017

Highlights of The Annual Debate 2017

The Annual Debate 2017 | Africa: The Next Chapter | Critical Points

Keynote 1 – Developing Tomorrow’s Leaders

  • 60% of Africa’s population are currently aged 25 and under and by 2024, Africa will be the most populous continent in the world.
  • It is thus vital to provide the educational opportunities to harness the talent and vitality of Africa’s youth as well as meet their growing aspirations.
  • The Africa Leadership University is a new network of institutions across the continent to do just this and train Africa’s future leaders in the right skills and self-confidence.
  • 5 points distinguish this initiative:  a focus on skills, not academic theory; strong links with potential employers; an emphasis on instilling an entrepreneurial instinct; using technology; and encouraging students to reflect on Africa’s challenges.
  • The Africa Leadership University encourages students to solve Africa’s challenges, and capture the continent’s opportunities.

To read more click the icon below:

 

2017

April 2017

04 April 2017

Moroccan Ministry of Energy, Mines, Water & Environment to join discussions at the Africa Energy Forum in Copenhagen

The Ministry of Energy, Mines, Water and Environment of the Kingdom of Morocco, has confirmed attendance at the Africa Energy Forum in Copenhagen from 7-9 June 2017

At the Powering Africa: Summit which took place in Washington DC from 9-10 March, Morocco’s ONEE presented their Gas to Power Programme and MASEN discussed their sustainable energy programme under the leadership of Mustapha Bakkoury, President and Chief Executive Officer. Both organisations are clearly focused on a broader role within Africa carrying with them the potential of building physical energy links between the continent and Europe. The support of the Ministry at the Africa Energy Forum (AEF) this year underlines the commitment from the Kingdom of Morocco to explore energy partnerships with Europe and hasten the pace of foreign direct investment in Morocco.

AEF is set to bring 2,000 participants to Copenhagen this June for the annual gathering for government ministers, heads of utilities, project developers and global investors driving forward the development of Africa’s energy projects.

Other recent confirmations include H.E. Dr.Eng.Seleshi Bekele, Minister of Water, Irrigation and Electricity, Ethiopia, Ulla Tørnæs, Minister for Development Cooperation, Government of Denmark, Teresa Ribeiro, Secretary of State for Development, Government of Portugal, Hisham Sallam, Second Secretary – responsible for Economics and Energy, Government of Egypt, Mateus Magala, Chairman of the Board of Directors, EDM, William Amuna, Chief Executive Officer, GRIDCo, Ghana and Emmanuel Antwi-Darkwa, Chief Executive Officer of Volta River Authority in Ghana.

A new Platinum agenda stream will bring together senior level government officials with some of the world’s biggest investors in discussions on how to accelerate projects, whilst specific country sessions will explore the unique investment climates and priority projects for countries such as Nigeria, South Africa, Côte d’Ivoire, Ghana, Mozambique, Morocco,  Ethiopia,  and Kenya.

Organisers of the Forum EnergyNet will host a city boat cruise along the canals of Copenhagen and pre-Forum golf championship day to build additional networking opportunities into this annual business Forum.

Contact: Amy Offord - Marketing Manager

Event dates: 7-9 June 2017

Event location: Bella Center, Copenhagen, Denmark

Organisers: EnergyNet, part of Clarion Events Ltd

Email: AEF@energynet.co.uk

Tel: +44 (0)20 7384 8068

Visit: www.africa-energy-forum.com

About EnergyNet

EnergyNet arranges investment forums, investment meetings and conferences focusing on the energy and industrial sectors in emerging markets, including both conventional and sustainable energy. For more information please visit www.energynet.co.uk

2017

April 2017

03 April 2017

South Africa Update | Africa Confidential

By Patrick Smith, Editor of Africa Confidential 

Again, we start in the week in South Africa as the country and its politicians react to President Jacob Zuma's sacking of Finance Minister Pravin Gordhan. A different level of power play is going on in Abuja where the head of Nigeria's anti-corruption organisation has just launched a damning report on President of the Senate, Bukola Saraki. And then to Washington where Egypt's President Abdel Fatah el Sisi is due to meet with President Donald Trump and the other big summit in the United States is a Trump meeting with China's President Xi Jinping where some diplomats hope that Africa might provide one of the few points of agreement.

SOUTH AFRICA: Close-run confidence vote looms after Zuma sacks Gordhan
This time the numbers may not work for President Jacob Zuma. Under siege within the top echelons of the governing African National Congress after his peremptory sacking of Finance Minister Pravin Gordhan and deputy Mcebisi Jonas in a reshuffle late on 30 March, Zuma could face a tough no-confidence vote in parliament within ten days.

On 2 April, parliamentary speaker Baleka Mbete announced she would return early from an overseas trip to consult on opposition party requests for parliament to be recalled – it is currently in recess until 3 May – to hold a confidence on Zuma.

Until now, Zuma and his acolytes, relying on the ANC's 62% majority in the 400-seat parliament, have easily seen off four confidence votes launched by the opposition parties since 2009. In the last such vote last November, several dissident MPs and ministers failed to attend the vote, but most of the ANC's  249-strong parliamentary caucus backed Zuma.

