Hillary Clinton’s most excellent African journey
August 10, 2012 | 0 Comments
J Brooks Spector*
Hillary Clinton’s exuberant progress across Africa is a marked departure from the tough, challenging reception given George Bush’s secretary of state. Rather, this trip seems to have been more a victory lap accompanied by modest economic goodies and a round of drinks or two to celebrate a litany of success. But, were there some other, darker, currents at play? J. BROOKS SPECTOR takes a look.
The text for Hillary Rodham Clinton’s multi-nation itinerary was constructed quite explicitly out of a strategy document, a white paper that had been issued by the White House two months earlier, the US Strategy Toward Sub-Saharan Africa. According to this paper, US goals for its Africa policies were to: 1) strengthen democratic institutions; 2) spur economic growth, traded and investment; 3) advance peace and security; and 4) promote opportunity and development.
All of this comes as the US commits as few resources as possible to the cause. The cupboard is virtually bare in many ways. So, instead of yet another call for yet another Marshall Plan, this White House paper sums up by saying that “across all [these] objectives, we will: deepen our engagement with Africa’s young leaders; seek to empower marginalized populations and women; address the unique needs of fragile and post-conflict states; and work closely with the UN and other multilateral actors to achieve our objectives on the continent.”
Fine words, those, but they are also point to the fact there are few if any new grand initiatives in the works any time soon. Quite simply, this is the case because the money either isn’t there, or because Congress is not about to look for any more, given today’s budgetary climate and the languid economic recovery. In fact, foreign aid programmes may face a real buzz cut from the potential fiscal cliff that may kick in at the beginning of 2013 with the federal budget.
As for Hillary Clinton’s trip itself, older-style “war on terror” themes were still on display, at least in the opening segments of the trip, as when the stop in Senegal pointed to the role of the US military teams active in confronting Islamic fundamentalist insurgents said to be operating in the Sahel region, or when they were a key point of emphasis with Clinton’s stopover in Uganda in terms of US military support in confronting the Lord’s Resistance Army (the LRA) or in Kenya in speaking about the ongoing crisis in Somalia.
However, by the time Clinton touched down in South Sudan’s capital of Juba, the focus had shifted to efforts to bring wary, recalcitrant Sudan and South Sudan to turn their energies away from conflict with each other and towards cooperation. This would permit a flow of revenue from the export of South Sudan’s great petroleum resources to be dedicated to development purposes, as was planned for in the recent independence agreement.
By the time Clinton and her entourage landed in South Africa, the focus had turned resolutely towards pragmatic, practical business deals—save for a bit of required noise about Syria.
While Clinton was off for a photo-op lunch in Qunu with an elderly Nelson Mandela and his wife, Graca Machel (as always a touchstone for the US media), most of the rest of her entourage was in Sandton to participate in the first US-SA business partnership conference. Co-hosted by the Chamber of Commerce in America and the American Chamber of Commerce in South Africa, in tandem with South African business federations like Busa, the event was a daylong speech-a-thon that pulled in three sustained contributions by three South African cabinet ministers: public enterprises’ Molusi Gigaba, trade and industry’s Rob Davies and energy’s Dipuo Peters.
In Clinton’s comments to that business crowd at the end of the day after she departed Qunu, she told the throng, “We want sustainable partnerships in Africa that add value rather than extract it. And one of the ways we are building those partnerships is to look to enhancing and strengthening the ties between American businesses and African businesses because, as we look across Sub-Saharan Africa, we see enormous economic growth even as the global economy continues to struggle. Seven of the world’s 10 fastest-growing economies are in this region. And these emerging markets present enormous opportunities not only for the people themselves, who we hope will benefit because of inclusive, broad-based prosperity arising from growth, but also for American businesses who have a lot to offer.”
This event was a “full-court press” to provide a chance for American companies to line up to bid for a good share of the big spending expected to flow out of South Africa’s infrastructure development program now coming down the track. Specifically, the US already seems to be pinning its hopes on scoring big in the energy and transport sectors. As a result, representatives from really big companies like GE, FedEx, Black & Veatch and Boeing got up close and personal with Transnet and Eskom’s plans to buy lots of the big stuff that will be the key to rebuilding South Africa’s economy and aging infrastructure.
A heavy-duty quartet of senior officials, including Undersecretary of State Robert Hormats and Undersecretary of Commerce Francisco Sanchez and Export-Import Bank and Overseas Private Investment Corporation top officials, were all on board as essential parts of this super sales pitch. Hormats in particular has been a player inside Washington political circles and New York City financial power centres for decades.
In their every utterance, all of these individuals were at great pains to make the case America and its businesses (unlike some other unnamed countries) are reliable partners who work and play well with local businesses and government to achieve a nation’s social goals like supporting BBBEE processes and providing effective training and other advancement opportunities (unlike some other unnamed places). Coming from a deeply heterogeneous society like America, American businesses understand, right in their DNA, the kind of society South Africa is (unlike some places).
Paralleling this revved-up sales pitch on behalf of American business have been some public statements highlighting a growing realization by the South African government as to the impact and importance of the US-SA economic relationship in foreign direct investment, trade and training. As part of this, the South African government now seems increasingly aware of the importance of what has become yet another major element in the US-SA economic relationship: the African Growth and Opportunity Act, and the fact that in its current incarnation it runs out in 2015, unless the US Congress decides to renew it.
AGOA provides tariff-free import into the US for thousands of products from some 37 African nations. More than for most African nations, it has become an important element in the success of South Africa’s export-driven industries such as auto manufacturing. South Africa is actually under two “threats” vis-à-vis AGOA. One is that the US Congress might not renew the law. The other is that South Africa might even be written out of its provisions for eligibility because of its middle-income industrialized status in comparison to most other African nations.
A cynic—or a sharp-eyed observer—might note that the SA government has to some degree brought this upon itself when it waved off signing a free trade association between the US and the Southern African Customs Union nations over half a decade earlier. As a result, a key part of SA’s trade relationship with the US is dependent on the US Congress’ sensibilities regarding any new lease on life for AGOA or for SA’s inclusion in it if it does pass.
Like his predecessors George W Bush and Bill Clinton, Barack Obama has embraced AGOA to demonstrate that the US commitment to Africa is not just a function of foreign aid largesse, military ties or special bilateral deals. Rather, it is the embodiment of the partnerships Obama said he hoped for in his Accra speech several years ago. Back then, he said “the true sign of success is not whether we are a source of perpetual aid that helps people scrape by. It’s whether we are partners in building the capacity for transformational change.”
Given the pressures on the foreign aid and even PEPFAR (the major US programme to combat HIV/Aids) budgets, increases in aid are highly unlikely.
On her final day in South Africa, Clinton spoke at the University of the Western Cape. In her speech, after reiterating those Obama strategic pillars, Clinton asserted, “I’ve often heard it said that African problems need African solutions. Well, I’m here to say that some of our global problems need African solutions too. And few nations on this continent can carry as much weight or be as effective partners and leaders as South Africa.
“You are a democratic power with the opportunity to influence Africa and the world. You have led on non-proliferation at the International Atomic Energy Agency and on climate change at the Durban conference. You’ve led on economic cooperation at the G-20. You’ve led on women’s participation in politics. And a South African woman will soon become chair of the African Union Commission, a first in the history of that organization. Now all of this is good news for the people of South Africa, this continent, and the world. But respectfully, I say that we and you can, should, and must do more.”
One South African politician who attended told The Daily Maverick that he had been “especially impressed by Hillary’s clear attempt to distance herself from any perception of the US as empire building. Her reference to the idea that the world needs African ideas to succeed was telling. It was the right message for the time,” he added.
If the meetings, dinners, speeches and congratulatory remarks did not deliver a major diplomatic initiative or major economic agreement, they just as clearly showed the two nations have moved well beyond the edgy prickliness that so-often exemplified the Bush-Mbeki era. And the new bilateral business partnership meeting and the third session of the US-SA strategic partnership meeting held the day after the business conference generated a laundry list of smaller agreements, grants, loans and handshakes of the kind that mark the conclusion of talks between two friendly nations.
In this case, the announcements included a $2-billion declaration of intent between the US Export-Import Bank and South Africa’s Industrial Development Corporation for credit guarantees in renewable energy; a Global Disease Detection Centre in South Africa established with the assistance of the US Centers for Disease Control; a credit guarantee for $150-million in funding to small and medium enterprises; a $7.5-million public-private partnership to improve teacher quality; and a half million dollars to help South African students pay for admissions testing, application expenses and travel to study in the US.
There were also similar small grants to combat sexual and gender-based violence; fund collaboration between SA’s Competition Commission and the US Federal Trade Commission, as well assistance with water resource management in South Africa’s trans-boundary river basins along its northern borders.
Despite all these “warm fuzzies” in meetings of what may well be Clinton’s final trip to South Africa as secretary of state, she did take an opportunity to bring up the crisis in Syria. This was, in effect, the diplomatic equivalent of a small but visible frown over South Africa’s reluctance to back a stronger UN role there.
As Clinton herself said, “I hope that we will look at the urgent tasks that I think confront the people of Syria and the international community and think through how we can address them. First, we must figure out ways to hasten the day when the bloodshed ends and the political transition begins. We have to be sure that we’re working with the international community to bring that day about and to be very clear of our expectations of both the government and the opposition about ending the violence and beginning the political transition.”
She noted further that following her stops in Ghana, Benin and Nigeria (the latter two added just recently to her itinerary), she would be going to Istanbul to discuss these issues with Syria’s neighbour, Turkey, before returning to Washington.
If this visit marked an underscoring of an improved relationship in the character of the clear commercial pitch for American products for South Africa’s national infrastructure, it was also simultaneously a recognition that a 500-kilogram panda was also in the room.
If Robert Hormats declined to comment about Xinhua News Agency reports the Chinese government was unhappy with the tone of Clinton’s remarks in Senegal about the reliability of America as a trade partner in contrast to some other nations, this competition kept popping up during the informal conversations at the business conference. That, and the fact this trip was clearly designed to be a counterweight to the heft and presence the Chinese are showing in Africa.
And of course, everyone wanted to speculate about Hillary Clinton’s future in American politics, now that she has insisted she will not remain in her position after the election (or run for president again), regardless of who wins in November. This would be true, even if Mitt Romney wins the election and she becomes a kind of default leader of her defeated party. By 2016 she will be 68, after all, and that is rather old to begin a strenuous race for the White House. She is apparently in excellent health, and there is the example of Ronald Reagan, who was 71 when he first took office as president.
Well, we shall see on that score. A year, let alone four of them, is a lifetime in politics, as the old saying has it. DM
*Source Daily Maverick
Brazil Gains Business and Influence as It Offers Aid and Loans in Africa
August 8, 2012 | 0 Comments
By SIMON ROMERO
RIO DE JANEIRO — In Mozambique, Brazil’s government is opening a plant making antiretroviral drugs to fight the AIDS epidemic. Brazil is lending $150 million to Kenya to build roads and ease congestion in the capital, Nairobi. And in Angola, West Africa’s rising oil power, a new security agreement seeks to expand the training of Angolan military personnel in Brazil.
Brazil, which has more people of African descent than any other country outside of Africa itself, is assertively raising its profile again on the continent, building on historical ties from the time of the Portuguese empire.
The array of aid projects and loans recently extended to African countries points both to Brazil’s ambitions of projecting greater influence in the developing world and to the expanding business allure of Africa, where some economies are rapidly growing even as parts of the continent still grapple with wars and famine. The charm offensive is paying off in surging trade flows between Brazil and Africa, growing to $27.6 billion in 2011 from $4.3 billion in 2002.
“There’s the growing sense that Africa is Brazil’s frontier,” said Jerry Dávila, a historian at the University of Illinois who has written extensively about Brazil’s inroads across the South Atlantic Ocean. “Brazil is in the privileged position of finally reaching the institutional capacity to do this.”
The prominence given to Africa also reflects Brazil’s shift from aid recipient to provider. Big development challenges persist in Brazil, including woeful public schools and a sharp economic slowdown this year. But Brazil is a major agricultural exporter that recently surpassed Britain as the world’s sixth-largest economy, and it now boasts more embassies in Africa than Britain does — a notable change from when Brazil relied on foreign aid in the 1960s, largely from the United States, to alleviate hunger in the country’s impoverished northeast.
Africa now accounts for about 55 percent of the disbursements by the Brazilian Cooperation Agency, which oversees aid projects abroad, according to Marco Farani, the agency’s director. Altogether, including educational exchanges and an expanding loan portfolio, Brazil’s foreign aid exceeds $1 billion, he said. Big portions of Brazilian aid also go to countries in Latin America, and there is a smaller focus on East Timor, the former Portuguese colony in Southeast Asia.
“We still have a smaller foreign aid profile than other some countries, but we’re learning how to do cooperation,” Mr. Farani said.
Brazil still trails other nations, notably China and the United States, which have far more expansive aid programs and trade in Africa. Elsewhere in Latin America, Venezuela and Cuba have offered different ways of enhancing African ties. Venezuela organized a 2009 summit meeting of African and South American leaders, in which President Hugo Chávez tightened an alliance with Libya’s leader at the time, Col. Muammar el-Qaddafi.
During the cold war, Cuban troops supported Communist governments in Africa. In Angola, this mission included the seemingly paradoxical task of protecting a Chevron oil complex at the same time the United States was supporting an insurgency against Angola’s leaders. More recently, Cuba has sent thousands of doctors to Africa.
But while the Cuban and Venezuelan efforts have largely prioritized developing-world solidarity with some African nations, Brazil’s growing foothold in Africa is more complex, involving ambitions to forge Brazil into a diplomatic and economic powerhouse.
After a surge of openings of diplomatic missions over the past decade, Brazil now has 36 embassies across Africa, and hopes to open its 37th in Malawi this year. Brazil is already using this presence to bolster its actions on the world stage, sending jets to fly delegations from Sierra Leone, Liberia and Cape Verde to the United Nations Conference on Sustainable Development, which was held here in June.
Other projects are intended to lure Africans to study in Brazil. A new university began offering classes last year for students from Portuguese-speaking countries, including Angola, Guinea-Bissau, Mozambique, and São Tomé and Principe.
Since Brazil does not need to import large amounts of oil or food, its plans in Africa differ somewhat from other countries seeking greater influence there. Outreach projects tie largely into efforts to increase opportunities for Brazilian companies, which sometimes work with Brazil’s government in offering aid.
Some of Brazil’s biggest inroads, predictably, are in Portuguese-speaking countries like Angola, where the Brazilian construction company Odebrecht ranks among the largest employers, and Mozambique, where the mining giant Vale has begun a $6 billion coal expansion project.
But Brazilian companies are also scouring other parts of Africa for opportunities, putting down stakes in Guinea and Nigeria. A leading Brazilian investment bank, BTG Pactual, started a $1 billion fund in May focused on investing in Africa. New links are also emerging, including Brazilian farming ventures in Sudan; a flight from Addis Ababa, Ethiopia’s capital, to São Paulo; and a fiber optic cable connecting northeast Brazil to West Africa.
Some of Brazil’s forays in Africa have come with complications, including criticism of warming ties with leaders connected to human rights abuses, like Equatorial Guinea’s president, Teodoro Obiang Nguema Mbasogo. A freedom-of-information measure has enabled journalists to delve into African arms deals by Brazilian companies, including the sale of cluster bombs to Zimbabwe.
African students studying in Brazil have filed numerous complaints describing slurs and aggression, complicating the myth of “racial democracy” that once prevailed here, in which scholars contended that Brazil had largely escaped the discrimination common in other societies.
In one episode here in Rio, Eleutério Nhantumbo, a Mozambican police officer with a scholarship to study public security at a Brazilian university, said he was stopped by police officers on one occasion. They ordered him to raise his shirt upon exiting a store on the suspicion that he had stolen something.
When he questioned why they had singled him out, he said the officers responded with a racial slur and warned him of addressing them without respect; hearing his accent in Portuguese, they queried him about his origins. “The police asked, ‘Where’s Mozambique?’ ” said Mr. Nhantumbo, 33. “They didn’t know that there existed a country with this name.”
Brazil, closely linked for centuries to Africa through shipping routes and the slave trade, is thought to have imported 10 times as many slaves as the United States did before slavery was abolished here in 1888. For a stretch in the 19th century, Brazil was the seat of the Portuguese empire, making the capital then, Rio de Janeiro, a nerve center for trade with Africa.
Those ties withered until civilian leaders sought to establish relations with newly independent governments in Africa in the early 1960s. That process cooled after Brazil’s military rulers seized power in a 1964 coup supported by the United States.
Then economic necessity and a quest to build autonomy from the United States laid the foundations in the 1970s for today’s diplomatic buildup in Africa. Seeking to offset spending on oil imports, including cargoes from Nigeria, military rulers set about opening new markets in Africa for Brazilian companies. They found some success, notably in newly independent Angola.
Brazil’s former president, Luiz Inácio Lula da Silva, built on those inroads in trips to Africa from 2003 to 2010, referring to the “historic debt” Brazil had to Africa in its formation as nation.
Taylor Barnes contributed reporting.
ECOWAS Prepares to Deploy Force to Mali
August 8, 2012 | 0 Comments
By Peter Clottey*
An official of the Economic Community of West African States (ECOWAS) says the bloc has begun a “final planning conference” to deploy a standby military force to Mali.
Communications director, Sonny Ugoh says ECOWAS also is seeking a United Nations Security Council mandate to deploy its force to deal with al-Qaida-linked Islamist militants and Tuareg separatists who have taken over the northern regions of Mali.
The ongoing one-week conference is being held in Mali’s capital, Bamako.
“This planning conference is just to look at all the dimensions of the impending deployment — look at them, evaluate them and see from the planning point of view, make sure that all the elements are included so that a report can be prepared that will now go to the committee of chiefs of defense staff,” Ugoh said.
