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Carlos Lopes: To industrialise, Africa needs strong but smart states
May 2, 2016 | 0 Comments

“Africans have not negotiated well in a number of areas…Who’s fault is it? It’s Africa’s problem and they need to address it.”

by *

Credit: UNECA.

Credit: UNECA.

African Arguments caught up with the UN Economic Commission for Africa’s Executive Director to talk about economic transformation, what’s holding the continent back, and whether leaders will really take action in the wake of the #PanamaPapers.

In a lot of your work, you emphasise the need for Africa to undergo ‘structural transformation’. What does this mean, and why is industrialisation so important to it?

There is a whole literature about structural transformation, but in practical terms right now in Africa it means moving to higher productivity sectors. We see this happening in three particular areas. Firstly, there’s agricultural productivity, which is at its lowest in Africa yet offers incredible potential for minimising poverty and contributing to industrialisation through agro-processing. Secondly, there’s manufacturing, which requires policies that mimic part of the experience of successful industrialisation processes of the past but are much more adapted to African characteristics. And thirdly, there’s the service sector, which needs to become more integrated into the formal economy.

Industrialisation plays a critical role because it’s more than just the production of processed goods or value addition from natural resources. It’s also an enabler for a rising society and, being a latecomer, Africa can learn from the experiences of others and adjust. For Africa, issues such as the environment, for instance, can be tackled up front.

There are varying verdicts as to how African industrialisation is faring. Some emphasise that manufacturing as a share of Africa’s GDP has almost halved from its 20% level in 1970. But others highlight that manufacturing is increasing at 3.5% a year, faster than the global average. What’s your take?

If you measure it by manufacturing value added, which is the common preferred indicator, then yes it is true that in percentage GDP terms, African manufacturing is stagnating if not falling. But African economies have doubled in the last 15 years, so even if you maintain the same percentage it means a lot more industry has come on board. Moreover, this also doesn’t take into account a number of activities that we can consider industrial but aren’t counted in statistics because of delays in updating national accounts.

Our take is that industrialisation is increasing significantly in some countries, though not across the entire continent, and that we need to accelerate and aggressively.

What’s holding African industrialisation back? Is it insufficient infrastructure? Lack of imagination amongst policymakers? Trade treaties that constrain what governments are able to do?

It’s all of those but the important question is which of those comes first. I think the capacity for comprehensiveness that comes with an industrial policy is what is the most important, because if you tackle the issue from just a specific sector or enabler or dimension, you are never going to get your act together.

The countries that really move and industrialise always have the same recipe: a very strong state hand, but a state that is very smart, a state that is capable of introducing smart protectionism because crude protectionism is no longer available, a state that is capable of identifying the critical enablers like infrastructure, and a state that knows how to fund its policies whether through domestic resource mobilisation or astute borrowing.

In a recent ECA report, the World Trade Organisation (WTO), Bilateral Investment Treaties and Economic Partnership Agreements are painted as significant barriers to African industrialisation. Do these agreements just need tweaking or are they inherently detrimental for Africa?

I think African countries have embarked on signing stuff they shouldn’t sign, but too bad for them. The WTO is a consensus-based mechanism that would allow for stalling, so if Africans don’t get their act together to stall the things that are bad for them, then that’s an African problem not a WTO problem.

I think Africans have not negotiated well in a number of areas. They are not taking advantage of space they already have. And Africans are also distracted by negotiating bilateral trade agreements before they finalise their own. Who’s fault is it? It’s Africa’s problem and they need to address it.

Given enormous global power imbalances, do you think it’s enough for African policymakers to just be slightly smarter and more imaginative under the current system, or do you think there needs to be more fundamental change too?

The moral and political dimension I leave for the media, NGOs, and civil society, though we should certainly give them ammunition so their claims are evidence-based. Where we can really make a difference is in deconstructing some untruths that have long been masquerading as truths. That’s why we’ve been plunging into legislative issues, contract negotiations, and investment and trade treaties to try and have a more informed discussion. We think a lot of space exists in these that Africans are not using. After all, countries that are good negotiators do get a better deal.

In terms of untruths, take this race to the bottom towards zero tax for investors for an example. Does it attract more investors in relation to potential competitors? No. Typically countries that are well organised and structured and that offer investors a package of incentives that are not tax-based are more attractive than ones offering tax incentives.

When it comes to illicit financial flows, through which $50 billion leaves Africa each year according to an ECA report, do you think leaders will seize this moment after the #PanamaPapers to implement real reforms?

There are various dimensions to the debate, but because of Mossack Fonseca we are currently focusing on one dimension: namely tax jurisdictions and how multinationals are taking advantage of different loopholes to move from one jurisdiction to another in order not to pay tax.

Another dimension, however, is the competition amongst financial centres. The City of London, for example, doesn’t want to lose its prominence as one of the leading financial centres of the world. This means that they have to stay ahead of competitors and protect a certain number of very complex legislative dimensions that will appear from a regulatory point of view to be very strong and powerful, but at the same time be lenient where they know competitors could have an edge.

There is certainly now a strong public push for regulators to put a bit of order to things. And I don’t think the rhetoric is hypocritical, but how far they will go and how much political leaders will embrace actual change is another matter.

*Source African Arguments.James Wan is the editor of African Arguments. He tweets at @jamesjwan.

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Africa needs the space to learn (and make mistakes) on its own terms
May 2, 2016 | 0 Comments

As Africa finds its voice after centuries of being silenced, well-intentioned outsiders must be careful to help and not hijack this moment.

by *

South Africans march for action against climate change in Durban. Credit: Ainhoa Goma/Oxfam.

South Africans march for action against climate change in Durban. Credit: Ainhoa Goma/Oxfam.

Just back from the Tana Forum on Peace and Security, held in the sleepy town of Bahir Dar on the shores of Ethiopia’s Lake Tana, my head churns with questions about how African debates like this should be organised.

Should they be held under a Baobab tree or in international hotels? Should they be formal or informal? Should they emulate Western or Asian styles or ignore them altogether? And ultimately, after centuries in which African voices have rarely been heard – from slavery, through colonialism, and up to the present day – who should now talk for Africa about Africa?

In a way these questions have never been more salient. After all, even looking back at the continent’s recent history, there is no shortage of examples of Africa suffering from the sharp end of foreign countries’ self-interest or misguided decisions while its own voice has been silenced.

This is true even after most countries gained independence, as the ideological rivalries of the Cold War turned Africa into a battleground for proxy wars coordinated in distant capitals, giving no room for Africa’s own interests; when structural adjustment in 1980s and 1990s was imposed heavy-handedly from the offices of the IMF and World Bank, their prescriptions ignoring the realities and resistances on the ground; and still today, as the continent is defined in the international media as Hopeless, Rising or anything in between while Africa’s own perspectives remain marginalised.