This time top ANC officials such as Vice-President Cyril Ramaphosa, Secretary General Gwede Mantashe and Treasurer General Zweli Mkhize have publicly criticised Zuma, and several senior figures in the party have said they would vote according to their conscience. The South African Communist Party has publicly opposed Zuma's reshuffle, specifically the sacking of Gordhan and Jonas.

The timing of the vote could prove critical as Zuma's opponents would want to maximize the the current wave of hostility to the President. Their best chance would be to reconvene parliament before Easter.

At least 70 ANC MPs would have to vote against Zuma to get the simple majority needed for a no-confidence motion to succeed. That now looks possible with opinion in the country and party moving strongly against Zuma.

A successful vote of no confidence would trigger an extraordinary meeting of the ANC's National Executive Committee in which Zuma would be likely to face a motion for his recall. That was the fate of former President Thabo Mbeki, who was brought down in 2008 after an extended and skilful campaign against him by Zuma. The usurper then could now meet the same fate this year.

EGYPT/USA: El Sisi and Trump confer on anti-Islamist fight
An assiduous wooer of Donald J Trump, Egypt's President Abdel Fatah el Sisi will become the first Middle East leader to meet the new US President in Washington DC on 3 April. El Sisi, who was the first international leader to congratulate Trump on his election victory last November, seeks military and diplomatic backing for his fight against Islamist groups.

First prize for El Sisi would be for Trump to endorse the Eguptian leader's ban on the Muslim Brothers, Al Ikhwan el Muslimeen, with a declaration that the US would treat the group as a terrorist organisation. That would have serious consequences for the group's finances and its supporters in countries such as Qatar and Turkey.

El Sisi is also looking for US financial help. Egypt is a third of the way through a $12 billion adjustment programme backed by the International Monetary Fund but inflation is running at about 30% after the government let the pound float, and it has lost half its value against convertible currencies.

The two may also discuss the war in Libya where rogue general Khalifa Haftar, backed by Egypt and the United Arab Emirates, has been trying to win US security and diplomatic support for his campaign against Islamist militias in the west of the country.

NIGERIA: Anti-corruption czar releases dossier on Senate president
The rumbling row between Ibrahim Magu, chairman of the Economic and Financial Crimes Commission and Bukola Saraki, the President of the Senate has escalated into a full-blown political clash over claims about the corrupt diversion of N3.5 billion (US$11 million).

Over the weekend Magu's office released a report accusing Saraki's aides of having used some N3.5 billion to bribe National Assembly members to drop an investigation into the whereabouts of overpayments made by state governments to the Treasury to meet debt service obligations. Following the government's negotiation of some $18 bn. of debt relief with the Paris Club of official creditors in 2005, state governments were owed a refund on the sums they had submitted to service the debts.

The EFCC report claims that part of the debt relief sent to the state governor's forum, chaired by Saraki at the time, was improperly diverted. But Senators such as Ali Wakili and Fatima Raji-Rasaki, both staunch allies of Saraki, have rubbished the EFCC allegations. This row follows the Senate's rejection, for the third term running, of President Muhammadu Buhari's request for Magu to be confirmed as substantive chairman of the EFCC.

There is now a stalemate between the Presidency and the Senate over the matter. The latest row between Saraki and Magu is unlikely help any resolution: in theory, Magu's candidacy is finished but it seems he still has some backing in the presidency.  Next stage may be some of the discreet negotiations in which Saraki is a specialist.

CHINA/USA: Could Africa be point of agreement in Xi-Trump summit?
When China's President Xi Jinping meets President Donald J Trump in Florida on 6-7 April, Africa policy could provide one of the few points of agreement. At least, that is the view of a new report put together by a team of senior diplomats urging a common China-US approach on key issues confronting Africa. So far Trump has shown less interest in Africa than in any other region. And it is an area where President Xi has far more knowledge and experience than Trump.   
 
The diplomats arguing for better China-US cooperation in Africa include: Mohamed Ibn Chambas who heads the United Nations office in West Africa; Zhong Jinhua, Beijing's former special representative on African affairs; and Princeton Lyman, a former ambassador for the US to Nigeria and South Africa. They mapped out substantive areas of cooperation which included: economic growth and development; mitigating conflict; enhancing political stability; and fighting violent extremism and organised crime.
 
There are a few examples of Sino-US cooperation in Africa such as the anti-piracy operations in the Horn of Africa and the their planned replication in the Gulf of Guinea. There may also be room for talks between the two leaders on other areas of security cooperation in Africa, backing local efforts against jihadists and other insurgents.
 
But Xi will want to know much more about the Trump administration's planned cuts to the UN and foreign assistance budgets, as well as its renunciation of the Global Climate accords reached in Paris in December 2015.

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

2017

March 2017

28 March 2017

Africa Confidential Briefing | SOUTH AFRICA: Reshuffle could become reality as Zuma recalls Finance Minister from investment tour

By Patrick Smith, Editor of Africa Confidential 

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.

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