He said officials from the African Union, the European Union and the United Nations are taking part of the conference to develop ways to deal with the situation in northern Mali.
Islamist groups and Tuareg separatists seized control of northern Mali in April, taking advantage of the turmoil after renegade soldiers overthrew the government in Bamako. The militants have since taken full control of the north and imposed a strict version of Islamic law, despite protests from much of the population.
ECOWAS protocol stipulates that a standby force can be deployed after a formal request is made by a member state of the bloc. Ugoh said the bloc expects leaders in Mali to officially request deployment of a standby force.
Ugoh said ECOWAS had already asked for a U.N. Security Council mandate to allow deployment of the standby force to Mali.
“The Security Council mandate has been asking us to satisfy certain issues relating to the impending deployment, and we have been working on those. We are hoping that this time around we will be to address all the issues that will enable to the Security Council respond positively to the ECOWAS request,” said Ugoh.
He said the final planning conference forms part of the bloc’s plans to restore constitutional order in Mali.
“We are hoping that [request] could come as quickly as possible…so that the force can be deployed,” said Ugoh.
He also said that ECOWAS welcomes support from its international partners to resolve the security challenges in Mali. Ugoh adds that the bloc wants to speed up deployment so it can restore constitutional order in that country.
S. Sudan calls for international financial assistance to file $12 bln lost in Sudan’s oil deal
August 8, 2012 | 0 Comments
August 7, 2012 (JUBA) – South Sudan has called on the international community to assist the one-year old nation fill a huge financial gap created by the recent agreement with Khartoum as details on oil deal emerge.
African Union chief mediator, Thabo Mbeki, on 3 August announced a break-though deal on oil transportation fees. In line with this agreement Juba will pay $11 for the oil produced unity state and $9.10 for the oil of Upper Nile. The South Sudan will also pay $3.028 billion as transitional financial assistance. The deal will last three and a half years.
South Sudan’s vice president, Riek Machar, on Tuesday said the deal which was reached due to the pressure exerted by the international community has unfortunately left a huge gap of oil revenues lost to Khartoum.
In a meeting on Tuesday with the Ambassador of Netherlands, Kees Van Baar, the Vice President told the European diplomat that the new nation will lose a total of $12 billion dollars to Khartoum per the deal.
He said South Sudan will continue to lose 17% of its total oil revenues every year for the next three and a half years.
In detailing the figures of the deal he said the average commercial agreement reached with Khartoum is $3.5 billion for the next three and a half years, which is inclusive of all types of fees.
The arrears of commercial deal owed to Khartoum which dated back between 9th July 2011, when South Sudan became independent to January 2012, when the oil production was shut down, will also amount to another half a billion dollars, he said.
South Sudan, he added, will also lose $4.97 billion of debt relief which Khartoum owed South Sudan, but is now pardoned per the agreement. There will also be an additional cash grant of $3.03 billion to be paid by South Sudan to Khartoum to improve on its economy.
The agreement has forced the new nation to become “the biggest donor on earth to a single country, Sudan”, Machar added.
He further analyzed that the figure is equivalent to $40 per barrel if the whole amount lost were to be translated into how much South Sudan could pay per a barrel of oil it produces.
He however reiterated the necessity of the deal, adding that South Sudan was willing to buy peace and win Khartoum to become a good neighbour.
The international community, he said, should now come forth to assist the new nation in financing major development projects in the country.
Sudan and South Sudanese delegations are expected to resume talks on the other unresolved issue during the last week of this month. A presidential summit is also planned by the mediation in September.
After the signing of a comprehensive deal the two countries have to seek international financial assistance. Khartoum which is affected by the US sanctions needs Juba support to convince the Congress to remove it.
*Source Sudan Tribune (ST)
Ezekwesili, others to chart new economic path for Africa
August 8, 2012 | 0 Comments
By Laolu Akande (New York) and Marcel Mbamalu (Lagos) *
BUILDING on her work in the last five years as World Bank Vice President for Africa, former Nigerian Solid Minerals and Education Minister, Oby Ezekwesili, is teaming up with billionaire George Soros to chart a new economic course for Africa.
The move will help advanced economies on the continent to finally reach and positively touch the lives of the poor African majority, and set up a world-class graduate school of public policy in Abuja.
Ezekwesili, who has been appointed by the Open Society Foundations (OSF) to lead its new Africa Economic Policy Development Initiative, will provide economic policy support for Sierra Leone, Liberia, Guinea and other African countries.
Ezekwesili, in May, rounded off her tenure as World Bank VP for Africa, and handed over to Makhtar Diop, a Senegalese.
Ezekwesili told The Guardian in New York on Monday evening that her partnership with the Open Society and its billionaire founder was strategic, providing the opportunity “to advance the centrality of sound policies for economic growth that delivers benefit to a larger number of African citizens especially because capable states do better in articulating and executing sound public policies.”
After holding meetings with other top officials of the Open Society in New York, she added that “in this assignment, I want to bring in structural transformation, especially now that Africa must prioritise structural transformation through economic diversification.”
A statement from the Open Society in Abuja yesterday, where Ezekwesili would be based in her new role, also said: “The Open Society Foundations today announced that it has asked Obiageli Katryn Ezekwesili, a world-renowned expert on economic reforms and economic governance, to lead its new Africa Economic Policy Development Initiative. “
According to the statement, the initiative was created to build on the strong growth performance of Africa over the last decade and the emergent urgency for structural transformation of economies to expand benefits to the poor majority through policies that boost private sector jobs and incomes.
Continuing the Open Society said: “Operating from Abuja, Ezekwesili will advise the leaders and policy-makers of the countries on their economic strategy and policy reforms that can help boost investment and create job growth in the Mano River region. The initiative over the next three years will expand to include other countries across Africa.”
The initiative, which is focusing on Sierra Leone, Liberia and Guinea, countries in West Africa, will help develop leadership in public policy and economic reforms within governments and will leverage African expertise in the Diaspora to strengthen state capacities in various sectors of economies in Africa, according to the Open Society.
Commenting on the new role of the Nigerian former minister, President Alpha Conde of Guinea said: “We very heartily welcome this initiative by the Open Society Foundation and are eager to seize the opportunity to receive the valuable policy advice and support from Oby Ezekwesili. We benefited from her rich experience and policy expertise when she was at the World Bank and helped us considerably in advancing our country’s economic reforms and development priorities.”
In his own comments, Open Society founder, Soros, observed: “I am delighted for Oby to join our team working on Africa.”
Soros, who is also the chairman of the Open Society Foundations added that “my foundations have long been committed to fostering economic development in post-conflict countries and nations transitioning to democracy.”
Ezekwesili will take the title Senior Economic Advisor in the Open Society Foundations and in that capacity, “will oversee the creation of a public policy advisory centre in Abuja that will collaborate with Paul Collier, the professor of economics who focuses on developing countries and others to provide economic policy solutions to pro-reform governments starting with Guinea, Liberia and Sierra Leone.”
In addition to that, the former World Bank Vice President for Africa will help establish “a separate Africa-wide graduate school of public policy, based in Nigeria, that will collaborate with leading universities including the School of Public Policy at the Central European University.”
Ezekwesili said that there was a two-year timeline, “to begin to build towards the school.”
Open Society President Christopher Stone also praised Ezekwesili saying: “Oby has dedicated her career to the proposition that governments in Africa, as elsewhere, can achieve equitable growth when they are open, honest and disciplined. She is the right person to lead this new initiative.”
In her job at the World Bank, where she was Vice President in charge of Africa, Ezekwesili was responsible for operations in 48 countries in Sub-Saharan Africa and supervised a lending portfolio of over $40 billion.
Statement by Ms. Hope Sullivan Masters on the Hosting of the 9th Leon H. Sullivan Summit in Malabo, Equatorial Guinea
August 8, 2012 | 0 Comments
Washington D.C., August 6, 2012 – For several months, the Leon H. Sullivan Foundation has been under news, twitter, and blog attacks by journalists and vocal “human rights
organizations” who have used smear tactics and yellow journalism to undermine the upcoming Ninth Leon H. Sullivan Summit which will be held in the West Central African Country of Equatorial Guinea. Under the moral misnomer of a selfless mission focused on advancing “human rights” in the developing world, these organizations use the politics of destruction and cheap buzz-words to bring attention to themselves without fact checking or simple truth verification of their outrageous claims of ongoing abuse and corruption. These critics continuously harp about the same outdated news accounts, the same salacious and blasphemous statements about corruption and poor governance, and the same tawdry details of widely publicized legal matters concerning members of the family of the President of Equatorial Guinea, in particular, his young son Teodorin.
Personally, I had taken the position that I would remain silent amidst their misguided rants, as it is clear that they have no understanding of the purpose of the Leon H. Sullivan Summits. I learned many years ago that the learning curve is extraordinarily steep when you set out to re-educate misinformed individuals who are clearly hell-bent on throwing rocks at others. However, over the past few days, the architects of this campaign to destroy the 2012 Summit, chose to make their attacks personal, when they made the vile assertion that The Sullivan Summit, and I by extension, are destroying the reputation of my late father, a man who I not only loved as a devoted daughter, but a man who I believe possessed one of the most brilliant and progressive minds of the twentieth century.
Why Is Equatorial Guinea the host of the Summit?
This question has been asked and answered ad nauseum, but I will do so once again in the hopes that some might learn a bit more about the Leon H. Sullivan Summit, the Leon H. Sullivan Foundation, the emerging face of the African Diaspora and the all important coalition of African leadership which guides the Leon H. Sullivan Summit and the legacy of my late father.
The Leon H. Sullivan Summit is hosted in African countries, which are members of the African Union (AU). The AU serves as a vehicle whereby Africa can solve their own social and economic problems as well as other political issues and the many issues they face as a result of globalization. The African Union is Africa’s forum; it is a platform for the leaders of Africa, a unifying and strengthening coalition for the onward development and unification of Africa.
In January 2011, the President of Equatorial Guinea, OBIANG NGUEMA MBASOGO was elected to the Presidency of the African Union. As such, it seems ironic at best that the individuals who harbor such anger and hatred of President Obiang are discounting the fact that he was chosen to lead this august body of nations by the other leaders of Africa.
For centuries, Africa has been exploited, denigrated, and treated as the habitat of people of inferior intellect. Through the process of independence, Africa and Africans have been able to reposition themselves and their nations as self-governing nations. Moreover, when the nations of Africa speak in one voice, in the great tradition of democracy that Africa has been encouraged to adopt across the board, the result of that process by many is considered unethical by those journalists and organizations who disagree with their leaderships.
It would appear that some would still like to be in the position of controlling the people and the resources of Africa. We can call their missions those of human rights or apply whatever label we might choose, to soften the denial of the voice of the African citizenry, but the truth lies in the blatant disrespect of the voice and choice of the African people. Today, through the advent of the internet and free access to make an impression on the opinions of others, there is a new threat to Africa, it is the threat of the opinionated albeit totally irrelevant journalists and bloggers who are armed only with an ax to grind and an arrogance which leads them to believe that they, more so than the African people, are better able to determine who should lead the nations of Africa.
This Summit might not occur in a country that others might choose, but it might very well be a teachable moment for some individuals to acknowledge the irony of their arrogance and an opportunity to finally accept the tenets of the lofty ideals of democracy – whether they agree with the result of the process or not. Democracy, and ultimately human rights, are rooted in the belief that the governed shall chose their own path, not a colonial master, and not a bitter angry blogger who has never set foot on the soil which he chooses to disrupt.
Some who now correctly refer to Leon Sullivan as a champion of human rights are the very same individuals who criticized him for his engagement in apartheid South Africa when he unleashed the powerful Sullivan Principles in the early 1970s.
Oddly enough, members of certain critical organizations have also made millions of dollars through their socially conscious investment strategies – a literal copycat of the work that my father was criticized so roundly for creating in the early 1980’s.
The criticism of my father at that time, as is their criticism of me in mine, was his insistence on working within the framework of Africa to assist in the evolution of what is now a free South Africa. My father did not agree with those who believed that solutions could be achieved by ignoring the issues that exist. At that time there were calls for a complete economic embargo against the Republic of South Africa in an effort to literally “starve” the nation into submission to democracy. My father believed that starving the system would only lead to violence and bloodshed at desperation. It would meet the resolve of pride and fear and would not help bring about change within that system; to the contrary, he knew that it would only be through economic engagement with that system that the people of South Africa would be able to participate in their economy and ultimately in the global economy. In the process of defending his beliefs my father was roundly criticized and many so-called “human rights” organizations chastised him relentlessly for his insistence on corporate disobedience rather than total divestment. It was this concept, which has now created the entire cottage industry of Corporate Social Responsibility, the basis upon which the UN Millennium Compact and the Calvert Principles were based on.
The legacy of Leon Sullivan is one that does not run away from challenges, controversies, or criticism. The fact is that organizations, which are created with the spirit of destruction, such as the ones who make their livelihoods bashing others even as they attempt to build records of improvements and reform, are the very same organizations that must create and maintain controversy in order to survive.
Freedom of speech is a wonderful right that we share, but it must be balanced with truth and verification of facts. It is appalling to read about the blatant untruths that are being perpetrated by journalists and these isolated and disassociated tiny pseudo-organizations to make inflammatory and tortuous claims about others, without any effort or inclination to actually come on the ground to Equatorial Guinea to verify their statements.
The truth is that President Obiang has modernized his country and has implemented major political reforms. As I look around Equatorial Guinea, it appears the entire country is a worksite in which capital and technology from around the world participate without discrimination – and which provides tens of thousands of jobs for the people of Equatorial Guinea in the process. The US State Department states as follows about the most recent elections in EG: International elections observers reported that the elections were conducted in a free and fair manner.
President Obiang has elected voluntarily, to comply with the rules and obligations of the Extractive Industries Transparency Initiative (EITI). These rules govern the use of resources provided by oil, natural gas, and other extractive industries. As of today, there are those critics of the Leon Sullivan Summit who sat on the Board of Directors during the same time period when President Obiang chose to voluntarily comply with their standards. If these critics wish, they are more than welcome to attend the Summit and see for themselves the advancements made by President Obiang for his country.
I urge these critics to make better use of their time writing positive stories about Africa, and reporting truthfully on the legacies of fearless men, particularly those whose wisdom is in no small part the basis upon which they find their daily incomes.
*Hope Masters Sullivan is President and CEO of the Leon H. Sullivan Foundation.
REMARKS Secretary of State Hillary Rodham Clinton &South African Foreign Minister Maite Nkoana-Mashabane After Their Meeting
August 8, 2012 | 0 Comments
August 7, 2012 Pretoria, South Africa
FOREIGN MINISTER NKOANA-MASHABANE: Good afternoon, ladies and gentlemen of the media. Secretary Clinton and I have just concluded the second Strategic Dialogue, and I am happy to say to all of you that through this Strategic Dialogue we have confirmed once again our strong political relations. And we’ve agreed that through this we would continue now broadening our economic ties, especially through strengthening trade and investment opportunities, and continuing our partnership in the fight against the spread of HIV and AIDS and on areas of global interest and concerns.
On economic ties and the strengthening of trade and investment opportunities between our two countries, we concluded a Trade and Investment Framework Agreement in June 2012. And in June 2011, trade between South Africa and the United States was valued at South African rands 130 billion. Through the TIFA, it is hoped that this figure will grow and benefit both our countries.
Currently 98 percent of South Africa’s exports enter the U.S. market duty-free and quota-free under the current dispensation of the U.S. Africa Growth and Opportunity Act, AGOA. Africa is eagerly lobbying for its extension beyond 2015. There are already more than 600 American companies. I had one company executive sharing with us in the meeting of the business community that he will, by September, be – his company will be company number 601 American company with a presence in South Africa. And I’m also pleased to note that a number of larger South African companies like Sasol, (inaudible), Sappi, Standard Bank, and Absa are investing in the U.S. economy and thus in the process of contributing to job creation for both our countries.
As you know, the fight against HIV and AIDS remains at the forefront of the South African Government’s national priorities. And today, Secretary Clinton and I worked on means to help our countries to continue our partnership in the fight against HIV and AIDS and the spread thereof through the U.S. PEPFAR program. Through PEPFAR, the U.S. has contributed over three billion U.S. dollars to South Africa from 2004 up to 2011. We remain a strong supporter of a continued partnership with the U.S. on HIV and AIDS. And I would like also to invite them to continue to their ties with people of South Africa in this regard.
The South African Government welcomes President Obama’s recently announced new strategy towards Sub-Saharan Africa outlining the foreign policy thereof. This strategy includes the following: the strengthening of democratic institutions; the spurring of economic growth, trade and investment; the advancement of peace and security; the promotion of opportunities and development for all Africans. We believe that this strategy synchronizes and sounds – and resonates very well with our five key priority areas. But it also resonates very well with South Africa’s own foreign policy priorities of putting Africa first – Africa first on peace, security, and development, on infrastructure built, inside trade, and also focusing on beneficiation of our mineral resources through manufacturing and clean industrialization. So we see a good partnership unfolding out of these two strategies.
We believe that this strategy will help if we work in close correlation with the election of Dr. Dlamini-Zuma, who has just been elected as the new AU chair, the first African woman to be elected in this position after 49 years, the first from South Africa. But we want to make sure that she continues with our support to work for the unity, development, secure Africa and African Union, and that we enhance democracy, rule of law, and prosperity, not only for the few on the continent, but as she said earlier on, for the more than 500 million women who form almost more than 50 percent of the population of the African Union of a billion people. We believe that these plans will translate into constructive and empowering relations between the people of Africa and the U.S.
From what I’ve said here, it is clear that the Strategic Dialogue has elevated our mutual relations, and we look forward to broadening and deepening our ties in the years to come. I would want to once again personally thank Secretary Clinton for the passion, for the sincerity, for the hard work she’s put in making this dialogue, this Strategic Dialogue, to be businesslike, friendly, focused, and that I would want to say with her partnership we’ve managed to achieve a lot.