This is where the Tana Forum comes in, a rare event that is genuinely Africa-led and organised. Established to provide a space for debate about peace and security, it was set up five years ago by the late Ethiopian Prime Minister Meles Zenawi in conjunction other African leaders such as former presidents Olusegun Obasanjo and Thabo Mbeki.

It has been held annually since and the topic of this year’s edition was ‘Africa in the global security agenda’. Among the many speakers were the former UN secretary-general Kofi Annan, former president of Timor-Leste Ramon Horta who had just completed a report on peace operations around the world, and Somalia’s President Hassan Sheikh Mohamud. Also there was Wolfgang Ischinger, Chair of the Munich Security Conference, the world’s leading think tank on peace and security issues. Ischinger took to the floor to re-emphasise the strong partnership between his institution and the Tana Forum which is modelled on the Munich Security Council.

To be frank, not everyone was happy about this year’s Forum. For instance, political analyst Alex de Waal, writing here on African Arguments, expressed his view that the event has become “dull, repetitive and formal”, adding that in contrast to the first edition which was “devoted to intense, informal and candid discussion”, the 2016 event was mostly “taken up by entirely predictable speeches”.

Frank criticisms such as these are all well and good, and all new endeavours will inevitably fall short and fail to please everyone. But as we think ahead to the next conference, and in the context of Africa’s history of being marginalised in its own affairs, the important thing going forwards is that regardless of any limitations, the Tana Forum and projects like it are given the breathing space to learn on their own terms.

After centuries of being lectured, reprimanded and pressured to do things differently, it is crucial that African initiatives are able to correct their own weaknesses and learn by doing. It may take time, but patience is needed if genuinely African perspectives and models are to be built up – ones that is of Africa, by Africa and for Africa.

Across the continent, there are hopeful signs of a new and louder voice emerging as more African research institutes, think tanks and media houses provide increasingly candid reports from African viewpoints. But this newly assertive Africa, admittedly still coming of age, needs to be listened to and nurtured, even when it makes missteps and blunders.

As the continent’s economies develop, its political influence increases, and its population grows, Africa and African initiatives need to be given the breathing space to take charge of their own destinies on their own terms. This should be the new normal, the new name of the game. After over 50 years of independence, the continent is mature enough to discuss its challenges in a robust and rigorous way, and while their views are welcome, well-intentioned outsiders must be careful to help and not hijack this moment of exploration, renewal and growth.

We all, in humility, will gain by listening to what others bring to the table. As Leopold Senghor, the late poet-President of Senegal, said, we must have a “seat at the give and take table as equals”.

*Source African Arguments.Adama Gaye is a Senegalese Author, former editor of London-based West Africa Magazine. and a Tana Regional Fellow. The views expressed here are his own.

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How Election Monitors Are Failing
April 29, 2016 | 0 Comments

Uganda’s recent election showed, once again, that international election observers aren’t calling it like they see it.

BY NIC CHEESEMAN, GABRIELLE LYNCH, JUSTIN WILLIS*

In the photo, Ugandan police officers stand guard outside the house of the country’s main opposition leader, Kizza Besigye, in a suburb of Kampala on February 22. Photo credit: ISAAC KASAMANI/AFP/Getty Images

In the photo, Ugandan police officers stand guard outside the house of the country’s main opposition leader, Kizza Besigye, in a suburb of Kampala on February 22.
Photo credit: ISAAC KASAMANI/AFP/Getty Images

Uganda, heated controversy still surrounds President Museveni’s re-election with just over 60 percent of the vote two months ago. At a press conference on February 20, the European Union election observation mission presented its preliminary report on how the election had been conducted. The controversy surrounding the race, and the claim by the opposition Forum for Democratic Change (FDC) that the polls had been rigged, ensured a charged atmosphere. But despite finding that the number of votes it counted did not correspond to the official results in 20 percent of observed polling stations, the mission refused to answer a question about whether the elections were “free and fair.” Instead, they pulled their punches, directing the audience to read the report “and draw their own conclusions.” 

International election observation missions — when small teams of foreign nationals are sent to watch over elections under the auspices of groups such as the European Union, African Union and the Carter Center — are intended to deter foul play and ensure free and fair polls.

In practice, these monitors are not generally known for toughness or frank criticism.

In practice, these monitors are not generally known for toughness or frank criticism. But even by their notoriously cautious standards, the verdict in Uganda was strikingly tentative and evasive. The EU monitors had heard human rights groups’ complaints about intimidation by security forces and pro-government “volunteers,” witnessed voting materials turn up late to many polling stations located in opposition strongholds, and seen the main opposition candidate, Kizza Bessigye, arrested multiple times. The chair of Uganda’s Electoral Commission, Badru Kiggundu, evenbroke the most basic rule of official neutrality when he declared that Besigye was not “presidential material.”

The refusal of the European observers to make a strong and clear statement about these abuses frustrated Uganda’s opposition and civil society, but it was not surprising. Across Africa, international observers have frequently refused to give elections the evaluations they deserve for fear of offending incumbent governments and triggering political instability — and, also, it would seem, because they apply lower standards on the continent. Research by Brian Klaas of the London School of Economics has found that elections in Africa are significantly less likely to be branded “unfree and unfair” than elections held elsewhere in the world when they suffer the same manipulations. As a result, incumbents typically get away with a wide range of abuses, including such major offenses as the exclusion of rival candidates.

Although the problem is worse in Africa than elsewhere, this is a global phenomenon. Problematic elections have been given the “green light” in places such as Afghanistan, Azerbaijan and Iraq, as international leaders place security and stability — and their own relationships with established governments — ahead of democracy. This has led to many situations in which the content and the conclusion of election observation reports are out of sync. While the small print often lists pages of significant failings, the summary invariably concludes that the elections were “good enough.” The implications for democracy are dire: it’s not just B+ polls that are being allowed to “pass” international scrutiny — even “incompletes” are being allowed through.

The challenges facing election monitors are both political and technical. One of the reasons demonstrating electoral manipulation is particularly difficult in places like Uganda is that the size of most monitoring missions is pitifully small. The EU mission in Uganda, for example, was only 130 strong. Since observers must go around in pairs, in practice, about 45 “teams” were responsible for covering something like 28,000 polling stations. It is simply not practical to detect subtle electoral fraud on this basis. Moreover, therandom sampling technique that the EU uses to select polling stations for its teams to cover — on the basis that such sampling is more likely to ensure a representative sample of the national picture — means that observers have polling stations selected for them in advance and cannot target areas that are known to be problematic.

The technical limitations are exacerbated by political realities. In many of the world’s semi-democratic states, the combination of repression by government forces and the failure of electoral commissions to quickly release a full set of results make it all but impossible for observers or the opposition to provide incontrovertible evidence of fraud. In Uganda, the law sets a 10-day deadline for the submission of evidence of rigging. But during this period, opposition offices were raided by police or mysteriously “burgled,” and the main opposition leader was placed under house arrest. This alone should be sufficient for international observers to declare the process flawed — but the appeals process is rarely given much weight in election observers’ reports, which focus heavily on the period leading up to polling day.