And I also want to thank her for always acceding to my invitation to come to South Africa on this very special month, when we celebrate the woman’s month in South Africa. This time around, she arrives in South Africa on the eve when South African women will be celebrating the 56th year since the 1956 historic march by South African women, 20,000 of them from all walks of life marching against apartheid and past laws in this country. Once again, dear friend, colleague, welcome to South Africa.
SECRETARY CLINTON: Thank you so much, Minister. And it’s always a great personal pleasure for me to be in South Africa. I want to compliment you on this very impressive new headquarters for your department, and I feel that it will even greatly enhance the already strong impression that people have of the leadership that is coming from your country.
I also want to express my appreciation to all of those who worked so hard on both sides to make this Strategic Dialogue a success. The Minister and I are the beneficiaries of an enormous amount of work that has gone on in both of our capitals, between our top officials, across each of our governments, and the results are commendable. So thanks to everyone who has participated and contributed.
My visit here is the centerpiece of a trip that began in Senegal, continued in South Sudan, Uganda, Kenya, and Malawi. It will conclude with visits to Nigeria, Ghana, and Benin. And at every stop, I had the same message: America wants to build sustainable partnerships in Africa. As the Minister said, this is the message of President Obama’s recently published strategy toward Sub-Saharan Africa, and it is one that I and my colleagues work every day to achieve. And nowhere is that more true or more important than here in South Africa. We are building a partnership that adds value – saving and improving lives, spreading opportunity and sparking economic growth, strengthening the institutions of democracy, and so much more.
Let me mention four focus areas: First, our cooperation in the region and beyond. We are working together on a host of difficult issues, from Zimbabwe to the Democratic Republic of Congo to Syria, from climate change to nonproliferation. And we know we won’t agree on every issue as to how something should be accomplished, but we agree on what needs to be done. So what we do, as any two friends and certainly any two nations who share common values and common perspectives, is to work through all of the issues before us. We are forming a working group on global and African affairs to bring senior officials from our government together regularly to take our cooperation to the next level. I’ll have an opportunity to speak at greater length about these matters tomorrow in Cape Town.
The second is our work to expand our economic relationship. We already have strong two-way trade, but we can and must do better for both of our nations and people. That’s why the United States is committed to helping South Africa grow your economy, and I’m pleased that our Export-Import Bank and South Africa’s Industrial Development Corporation have signed a $2 billion agreement to provide credit guarantees to stimulate the growth of South Africa’s renewable energy sector. And a new partnership between USAID and the South African-based firm Cadiz will make up to $150 million available to small-and-medium-sized businesses in South Africa with the hope of creating more than 20,000 jobs.
We also recognize that strengthening South Africa’s education system, like in any country, is essential to your economic future. So we are launching the school capacity innovation program to fund the scale-up of new approaches to teacher training, an innovative $7.5 million public-private partnership between the ELMA Foundation, USAID, J.P. Morgan, and designed in collaboration with the South African Department of Education. I’m also announcing today a $500,000 opportunity grants program, which will help talented South African students who need financial assistance to study in the United States by covering visa testing and application fees, as well as international travel. One of the most heartbreaking things I see from time to time as Secretary of State are meritorious students around the world who get admitted into our very competitive universities and then don’t have the money to come. So we want to help those in South Africa who find themselves in that position.
The third area is our shared fight against HIV/AIDS. As the Minister has said, we’ve committed and invested billions of dollars over the last seven or eight years. And together, the United States and South Africa have saved the lives of hundreds of thousands of South African men, women, and children. Now, we know that South Africa’s ready to take the lead, and under the framework that will be signed tomorrow, South Africa will be increasing its own investment and taking more responsibility for managing this epidemic. I’ve spoken at length about our goal of achieving an AIDS-free generation, and we will see this fight through to the end with our partners and with the leadership and the model that South Africa is setting.
The final area is expanding our cooperation into new issues and is quite a list. I welcome the decision by South Africa’s Department of Science and Technology to join the Global Alliance for Clean Cookstoves, a major public-private partnership that was launched two years ago to help 100 million households adopt clean cookstoves and fuels by 2020. We’re also creating a new cyber working group to identify the common cyber threats and national priorities to build capacity to fight cyber crime and coordinate in international forums.
We’re also working to enhance gender equality, an issue of special importance not only to the Minister and myself, but especially during this month when South Africa celebrates the many, many contributions that women made against apartheid and the fight for freedom. I’m delighted to announce that South Africa’s Minister of Women, Children, and People With Disabilities has confirmed her nation’s commitment as a founding member to the Equal Futures Partnership, an initiative that fosters women’s political participation and economic empowerment by bringing governments together with multilateral organizations, the private sector, and civil society.
Finally, I want to say a brief word about an issue that doesn’t get nearly enough attention in the world, and that’s child marriage. This is an issue that the Elders have taken on. And it’s good that they have, because an estimated one in three girls in the developing world are married before the age of 18. That means they are less likely to get an education, more likely to encounter life-threatening health problems, which shortchanges and shortcuts them and sometimes their lives, and robs their communities and their countries of their skills and talents.
Yesterday, when I had the great honor and personal delight of visiting Madiba, I talked with Graca Machel at their home about the commitment that the Elders, of which she is a member, has made. And I support the Girls Not Brides partnership founded by President Mandela. The United States will intensify our diplomacy and development work to end child marriage, and it’s a personal commitment of mine as well as a great value that South Africa, the United States, and so many people around the world share.
So Minister, we have a full and formidable agenda, but we’re chipping away at it, and I believe that both of us plus our teams are more than up to it. But again, thank you for your warm hospitality here, and I’m delighted to have this chance to see you again on a personal level and to trade ideas on the important opportunities and challenges facing us.
MODERATOR: Thank you very much, Excellencies. Now I know ideally, we should be taking 40 questions, but we only have time for four, so let’s start. Anne Gearan from Washington Post, and (inaudible). Let’s take the first two. There’s a microphone there.
QUESTION: Hello. Madam Secretary, does the defection of the Syrian Prime Minister spell the end of the Assad regime? If so, what is your prediction for how long Assad can hold on? Looking ahead to your meetings in Turkey, can you tell us a bit about whether you’re considering new assistance to the rebels or the Syrian opposition?
And to the Minister, is South Africa now prepared to support new action at the UN Security Council, such as sanctions? Thank you.
SECRETARY CLINTON: Well, let me begin by saying that of course, we noticed the Prime Minister’s defection yesterday. That’s the latest in a line of such defections. And the opposition is becoming increasingly coordinated and effective. It now reportedly holds territory from northern Aleppo to the Turkish border. It’s also seized regime weapons, including tanks. And it is a very difficult time for the people of Syria who are caught in this terrible violence.
But I hope that we will look at the urgent tasks that I think confront the people of Syria and the international community and think through how we can address them. First, we must figure out ways to hasten the day when the bloodshed ends and the political transition begins. We have to be sure that we’re working with the international community to bring that day about and to be very clear of our expectations of both the government and the opposition about ending the violence and beginning the political transition.
Second, we’ve got to address the desperate humanitarian needs of those suffering inside Syria and those who have fled. These are growing by the day. The UN and neighboring countries are asking for more assistance, and we have to work together to meet their needs.
Third, I do think we can begin talking about and planning for what happens next, the day after the regime does fall. I’m not going to put a timeline on it. I can’t possibly predict it, but I know it’s going to happen, as does most observers around the world.
So we have to make sure that the state’s institutions stay intact. We have to make sure that we send very clear expectations about avoiding sectarian warfare. Those who are attempting to exploit the misery of the Syrian people, either by sending in proxies or sending in terrorist fighters, must recognize that that will not be tolerated, first and foremost by the Syrian people.
We have to think about what we can do to support a Syrian-led democratic transition that protects the rights of all Syrians. We have to figure out how to support the return of security and public safety and
how to get their economy up and going. As you know, I’ll be going to Istanbul to discuss these issues with the Turks.
But the intensity of the fighting in Aleppo, the defections really point out how imperative it is that we come together and work toward a good transition plan. And I would hope that everyone would recognize that the best way to get there quickest is to stop the fighting and begin a political transition to a better future for the Syrian people.
FOREIGN MINISTER NKOANA-MASHABANE: Well, I think Secretary Clinton has responded largely to your question. South Africa’s position is and has always been that no amount of bloodshed would ever take the place of a political solution to the crisis in Syria and everywhere else where a nation finds itself with an internal conflict brewing.
And as Secretary Clinton had said, we all are yearning with the people of Syria for a Syrian-led return to normalcy. And what would hasten that would be how do we hasten the end of bloodshed, how humanitarian organizations are given space to do what they expected to be doing. South Africa has always been say – condemning violent attacks from both sides, from both the opposition and government, and use of force on ordinary civilians.
So the solution to the crisis in Libya – I’m sorry, in Syria – is going to be political. And the sooner we quicken our steps as the international community to support these people of Syria, the better. But nothing will ever take the place of the Syrians themselves coming up with a made-in-Syria solution to their problem, supported by the international community.
So South Africa’s position yesterday, today, and tomorrow remains the same. While we is going to be supporting sanctions and this and that, reality is the Security Council had had several discussions on these matters. As Secretary Clinton has said, we all agreed this carnage has to stop. We always been grappling with the how we should quicken steps, how we should help the Syrian people to resolve this problem, supporting largely the Arab League and the GCC Council in their own region to resolve these problems.
QUESTION: (Inaudible) from SABC. I just wanted to find out if there’s any conclusion that has been made on AGOA, whether it will be extended. And if so, to – what would be the timeframes?
SECRETARY CLINTON: Well, I can tell you that the United States is strongly committed to extending the African Growth and Opportunity Act. It is the centerpiece of our policy, and we want to see South Africa included in an extension. We’re going to start working on this when the new Congress comes in after the elections this year. So I can promise you our best efforts to make the case to get it extended, to make sure South Africa is included in it. That’s the position of the Obama Administration, and we’re going to do our very best to make sure that is done.
FOREIGN MINISTER NKOANA-MASHABANE: I think just on this issue, we welcome this commitment that comes from President Obama’s Administration brought to us through Secretary Clinton and would want to take this opportunity to thank your Administration for that, but also to just say that looking at the kinds of goods and services that enter the American market through this Africa Growth and Opportunity Act, we are just but beginning to diversify the beneficiated goods and services that enter that market, taking advantage of the Africa Growth and Opportunity Act – reality is South Africa with relative know-how in value add if you remove us on the list. So you remain with still commodities entering the American market through the AGOA process, and that does not necessarily strengthen the pronouncement that was made by President Obama on the outlook of the future strategic vision on how the American Administration would want to engage with Sub-Saharan Africa.
MODERATOR: Last two questions, Anne Look, Voice of America, and Nicolas (inaudible), the Business Daily. Those will be the last two questions.
QUESTION: Hi. In light of the summit going on in Kampala today and tomorrow, I just wanted to turn quickly to the ongoing violence in the DRC. Rwanda and Uganda have been accused of supporting the M-23 rebel movement, and the U.S. has cut off military aid to Rwanda. I’m just curious, how far is the U.S. willing to go to cut off outside support for the rebels? And what could you tell us about your meetings during your visits of the past two days with regional leaders?
And then to the Minister, you talked earlier about Africans finding – Africa finding solutions to African problems. So I’m just curious what you’re hoping to see come out of this summit. What are your hopes?
FOREIGN MINISTER NKOANA-MASHABANE: Which summit are you referring to?
QUESTION: The Great Lakes.
FOREIGN MINISTER NKOANA-MASHABANE: Great Lakes. Okay, okay.
SECRETARY CLINTON: Well, first I have discussed the issues about the ongoing violence in the eastern part of the Democratic Republic of Congo with every official I have met, because we view this as a serious threat to regional security and stability. I do want to commend the meeting that is being held in Kampala. The decision by Rwanda, Uganda, and the DRC to resume talks is an important step. We hope that these talks will be guided by the principles of restraint and mutual respect for sovereignty. Because M-23 is certainly the most active, well-known armed group threatening the people of eastern Congo today, but not the only one. There has been a steady trail of rampaging violence – rape, killing, and terrible human rights abuses – over the last several years by renegade criminal bands.
And we support the efforts of the DRC, and we urge all the states in the region, including Rwanda, to work together to cut off support for the rebels in the M-23, to disarm them and to bring their leaders to justice. I think it’s imperative that we move quickly to act on whatever decisions come out of the summit in Kampala. So we will await a report from that, but President Museveni certainly assured me that he was going to work toward such a resolution.
FOREIGN MINISTER NKOANA-MASHABANE: Well, a few days ago, I hosted the SADC Ministerial Committee on the Organ on Politics and Security. There were about 50 ministers in this room from all over SADC. Four of SADC members are also members of the Great Lakes region. We took opportunity of that meeting to receive a report on what’s taking place in – at that – the security developments or insecurity along the east part of Congo, and all informed further by the report that is for public consumption from the UN Security Council about the level of insecurity in that area.
That meeting concluded that we needed to send a security analysis team into the DRC, into the neighboring countries, on a fact-finding mission. We have received their report. They’ll also be reporting or presenting their findings into that meeting that you had referred to of the leaders of the Great Lakes. So both leaders from the Great Lakes and leaders of SADC are looking forward towards a positive outcome of the meeting of heads of states of the Great Lakes, four of which, as I said earlier on, also belong to SADC.
What are we asking for? That the DRC be given an opportunity to rebuild that country peacefully, and that they remain a secure area or country, that they focus on issues around development and sustainability of (inaudible) in that particular area. We owe this, all of us, as neighboring countries and regions around the DRC, but also to work with of the people of the DRC to capacitate institutions of security and generally of governance. That’s what we hope to achieve with this.
The SADC summit that will be taking place in less than a week’s time in Maputo would also be receiving a report and also further making recommendations on how SADC and the Great Lakes, and indeed, broadly, the African Union, talking about African solutions for African problems. We will always look forward to the support of the international community. But international community should not find us folding our arms and not knowing how to figure out on how to deal with our own backyards. So these are the steps that leaders in this region have taken, widen the (inaudible) support from friends like the U.S., as Madam Secretary had said early on.
MODERATOR: Last question.
QUESTION: (Inaudible.) Can I ask both of you what impact the strong growth in relationships between both South Africa and Africa and China is having on your relationship between South Africa and the United States? What is the impact of that growth?
FOREIGN MINISTER NKOANA-MASHABANE: We – from the South African point of view is that we look at compatibility and collaboration, and we agree with both of our partners in the U.S. and China that the time for just focusing on extraction of mineral resources of our continent to take somewhere else has ended, that leaders of this continent would want partners to come in and work with us to beneficiate on our natural resources, which will (inaudible) manufacturing and bring about clean industrialization.
We were in China a few weeks ago and President Zuma was very, very clear when he participated in the focus meetings as to the un-sustainability of extractive industries that don’t look at beneficiation. And we got a commitment even there that this is what we expect. We think that it makes business sense for both American companies and wherever else, that now that the African continent has become the second-fastest growth point, it’s good to do business with the African continent in a just manner, because you are assured of good returns for your good investments. So we love this love affair that’s growing. It’s welcome, from both east and west, as long as we agree on the terms as determined by us, that our partners support, that which the African leaders are seeing and have committed to.
What do we promise in return? Good governance, transparency, rule of law, don’t bribe; there will be no bribe-takers, so that we continue to bring about skills development, we grow the economies, we change the lives ordinary – of ordinary civilians in Africa for the better. And because it’s the women’s month, yes, in particular for women of this continent, who were never given an opportunity to become main participants in the economic well-being of their continent.
SECRETARY CLINTON: Well, first, from the United States perspective, we brought a large, distinguished business delegation because we want to see more U.S. companies investing in South Africa. It’s a regional hotspot for innovation and entrepreneurship. As the Minister said, we already have 600 companies doing business here. We’re about to apparently have the 601st, and I want to see many more in the months to come.
And when our companies do invest, we want to make sure that it is the people of South Africa that reap the benefits, that our companies are good stewards, that the economic opportunities we help to create generate broad-based prosperity. We don’t want to see the benefits, the bulk of the benefits of our economic engagement, to go to a small group of elites or to foreign companies. We want it to empower people in line with the aspirations of the South African Government and people. And I would echo the minister’s point, especially women and young people.
So part of what we talked about in our business roundtable today was how American businesses can bring skills to be transferred to provide education and skill training for young South Africans. For example, the representative from Boeing said air travel’s going to explode in South Africa and across the continent; we’re going to need engineers, mechanics, all kinds of trained people in order to support that expansion. And that’s just one example of the kind of partnership we are seeking.
And I would only add that it’s only natural for South Africa to want to expand trade with everyone in the world. It would be political malpractice if the government did not seek out economic opportunities everywhere. The United States does the same. We trade all over the world, including in China. Competition and increased trade are good for the global economy, and that’s especially important when we’re all trying to catalyze additional growth coming out of the slow-down.
What we ask for, and what I think you heard the Minister saying, is let’s be sure we have a level playing field. Let’s be sure we have rule of law, that contracts are respected, that intellectual property is protected, that we have the rules of the road, so to speak, up to international standards and norms. And as an emerging economy and a democracy, South Africa brings so much to the global economy. So our hope is that we will see growth that is broad-based, that creates inclusive, sustainable prosperity in South Africa, that also benefits much of the rest of the continent and even beyond, but that it will also set the standard for what it means to be making investment and doing business in an economy, in a democracy like South Africa.
So I think we’re all on the same page. Thank you.
MODERATOR: Thank you very much. That concludes the press briefing.
*Source State Department
Rwanda: Nation ‘Will Survive Without Aid’
August 7, 2012 | 0 Comments
Kigali — The Rwanda government has said even without donor aid, Rwanda will survive.
Foreign Minister Louise Mushikiwabo told the press that Rwanda has proven over time that it can withstand the toughest of conditions and this will be no different albeit with difficulties.