This is not just an African phenomenon. In the 2013 election in Azerbaijan, a set of “results” was accidentally released the day before the election on an iPhone app. Officially, this was explained away as a simple technical mistake, and a different set of figures were announced after voting had taken place. But many suspected that President Ilham Aliyev had intended to release a set of pre-fabricated results, and had only been prevented from doing so because they had been accidentally circulated too early. Subsequent evidence of “widespread irregularities, including ballot-box stuffing and what appeared to be fraudulent counting” was reported by the Organization for Security and Cooperation in Europe. Yet international observers that focused only on the act of voting, like those from the Parliamentary Assembly of the Council of Europe’s short-term delegation, missed the bigger story, concluding that they had witnessed a “free, fair and transparent electoral process.” Few observers who were able to take a longer-term view concurred with that judgment.

Clearly, the idea that international election observers are a neutral, independent force is a myth.

Clearly, the idea that international election observers are a neutral, independent force is a myth. In reality, they are every bit as subject to political pressures as the parties they observe. In the early 1990s, observersturned a blind eye to deeply flawed elections in Kenya because they were worried that speaking out would trigger civil war and regional instability. In so doing, however, they became complicit in the attempts of a brutal authoritarian regime to hold onto power and undermined their own reputations. In the run-up to the 1992 election, President Daniel arap Moi’s regime instigated ethnic clashes designed to displace, and hence disenfranchise, opposition voters. In total, over 1,500 people died and 300,000 more were forced to flee their homes. The government also engaged in a wide range of other dubious measures, from censoring the press to stuffing ballot boxes. The international community’s failure to speak out against these developments motivated the respected Kenyanist Stephen Brown to write a scathing article with the eloquent subtitle, “How Foreign Donors to Keep Kenya’s Daniel arap Moi in Power.”

Similar tensions are at play in Uganda today. President Museveni’s decision to send Ugandan troops to form the bulk of the African Union Mission to Somalia (AMISOM) has made his government central to Western anti-terror efforts in the Horn of Africa. As a result, the EU and U.S. can ill afford to lose Museveni as an ally — even if harsh words are often exchanged in public. Like their counterparts in Kenya and Iraq, Western representatives in Uganda are also concerned about what would happen if they called for the results to be recounted or the election to be re-run. Would the country implode under the pressure? Could a Besigye presidency be relied upon to deliver stability and to be as enthusiastic about sending Ugandans to fight in a foreign country?

The uncertainty around these questions has left western election observers in a familiar dilemma. They cannot endorse the results of elections that have been so evidently uneven, but they cannot condemn the process entirely, for that would both imply that Uganda’s government has no legitimacy (an awkward implication for a regional ally) and suggest that elections can never bring political change. 

As a result, the EU report on Uganda’s recent elections is a classic of a genre that has emerged over the recent decades of electoral observation in Africa. The report captures a whole catalog of dubious electoral practices, including local-level intimidation of opposition, obstructions placed in the way of opposition presidential campaigns by the police, and the wide gap between a ruling party that draws freely on state resources for its campaign and an opposition that relies on donations from supporters. At the same time, in a strenuous effort to put a good face on the proceedings, the report commends the public for their “remarkable determination on election day [while] waiting for long hours to cast their ballots,” implicitly offering “voter enthusiasm for the democratic process” as a form of endorsement of the elections (if not explicitly for their result).

This is all eminently understandable. Serving as an election observer is a great responsibility and concerns of political stability are legitimate in countries with a history of conflict. It is also true that, for all the faults of the elections, Museveni may well have won the most votes.

Even so, observers who pull their punches may end up causing considerable damage.

Even so, observers who pull their punches may end up causing considerable damage. Excessive tact in assessing election results can set back the cause of democracy and undermine the confidence of opposition parties and their supporters that Western governments will play fair. Governments in places such as theDemocratic Republic of Congo and Zambia — both of which are due to have elections this year — will be watching events in Uganda closely. In both countries, the contests are expected to be particularly tight, and leaders there will be looking for every advantage they can get. The failure of election observers to take a stand in Uganda will encourage other dictators to rig their own elections, safe in the knowledge that they are unlikely to be held to account. In the long run, this is likely to erode public support for the political process and to breed political grievances that all too often spill over into conflict.

Maybe it’s time to take a more hard-headed approach to elections in authoritarian states. If the circumstances are simply too uneven to provide genuine competition, and if observers know that they will not be in a position to call out fraud if they see it, then might it be better for international monitors to stay at home? At least this way the international community will avoid legitimating — and hence becoming complicit in — deeply flawed polls that make a mockery of democracy.

*Source FP

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Letter from Africa: Anger, fear and ‘Afrophobia’ in Zambia
April 28, 2016 | 0 Comments
Many of the 700 foreigners who have fled their homes took refuge at a church in Lusaka

Many of the 700 foreigners who have fled their homes took refuge at a church in Lusaka

In our series of letters from African journalists, film-maker and columnist Farai Sevenzo considers the implications for Zambia of recent riots.

Six bodies of murdered citizens have turned up in the Zambian capital Lusaka in the last month.

It was widely reported that the victims had been mutilated and were missing their hearts, ears and private parts.

At the heart of the matter lay the darkness of ritual killings – when people are murdered for their body parts in the malevolent belief that in the hands of powerful sorcerers, these organs can be employed as charms to enhance political ambition and improve the lot of individuals in the pursuit of business and money.

While no African imagination is bereft of these tales, the practice of ritual murder has been shocking because of the frequency of its occurrence.

Albinos have borne the brunt of it in Burundi, Tanzania and now Malawi – where just this week police arrested 10 men for allegedly killing a 21-year-old albino woman.

Farai Sevenzo:

Other cases of ritual killings have been reported from Nigeria to South Africa.

As a short cut to riches and influence, ritual murders have never been proven to work or they would have long replaced the tried paths of education, ambition and sweat.

What they do instead is polish “Heart of Darkness” labels for constant use on a continent awaking to her full potential and the promise of a 21st Century free of superstition.

Hunger and unemployment

The consequences of these murders were to prove far more serious for President Edgar Lungu’s Patriotic Front (PF) government.

The residents of Lusaka’s townships of Zingalume, George and Matero – where the bodies were discovered – attacked the police with stones for not doing enough to protect them from the ritual murderers.

But far more insidious enemies have been stalking Zambia’s poor – hunger and unemployment.

"Afrophobia is our xenophobia; it appears to be as African and as regular as ritual murders and deserves to be shunned"

“Afrophobia is our xenophobia; it appears to be as African and as regular as ritual murders and deserves to be shunned”

The collapse of the Zambian copper trade as well as the kwacha currency and the onset of the southern African drought could easily be detected in the motives of the subsequent riots which saw xenophobic attacks on foreigners in Lusaka’s high-density suburbs.