“With or without aid, Rwandans will not give up, we shall fend for ourselves as we have always done, in any case, we have done so before,” she said.
A visibly stressed Mushikiwabo added her government has dealt with several reports full of false allegations before and no matter how long it took, in the end, the truth vindicated them.
She cited the long running allegations by the French that Paul Kagame’s rebel group shot down the late Habyarima’s plane setting off the genocide, but the matter was recently laid to rest with RPF being cleared of all charges by a French judge. On the significance of the threatened aid cuts, Mushikiwabo admitted that though her country needs aid, it’s not entirely the basis of Rwanda’s prosperity.
“Come to think of it, over 50% of our budget is domestically funded and though the balance is expected from aid, you can’t dismiss our own efforts as Rwandans and if we need to survive without aid, we shall do it,” she noted.
But she added that Rwanda needn’t fear as the country has many friends who have stood by it since the end of the genocide.
Increasing domestic borrowing
Meanwhile, Rwanda’s Minister of Finance and Economic Planning has revealed that the Government will be forced to increase domestic borrowing to counter the impact of delays in disbursement of funds to the national budget by donors.
The UK government said it was delaying disbursement of £16m ($25m) in budget support due this month ‘while it considered whether aid conditions had been met.’
Germany suspended $26m to Rwanda’s budget planned from this year through 2015, while the Netherlands delayed US$6.15m also in budget support. Though Rwangobwa sounded optimistic that affairs will improve concerning the UK, he added that Netherlands and Germany were not clear in their decision saying it’s compromising the policy on aid effectiveness.
Rwanda plans to boost its national 2012/13 budget, with Rwf297 billion from development partners in form of direct budget support compared to Rwf279 billion in 2011/12. The aid delays came after reports that alleging that Rwanda is supporting M23, a rebel group in the Democratic Republic of Congo, allegations Rwanda has denied.
Rwanda meets accusers
On Monday last week, Rwanda submitted to the UN Sanctions Committee its rebuttal on allegations contained in an addendum to a Group of Experts report that claims Kigali is backing the M23 rebels, who have, over the last two months, seized parts of eastern Democratic Republic of the Congo (DRC).
“There wasn’t a trace of truth in their allegations and we have provided evidence and facts that will only expose the report as some dark plot aimed at an equally darker agenda,” said Foreign Minister, Mushikiwabo
*Source East African Business Week (Kampala
Uganda in trouble: Museveni should now enjoy a well-earned retirement
August 7, 2012 | 0 Comments
– By Richard Dowden*
Three tell tale signs. Firstly it was discovered that the 16-strong Uganda Olympic team was outnumbered by the officials accompanying it, many of whom are paid five times what the athletes receive. Much of the money that was supposed to be spent on training was ‘eaten’. If you don’t care if your national sports team wins, then you probably won’t care if your country becomes a winner.
Secondly, I visited the Uganda National Museum last week and it did not seem to have been swept, cleaned or updated since my last visit in 2006. The only new and witty (but puzzling) addition I could see was a portrait of the British Queen Elizabeth in a Basuti, the grand formal Ugandan dress. I have visited the museum irregularly since 1971 and it has grown increasingly shabby, outdated in concept and presentation. Last year it emerged that the government wanted to sell off the site and build a 60 storey office block. Only a public outcry prevented it. It reminded me of that line by the Benin artist Romuald Hazoume on slavery, “They didn’t know where they were going, but they knew where they had come from. Today they still don’t know where they are going, and they have forgotten where they come from”.
The third tell-tale and most worrying sign is that whenever people talk politics in a public place they now drop their voices.
Uganda is in trouble. These small but significant indications are supported by an almost universal fury among Uganda’s professional and business class at the arrogance and corruption of the narrow ruling elite, mainly from the west of the country, who have been in power since 1986. Yoweri Museveni, the man who once said that Africa’s major problem was that rulers stayed on too long, has been President for 26 years. This week he said that he would step down when he had identified a successor with vision who must be “a nationalist, patriotic and pan African, one that promotes social economic transformation and is democratic”.
But it is in the nature of those in power to accumulate more and more of it. The longer you stay in power, the smaller the chances of a good new leader emerging. Like a great tree that prevents anything growing underneath it, a powerful ruler is almost always followed by a technocrat or a rebel. Museveni has tried to find a successor, but when a man tries to make his son and then his wife his political heir, you know he has no real intention of relinquishing control. And the worst news for Uganda’s politics is that 2.5 billion barrels of oil are due to come on stream shortly. Name three oil producing countries in Africa and the Middle East which are genuine democracies.
Museveni liberated his country, or at least the southern part of it, in the early 1980s. He brought a new vision and established security. His army was disciplined and well behaved – though exactly what happened when it crossed the Nile and invaded the north is still to be properly documented and analysed. I lived in Uganda during the first two years of Idi Amin, I visited it after he was driven out in 1979 and saw the horrors of the Obote 2 regime and appalling brutality of the Okello military rule. In his first few years in power Museveni re-established the Uganda state, law and security. No one can ever take that away from him and the National Resistance Movement. In those days when he came to London he would invite Africa journalists for a chat. He was full of ideas and his eyes twinkled with delight at a verbal fencing match with us. Last year I met him briefly at his vast Chinese-built palace at Entebbe. He greeted me formally and I was dismissed. The eyes were dead. He looked utterly exhausted.
Fortunately, there are still some good people in his party who have not built themselves palaces with stolen money. There is also a new generation that is not afraid to disagree with their elders. There is time for a new leader to establish herself or himself, and head into the 2016 election with a good chance of winning. The opposition is fragmented, in disarray and needs new leadership. But free and fair elections are still possible if the government has the will and courage to let them happen. The alternative is that the next regime-change in Uganda will eventually be asserted by traditional methods – the coup or the war.
*Richard Dowden is Director of the Royal African Society and author of Africa; altered states, ordinary miracles.
Malawi Checks China’s African Advance
August 7, 2012 | 0 Comments
Claire Ngozo, *
All Chinese-run businesses outside Malawi’s four major cities have to close down after a new law barring foreigners from trading in outlying and rural areas.
LILONGW – The move in Malawi to close down Chinese businesses outside of the four major cities has been condemned as xenophobic by rights organisations. A new law enforced Jul. 31 barred foreigners from carrying out trade in Malawi’s outlying and rural areas.
The Investment and Export Promotion Bill required traders to move to the southern African nation’s major cities Lilongwe, Blantyre, Mzuzu and Zomba. The law is an attempt to protect local small-scale businesses from competition from foreign traders.
Two prominent civil rights organisations, the Centre for Development of People and the Centre for Human Rights Rehabilitation (CHRR), have warned the Malawian government against encouraging the victimisation of foreign traders.
“We are worried about the increasing xenophobia sentiments and attacks on foreign nationals who are doing legal business across the country,” the executive director of CHRR, Undule Mwakasungula, told IPS. He argued that the way Chinese traders were being treated was in violation of their human rights.
“Malawi should not be perpetrating xenophobic attacks on foreign nationals under the pretext of protecting the interests of local businesses.”
The new legislation comes immediately after Malawian traders in some rural areas grouped together in May and convinced local government authorities to force out Chinese traders. The protests first began in Karonga, a bustling town in the north of Malawi, which borders Tanzania, and later spread to all 28 districts in the country.
While there are no official figures yet as to how many foreign traders have complied with the new law, IPS confirmed that in seven of the country’s 28 districts, Chinese traders closed down their businesses.
They now have to apply for new licences to trade in the specified four cities. But many may not qualify, as the new legislation requires investors to deposit a minimum of 250,000 dollars in Malawi’s central bank as start-up capital.
Malawi’s Minister of Trade John Bande said that the new legislation was intended to regulate foreign investment.
“The new law clearly outlines what kind of businesses foreign investors will be allowed to get involved in. We will not accept foreigners to come all the way from places like China and open small businesses and shops in the rural areas of this country and compete with local traders,” Bande told IPS.
But Mwakasungula said that the main challenge faced by local businesses was that they lacked the financial and technical muscle to compete favourably with the Chinese. He said that it was unreasonable for the government to resort to such a “drastic decision”.
“It is unrealistic for the government to think that stopping foreign traders from doing business will automatically boost businesses run by locals,” he said.
There are no official figures on the number of Chinese or foreign traders there are in Malawi. However, Chinese-run shops, restaurants and lodges have sprouted across the country since 2007, when Malawi established diplomatic relations with China. The country had just abandoned its 41-year-old ties with Taiwan in favour of the economic giant.
China has become Malawi’s major economic partner since then. According to statistics from Malawi’s Ministry of Trade, the country’s trade volumes jumped to a record high of 100 million dollars in 2011 – a 400 percent increase from 2010.
The two countries have a 2008 memorandum of understanding about issues of industry, trade and investment. It commits China to increasing Malawi’s productive capacity in tobacco, cotton, mining, forestry, and fertiliser production, among other things.
China has also given Malawi 260 million dollars in concessionary loans, grants and development support. This year, the country’s first five-star hotel opened. It includes 14 opulent presidential suites and a state-of-the-art conference centre, and was built by the Chinese government.
In April 2012, China’s direct investment in Africa surpassed 15.4 billion dollars, according to statistics from the Chinese embassy in Malawi.
But ordinary Malawians are not happy with the influence that the Chinese have on the country’s economy.
Ellen Mwagomba, who has been at the forefront of the protests against Chinese traders in Karonga, has had a grocery store there since 2003. She told IPS that sales in her shop plummeted in 2008 when the Chinese started trading in the area.
“This place is a hive of activity since it is a border area. Business used to be good until the Chinese invaded us, bringing cheap goods and taking away our customers,” Mwagomba said.
She said that her grocery store lost business to Chinese traders as they charged as little as a quarter of the price that local traders asked for their goods.
“The goods I stock are from the local industry and from South Africa and are of good quality, they are not very cheap. But people would rather go for the cheap Chinese goods, which are also of cheap quality,” said Mwagomba.
She said that consumers preferred to purchase Chinese goods, to maximise their spending power. Up to 74 percent of the population in Malawi lives on less than 1.25 dollars a day.
But Mwagomba and other like-minded locals convinced the local assembly to remove Chinese traders from their district.
“They started leaving in June and business is now picking up for us, even before the new law became effective. I am now making up to 500 dollars a day in sales. I could barely make 100 dollars a day when the Chinese traders were here in full force,” Mwagomba told IPS.
But many Chinese feel they have been treated unfairly. Fu-han Chao used to run a restaurant in Mzimba district, in northern Malawi. But he was forced to close it down on Jun. 30, before the new law came into effect, following an order by local government authorities after Malawian traders complained about the cheap goods sold at low prices by their Chinese counterparts.
“The local traders don’t work as hard as we do. We open our shops much earlier and close them much later. We even open on Sundays when most businesses are closed, and we are hated for that. We have been treated very unfairly and I feel really angry about this. I felt threatened most times, and scared,” Chao told IPS.
He added that business was meant to be about competition. He said that until he was forced to close his restaurant, he had a number of customers and was making up to 800 dollars a day.
“We are contributing a lot to the economy of this country. I am yet to decide on what to do next. Maybe I will go back to China, but it is also tough to run a business back there because the population is high and the competition is also high,” he said.
Meanwhile, the Chinese government has not supported its traders on this issue.
“It is up to the Malawi government to thoroughly screen the Chinese nationals willing to invest in the country. These are small vendors and why should the Malawi government allow them to do business? They are capitalising on government’s failure to screen foreign traders,” China’s Ambassador to Malawi Pan Hejun said at a press briefing on Jul. 23.
“Rules should be respected and we don’t encourage these traders to go into rural areas. We encourage real investors,” Hejun said.
Clinton Promotes US Investment in Africa
August 7, 2012 | 0 Comments
JOHANNESBURG — U.S. Secretary of State Hillary Clinton is in South Africa as part of her tour of the continent. She met with former president Nelson Mandela at his home Monday before taking part in a high-level summit aimed at promoting U.S. investment and trade — which has been a key focus of the secretary’s trip. On Tuesday, she travels to the capital, Pretoria, to participate in the third annual U.S.-South Africa Strategic Dialogue.
Clinton spoke at the U.S.- South Africa Business Summit Monday in Johannesburg. The event brought together 200 top business executives and government officials from both countries.
“What I think we have to look to is not only helping our own businesses and yours be more competitive, grow, create jobs, but then how we translate economic growth into opportunities for people, particularly those who still need to be given a chance to work themselves and their families out of poverty,” Clinton said.
In South Africa, Clinton has been joined by a delegation of 10 senior U.S. business executives representing a wide range of sectors including aviation, energy and shipping.
South Africa, Clinton said, plans to make “big investments” in infrastructure over the next 20 years that could create “massive new opportunities” for American businesses and jobs in both countries.
Trade between the countries already totals $22 billion annually. South Africa is the leading market on the continent for American goods, while the United States is both an important export market and a source of foreign direct investment for South Africa.
Razia Khan, the head of Africa research at London-based Standard Chartered Bank, says Clinton needs to cement those business ties.
“It’s about being able to secure the relationship, ensuring that their interests are aligned, and that there is a framework for working through disagreements. Both South Africa and the U.S. have almost been sidelined by the importance of China, the speed with which we’ve seen China-Africa trade increasing,” Khan said.
Africa is home to some of the world’s fastest growing economies and populations. Analysts say the continent is increasingly a land of investment opportunity, not risk.
South Africa holds the rotating African Union leadership, which Khan says makes the country influential in molding foreign trade relations on the continent.
Boosting U.S. trade and investment in sub-Saharan Africa is one of the cornerstones of the Obama administration’s Africa foreign policy.
“Africa is more than a billion people now, more than two billion by the half century mark. [That] represents a vast untapped market for U.S. trade and investment,” said J. Peter Pham, Director of the Washington-based Michael S. Ansari Africa Center.
The United States is Africa’s second largest trade partner after China, which is known to leverage infrastructure projects for access to Africa’s consumers and its natural resources.
Clinton kicked off her trip with a speech in Dakar by saying the U.S. will seek out business opportunities but not at the expense of democracy and human rights.
“The United States will stand up for democracy and universal human rights even when it might be easier or more profitable to look the other way, to keep the resources flowing. Not every partner makes that choice, but we do and we will,” she said.
China in Africa
China criticized Clinton’s remarks as “cheap shots,” aimed at “discrediting China’s engagement with the continent.”
Razia Khan of Standard Chartered says Africa’s future prosperity depends on more than increased trade, be it with China, the U.S. or other countries. Africa, she says, needs to diversify its exports.
“It (Africa) has primarily been seen as a producer of raw materials, (it) may not have the infrastructure, (it) may not have the scale economies in place in individual countries to really be able to do much in the way of value addition to boost its own manufacturing sector,” Khan said.
While in South Africa, Clinton will continue her push for American companies to invest in Africa. She will also highlight U.S. efforts to facilitate the import of African goods through measures like the African Growth and Opportunities Act, which allows African countries to sell certain manufactured items into the U.S. quota-free and duty-free.
However, Khan said those efforts, while positive, have not yet had a “major influence.”
“Much more emphasis is needed in this area because unless Africa can diversify its export base, unless we do see greater value additions, most African economies are simply not going to be able to produce the formal sector jobs that their demographics imply they absolutely have to be creating,” Khan said.
The African Development Bank and the United Nations have released joint reports this year on concerns that Africa’s population boom coupled with its current trend of “jobless,” commodities-based growth poses a serious risk to future security and stability.
Africa’s youth population will not only double by 2045, the studies say, but it will also be better educated, yet less able to find work, if current trends continue.
Khan says increased trade will help Africans reap the benefits of their growing economies.
“There is no question about it, that one way to lift a greater number of people out of poverty is to have more economic activity and that is made easier through increased trade. It really doesn’t matter whether that trade is with the East or with the West,” Khan said.
Earlier Monday, Clinton met privately with former South African president Nelson Mandela at his home in the city of Qunu. The former president recently turned 94 and rarely makes public appearances.
France would back African lead intervention in Mali
August 6, 2012 | 0 Comments
France’s Defence Minister Jean-Yves Le Drian has stated that France would back an African lead military intervention in Islamist-held northern Mali.
But even if he believed such an operation was inevitable – and desirable – it was not for France to take the lead, he added.
“It is not for France to take the military initiative in Mali,” he told journalists during a visit to Lorient in northwest France.
France, he said, “wants it to be the African forces, in particular those of the Economic Community of West African States (Ecowas) and possibly the African Union (AU), that take the initiative,” he said.
He said an African military intervention in northern Mali was “desirable and inevitable.”
“France will support it and, I hope, the European Union also.”
At stake was political stability in the south of the country which was not yet guaranteed, even if interim president Dioncounda Traore had returned to the country from Paris earlier this week, he added.
The situation in the north of the country was “very worrying”, said Le Drian.
The hardline Islamists who occupied the vast north in the chaos following a coup have tightened control over the area, imposing a harsh form of Islamic law.
Among those now in power in the north are the Islamist group Ansar Dine (Defenders of Faith) and Al-Qaeda in the Islamic Maghreb (AQIM).
Late last month, members of the new Islamist regime dragged an unmarried couple to the centre of the town of Aguelhok for a public stoning, the first reported execution according to strict Sharia law since the takeover.
“We must … avoid (letting) Mali become a ‘Sahelistan’…,” Le Drian said, drawing a parallel with hardline Islamist forces in Afghanistan.
Source – AFP.
Who’ll lead Kenyans from dictatorship to democracy?
August 6, 2012 | 0 Comments
By TEE NGUGI*
Kenya has an ambitious plan to become an industrialised middle-income country by 2030, aptly named Vision 2030. The country has also promulgated an ambitious Constitution that aims to transform it into a tolerant, democratic society rooted in the rule of law.
To appreciate just how audacious these ambitious are, consider where we are coming from and where we are now.