The rioters took what they could to eat and blamed foreign shopkeepers for the ritual murders.

The “foreigners” under attack had spilled over the borders of the Democratic Republic of Congo and then into Zambia after the Rwandan genocide in 1994.

They were mainly Hutu refugees who had stayed on in Zambia, despite the UN refugee agency declaring Rwanda a safe destination for their return back in 2013.

There is nothing glamorous about being a refugee – for 22 years some 6,000 Rwandans have wandered stateless in Zambia without passports and legal status.

They then mingled with the locals in townships just like Zingalume, which are by no means upmarket addresses, and set up little shops to trade and survive.

More than 250 people have been arrested by police sent out to stop the looting

More than 250 people have been arrested by police sent out to stop the looting

It is in xenophobia’s nature to point the finger of blame at those foreigners who own something, who show evidence of money where there is none to be found.

The former Rwandans found themselves seeking shelter in churches and assurances for their safety from the Zambian government with more than 700 displaced after two days of rioting.

In the short and dangerous history of xenophobia in South Africa and now Zambia, the word “foreigner” invariably refers to black Africans, not to the Portuguese escaping Lisbon’s meagre prospects for the oil fields of Luanda, or the Chinese who run Zambia’s copper mines, supermarkets and chicken farms.

Afrophobia is our xenophobia; it appears to be as African and as regular as ritual murders and deserves to be shunned.

Freedom fighters welcomed

Zambia’s history of welcoming Africans without a home is legendary.

South Africa’s African National Congress (ANC) was based in former President Kenneth Kaunda’s Zambia as they fought apartheid, as were Zimbabweans fighting white-minority rule in what was then Rhodesia.

At the centre of President Lungu’s dilemma is the economic crisis now gripping Zambia as copper mines fold and the rains refuse to fall.

Youth unemployment and a rising cost of living seems more likely to be the roots of future riots, not ritual murders.

A Global Hunger report has grouped Chad, the Central African Republic and Zambia as the “three most hungry countries on the global hunger index”.

Mr Lungu became president in January 2015 following a rushed poll necessitated by the death in office of Michael Sata.

Zambia’s gloomy economic outlook has him trying to put out fires on many fronts as the country prepares for general elections due in August 2016.

The move to deploy soldiers to the townships is being seen as a calculated government plan towards voter intimidation, not a means to restore security.

It is unlikely that any amount of soldiers on the streets will make this an easy ride for the PF government.

History records only too well how this nation responds to hunger.

A month after his release from jail in 1990, Nelson Mandela visited Zambia to thank the country for its help in the fight against apartheid

A month after his release from jail in 1990, Nelson Mandela visited Zambia to thank the country for its help in the fight against apartheid

Thirty years ago Mr Kaunda, Zambia’s founding president, tried to face down riots that had began in the mining towns of Kitwe and Ndola at the doubling of food prices.

By June 1990 the riots had reached Lusaka, the soldiers sent to quell them attempted a coup and Mr Kaunda was to be defeated at the ballot box by 1991.

The ritual killings may have left six citizens dead and mutilated, hundreds of refugees displaced and soldiers on the streets; but as long as the economic crisis continues to grip Zambia, further riots may come to Lusaka sooner than the rains.

*Source BBC

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$80 billion, not $50 billion: loss of African funds even worse than thought – Mbeki
April 27, 2016 | 0 Comments

By LEE MWITI*

Panel revises figures upwards, and the money is not leaving continent in plastic bags: Kinshasa, we have a problem

Obiang Mangue: Was linked to the export of hundreds of millions of dollars to the US where he bought property and fancy cars. (Photo/TNOM/Flickr).

Obiang Mangue: Was linked to the export of hundreds of millions of dollars to the US where he bought property and fancy cars. (Photo/TNOM/Flickr).

IN 2005, US lawyer George Nagler was contacted by Rosalina Romo, the executive assistant of Teodoro Nguema Obiang Mangue, son of Africa’s longest serving president and who is on course to extend his 37-year rule over oil-rich Equatorial Guinea.

Romo and Nagler together set up Sweet Pink Inc, which named Romo as its CEO, secretary and chief financial officer. Mangue was listed only as “assistant treasurer”, but under questioning in a US Senate investigation, the lawyer said it was his understanding the younger Nguema was the sole owner and source of funding.

A few days later, Mangue’s then girlfriend, well-known US rapper Eve Jeffers was appointed the firm’s president.  The company was among those known to have been used by Mangue to between 2005 and 2007 move more than $110 million into the US and buy property.

Under pressure from authorities, his US banker eventually closed the accounts, according to the resulting Senate report that was captured in a 2011 World Bank report on stolen assets, The Puppet Masters, and which also in part spotlights how public officials including presidents and state governors from Nigeria and Zambia to Kenya used corporate and financial structures to obscure money trails.

The big people eat it all

Equatorial Guinea has a population of about 760,000  people and on paper a GDP per capita of $20,500—the highest in Africa. Yet three quarters remain mired in poverty, despite its natural-resource riches, with oil exports constituting 80% of its GDP.

The stashing away of such funds in tax havens and global financial centres and which would otherwise build schools, hospitals and infrastructure, costs Africa heavily.

But it was only last year that the continent put a figure to the haemorrhage, when a joint panel headed by former South Africa president Thabo Mbeki in a much-anticipated report (pdf) showed that between 2000 and 2008, Africa lost at least $50 billion annually to illicit outflows.

On the back of the resulting uproar, the continent’s policy community set to work to show just how much of a difference such amounts would make to the region’s development.

The money was enough to simultaneously cut poverty and inequality on the continent by half, organisations from the African Union to the UN’s Economic Commission for Africa, which both backed the report, said.

It is also regularly highlighted that the total outflows from the continent every year were more than the amount of official foreign aid into the continent, which in 2012 was set at $46.1 billion.

But at the release of the findings from its two-year investigation, the Mbeki panel had a caveat: the amount fell “well short of reality”—an acknowledgment of the continent’s well known data problem, but also of just how difficult it is to track flows that by their nature are intended to be hidden from view.

The leak of the so-called Panama Papers has reinvigorated the debate and delighted many leading African names, giving a coveted glimpse into the secretive world of offshore structures. The leaked data from the legal firm Mossack Fonseca featured many African names, even as the distinction is strenuously made that they are not inherently illegal and some have their legitimate uses.

Could be worse

Now the panel says the problem could be worse than previously thought. The continent is losing at least $80 billion, Mbeki said Monday at a press briefing in Johannesburg, as the panel continues to burrow into newer numbers.

Mbeki said that after looking closer at the figures, the number had increased to an estimate of between $80 billion and $90 billion dollars—or nearly the amount the World Bank in 2009 said the continent would need to spend annually for 10 years to narrow the gap with the rest of the world.

“This could either be because more thorough work has been done or in fact there is in actual increase in the activity,” Mbeki said.

While the focus tends to be on the criminal activities such as tax evasion, corruption and trafficking, legally allowed tactics actually account for the bulk of outflows.

Mbeki said the commercial sector is responsible for handling two thirds of capital illicit outflows from the African continent.

Measures to clamp down on funds lost illicitly are being rolled out, but as the former president pointed out, the majority of such flows pass through the systems of banks, as he urged central banks to help track the money.

“This money is not leaving the continent in plastic bags, it goes through financial systems.”

One study showed that African countries lost up to $407 billion between 2001 and 2010 from trade misplacing alone—the misrepresenting of data about imports or exports.

The UN’s trade and development body UNCTAD says profit shifting costs poorer countries—the majority of which are in Africa— up to $100 billion a year.

In one famous case, an American construction conglomerate had almost 30% of its employees in Asia and Africa, made 30% of its sales in Asia and Africa—but recorded only one percent of its profit in Asia and Africa. Eighty percent of its profit went to a tax haven.

In July, a proposal by the continent for multinationals to be more transparent on tax avoidance was heavily watered down by wealth nations.

Mbeki also called for efforts to strengthen the ability of tax authorities on the African continent to keep up with the ever-adapting nature of such outflows, as there were institutional weaknesses.

Without understanding the nature of methods and structures used, it is very much shooting in the dark.

“We need to find a way of tracking these outflows so that we are able to measure whether the measures are working, leading to a reduction of the outflows,” Mbeki said.

Mbeki said the panel is consulting with countries and financial institutions such as the Organisation for Economic Co-operation and Development (OECD) and the European Central Bank.

He said the OECD has agreed to work with the panel in tracking and reducing the illicit outflows, and to develop measures of whether progress has been made.

With wealthy nations under pressure following the Panama leak, the outcome of a landmark anti-corruption summit in London next month will be closely watched by the continent, where leaders are turning up the campaign to have those funds found to be illicit to be repatriated to finance development.

*Source MGA Africa

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Resolving Conflicts with ‘African Solutions’ –
April 23, 2016 | 0 Comments

By Hailemariam Desalegn*

Hailemariam Desalegn, prime minister of Ethiopia, in his welcome address at the Tana High-Level Forum on Security, on April 16, Bahir Dar, advocates using African solutions to resolve conflict situations in the continent

Hailemariam Desalegn

Hailemariam Desalegn

IT is my pleasure and privilege to warmly welcome you all to the beautiful city of Bahirdar and to this unique gathering, which brings together African Heads of State and Governments, high-level government officials, prominent personalities and critical stakeholders on a most timely topic of common interest: “Africa in the Global Security Agenda”. Allow me, Excellencies, to recognize the magnificent work the Secretariat has carried out in successfully organizing yet another forum on security in Africa. I am very grateful to the people and government of the Amhara Regional State for the generous hospitality that they accord to the participants of this dialogue every year. I would also like to thank all the participants, who have come from far and near, to grace us with their presence.

Five years ago when the idea of Tana Forum was conceived, the purpose was to provide a unique , neutral and informal setting for serious discussions among African leaders, opinion makers, change agents, academics, practitioners and partners on African security challenges with a view to forge  African solutions to African problems. We are now on our fifth annual event. The growing attendance and diversity of participants demonstrates the growing recognition of the Tana Forum.

Thanks to your unwavering support and immense contributions, Tana Forum has become an invaluable platform for the exchange of views, best experiences and innovative approaches to the fast changing security challenges facing our continent and the global community.

No single challenge in Africa can be considered an only African one. In its impacts or underlying causes or implementation of proposed solutions, every challenge in Africa, in one way or another, involves, implicates or requires non-African actors.

The truth is that we are living in an increasingly interconnected and complex world, where apparently isolated and small problems will have global and non-linear consequences; where effective solutions require active collaboration of nations and stakeholders.

What ‘African solutions’ means is two things principally. First, information about problems, causes and solutions ought to be primarily collected and analyzed by those who understand the African context. Collection and analysis of information is not necessarily an objective exercise. It is influenced by the particular frame of reference and embodied values of whoever is undertaking this exercise. In addition, intimate and deeper local knowledge is required for effective design of solutions.

Second, the quality of delivering institutions is as important as the quality of the diagnosis and prognosis. ‘African institutions’ have to be the principal ones that should be entrusted with the responsibility to deliver.

The colonial powers characterized informal governing institutions in Africa as backward and barbaric.  They undertook massive efforts to install formal institutions of governance, informed by their own experience and knowledge. Formal institutions were superimposed on informal institutions, without acknowledging the latter. It later became painfully clear that these exercises were not only ineffective but also counterproductive.

The good thing is that we have started the complementary design and use of formal and informal institutions in many areas. When it comes to peace and security, the experience is limited at best.

The notion of ‘African solutions’ is not limited to continental and regional processes and institutions. It also includes national institutions. If we cannot first develop and implement Ethiopian, Nigerian, Egyptian, Kenyan, Rwandese solutions and institutions, how come we expect to develop and deploy African solutions and institutions?

Permit me to briefly illustrate the enormous sacrifices Africa and her peoples’ continue to make in the face of several odds stacked against it; and why the rest of the world should support and partner with us; not deride, mock and leave us to our fate. Many of you might not know this but the truth is that Ethiopia, despite the developmental challenges we face (as almost all African countries do too) is one of the highest contributors to continental- and, by extension- global peace and security. We have not only put our citizens at the forefront of political and diplomatic missions in the Horn, and across Africa, but also contribute the highest number of personnel to United Nations and African Union peacekeeping operations in Africa. As I speak, for instance, our men and women in uniform are solely policing Abyei region, the contested borders between Sudan and South Sudan. I would also like to put on record that Ethiopia currently contributes the largest in terms of female contingents either wearing the UN Blue Helmet or serving under the auspices of the African Union; including several of them in senior command positions.

But, then, also all of these have become great costs; not just in terms of painful loss of lives, but also at a time when Ethiopia; as most other African countries, are grappling with enormous economic, social, political challenges at home. You will agree that even as we take the bold steps to serve as “first responders” wherever we are faced with grave threats to peace and security on the continent, we simply cannot do it all alone. As far as I can see, therefore, Africa needs the rest of the world just as the rest of the world needs Africa. For as long as there is disconnect, even for a short period, in the realisation that we are in this together, the world will not know peace; not the quality of peace that the current and future generations deserve.

We have seen improvements in developing and operationalizing the African architecture for peace and security, including the engagement of elders and women. These institutions must deliver in the areas of early detection of problems and correct analysis, deliberation and generation of solutions.

If we are not quick, effective and credible in these regard, forces outside Africa will be tempted to fill gaps. When they do so, they will be likely guided by their own detached frames of reference and models. The resultant solution will, therefore, be alien and non-effective and sometimes counterproductive. Such forces are motivated to do so not only by the possible and real spillover effects on them of security problems in Africa but also by the opportunity to entrench their interests and positions within Africa.