For 40 years under Kanu, independent views were viewed as sedition. Secret police were everywhere, including, as Kenyan poet Micere Mugo recently recounted to the media, at university lectures, listening for hints of subversion.
The president’s name was spoken in whispers unless, of course, you were praising him, in which case you genuflected and shouted hoarse at rallies and churches, thanking God for loving Kenya so much as to bless her with a leader of such peerless morality, wisdom and compassion.
Those who demurred at such scurrilous sycophancy found themselves in Nyayo House’s purpose-built torture chambers.
The state became a law unto itself, seizing land and property meant for hospitals, schools and other infrastructure to award to its sycophants. If you sang praises like a parrot — as we were encouraged to do — you were rewarded. Many became overnight millionaires. The country’s economic growth rate went negative.
We seem to forget that Kanu rule also left a county in a crisis of morality. It left a culture in which wealth — no matter how one gets it — is seen as a redeeming value; it bequeathed mindboggling selfishness, as exemplified in our driving habits; it inculcated a culture of mediocrity and short cuts; it taught us to see the world through tribalism, and to shirk personal responsibility in the execution of public duty…
In a phrase, Kanu left a society whose value system will have to be re-engineered in order to support Vision 2030 and the new Constitution.
The foregoing dictates the kind of president the country will need. First, a leader who will stake his personal prestige and sense of accomplishment on achieving the goals set in Vision 2030.
This will mean assembling a team of high achievers irrespective of tribe or party loyalty, and demanding — by personal example, Paul Kagame-style — total commitment to the task at hand, personal integrity and innovation.
Second, the country will need a leader who is keenly aware of our despotic past and is, therefore, totally committed to fully implementing the Constitution.
This will mean acting, appointing, deciding only on the basis of enhancing the aims of the Constitution.
Nelson Mandela understood keenly the human cost of apartheid, and on assumption of the presidency, went about with a singleness of purpose to banish completely its cultural, institutional and legal underpinnings.
Third, Kenya will need a leader who can visualise the society anticipated by the Constitution, and inspires us all to see that vision and work towards it.
This will mean re-educating us not to analyse our society through the prism of tribe, thereby creating a new basis for social interaction and political mobilisation.
They should help us overcome the fear of changing times, changing norms, fading traditions, and like US president Roosevelt help us to see that “the only thing to fear is fear itself” With that in mind, let’s check on the leading candidates for president. One of them — at a rally in his ethnic backyard — asked whether his ethnic group was born to only aspire to the vice-presidency.
Another exhorted an ethnic group to support him to avoid being locked out of the next government. Yet another, who reminds one of Charles Dickens’ Mr Pecksniffe, mongers fear and lies under affected piety.
Others imply that their candidatures are divinely inspired, while those of their opponents are the devil’s work.
Some have no agenda beyond the desire to block Raila Odinga from the presidency. Others have all the charisma and inspirational abilities of a tree stump.
And don’t get me started on the residual Kanu mentality and serious integrity issues of others. These candidates simply do not inspire hope or confidence in the future.
*Tee Ngugi is a social and political commentator based in Nairobi.Originally published at www.theeastafrican.co.ke
U.S. applauds Sudan’s oil agreement despite sketchy details
August 6, 2012 | 0 Comments
August 4, 2012 (WASHINGTON) – The United States quickly welcomed the announcement made by African Union (AU) mediator and former South African president Thabo Mbeki that the delegations of Sudan and South Sudan reached an agreement regarding oil transit fees.
The sticky issue has all but debilitated the economies of the two neighboring nations and both sides were entrenched in their negotiating positions despite intense regional and international pressure to reach a compromise.
South Sudan broke away from the north last year and took with it around three-quarters of the oil reserves but due to its landlocked situation the new nation could only export and process the crude through the pipelines inside Sudan’s territory to terminals in Port Sudan coastal city.
But due to a disagreement on pricing of the transportation service Juba decided to suspend its oil production which came after it was revealed that Khartoum started seizing some of the south’s oil in late 2011 to make up for what it says are unpaid fees.
Khartoum demanded the payment of $36 per barrel by Juba to export its oil but the latter offered around $1 saying this figure is consistent with international norms.
Sudanese officials also made it clear that the loss of oil revenue left a gap in the budget that needs to be built into any deal with south on oil.
Late on Friday, Mbeki made the surprise announcement to reporters that the two sides reached a comprehensive understanding on oil.
“It’s an [oil] agreement about all of the matters. The issues that were outstanding were charges for transportation, for processing, transit,” he told reporters according to Reuters.
“What will remain [now]…is to then discuss the steps as to when the oil companies should be asked to prepare for the resumption of production and export,” Mbeki said.
Officials in Khartoum and Juba were slow to confirm the news and both sides gave conflicting accounts of the price that was agreed upon.
A senior Sudanese official told Sudan Tribune on Saturday that Juba will export its oil for $25 per barrel. South Sudan government on the other hand said they will pay $9.48 for every barrel in addition to around $3 billion in one lump sum.
The accord is good for three and a half years after which the rates can be re-negotiated but only downwards, South Sudan government said.
Sudanese presidential assistant Nafie Ali Nafie today described the agreement as “rewarding” but that its implementation is contingent on concluding negotiations on security issues. He said the deal will provide a conducive environment to weaken rebel movements.
Khartoum accuses Juba of harboring and supporting rebels fighting the Sudanese army in Darfur, South Kordofan and Blue Nile. It insisted on tackling this issue prior to discussing all other post-secession items.
Luka Biong, senior member of Juba’s ruling Sudan People’s Liberation Movement (SPLM), said in an opinion article that Sudan has made “considerable concession” which he said “showed beyond any doubt that it [Sudan] is desperate to reach a deal on oil and other payments”.
He also said the price agreed upon was $11 as contradicting the $9 reported in Juba.
“As the South would not want to set precedence in oil tariffs as it intends to diversify its access to ports, the current deal of oil tariffs of $11 per barrel that has been reached provides a basis for confidence building and resolving other issues. On other payments, the offer of South of financial transitional assistance of about $3 billion to Sudan is unprecedented as it did not happen before in the post-independent history of Sudan to receive such free budget support from any country or organizations” Biong wrote in an Op-ed in ’New Nation’ newspaper.
The SPLM official however went on to say he wished the issue of Abyei was attached as a condition for the oil deal to be signed.
“One would have wished that the acceptance of the South of the current oil deal to be conditional on finally resolving the issue of Abyei Referendum, particularly the issue of eligibility to be exclusively for members of Ngok Dinka and other residents except nomads,” he wrote.
South Sudan’s chief negotiator Pagan Amum, despite also praising the deal, lashed out at the international community accusing it of siding with Khartoum in the talks.
“America, the U.K., all were silent. They were abetting the theft of Sudan,” he said. “They [international community] were all telling us ’let it flow, let Sudan take it.’ Because they don’t want it to affect prices” Amum said.
He also said that international pressure on the negotiations was based on desperation and the search for a “quick fix.”
U.S. president Barack Obama issued a statement welcoming news of the agreement.
“The leaders of Sudan and South Sudan deserve congratulations for reaching agreement and finding compromise on such an important issue, and I applaud the efforts of the international community which came together to encourage and support the parties in finding a resolution. In particular, I am grateful for the work of the African Union High-Level Implementation Panel, led by President Thabo Mbeki, for its determined and skilled leadership in bringing about this agreement” according to the statement on the White House website.
Obama’s Secretary of State Hillary Clinton said in a separate statement from Kenya praising the “courage” of South Sudan government.
“We praise the courage of the Republic of South Sudan’s leadership in taking this decision,” added Clinton, who had visited Juba on Friday on her current Africa tour.
“Now was the time to bring this impasse to a close, for the good of the people of South Sudan and their aspirations for a better future in the face of ongoing challenges. South Sudan’s leaders have risen to the occasion” she added.
A senior U.S. state department official speaking to reporters on background from Kenya said that that Khartoum and Juba “were in a downward economic spiral that was accelerating at a rapid pace that would have led them into major economic destruction” as a result of the oil shutdown.
“Ninety-eight percent of the revenues of South Sudan lost 95 percent of their budget – lost. And from all indications from the World Bank, from the IMF, and from independent economic analysis that we’ve done, would’ve shown that the South would have probably run out of foreign exchange sometime between the end of August and the first of October. Others say they might have been able to last up until December of this year or January, but this was a major disaster waiting for a new government” the official said.
“In the North, you can see what was also happening. For the first time probably in a decade, we were seeing on the streets of Khartoum daily an increasingly vocal and violent demonstrations against the government. We saw a large rise in inflation; we saw spiraling high fuel prices and fuel shortages and higher food costs in the North, demonstrating that they were in economic trouble as well” the official added.
The official suggested that Clinton pressed South Sudan president Salva Kiir successfully into sealing a deal with Khartoum on oil.
“[T] Secretary did point out very clearly that the prospects of the situation getting worse economically were very, very apparent. But she also said to President Salva Kiir and his leaders that the global economic community, which has helped South Sudan over the last several years with large infusions of money, is going through a tough time itself and that it could not expect an international bailout of the type that would be needed to be able to provide for all of the lost revenue and assistance that it was losing as a result of the oil shortages” the official said.
It remains to be seen how quick the oil will start flowing though experts say that it will take few months to get the pipelines up and running.
*Source Sudan Tribune (ST)
Join Pan African Visions for In roads to Africa, market your business and share your ideas www.panafricanvisions.com
August 6, 2012 | 0 Comments
Africa, a billion man strong market. The last world’s greatest emerging market according to US Under Secretary of State Johnnie Carson. Join www.panafricanvisions.com to measure and exploit the rich potential of Africa. Got an idea or a story? Share it with us, use PAV to get it out there. Got a business you want to market? Contact us. Looking for investment partners or business networks in the continent? PAV will help out. Check out www.panafricanvisions.com, email:email@example.com. PAV will help advertise and take your business to a bigger market and help grow networks
Equatorial Guinea To Host ‘Africa Rising’ Leon Sullivan Summit
August 5, 2012 | 0 Comments
–“Africa is where you will find the greatest opportunities in the entire world ” says Hope Sullivan Masters
World Leaders, Blockbuster Idols and Academia Powerhouses to Convene in August for the Ninth Leon H. Sullivan Summit to build partnerships for Africa
Washington D.C., July 26th, 2012 – Global leaders from Africa, Asia, Latin America, powerhouse intellectuals from the most prestigious colleges and universities in the world, NBA players, Emmy Award winning musicians and superstars from Hollywood, Nollywood, and Bollywood, and Grammy Award winning actors from the US and the Caribbean will be gathering for the star-studded 9th Leon H. Sullivan Summit, in the colorful city of Malabo, Equatorial Guinea at the invitation of His Excellency Obiang Nguema-Mbasogo. Beginning on August 20, the Summit will be a worldwide gathering of the African Diaspora under the theme of ‘Africa Rising’.
“Africa is where you will find the greatest opportunities in the entire world ” said Mrs. Hope Sullivan Masters, President of the Leon H. Sullivan Foundation. She went on to say, “The Sullivan Summit has always been the place where incalculable opportunities are introduced to the vast reserve of untapped innovative ideas and concepts of Africa. The enthusiastic feedback that we are receiving from all across the world about this Ninth Sullivan Summit is so impassioned and full of energy that the fusions which are about to occur in Malabo will result in a historic new chapter in Africa’s renaissance.” Hope Masters elaborated further, “ when the wealth of Africa is harnessed in a way where the African people will finally benefit from their own land you will have a “game-changing” situation which will fundamentally change the way the entire world regards Africa. This is the underlying mission of this Summit and the theme this year which is Africa Rising.”
With more than 4000 delegates expected to attend, Heads of State from across the world, blockbuster superstars and international musicians, the 9th Leon H. Sullivan Summit will prove to be a ground breaking event for Equatoguineans and all Africans alike.
“We will have a concert with performances by international superstars planned for the entire country and our Summit delegates. The Heads of State will announce a set of Sullivan Resolutions, which will disclose an urgent stratagem to ensure economic empowerment and human development for the nations of Africa. These Sullivan Resolutions will be a clear articulation to the world that the leaders of Africa are fully and completely committed to lead the global dialog on Africa, forged by the leaders of Africa themselves, to ensure the onward development of Africa while ensuring the rights and dignity of African people in the process.” said Sullivan-Masters.
The Sullivan Summit has also undertaken a full-scale renovation of a large orphanage in Malabo which will be re-dedicated during the Summit week; and they will be hosting the Inaugural Leon H. Sullivan Exhibition Basketball game featuring athletes from the NBA, the Canadian Basketball League, and well as from various leagues across Europe and Africa in addition to the bilateral and multilateral discussions among world leaders which will take place during the week-long Summit.
Historically the Sullivan Summits have been responsible for enacting significant change on the continent, and the Summits have been the only international forums in which former U.S. Presidents such as President Bill Clinton and President George W. Bush have attended while in office.
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The rebirth of Volkswagen in Nigeria
August 5, 2012 | 0 Comments
By Mohammed Shosanya*
Given the billions of naira spent annually on importation of automobiles in Nigeria, there is no gainsaying that building or resuscitation of the nation’s assembly plants will go a long way in cutting this huge amount.
Nigeria is said to be losing at least N550billion annually due to its inability to assemble or manufacture vehicles in the country while a total of 80,000 new and 200,000 used vehicles valued at over N400 billion are imported into the country annually
As part of its backward integration policy, the federal government through the National Automative Council introduced measures towards bringing back the dead auto plants into life.
Most auto-freaks could recall how the Volkwagen of this world dazzled with products assembled in-country. This soon disappeared into the oblivion, but it is now back and new life has been breathed into the company, which has also changed its name following its acquisition by the Stallion Group.
Our recent visit to the plant of Volkswagen Nigeria Limited, located in Lagos-Badagry Expressway is somewhat an exhibition of the rebirth of one of the nation’s auto giants which fell into slumber due to the collapse of the sector.
The environment was busy with heavy human and vehicular movement around the wide expanse of land that houses the plant signifying that business is ongoing there.
There were over 30 new Ashok buses that lined the parking bay of the plant. These buses are being manufactured there and probably awaiting discharge to customers.
This was a far cry from the ‘abandoned’ status of the plant over the last two decades.
Perhaps the new lease of life infused into the auto giant came to the fore when the Federal government privatized it few years ago which metamorphosed to VON Automobiles Limited
The company is now largely owned by the Stallion Group controlling 78 per cent shares; Barbados, 17 per cent and Lagos State Government has three per cent through Ibile Holdings.
The acquisition of controlling interest in VON Automobiles is in furtherance of Stallion Group’s corporate vision to create value segments in the local automotive industry, where we have played significant role
The new owners have invested N1bn in infrastructural development at the factory in Lagos.
Managing Director of the company, Tokunboh Aromolaran said that the local auto assembly plant had the capacity to churn out 15,000 pickups and light trucks on annual basis.
How the new phase of VON started: The retooling of the first phase of the moribund Volkswagen plant started in May/June 2011. Five months later, the plant had rolled out the first locally assembled AshokLeyland commuter bus.
According to Aromolaran, in the first phase, the company is producing city buses of the Ashok Leyland brand.
“Three models are in production, the Falcon, a 42-seater, 100 capacity city bus that has been tried and tested on Lagos roads as part of the BRT bus project and The Hawk, a 31-seater 85 capacity bus attracting attention of bus operators on narrow Lagos roads, and The Eagle, a 28-seater bus, popular among institutions and corporate bodies.
The company has put up a versatile assembly plant with a current capacity of 2,000 buses per annum, expandable with minimal effort.
Assessment of phase one: Mr Aromalaran said that the first phase of the plant is in full swing, refurbished and installed with new production machines for efficient operation
According to him, the phase one of the project enabled the firm to contribute (local supply) to the federal mass transit scheme recently introduced as part of palliative measures for the partial removal of fuel subsidy
He said the buses were indeed highly sought- after by transport operators during the bus procurement exercise embarked upon by the federal government in its effort to cushion the impact of partial removal of petroleum subsidy.
This, he said, was a testimony to the ruggedness and functionality of the vehicles and its compatibility with our road conditions.
“It has proven to be the most successful of the models employed in the successful BRT Mass Transit Scheme introduced by the Lagos State government and continues to be in high demand by other states desirous of introducing a bus transit service’’.
A senior official of the company told our correspondent that at least four buses were assembled daily since the phase one of the project commenced last November.
Projection on phase two: The company said the phase two of the project billed to kick off in December, this year, will entail the production of commercial trucks and pick-up vans in an ultra-modern plant with an annual capacity of 15,000 vehicles.
Items expected for production in the second phase, will include the Volkswagen, Hyundai and Foton brands of commercial vehicles
According to Aromolaran, the company has further made a projection of over N20 billion, provided the economic landscape enhances industrial sector growth.
He disclosed that the third phase of the whole project would involve the production of passenger vehicles, stressing that this and the second phase would be more technically driven and challenging.
The firm, he said, had employed over 200 people since it resumed vehicle production last year.
He said the company is taking serious pains to increase local value and has plans to increase the production of locally sourced components year on year, reaching over 50 per cent local value added by the third year of production.
Potentials of Nigeria’s auto market: The National Automative Council said the industry has capacity to produce over 108,000 cars, 56,000 commercial vehicles, 300,000 trucks and trailers, 6000 tractors, 1.2 million motorcycles and one million bicycles annually.
It also said there are over 50 auto component manufacturers some of which are original equipment manufacturers and others supply the after sales market.
Investment Opportunities: The Council says opportunities abound in low cost utility vehicle to serve the rural dwellers, manufacture of auto components and spares, manufacture of tricycles, motorcycles and bicycles, especially as government target 50percent and 100percent local content for them are yet to be met.
Incentives: These includes import duty of 2.5percent for CKD for vehicle assembly while that of fully built up units is 30percent.