It is, therefore, fitting that the fifth Tana High-Level Forum on Security in Africa is devoted to the interrogation and generation of strategies for strengthening the role of Africa in the global security agenda.

I look forward to participating in the dialogue. Have a fruitful and enjoyable time on the shores of Lake Tana.

*Culled from Real Magazine.Hailemariam Desalegn, prime minister of Ethiopia, delivered this welcome address at the just-ended two-day Tana High-Level Forum on Security in Africa in Bahir Dar, Ethiopia, on Saturday, April 16, 2016

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Africa and the Global Security Architecture
April 23, 2016 | 0 Comments

Africa must ensure that its positions on international security concerns – and not just African issues – are carefully coordinated and well presented as it seeks to have a permanent position in the international security architecture.

By Kofi Annan*

At the outset of these remarks, allow me to thank our Chairman for inviting me to the Tana Forum. This is the first time I am attending this prestigious event, which brings together many distinguished participants who share a deep, mutual interest in the security and well-being of Africa.

Our topic this afternoon is Africa and the Global Security Architecture.

Kofi Annan

Kofi Annan

During the Cold War years that would have not been a subject for much discussion. In those days, we looked for big-power champions who could provide diplomatic and security cover.

The contemporary world is far more complex.

And, as the awful atrocities that have been perpetrated in West, East and North Africa have shown, the continent is not immune to the security threats that many countries around the world now face.

But I want to start with some good news. Africa is actually doing better than many people may realize in terms of the security of its citizenry.

Today, and despite a few egregious exceptions, armed conflict is actually a smaller risk to most Africans than traffic accidents.

This improvement of the security situation helped set the stage for rapid economic growth of 5-6% per year for the last fifteen years.

As a result of this sustained period of growth, extreme poverty has fallen by 40% since 1990.

And Africa’s growth can no longer be explained just by global demand for its commodities.

Two thirds of Africa’s growth over the last decade has come from increased domestic demand for goods and services in thriving sectors such as telecoms, financial services, manufacturing and construction.

As a result, today, inflows of private investment dwarf international aid.

They have been encouraged by the efforts of governments across Africa to improve their macro-economic environments.

Although there is still some way to go, we have seen encouraging steps towards gender parity, and the continent is moving towards universal primary education.

The spread of HIV/AIDS is in decline, and the number of deaths from tuberculosis and malaria is falling.

Democracy is extending its roots as Burkina Faso, Guinea and Nigeria have recently demonstrated.

Other countries like Cote d’Ivoire, have emerged from the abyss of conflict and are making strides towards a better and more democratic future.

In other words, our continent is generally heading in the right direction.

This encouraging analysis will come, I know, as very cold comfort for those millions of people who are still living every day in the shadow of violent conflict and abject poverty.

Progress remains uneven, and the dangers today are both internal and external.

Rebel groups have flourished in the impoverished parts of weak states that feel hard-done by their governments, where the population is often abused by the security forces, or where they do not trust the courts to deliver justice.

External forces are taking advantage of these shortcomings. We cannot ignore that from Mauritania in the west to Somalia in the east, the flag of Jihad is being raised.

More than a dozen sub-Saharan countries are concerned, and tens of thousands have already died as a result.

Boko Haram actually killed more people last year than the Islamic State. Attacks in many places are a daily or weekly occurrence.

And local extremist groups are now linking up to each other across borders, and even to global franchises like Al Qaeda or Islamic State.

Precisely because of these affiliations, these conflicts are generally seen through a unique prism: the global war on Islamist terrorism.

This neglects what they have in common with other insurgencies on the continent, which have nothing to do with Islam.

It is no secret that unemployed young men are especially vulnerable to the temptations of violence and easily instrumentalised for that purpose.

This is not a specifically Muslim problem: a World Bank survey in 2011 showed that about 40% of those who join rebel movements say they are motivated by a lack of jobs.

In Africa, as elsewhere, the answer does not lie in a purely military response that fails to deal with the root causes of disaffection and violence.

As I constantly repeat, you cannot have peace and security without inclusive development, the rule of law and the respect for human rights. These are the three pillars of all successful societies.

It is largely because these three pillars are quite fragile in parts of Africa that we are still seeing instability and violence.

The truth is that the economic growth in Africa over the last fifteen years, though impressive, has been neither sufficient nor inclusive.

In fact, Africa has become the world’s second most unequal continent, according to the African Development Bank.

Too much of that growth has enriched a narrow elite and not enough was spent on infrastructure, health or education, which would have fostered development.

It is no coincidence that Boko Haram originated in one of the world’s poorest and most deprived areas of the continent.

Not only does wealth not trickle down, but it is barely taxed, depriving the state of resources to provide public services.

It is not just that Africa is unequal: it is also unfair. An African Union report has estimated that up to one quarter of the continent’s GDP is syphoned off every year through corruption.

The trafficking of drugs creates an especially difficult challenge. Drug money is insidious and invasive. It corrodes political institutions.

We must focus on the money trail.  We have been locking up the minor offenders while the big fish swim free.

The fight against violent rebel movements is necessary, and will require enhanced inter-African as well as international cooperation.

But this is not enough because the challenge of security in Africa is often a political challenge revolving around the acquisition and use of power.

As a result, elections are a source of tension and repression rather than an opportunity for the free expression of political will.

Leaders who hang on to power indefinitely by gaming elections and suppressing criticism and opposition are sowing the seeds of violence and instability.

African leaders, like leaders everywhere, must remember that they are at the service of their citizens, and not the other way around.

They have a mandate given to them, in trust, by their people, who can also take it away from them if they are found wanting and to have outstayed their welcome.

So looking forward, I see five critical challenges for Africa as it fashions its role in the global security order.

First, at the global level, Africa must have a strong and consistent voice at the pinnacle of the international security architecture – in the Security Council.

Ideally, this means African permanent seats. But until that can be accomplished, Africa must ensure that its positions on international security concerns – and not just African issues – are carefully coordinated and well presented.

Second, at the regional level, we should recognize and applaud the work of the AU and the sub-regional organisations, which have acquired considerable and commendable experience in mounting peace operations.

This effort must continue. But African states will have to give the AU the means to do so and, in future, rely less on outside funding.

Third, looking to the national level, the most urgent challenge is to create enough jobs for the continent’s youth.

According to the World Bank, eleven million young people are expected to enter Africa’s labour market every year for the next decade.

If these young people cannot find jobs, and do not believe in the future, they may be tempted by rebel movements of all kinds, as well as crime and migration.

Wherever I am in Africa, I am always struck not just by the number of young people, but also by their energy, their creativity and their talent.

We should invest in them, harness their talent and ensure that the next generation of leaders will do better than we have done.

Another major challenge lies in building confidence in the integrity of the electoral process.

Elections should be the vehicle for popular choice in which the winner does not take all and the losers do not lose all.

Those who win must recognize that they do not have a licence to rule without restraint or remain in office in perpetuity.

Let us not confuse legality with legitimacy. Elections that meet legal form but fail the test of integrity are only pyrrhic victories that usually store up trouble for the future.

Finally, I want to mention the quality of national security forces. Madiba once said that “freedom would be meaningless without security in the home and in the streets”.

That security in the home and in the streets depends in good measure on our security forces.

We must invest in them but also make them fully accountable as part of our democratic societies. They must be trained to protect the individual and his or her family and property, to earn their trust and work with the people.

We have come a long way from the Cold War days.

Africa is now part and parcel of the global security architecture.

We can and must step up to that role by investing in our people and by protecting rights and not just regimes.

If we do that, I am convinced that our future will be more peaceful and secure than our recent past and Africa will exert a powerful and constructive influence within the global security architecture.

*Real News. Kofi Annan, President of the Kofi Annan Foundation, former Secretary General of the United Nations and Nobel Prize Laureate, presented this Keynote Address at the Tana High-Level Forum on Security in Africa which Held from April 16 – 17, 2016, in Bahir Dar, Ethiopia.

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Republic of Congo government blames non-existent militia for attack, wages war on citizens
April 20, 2016 | 0 Comments

By *

The official goal of President Sassou Nguesso’s assault on the Pool region is to target the Ninja militia. But with no such group in existence, the government’s bombs kill only civilians.

Under the new constitution, Denis Sassou Nguesso could be in power until 2031. Credit: jbdodane.

Under the new constitution, Denis Sassou Nguesso could be in power until 2031. Credit: jbdodane.

Over the past two weeks, the government of the Republic of Congo has been engaging in a military campaign against its own civilians. According to reports, troops and armoured tanks have been dispatched to the south eastern Pool region. Helicopters there have dropped several bombs on residential areas leading to an unconfirmed number of deaths and widespread destruction. And dozens of people have been arrested and tortured.

This crackdown comes just weeks after the 20 March elections in which President Denis Sassou Nguesso, who has been in power for all but five years since 1979, secured yet another term in office. There were widespread claims that the polls were marred by fraud, and on 4 April, a group of young men set fire to the government’s administrative headquarters in Makélékélé, one of the capital Brazzaville’s nine arrondissements.

The government immediately called the assault a “terrorist attack” and set upon the brutal offensive that still shows no signs of abating. The government justified its response by pointing the finger of blame for the fire on the so-called Ninja rebels, a group has not existed for nearly ten years.

The Makélékélé fire

Brazzaville’s political geography mirrors that of the country as a whole: northerners typically live in the city’s northern neighbourhoods while southerners mostly live in its southern ones. This stratification largely harks back to the 1997 civil war in which northerners generally supported Sassou Nguesso and his Cobra militia, while southerners mostly supported then-President Pascal Lissouba.

The war ended with Sassou Nguesso returning to power after which he authorised a three-day pillage of Makélékélé, one of Brazzaville’s southern neighbourhoods, partly to compensate his Cobra militia and partly to intimidate southerners into submission. By December 1997, Makélékélé was deserted, its onetime residents killed or hiding in the forests.

To govern this neighbourhood, Sassou Nguesso appointed Maurice Maurel Kihounzou, who was implicated in the pillage. The new administrator-mayor described his responsibilities, saying: “I went to war for Sassou Nguesso. This is my compensation. Don’t expect anything from me.” Kihounzou has served in this position ever since and the 4 April fire targeted his office.

Within hours of the attack, the government blamed the Ninja militia. This was a group formed in 1993 as the bodyguard for Brazzaville’s then-mayor Bernard Kolélas. The Ninjas briefly fought against Sassou Nguesso’s Cobras in 1997, but amidst Sassou Nguesso’s attacks on the southern population, the militia evolved into a self-defence force for the Pool region.

By 2007, however, the Ninja militia had been thoroughly disbanded, following the decision of its leader Frédéric Bintsangou (aka Pastor Ntoumi) to accept a ceremonial post in government.

This means that today there is no Ninja militia. Ntoumi has spent the past decade on a ranch in Soumouna, Pool. He has no political aspirations, no constituency, and no weapons cache. And flush with oil revenue, Sassou Nguesso has enjoyed a monopoly on violence for at least 10 years.

Sassou Nguesso blamed the Makélékélé fire on a rebel group that does not exist.

The lost Congolese Spring

Back in September 2015, when Sassou Nguesso announced a constitutional referendum that would abolish certain restrictions to allow him to run for office again, the opposition believed that mass protests would force him to abandon his “constitutional coup d’état”.

Five days after the announcement, some 30,000 citizens protested in Brazzaville, easily the largest demonstration since Sassou Nguesso’s return to power in 1997. Protests continued until the referendum on 25 October. Sassou Nguesso claimed victory in the vote, but the opposition knew it still had a final chance to force him from power: the 20 March presidential election.

The opposition was disappointed in these polls too, however, and the new constitution grants Sassou Nguesso another five-year mandate, renewable twice. This means that he could, in principle, retain power through to 2031. For the vast majority of Congolese citizens, this prospect is crushing. Though Congo-Brazzaville has long ranked among Africa’s leading oil producers, some 60% of its citizens subsist on less than $2/day.

With the time for action fading, the Makélékélé fire was a final attempt to spark a revolution.

The crackdown

In response to the fire, the Sassou Nguesso government on 5 April launched a military campaign against the Pool region. It dispatched ground troops, tanks, and helicopters fitted with missiles. The official goal is to target the Ninja militia, but with no such group in existence, the government’s bombs kill only civilians.

One opposition leader described the operation this way: “These are targeted strikes. What are they targeting? Civilians. It’s terrible. What is happening in Pool is that we are busy destroying a whole people, it’s a genocide. When you know how densely populated these areas are, you know they are bombarding to decimate all the way to mongrels and cockroaches. They do so to ensure that they kill everyone, that their genocide is achieved.”

Since the government has denied humanitarian organisations access to Pool, the number of fatalities is unclear. Observers put the death toll in the hundreds. Many have sought refuge in the forests, while residents of Makélékélé have fled to Brazzaville’s northern neighbourhoods, where they calculate they will be safe amongst Sassou Nguesso’s few remaining supporters. Some have fled to the northern regions of Plateaux, Sangha, and Likouala.

The government’s military campaign against Pool is a signal to the opposition: acquiesce or be killed. The government has even made this threat explicit on social media. On 8 April it released a video entitled La paix ne va pas s’arrêter, or “peace will not end,” a play on Sassou Nguesso’s campaign slogan. In it, the narrator reminds viewers that “there is only one man who can guarantee peace, security, and stability”. The government repeated the threat in a series of videos released last week.

What next?