Others are industrial establishment that have implant training facilities enjoy a 2percent tax concession for a period of 5years; 20 percent of investments in infrastructure, 5 percent capital depreciation allowance above the initial allowance.
Can VON wither the storm of Nigeria?: Observers say the new owners of the auto-company would make great impact in the sector given the huge investments they have pumped into the plant as well as its plan to take the revolution in the company beyond the shores of Nigeria.
It is crystal clear that insufficient power supply and skyrocketing cost of energy is one of the constraints of auto plants in the country.
For instance, it is estimated that manufacturers in the country spend N63billion annually on diesel to power their plants due to inadequate power supply.
Speaking, Mr Duncan of CFAO Automative Nigeria was of the opinion that setting up auto assemblies requires a lot of investment in physical assets and human resources.
“And unless these assemblies are assured some levels of protection or application of law enforcement which provides them that security, they would not come to Nigeria.”
Director, Nigeria Auto Manufacturers Association, Arthur Madueke, said some African countries such as Kenya, Tunisia, Egypt, among others had to increase duty differentials between Fully Built Ups (FBUs) and Completely Knocked Downs (CKDs) as part of strategies to ensure viable local manufacturing.
He suggested a duty differential of between 30 to 50 per cent in Nigeria as possible start to enable local production of automobiles in the country.
He said the number of component companies in the country has reduced from about 150 to 50.
Mr Adewale Sunday, an auto analyst advised government to consider bailout fund for the sector and also ensures that players in the industry have access to low interest finance and tariff protection.
Kenyans must ensure credible vote: Clinton
August 4, 2012 | 0 Comments
By Nicolas Revise *
US Secretary of State Hillary Clinton on Saturday urged Kenyans to work together to ensure “transparent” elections next year and avoid a repeat of the deadly post-poll violence four years ago.
“We urge that the nation come together and prepare for elections that will be a real model for the entire world,” the top US diplomat said after talks with President Mwai Kibaki in Nairobi on the latest leg of her Africa tour.
Kenya plunged into violence after the December 2007 election in which Prime Minister Raila Odinga — then opposition chief — accused Kibaki as the incumbent president of having rigged his re-election.
What began as political riots soon turned into ethnic killings targeting members of Kibaki’s Kikuyu tribe, who in turn launched reprisal attacks in the country’s worst violence since independence in 1963.
Kenya, East Africa’s economic powerhouse, is due in March to hold its first general elections since the violence.
“The US has pledged to assist the government of Kenya to ensure that the upcoming elections are free, fair and transparent,” Clinton added, speaking ahead of talks with Odinga, a key candidate in the race for the presidency.
Kibaki will not contest the next election.
Two presidential hopefuls, Deputy Prime Minister Uhuru Kenyatta and former minister William Ruto, face trial in April in the International Criminal Court for crimes against humanity over the post-election killings, charges they deny.
They face charges including orchestrating murder, rape and persecution in the aftermath of the poll.
Clinton later met with Somali President Sharif Sheikh Ahmed, who along with his transitional government wraps up later this month after an eight-year interim period marred by infighting, minimal political progress and rampant corruption.
She said she was “very encouraged by the progress” in the fragile political process to elect a new government in Somalia before an August 20 deadline.
Clinton also met with other members of Somalia’s notoriously fractious political elite, including parliament speaker Sharif Hassan Sheikh Adan, one of dozens of candidates challenging Sharif for the job of president.
Ravaged by repeated droughts and over two decades of conflict, Somalia is torn between rival clans, Al-Qaeda-linked insurgents and the Western-backed government, which is propped up by a 17,000-strong African Union force.
Kenya, which invaded Somalia last year before joining the AU force, is a key US ally and closely linked to Washington’s efforts to quash Islamist movements in the volatile Horn of Africa region.
Late Friday one person was killed in a grenade attack in a Nairobi suburb, the latest in a string of blasts in Kenya since its troops invaded southern Somalia to crush extremist insurgent bases there.
Clinton, who visited neighbouring Uganda and South Sudan on Friday, is to travel to Malawi on Sunday.
On Friday she called for a “compromise” deal between rivals in Juba and Khartoum to resume oil production, stalled in a bitter dispute that brought the newly separated rivals to the brink of all-out war earlier this year.
Hours later, in the early hours of Saturday, African Union mediator Thabo Mbeki said that the “parties have agreed on all of the financial arrangements regarding oil.”
The golden leaf: boom time in Zimbabwe
August 4, 2012 | 0 Comments
By Ian Scoones*
Zimbabwe’s tobacco industry is booming once again. From the low point in 2008, at the peak of hyperinflation, when only 48m kg was sold, optimistic estimates for 2012 suggest that around 150m kg will be sold, with prices early in the selling season around 30% higher than last year. Production levels are not back to the peak level in 2000 of 236m kg, but the trend is ever upwards, with sales rising from 65m to 123m to 132m kg between 2009 and 2011. In 2011, the sales generated around US$360m, helping to fuel the dramatic 34% growth in the agricultural sector in the past year. With the season not yet concluded over US$440m has been sold in 2012.
Once the almost exclusive preserve of around 3000 large-scale white farmers, tobacco is now being produced and sold by around 60000 black farmers from the new A1 and A2 resettlement areas. With average sales of around 10 bales per farmer, this will result in an income of around US$5000 – no mean sum in Zimbabwean terms. And of course tobacco creates employment along the value chain, as well as tax revenues.
This is one of the really unexpected success stories of the land reform. While many accepted that small-scale A1 farmers with larger areas of land could engage in successful staple production and ‘accumulate from below’, as we described across our sample areas in Masvingo, for new farmers to participate so successfully in the high value export industry of tobacco farming was seen as unlikely. Most had written off the industry, expecting it to atrophy and die.
But contrary to expectations, the tobacco industry has been transformed, from the farms to the auction floors. A whole new set of people are involved. It is not only the farmers who have changed, but also the labourers, the buyers and the financiers. Women are increasingly involved, particularly in the processing, sorting and auction-floor activities. White farmers are still involved too in the high quality/high cost end of the industry, in a few farms remaining under their control, but also in lease arrangements with A2 farmers, who needed the skills and expertise for the production of top quality flue cured Virginia.
New contracting arrangements have emerged to support smaller scale farmers grow tobacco. Contracting reputedly resulted in the production of 34m kg in 2011, out of the total of 132m. Some major new entrants have emerged in the market, notably those with Chinese connections. Tianze, for example, has around 250 growers linked to it. Overall there are around 13 contract companies operating, as well as multiple smaller scale leasing and other arrangements.
It is this financing aspect that has been critical for the dramatic growth of the small-scale sector. This has allowed farmers to invest in inputs, and the rate of refusal has declined, and overall quality has increased. Chinese contract companies, loan facilities and other forms of finance have transformed the system. More traditional players, from the western based companies and other commercial lenders, are now re-engaging knowing that there is money to be made.
There are downsides of the tobacco economy, of course. Curing is largely carried out using local fuelwood sources, and the impact on forests and woodland resources has been high. A more sustainable source of fuel will clearly be necessary. Equally, the high labour demands have resulted in accusations of child labour on the farms, flouting labour laws and undermining child rights. These of course were core issues when white farms took on tobacco as a core crop some decades ago, and will hopefully only be transitional challenges.
For the longer term, the tobacco story in the last five years has some important lessons for the wider agrarian transition. While tobacco is not a crop appropriate everywhere (and is not significant in our study areas in Masvingo, for instance), there are some more generic insights worth noting. First, A2 farmers, who have really struggled elsewhere including in Masvingo with poor production due to low capitalisation and investment, can make it under the right circumstances. Second, markets are key, but so is support to engage in markets. It is not just price levels, demand and supply, but up-front investment, skill development and knowledge building about quality control and market niches. Third, finance is vital; and that’s where Chinese finance and contracting arrangements become critical. Fourth, there are definitely roles for white farmers with skills and capacities in a particular commodity area, but probably involving engagement in different ways, at the high end of the market.
Hopefully the lessons from the tobacco transition can be applied to other aspects of the agricultural economy, leveraging finance, expertise and market access for the benefits of a larger group of people than the previously narrow, privileged large-farm sector.
*This blog was originally posted on the zimbabweland blog. For more go to:http://zimbabweland.wordpress.com/.
Will London 2012 Awaken the African Diaspora’s Consciousness?
August 4, 2012 | 0 Comments
By Kenneth Umeh*
If you don’t know the story of Mo Farah now, you almost certainly will the day after the 5,000 metres Olympic final on Saturday 11th August. Mo came from Somalia to the United Kingdom at the age of 8 unable to speak a word of English. He discovered, loved (and latterly) conquered athletics and today stands on the cusp of Olympic glory for himself, for Team GB and for a generation of young men and women from Britain.
Similarly, Luol Deng fled from what is now South Sudan as a child and became a British citizen in 2006. Today he plays basketball in the NBA for the Chicago Bulls and will also represent Team GB in the Olympics.
With every Olympic Games new heroes and role models are born – the sporting stories of Mo Farah and Luol Deng are still being written, but their early chapters start in some of the poorest parts of Africa. Competing today for Team GB, they are in a position to inspire generations of young British sportsmen and women. In every playground and sports field, youngsters will find athletes that they want to imitate and emulate. Relationship psychologies and how bonds form is always fascinating and in this case even more so; between now and the games of 2016 and 2020, it is likely that there will be an even greater number of young diasporans representing Great Britain in the Olympics or other major global sporting events.
‘Legacy’ is one of the buzzwords of the 2012 Summer Olympic games but its focus seems to be limited primarily to regeneration in London and the wider United Kingdom. The cultural roots of many athletes representing Team GB suggest that ‘legacy’ should transcend these shores and, through the African Diaspora, reach into parts of Africa. Will the success of Olympians like Mo Farah and Luol Deng have a special resonance with young Britons from the Diaspora? Will it create a conscious desire to learn about their ancestry and to give something back? Will it enforce a sense of Britishness, or will it do nothing at all?
Behind the labels of Black British or Black African lie millions of stories, narratives of hope, despair and inspiration. Will gold for Mo Farah make young Diasporans proud to be British or proud to have familial origins in Somalia? Deeper questions of patriotism and nationalism evolve with each generation, and this is where older Diasporans have a role to play in cultivating the relationship and psychological bonds with the past and, most importantly, the future of the African continent. The Olympics offer the perfect opportunity for intergenerational communication within Diaspora communities, and a chance to talk about what their legacy and contribution to the continent can be.
Both Deng and Farah have set up charities working with refugees and tackling famine in the Horn of Africa, so they are already giving back and ensuring that their own legacies will not just be limited to the basketball arena, athletics track or the United Kingdom.
Will the Games lead to a re-questioning of individual identities and actions, particularly for younger member of the Diaspora? Maybe a grand reawakening is too much to ask, but the cultivation of a deeper desire to explore the lands and identities of their Olympic heroes would be a great place to start. If that is the case, then it is perhaps not so important what the likes of Mo Farah and Luol Deng do individually and on the track in cultivating a legacy, so much as what we do individually to inspire and educate younger generations of the African Diaspora about their ability to shape the future of two continents.
*Source: africanarguments.org. Kenneth Umeh is a writer and student support officer in London. He is a graduate of the School of Oriental and African studies.
African nations should bid for 2024 Games-UK minister
August 4, 2012 | 0 Comments
By Avril Ormsby*
LONDON (Reuters) – Britain’s Olympics Minister Hugh Robertson encouraged African nations to bid to host the 2024 Olympics, saying on Saturday the Games should not be the preserve of Western nations and the rich.
South Africa burst onto the international sports scene in 2010 when it hosted the soccer World Cup, and the continent’s runners dominate long-distance events.
But an African nation has yet to host the Olympics.
“I am a firm believer that the Olympics should not just be restricted to western Europe, to the Americas, to the prosperous nations of the Far East,” Robertson told Reuters at a National Olympic Committees of Africa event.
“That’s one of the most exciting things about Rio (the 2016 Olympic host city). And I would very much like to see the Olympics in future years go to the continent of Africa.”
No African city is on the shortlist to host 2020, the winner of which is due to be announced in 2013, after the few who proposed making a bid failed to follow through.
But Casablanca, in Morocco; Durban, in South Africa; and Alexandria, in Egypt, are being touted as possible bidders for 2024.
“I very much hope that African nations will bid in 2024,” Robertson said at the Africa Village hospitality and cultural arena, in London’s Hyde Park.
“I think it is really good for the Olympics to be spread out around the world, that the Olympic values should travel as far as possible. I would absolutely like to see that happen on the continent of Africa.”
DREAM COME TRUE
He welcomed the participation of South Sudan marathon runner Guor Marial who will compete in the marathon under the Olympic flag.
South Sudan, the world’s newest country which was recognised only last year, has not yet established a national Olympic Committee and so was not able to send a team to the Games.
“You want as many people competing as possible from as many different nations,” Robertson said.
“And South Sudan is now independent, so I’m delighted they’ve got representation here, and it will be under their own flag soon, won’t it.”
Ethiopian IOC member Dagmawit Girmay Berhane said the Olympics would come to Africa eventually, it was just a matter of when, helped by a bit of extra resources, infrastructure, political commitment and creativity.
“In my local language there is one word which says ‘yechalal’, and it literally means ‘yes, it can be’,” she said, still smiling from Ethiopian Tirunesh Dibaba’s successful defence of her Olympic 10,000 metre title.
“So no matter how long it takes, I am sure it will happen.
“We have the athletes, we have the passion. We love the sports.”
The only thing lacking was the infrastructure – but the cost of the Games would be outweighed by its value, she said.
“The value is more than monetary value,” she told Reuters.
“We have the will, we have the volunteers, we have the spirit, it is the resources. Resources and infrastructure, we need political commitment and we need the creativity.
“I think there is a generation looking forward to it, and it will touch a generation in terms of a dream come true.”
(Editing by Alison Williams)
*Courtesy of Reuters
Ethiopia and Meles: leadership crisis can become a democratic opportunity
August 3, 2012 | 0 Comments
By Alula Alex Iyasu*
Rahm Emanuel , President Obama’s former Chief of Staff, was often heard saying, “A crisis is a terrible thing to waste.” Asked to explain what he meant, he said, “Crisis presents an opportunity to allow you to do things you thought you couldn’t do.”
There is a potential crisis looming in Ethiopia in light of the Prime Minister, Meles Zenawi’s health concerns. Depending on who you choose to believe, Meles is anywhere between speedily recovering to dying. To date, he has taken an indefinite leave of absence from the day-to-day governing. I for one wish the Prime Minster a full and speedy recovery, but if he decided to step aside earlier than the 2015 election as he had previously indicated, the impact of his departure would be enormous to a country of 80 million whom he had ruled with an iron fist for the last 20 years.
Whether you agree with his polices or not, one thing is certain: Meles has been at the helm of a nation which has seen unprecedented economic growth and prosperity rivaling that of China and India.
However, whilst presiding over impressive growth figures, the Prime Minister and his political party (the EPRDF) abdicated their path to democracy, in earnest, sometime back in 2005. This was brought starkly to light when the results of a general election in which the EPRDF faced a strong challenge were reversed through killings and imprisonment of opposition political parties and supporters, a trend which continued in the subsequent election in 2010.
The elections and the resultant shrinking of Ethiopia’s political space turned the Prime Minister from a renaissance leader to pariah by some Western accounts. It also put the Prime Minster and the country in an economic and political conundrum: how to achieve prosperity without democracy? It turns out these seemingly dichotomous points, dictatorship and economic growth, contrary to what we have learned in universities and colleges, are in fact, possible in less than democratic systems. See China. It turns out, also, that the Prime Minister’s views on this are clear, as was shown by his comments at the 2012 World Economic Forum held in Addis Ababa, Ethiopia, in which he said, “There is no direct relationship between economic growth and democracy.”
Let’s assume for a moment that while economic growth is possible under a benevolent dictatorship (which the PM seemed to suggest), what if we then factor in democracy? And I am not talking about democracy-lite, which is a uniquely African phenomenon that begins and ends on Election Day with no substantive policy and regulatory changes to follow. I am talking about a fully-fledged democracy which not only comes with human rights, freedom of speech and the press, but a democracy which embraces free enterprise and a laissez-fair economic doctrine.
Consider this: Ethiopia has been growing at an annual rate of 8.9 percent for the last eight years or so. According to the Economic Intelligence Unit analysis of 2011, the economy is projected to grow by at least the same rate for the next five years. There are more middle income families in Ethiopia today than at any other time in its history. Manufacturing and agribusiness productivity are the highest they have ever been. Ethiopia exports more goods than ever before, led by coffee and soon to be superseded by electric power. The Ethiopian Diaspora from all over the world is returning to its country of birth flush with cash to invest in new enterprises.
And now consider this: Such economic growth is occurring in spite of a deficit in democratic institutions and transparency, inhibited by crippling economic and social policies, unfair and ad hoc taxation and an overall business and investment policy unfavorable to private enterprise. It has largely not taken place because of improvements in economic policies, incentives, democratic institutions or transparency. Above all else, this economic turn-around is testament to the creativity and resolve of the Ethiopian entrepreneur.
The democratic opportunity
The next Prime Minister of Ethiopia should take this potential and impending leadership crisis and turn it into an opportunity – to reform and improve areas hampered by overreaching government policy and an absence of democratic institutions. There is a golden opportunity to view the private sector as a true partner in national economic growth and not an entity to be feared and stymied. An opportunity to encourage public-private partnership as a means to raise capital for the kinds of ambitious development goals Ethiopia has outlined but lacks the funds. An opportunity to create democratic institutions with truly independent bodies that facilitate, arbitrate and encourage entrepreneurship.
And finally, there is an opportunity to attract wide-scale Western investment rivaling that already emanating from China. Beijing has underwritten most of the recent big-ticket investments in infrastructure, telecommunications and power systems. Chinese companies are propped up by the weight of their government at the negotiating tables in Ethiopia and elsewhere in Africa. While money is money to governments, regardless of where it comes from, it would be naïve to assume that the Chinese monopoly in Ethiopia is good for the long-term economic and political sustainability of the country. Democratizing Ethiopia could bring in fresh investments from the West, which recognizes the importance of Ethiopia as a viable emerging market, but is hampered by the country’s record on human rights and democracy.
To the extent that Meles’s successor chooses to liberalise the country’s political and economic space, Western governments would have the political cover to push for the necessary policy and regulatory framework that encourages private investment and partnerships across the Atlantic.
Let’s not forget, all politics is local. Basic economics has also thought us that a diversified investment portfolio is better than relying on a single partner. Attracting Western investors would not only benefit the people of Ethiopia by creating jobs and expanding domestic industries, but it would also give the Ethiopian government leverage against Chinese investments.
While history may prove ambivalent on the democracy versus growth dichotomy, democratic renewal should also be assessed through its capacity to provide a less tangible dividend. This being the potential to unleash the entrepreneurial spirit of a nation by creating the political and economic confidence necessary for investment, while attracting positive attention from currently sceptical western powers.
*Alula Alex Iyasu is Managing Director, Bridge International.Culled from africanarguments.org
Huge gas discovery off Mozambique
August 3, 2012 | 0 Comments
Johannesburg – Italian oil company Eni SpA has announced the discovery of more natural gas off the coast of Mozambique, expanding the yield of a major field off the southeast African nation.
Eni said on Wednesday that the field includes at least 10 trillion cubic feet of natural gas, increasing the total yield of the area to 70 trillion cubic feet.
The company said the drill site is 60km off the Capo Delgado coast. Eni has a 70% interest in the field, with Portuguese firm GalpEnergia, South Korea’s KOGAS and ENH each having a 10% stake.
Natural gas exploration has increased in recent years in Africa, long a source for crude oil. Recent discoveries in Mozambique have made it a major regional source of liquefied natural gas.
African aviation reaches new heights … with China’s help
August 3, 2012 | 0 Comments
Today, Ghana. Tomorrow, the world? A fledgling “Chafrican” airline sets its sights on the horizon
By CNNGo staff*
One of China’s leading airlines is teaming up with a new low-cost African carrier, which is due to take to the skies on September 21.
Hainan Airlines (HNA), China’s fourth-largest carrier and the first to receive a five-star award from Skytrax, will be spearheading Africa World Airline (AWA), which is based in Ghana.
Looking to end travel frustration in Africa
News of the fledgling “Chafrican” carrier comes in the wake of the demise of Ghana International Airlines, which ceased operations in 2010.
AWA, which has a reported start-up capital of US$50 million, hopes to spell an end to frequent flyer frustration in Africa.
“[Currently] to go to Cape Verde [off the west coast of Africa] from Accra, one has to fly to Lisbon in Portugal,” said an AWA official. “In some cases, you take off from Accra, fly to Europe and catch a connecting flight, which will see you flying over Accra to get to your destination within Africa.”
AWA’s fleet will start out with a brace of 50-seat Embraer ERJ145LR aircraft leased from Tianjin Airlines.
According to The Ghanaian Times, AWA will fly domestic routes at first — to Kumasi, Tamale and Takoradi — then gradually expand to regional destinations, such as Ouagadougou in Burkina Faso, Abidjan in Ivory Coast and Lagos in Nigeria.
Fares have yet to be announced and the carrier plans to head overseas by 2017.
Haikou-based HNA is reported to be the controlling stakeholder of AWA. The top management of the Ghanaian carrier will be drawn from different affiliates of the Hainan Airlines Group.
Zhang Jiuhua (张九华), currently vice president of Tianjin Airlines (a carrier under Hainan Airlines Group), is likely to be the chief executive officer.
AWA is funded by three partners apart from HNA — the China-Africa Development Fund, the Ghanaian Social Security and National Insurance Trust, and Strategic African Securities.
Hainan Airlines told Air Transport World (ATW) that the main motivation for its investment was the “big market demand for air transport industry in Ghana and other parts of West Africa triggered by the backwardness of ground traffic.”
The Centre for Aviation commented that AWA could elevate Ghana to the air hub of choice in West Africa.
High Demand for air travel
HNA’s investment arrives in Ghana just as the potential of Africa’s aviation market is starting to make headlines.
Boeing Commercial Airplanes projected the world’s second-most populous continent will require an additional 900 aircraft, 14,500 pilots and 16,200 maintenance technicians over the next 20 years.
J Miguel Santos, Boeing’s director of sales for Africa, pointed out to Business Day that a growing middle class was presenting an opportunity for a regional low-cost airline for Africa.
Raising China’s profile in African aviation
On the other hand, HNA’s new business move is helping China raise its profile in Africa outside of mining and construction.
According to Civil Aviation Administration of China, this is the first time any Chinese enterprise has bankrolled Africa’s aviation industry.
The agreement echoes HNA’s game plan of expanding its presence in Africa and South America.
Tan Xiangdong (谭向东), chairman of Hainan Airlines Group, said on an earlier occasion that his company is aiming to own 40 percent of its assets overseas in three to five years.
Nigeria: Big Problems But a Big Future
August 3, 2012 | 0 Comments
By Elizabeth Donnelly*,
Whether by accident or design, Nigeria is destined to become Africa’s largest economy. The kind of economic growth it will experience in the coming years and the extent to which this will transform the lives of its 160 million people is yet to be determined.
With two dollar billionaires, many more millionaires, but with 61 per cent of its population living on less than a dollar a day, Nigeria is a country of extremes, a reality that makes grappling with its challenges and taking advantage of its opportunities altogether more complicated.
Look towards the northeast of Nigeria, and the country seems on the verge of collapse; turn around and cast your glance southwestwards, and it is on the verge of take-off.
Growing international interest in Nigeria is dominated by terrorism and business opportunities, the two factors that divide opinion on its future prospects.
In January, after Nigeria was immersed in nationwide protests and strikes over the controversial removal of a generous fuel subsidy, it was shaken by a devastating terrorist attack on its second city, Kano. As the year has gone on there have been more horrific bombings and shootings in the streets, markets and places of worship of the north as well as a suicide bombing in Abuja, all carried out by Boko Haram. This evolving Islamist terrorist organisation has killed hundreds of people and is damaging the North’s already struggling economy.
But terrorism is just the latest addition to Nigeria’s mix of concerns that includes corruption, prospects for reform, human security, levels of poverty and the sanctity of contract law. Nigeria’s roads are still more dangerous than Boko Haram.
Observers hope a handful of reformist governors will create islands of best practice in some states and some sectors – and that this positive influence will spread nationwide.
Lagos is Nigeria’s ‘poster-boy’: 30 per cent of the country’s GDP is concentrated in this state and more than 60 per cent of Nigeria’s industrial and commercial activity occurs here. Investor confidence in Lagos is strong, thanks to a reformist governor, Babatunde Fashola, who has focused on delivery of basic services and improving infrastructure. He has worked to implement policies based on a longerterm vision than many of his counterparts, and has sought to institutionalize change – providing some comfort to Lagosians and investors who know that this is his last term as State Governor.
But there is an awareness – and a nervousness – in Lagos about the negative consequences of success. Credit Suisse reports that in the run-up to 2025, the state capital will be the sixth fastest growing city in the world. Seen as the land of opportunity in a nation where, according to the National Bureau of Statistics, 23.9 per cent of the population is unemployed, the immigration pressures on Lagos are growing.
The ‘islands of best practice’ approach cannot on its own put Nigeria on a path that will avoid future calamities. This is not a country where the ‘trickle-down’ effect works – patronage networks notwithstanding. Lagos and those other states that are breaking away from a reliance on oil rents from the centre cannot carry the nation: Nigeria’s population is too large, its potential too great and its challenges too complex and intertwined.
Nigeria needs to move away from shortterm transactional politics and policy. It is long-termism and institution-building that will bring this country the prestige that many of the elite believes it already deserves, and economic growth that will reduce the extremes.
Nigeria never provides straightforward answers. Sheer scale means that it will continue to be of global significance, even with a passive leadership that is happy with the status quo. What would emerge under such leadership would be a country that, though a contender for a G20 spot and a permanent seat on the UN Security Council, would still be bedevilled by internal problems, including more intense localized violent conflict, increased inequalities and rising crime, poor development indicators and worsening social tensions. As such, it would remain in the popular imagination a surprising choice for an investment or a visit.
The alternative is that incremental change continues and is used strategically, that key points for change are exploited with faster gains creating momentum for delivery at all levels of government – so that there is economic growth with equity and the extremes are reduced. The problems won’t go away, but would be greatly undermined. Nigeria would become an active international player – not a passive one that made it by chance.
*Elizabeth Donnelly is manager of Chatham House’s Africa Programme.
Clinton challenges Africa to embrace democracy
August 3, 2012 | 0 Comments
By MATTHEW LEE*
DAKAR, Senegal (AP) — In veiled swipes at China’s investments in Africa, U.S. Secretary of State Hillary Rodham Clinton on Wednesday urged African leaders to embrace democracy and partnerships with responsible foreign powers as a means to improving their living standards and addressing the root causes of extremism on the continent.
Clinton, speaking to university students, lawmakers and diplomats in Senegal’s capital, challenged Africa’s elite to fully respect human rights and she warned of the consequences of rampant abuses, corruption and intolerance that breed contempt and contribute to instability.
“There are still too many places in the region and across the continent where democracy is threatened, where human rights are abused, and the rule of law is undermined,” Clinton said. “Too many Africans still live under autocratic rulers who care more about preserving their grip on power than promoting the welfare of their citizens. Violent extremism, transnational crime and rampant corruption all threaten democracy.”
She said America would stand by African reformers and she indirectly took on China. Beijing has been criticized for ignoring human rights concerns, local laws and environmental regulations as it boosts investment in Africa in search of energy and resources to fuel its exploding economy.
By contrast, she said the United States is committed to “a model of sustainable partnership that adds value, rather than extracts it” from Africa. “The days of having outsiders come and extract the wealth of Africa for themselves leaving nothing or very little behind should be over in the 21st century,” she said.
Without mentioning China by name, she maintained that unlike other countries, “America will stand up for democracy and universal human rights even when it might be easier or more profitable to look the other way, to keep the resources flowing.”
“Not every partner makes that choice, but we do and we will,” she said, calling support for democracy and human rights the “heart of the American model of partnership.”
A senior U.S. official, who briefed reporters on condition of anonymity, said the administration believes the US and China, among others, are competing for African resources. Further, administration officials say they think the U.S. is acting more in the interests of the African people by conditioning aid on good governance and requiring American companies to respect local laws and regulations.
Clinton’s comments follow a China-Africa summit last month at which Chinese President Hu Jintao pledged $20 billion in credit to African governments over the next three years to support infrastructure, agriculture, manufacturing and small business growth. At the event, Hu commended the hands-off approach of China’s investment decisions on the continent.
China will “give genuine support to African countries’ independent choice of development path,” he said. Hu suggested that human rights conditions and other rules imposed by the West on assistance are unnecessary and burdensome.
Hu also said China and African nations should increase cooperation to “oppose the practices of the big bullying the small, the strong domineering over the weak and the rich oppressing the poor.”
Analysts say China’s growing role is on the minds of American and African policymakers. Clinton’s visit comes as Africans are seeking to redefine their relationship with China to that of “equal partners” and not only resource providers, according to Haroon Bhorat, an economist at the University of Cape Town.
Clinton was in Dakar on the first leg of an 11-day African tour that will take her to at least six other nations, including Uganda, South Sudan, Kenya, Malawi, South Africa and Ghana. In Ghana, she will attend the state funeral for the late president, John Atta Mills, who died last week.
Her speech coincided with the first major storm of the rainy season, a positive sign in a place where drought is responsible for a food crisis.
Clinton praised Senegal, the only mainland West African country never to have experienced a coup, for its democratic history and recent elections in which a longtime incumbent lost and handed over power to the victor, Macky Sall, whom she met before the delivering the speech.
But she noted that such trends were not necessarily the norm in the region, such as in Mali or Guinea-Bissau where militaries ousted an elected president.
“Leaders who hold on to power at all costs, who suppress dissent, who enrich themselves, their families and their supporters at the expense of their own people — who define democracy as one election, one time — are on the wrong side of history,” Clinton said.
In Mali, long considered a model of West African democracy until the coup, Clinton said the military and members of the ousted government must reach consensus to restore civilian leadership and blunt the threat posed by radical Islamists who are taking advantage of a power vacuum in the north.
“We encourage all parties to set aside their differences and work to restore democracy, preserve the territorial integrity of the country, and reject the appeals of violent extremism,” she said. She added that the U.S. would continue to withhold full development assistance, including security aid, until a democratically elected government is in place.
Guinea-Bissau, where no president has ever served a full-five year term, Clinton said there was a real threat from what she called the “very troubling trend” of drug trafficking. She warned that unless democracy was restored there was a risk that it could become “totally dependent” on Latin American drug traffickers.
In South Sudan, she will congratulate leaders on reaching the one-year mark of the creation of their country after it split with Sudan. But she also will stress the need for the nascent state to resolve its differences with Sudan that threatened to reignite what had been Africa’s longest-running civil war when it ended with a historic peace treaty in 2005.
In Uganda, where the U.S. has sent a small number of special forces troops to help African militaries combat the Lord’s Resistance Army of Joseph Kony, Clinton will return to the security theme.
From Uganda, Clinton will travel to Kenya, where in addition to urging leaders to hold peaceful, free and fair national elections in 2013, she will meet Somali officials and underscore U.S. support for completing a planned political transition later in August.
After a brief stop in Malawi, Clinton then heads to South Africa, where she will continue a strategic dialogue with South African officials, promote U.S. business in the country and pay her respects to former President Nelson Mandela, who recently celebrated his 94th birthday.
She will then attend Mills’ funeral in Accra, Ghana.
*Source AP.Associated Press writers Rukmini Callimachi in Dakar and Bradley Klapper in Washington contributed to this report.
Private equity: new cash for expanding businesses
August 3, 2012 | 0 Comments
Funds target capital-hungry companies in Africa
By Bill Hinchberger*
Africa is growing, and African companies need cash to expand. Investors want in on the action, especially given low returns in many other parts of the world these days. But with few stocks and bonds, and scant liquidity for those out there, how do investors get a foothold? And how do African firms access much-needed cash?
Enter private equity — the purchase by a private investor of a share of a company that is not listed on a stock market. The company can take the money from the sale and use it for expansion or other investments. In exchange, the owner gives up some control, as the new partner gets a seat on the board or, in smaller companies, plays an advisory role. Eventually investors make money by selling their shares or receiving dividends.
In Africa, private equity is all the rage. “If you look at all the opportunities,” says David Jeromin, managing partner of the US-based Golden Mean Capital, it is like the “nightmare” of someone with attention deficit disorder. “There is just so much stuff.”
Announcements of new African private equity funds come regularly. In February the African Development Bank (AfDB) announced that it would chip in US$50 million towards a fund of the US-based Carlyle Group, which plans to invest at least $500 million in sub-Saharan Africa. In May, the Brazilian investment bank BTG Pactual launched a $1 billion Africa-focused private equity fund. In the 15 months from January 2011 to March 2012, eight new funds focusing on East and Southern Africa were launched.
East Africa alone has 16 dedicated funds, out of 53 active in that region. Officials of nearly three dozen funds responded to a survey, released in March by Deloitte, a global consultancy, and Africa Assets, a private research and consulting firm, showing that nearly four-fifths planned to increase outlays in the next year.
The overall numbers are impressive, although a bit volatile. Private equity investment in sub-Saharan Africa jumped from $741 million in 2003 to $1.3 billion last year, with ups and downs in between, according to the Emerging Markets Private Equity Association.
Private equity placements come in all sizes. The biggest in East Africa last year was a $287 million deal by Egypt’s Citadel Capital to invest in Rift Valley Railways, which operates the railroad from Kenya’s Mombasa seaport to Uganda. The AfDB, whose private equity portfolio stands at $1.1 billion, regularly invests in independent funds that make equity placements in Africa. These funds have invested in 294 companies, of which 54 topped $15 million and 163 were under $1 million.
Infrastructure, banking, mining, oil and gas, and other commodities generally attract the heavy hitters. At the other end of the spectrum, venture capital focuses on less mature companies, which are generally small and often headed by a charismatic entrepreneur.
One such company is Cheetah Palm Oil, a start-up in Ghana founded by the well-known economist George Ayittey. Cheetah has backing from Golden Mean Capital. Instead of buying land and growing crops, it will work with a producers’ cooperative to help market products internationally and to ensure that farmers get fair prices, microcredit and agricultural extension services. The project has the potential to encompass 50,000 small growers with farms covering 75,000 hectares of land.
This is not your genteel, Silicon Valley–style venture capital. “You have to rally resources around the entrepreneur and build infrastructure,” says Mr. Jeromin, whose firm is solidly in the venture capital realm. “It takes a heck of a lot of time.”
Venture capital remains a small subset of all private equity operations in Africa, partly because it is so labour-intensive. “There are a lot of people who do not want to get their hands dirty,” Mr. Jeromin complains.
A rutted road
Even for larger investors, the path to profitability can seem more like a rutted dirt road than like a freshly paved expressway. “Private equity is not challenging in terms of finding investment opportunities,” says Larry Seruma, chief investment officer and managing principal of Nile Capital Management, based in the US state of New Jersey. “It is like fishing in a barrel. The problem is with managing the business. Often there is not enough talent to take it to the next level. If you are a minority shareholder, you might not find the right people to represent you on the board, for example.”
On the talent front, Seruma, himself a native of Uganda, finds hope in the return of people who were once counted as drops in the brain drain. “The African diaspora is huge,” he says. “Well educated people are going back. Employment in the developed markets is not that good anymore, and Africa is growing. Local talent is moving back.”
Investors are also worried about their “exit strategies,” a euphemism for how they expect to realize returns on their investments. After all, these are profit-seeking capitalists, not philanthropists.
Venture capitalists like Mr. Jeromin sometimes look to larger private equity firms to buy their stakes as their protégés grow. Another option is known as a “trade sale,” selling all or part of a firm to a muscular multinational company looking to expand. Potential buyers could include major players in neighbouring countries seeking cross-border expansion to take advantage of the liberalized flow of goods and services within regional trade blocs.
Recently the Aureos Southern Africa Fund sold its 49 per cent stake in Zambia’s foremost producer of table eggs, Golden Lay, to the African Agriculture Fund, a private fund managed by Phatisa, which invests in sustainable food businesses across Africa. “This marks a very successful investment and exit for Aureos,” says Ron den Besten, its managing partner. “Golden Lay has made great strides in the last five years. Production capacity has more than doubled as a result of our strategy of investment in new state-of-the-art laying houses, providing the impetus for exponential financial growth during our investment period.”
One popular exit strategy elsewhere, especially in the US, is the initial public offering (IPO), in which an investor sells at least part of its stake when the company puts its shares up for sale on a stock market. But African stock markets tend to be thin and illiquid (see Harnessing African stock exchanges to promote growth), and so IPOs have been relatively rare, although not unheard-of.
Mr. Jeromin reaches back into US history for another strategy. “If you go back to the 1800s, before there were liquid markets, investors got their money through dividends. You can set up a preferred-share structure,” in which certain shareholders receive privileged pay-outs.
Private equity is not without its drawbacks. Company owners and entrepreneurs will not always be pleased by pressure they might get from their new partners. And investors may lose interest if their exit strategies prove elusive.
But private equity seems to be starting to fill a void that cannot be handled by banks alone. “For most companies in Africa, raising money means going to the bank,” says David Levin, senior managing partner of Nova Capital Global Markets in New York. “We bring in a different level of financing.”
*Source Africa Renewal Online
Is democracy under threat in West Africa?
August 3, 2012 | 0 Comments
Coups in Mali and Guinea-Bissau, democratic defence in Senegal
By Lansana Gberie
In May, Said Djinnit, head of the UN Office for West Africa (UNOWA), briefed Security Council members on what he saw as a disquieting trend in West Africa. During the
preceding two months, Mr. Djinnit told council members, military coups had aborted preparations for democratic elections in Mali and Guinea-Bissau. Senegal, where his office is based, just managed to escape a violent turn. Electoral violence in Nigeria in April 2011 caused the deaths of more than a thousand people, while terrorist violence — led by an Islamist group called Boko Haram — has since escalated, leading to many more deaths and destruction in the country.
Also last year, a simmering civil war in Côte d’Ivoire was reignited after the incumbent president, Laurent Gbagbo, refused to honour an electoral verdict against him. In fact, over the past year, Africa has experienced eight such unconstitutional or extra-constitutional attempts to change governments or to hold on to power, and some have been successful. Something must be done to tamp down this trend, Mr. Djinnit told council members.
Democracy more the norm
Because of West Africa’s past experience with coups and civil wars, it was inevitable that the latest developments would induce strong anxieties. Yet for the past 10 years, elections and peaceful changes of government were becoming more the norm. Some of the region’s long-lasting wars, like those in Sierra Leone and Liberia, were ended, and democratic elections brought in more capable governments.
That Africa as a whole is becoming more democratic, stable and prosperous as a result of frequent elections was celebrated even by the mildly “Afro-pessimist” London magazine The Economist. In July 2010 it commented, “Only a decade ago countries such as Sierra Leone and Liberia were bywords for anarchy and bloodshed. Now their people vote enthusiastically. It will be hard even for dictators to take that right away altogether, for the experience of elections, even flawed ones, seems to help embed democracy.”
In February 2009, following coups in Mauritania and Guinea and an attempted coup in Guinea-Bissau, the African Union (AU) enunciated a policy of zero tolerance for all coups. It condemned the “resurgence of the scourge of coups d’état in Africa” and declared that it will never recognize a government that comes to power unconstitutionally, a position later endorsed by the UN Security Council.
Mr. Djinnit’s alarm and the swift condemnation of the coups in Mali and Guinea-Bissau — first by the Economic Community of West African States (ECOWAS), then by the AU and the Security Council — were therefore predictable. Yet the manner in which these developments have played out suggests a complicated picture.
Guinea-Bissau has been an exception to the overall trend of democratization in West Africa: the country has experienced five military coups in the past decade, and no elected president has served out his term. So when soldiers seized power on 12 April and imprisoned interim President Raimundo Pereira, Prime Minister Carlos Gomes Junior and several other senior officials, aborting preparations for a run-off presidential election, the move did not come as a particular shock.
Setback in Mali
Mali, however, was a celebrated case of democratic awakening in West Africa, so the events there did take many by surprise. On 22 March, soldiers led by a young officer named Amadou Sanogo abandoned a faltering campaign against Tuareg rebels in the north of the country and seized power from President Amadou Toumani Touré. ECOWAS promptly condemned the coup and imposed financial and other sanctions on Mali.
This was not simply a case of the military going awry: external factors clearly played a decisive role in the turn of events. The problem had to do with the resulting return to Mali
of tens of thousands of migrants, including a few thousand heavily armed and battle-hardened Tuareg fighters who had fled Libya following the overthrow of the dictator Muammar al-Qaddafi. These fighters gave new potency to the few and largely contained Tuareg separatists in northern Mali, leading to the rebels’ capture of the three northern regions of Gao, Kidal and Timbuktu and a proclamation of secession from southern Mali.
There are wider implications for the region, beyond Mali itself. A report by a UN inter-agency mission to the Sahel in January to assess the impact of the return of about 420,000 migrant workers to Mali, Niger and Mauritania predicted broader instability. The mission found that Libyan small arms, explosives, rocket-propelled grenades and small-calibre anti-aircraft cannons mounted on pick-ups were finding their way into the hands of diverse separatists and other rebels. Groups like Al-Qaeda in the Islamic Maghreb (AQIM) and Nigeria’s Boko Haram were already flocking to Mali in mid-2011. Many parts of Mali, Niger, Mauritania and Chad have been overwhelmed by the returnees from Libya, 95 per cent of whom are male, poorly educated, aged 20-40 and embittered. AQIM was providing relief for some of the returnees, facilitating potential recruitment and popular support, the mission was told.
According to the mission, the most advanced of the measures adopted to deal with these problems were probably those taken under Mali’s Special Programme for Peace, Security and Development in the North, a pet project of President Touré, although there were local concerns about poor management. Barely two months after the report was issued, the coup took place, and Mr. Touré later fled to Senegal.
Averting crisis in Senegal
When Mr. Touré arrived in Senegal in April as a refugee, the scene was steeped in pathos. Less than two months earlier, Mali, with the dignified Mr. Touré presiding over an electoral process in which he was not participating, seemed to stand taller than Senegal, which was then deep in a morass created by its fumbling president.
Senegal has been a constitutional democracy since it gained independence from France in 1960, and has suffered no coup or serious political upheaval. This would suggest that elections had become routine. However, President Abdoulaye Wade, who came to power in 2000 and was already in his eighties, introduced a new constitution. The Constitutional Court issued a curious legal judgment permitting Mr. Wade to run for a third term, maintaining that since the constitution was new, his first term could not be counted. The argument had a narrowly legalistic logic that was lost on most Senegalese. All they knew was that the constitution said the president should not serve more than two terms, and Mr. Wade had already served two.
There were mass protests, leading to burned public buildings and several deaths. Senegalese — and the world — prepared for the worst. But when the elections finally came in February, Mr. Wade secured only 34.8 per cent in the first round. In the run-off the following month, he was crushed by 51-year old Macky Sall, who had previously served as his prime minister. Following his humiliating rebuff, Mr. Wade handed power over to Mr. Sall.
What accounted for the different outcomes in Mali and Senegal? First, of course, was the spreading rebellion in Mali, bolstered by Libyan arms. Also important is that the two countries have rather different historical experiences, with electoral institutions and a democratic culture much stronger in Senegal than in Mali. In fact, the four communes of the French colony of Senegal enjoyed a remarkable democratic franchise dating back to the 19th century. History does matter.
Yet Senegal’s democratic traditions did not prevent pre-election tensions and violence, suggesting that even reasonably strong democratic systems in the region are vulnerable. Vulnerable to what? In all the cases cited, elections were either taking place or approaching.
Are elections becoming, as the UK political scientist and Africa expert Dennis Austin suggests, a “spur to violence” in the fragile democracies of West Africa? Competitive politics, while attractive, clearly add depth to the sense of division in diverse societies, since there is a strong temptation for rogue leaders to exploit ethnic and other fault lines. The problem is that there seems to be no better alternative.
A June report by the New York–based International Peace Institute on “Elections and Stability in West Africa” recommends a creative approach to electoral assistance. It suggests that external electoral assistance be integrated within a broader conflict-prevention strategy that gives attention to the political aspects of the electoral process, as well as the technical ones.
Safeguarding elections, in other words, should be seen as just one component of a longer-term commitment to building democracy. Also important are the growing calls on the international community to stand firm in not recognizing any coup, as espoused by the African Union.
*Source Africa Renewal Online
Africa’s love affair with BlackBerry
August 3, 2012 | 0 Comments
It’s elegant, it’s hip and it’s one of the hottest phones on the African market. Nothing says “I am important” like a man or woman whipping out a BlackBerry smartphone. It’s easily recognizable with its wide screen and trademark keypad. According to Masahudu Ankiilu Kunateh, editor at Ghananewslink.com, “What is your BB pin?” has become the ultimate sizing-up request. To be asked the question, he says, you have to be considered cool enough to own one.
Research In Motion (RIM), the Canadian company that owns BlackBerry, has managed to carve itself a niche in Africa. In 2010, with the help of Brightstar, a global services company that works with key players in the wireless industry, it started distributing its gadgets throughout sub-Saharan Africa. Today South Africa boasts over 2.5 million active devices, according to World Wide Worx, a South African technology research firm. Nigeria has 2 million active devices.
A lot of phone companies are trying to tap into the African smartphone market, because of flagging sales elsewhere. Samsung and Nokia are competing for the Kenyan youth market, writes James Ratemo, online sub-editor at the Nation Media Group. Even RIM stocks went down by 70 per cent in late June, losing to Apple and Google in North America and Europe.
But the secret to BlackBerry’s success in Africa is its affordability. The BlackBerry Messenger application software, which enables people to share voice and text messages, pictures and video clips, is free. Affordable data plans, like those in South Africa, allow users to pay a flat-rate of $7 per month for Internet access. RIM of Africa has also partnered with top mobile carriers like Vodafone, MTN and Airtel, sharing profits instead of tying the device to one carrier, underscores Mr. Kunateh. And its signature feature — a secure, encrypted data system that makes it difficult for an outsider to monitor communications — could help it win over local businesses.
But nothing is set in stone. The Chinese company Huawei is a strong competitor with its low-end smartphones. Currently, its locally-manufactured Android phone, which goes for the equivalent of US$80, is a big hit in rural Kenya. Google, whose Android apps are the latest craze in sub-Saharan Africa, is also testing out the waters.
*Source Africa Renewal Online
African Economies Capture World Attention
August 3, 2012 | 0 Comments
But huge challenges still lie ahead
By Kingsley Ighobor
Young men and women chat along the glittering corridors of the sprawling shopping complex. With state-of-the-art mobile communication gadgets in hand, they go in and out of the mall’s 65 shops, filling shopping bags with expensive items. There is a large and well-equipped children’s playground at the back. Fully air-conditioned, the mall has 20,000 square metres of retail space, a theatre, restaurants, bars and parking for 900 cars. Welcome to the Accra Mall in Ghana, one of West Africa’s best — and comparable to any mall in the world.
In Ghana, as in many other African countries, young people are living out the continent’s economic growth. They are educated and relatively well-off, as seen in their cars, dress and homes. Ghana’s economy grew by an impressive 14.4 per cent in 2011, while many African economies are expected to be among the world’s fastest-growing in 2012, according to the World Bank. Ghana, Liberia, Nigeria, Ethiopia, the Democratic Republic of the Congo and others will lead the charge.
Undoubtedly Africa is still bedevilled by poverty, with half of its people living on less than $2 a day. However, its economic growth over the past decade has been striking.
A hopeful continent
“There is a new story emerging out of Africa: a story of growth, progress, potential and profitability,” reports Ernst & Young, a US-based business consulting company. Johnnie Carson, the US secretary of state for African affairs, adds: “Africa represents the next global economic frontier.” Investors had better be aware, advises Mr. Carson, who recently led a US trade delegation to Mozambique, Tanzania, Ghana and Nigeria. China’s trade with Africa reached $160 billion in 2011, making the continent one of its largest trading partners.
Ten years earlier, in 2000, The Economist saw no reason for hope. It pronounced Africa “the hopeless continent,” noting problems that included a bloody civil war in Sierra Leone, famine in Ethiopia and political conflict in Zimbabwe. But last December, the London magazine reconsidered: “Since The Economist regrettably labelled Africa ‘the hopeless continent’ a decade ago, a profound change has taken hold.” Today “the sun shines bright … the continent’s impressive growth looks likely to continue.”
Africa’s overall economic indicators have been remarkable. Over the past decade, Africa’s trade with the rest of the world has increased by more than 200 per cent, annual inflation has averaged only 8 per cent and foreign debt has decreased by 25 per cent. Foreign direct investment (FDI) grew by 27 per cent in 2011 alone.
Even though projections for overall growth in 2012 have been revised downward due to the political crisis in North Africa, Africa’s economy will still grow by 4.2 per cent, according to a UN report in June. Sub-Saharan African economies will grow at more than 5 per cent, notes the International Monetary Fund (IMF). In addition, there are currently more than 600 million mobile-phone users on the continent, while increasing literacy and improving skills have resulted in a 3 per cent growth in productivity.
Most foreign investors are still cautious about Africa, particularly because of security and infrastructure problems. But there is a steady increase in intra-African investment, which in 2011 accounted for about 17 per cent of total FDI, according to Ernst & Young. African entrepreneurs are reaping the benefits. The world’s richest black person used to be the US talk show icon Oprah Winfrey, worth $3 billion. Today, Aliko Dangote of Nigeria, referred to by Forbes magazine as a “commodities titan,” has amassed more than $10 billion.
Several factors make Africa an investor’s dreamland. McKinsey Global Institute, a think tank, writes, “The rate of return on foreign investment is higher in Africa than in any other developing region.”
Africa’s economic growth is driven by a number of factors, including an end to many armed conflicts, abundant natural resources and economic reforms that have promoted a better business climate.
More political stability is lubricating the continent’s economic engine. The UN Economic Commission for Africa (ECA) in 2005 linked democracy to economic growth. “Good governance is central to improving economic performance and promoting economic progress in Africa,” argued Abdoulie Janneh, the ECA executive secretary at the time.
Another important factor is accelerating urbanization. While it may strain social services in the cities, it has also led to an increase in urban consumers. More than 40 per cent of Africa’s population now lives in cities, and by 2030 “Africa’s top 18 cities will have a combined spending power of $1.3 trillion,” McKinsey projects. The Wall Street Journal reports that Africa’s middle class, currently numbering 60 million, will reach 100 million by 2015.
Still a long way to go
Africa’s current economic indicators may appear upbeat, but analysts say it is not yet time to celebrate. “I’ll be cautioning against excessive exuberance,” says Donald Kaberuka, president of the Africa Development Bank (AfDB). “A sustained slowdown in advanced countries will dampen demand for Africa’s exports,” adds Christine Lagarde, managing director of the IMF. Europe accounts for more than half of Africa’s external trade, and tourism could also suffer as fewer Europeans come to Africa, denting economies — like those in Kenya, Tanzania and Egypt — that rely heavily on tourism.
The South African central bank also warned in May that the crisis in Europe, which consumes 25 per cent of South Africa’s exports, poses huge risks. And adverse effects on Africa’s largest economy will have devastating consequences for neighbouring economies.
Another flashpoint is the resurgence of political crises. Due to the Arab Spring, economic growth in North Africa nose-dived to just 0.5 per cent in 2011. Recent coups in Mali and Guinea-Bissau could have wider economic repercussions. “Mali was scoring very well, now we are back to square one,” says Mthuli Ncube, the AfDB’s chief economist. Ethiopia, Kenya, Uganda and other countries are militarily engaged in Somalia, which may slow their economies. And Nigeria is grappling with Boko Haram, a terrorist sect in the north of that country.
Africa also faces other headwinds. The 2011 Africa Economic Report of the ECA and African Union warned of Africa’s “jobless recovery,” noting that investors are concentrating on the extractive sector, particularly oil, gold and diamonds, which produces few jobs.
Another report, the African Economic Outlook 2012 (produced by the AfDB, ECA, Organization for Economic Cooperation and Development and UN Development Programme) reinforces concern about unemployment, adding that about 60 per cent of Africa’s unemployed are aged 15 to 24 and about half are women. In May, UNDP raised an alarm over food insecurity in sub-Saharan Africa, a quarter of whose 856 million people are undernourished.
Talk of a rising African middle class is hasty, the AfDB argues. Defined loosely as those who live on $2 or more a day, most “middle-class” Africans have daily expenditures of no more than $4, notes the bank. Potential economic shocks could easily throw many families into poverty, below the $2 threshold. High income inequality also clouds the picture. In 2008, for example, just 100,000 of Africa’s 1 billion people had a total net worth of $800 billion, equivalent to 60 per cent of the continent’s gross domestic product.
Despite such hurdles, Africa’s economies do not seem set to slow down. Ernst & Young insists that this “story has to be told more confidently and consistently.” But equally important is the need to ensure that the continent’s economic growth also creates jobs and helps rescue millions from poverty.
*Source Africa Renewal Online