As the military attacked the Pool region, the police have arrested and tortured dozens of citizens. To attract attention to the unfolding humanitarian crisis, the leading opposition coalition, FROCAD-IDC, attempted another protest, this one on 15 April, in Brazzaville, a day before Sassou Nguesso’s inauguration.

In response, the government placed FROCAD-IDC’s president, Claudine Munari, under house arrest. Other opposition leaders — including Charles Zacharie Bowao, André Okombi Salissa, Jean-Marie Michel Mokoko, and Guy Brice Parfait Kolélas – remain under house arrest as well. The 15 April protest was cancelled.

Persuaded that Sassou Nguesso will employ violence to retain power, most citizens have relinquished hope of a Congolese Spring. Opposition leaders have not, but if change comes, they increasingly believe it will emanate from Western pressure rather than Brazzaville protests. Accordingly, opposition leaders are currently waging a lobbying campaign in Western capitals.

On 15 April a group of Congolese citizens and concerned “Friends of Congo” visited the US House of Representatives, National Endowment for Democracy, and Voice of America. Days earlier, after a series of interviews with French media outlets, they released an open letter to President François Hollande in Le Monde. The Congolese government responded by announcing it would arrest opposition leader Bowao for “disturbing public order”.

As the opposition looks to Western capitals, Sassou Nguesso has gone in the opposite direction and is keen to broadcast this. Days before the inauguration, the government released a list of world leaders who had “congratulated” Sassou Nguesso for his “electoral victory”. The list is short and features Vladimir Putin, Xi Jinping, Paul Biya, José Eduardo dos Santos, Paul Kagame, Idriss Déby, Ali Bongo Ondimba, and Joseph Kabila, as well as a handful of other African presidents who have sought Sassou Nguesso’s financial support for electoral campaigns. By casting his lot so publicly, Sassou Nguesso is again signalling to Congolese citizens: He will not be bound by human rights norms encouraged by Western governments.

The central question for the coming months is this: Will opposition lobbying secure some intervention from the international community that fundamentally undercuts Sassou Nguesso’s ability to generate revenue and purchase political support? This question is yet to be answered, but if an ongoing aerial campaign against civilians does not compel Western intervention, very likely nothing will.

*Source African Arguments.Brett L. Carter is a fellow at the Centre for Democracy, Development, and the Rule of Law, Stanford University. As of August 2016, he will be an Assistant Professor at the School of International Relations, University of Southern California.

 

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Why the wealth of Africa does not make Africans wealthy
April 19, 2016 | 0 Comments

By Kieron Monks*

A gold mine in the Democratic Republic of Congo. The country holds natural resources worth trillions of dollars but the population is blighted with extreme poverty and violence. In a new edition of his book 'The Looting Machine,' investigative journalist Tom Burgis explores why resource-rich states are failing their people

A gold mine in the Democratic Republic of Congo. The country holds natural resources worth trillions of dollars but the population is blighted with extreme poverty and violence.
In a new edition of his book ‘The Looting Machine,’ investigative journalist Tom Burgis explores why resource-rich states are failing their people

Katanga province in the Democratic Republic of Congo is blessed with enormous natural wealth, including vast deposits of precious minerals such as diamonds, gold, and tantalum.

Katanga saw a spectacular mining boom around the turn of the century, when President Laurent-Desire Kabila and then his son Joseph licensed international mining companies to tap its treasures.
A diamond polishing factory in Botswana, part of a high-skill industry that has been developed from the nation's raw materials.

A diamond polishing factory in Botswana, part of a high-skill industry that has been developed from the nation’s raw materials.

This arrangement generated riches for the Congolese elite, and vastly more for the prospectors, but offered little to the poverty-ravaged population. From 1999 to 2002, the Kabila regime “transferred ownership of at least $5 billion of assets from the state-mining sector to private companies under its control… with no compensation or benefit for the State treasury,” a United Nations investigation found.

The bonanza coincided with a ruthless crackdown on dissent. In 2004, a small, mostly civilian group took over a mine operated by the Australian firm Anvil Mining in Kilwa village, protesting that the company was making huge profits without rewarding the local workforce.
According to a UN report, the Congolese army crushed the uprising and killed around 100 people, many by summary execution.

Modern colonialism

The combination of staggering wealth, rampant violence, and abject poverty in DR Congo is no coincidence, but part of a pattern causing devastation across Africa, according to Financial Times investigative journalist Tom Burgis.
In a new edition of his book The Looting Machine, the author probes the paradox of “the continent that is at once the world’s poorest and, arguably, its richest.”
Burgis, a former correspondent in Lagos and Johannesburg, finds a wide variety of kleptocrats and rackets over his travels through dozens of resource-rich countries. But a common thread is that the wholesale expropriation of resources during colonial times has barely slowed through the post-independence era, albeit with new beneficiaries.
“Western governments are not supposed to wield commercial and political power at the same time, and certainly not to use one to benefit the other,” says Burgis. “In colonial states…The British or Portugese would cultivate a small group of local people who would fuse political and commercial power to control the economy.”
“When the foreign power leaves, you are left with an elite that has no division between political and commercial power. The only source of wealth is mines or oilfields, and that is a recipe for ultra-corrupt states. Somewhere like Nigeria, an ‘extractor elite’…wanted to draw to itself the rent that oil and mining resources generate.”
Burgis cites another colonial hangover in the continued presence and power of oil and mining firms.
“The multinational companies hold enormous economic and political power in post-independence African countries,” he says. “In this way, there is a pretty straight line from colonial exploitation to modern exploitation.”

Fueling oppression

The ability of governments to rely on resource revenue leads to corruption and oppression, Burgis argues, as they are not accountable to their people through a social contract based on taxation and representation.
He cites Angola, which earns almost half of its GDP from oil, as an example of government as “a service for the elite.” A 2011 IMF audit revealed that $32 billion disappeared from official accounts between 2007 and 2010, a quarter of the state’s income.
The Angolan elite rejects accountability and does not tolerate any challenge from the public, Burgis adds, recalling the recent case of activists being jailed for a public reading of a pro-democracy book.
“Government can behave that way if it doesn’t need the consent of its people,” the author says.
Angola has taken steps to address such criticism in recent years, with the 2012 election deemed “generally free and fair” by neutral observers. But human rights groups attest that oppression remains a fact of life.

Secret deals

Innoson Motors factory in Nnewi. Nigeria is attempting to diversify its economy away from oil dependency, and towards manufacturing

Innoson Motors factory in Nnewi. Nigeria is attempting to diversify its economy away from oil dependency, and towards manufacturing

The growth of offshore banking in the late 20th century created new opportunities for resource tycoons to cover their tracks, a practice laid bare in the Panama Papers.

Israeli businessman Dan Gertler was an early pioneer. After forging a close friendship with DR Congo President Joseph Kabila, he was granted a near monopoly on exporting the nation’s diamonds, and quickly became a billionaire. Gertler routed the cash through an elaborate network of offshore accounts in tax havens, keeping the details of controversial deals secret.
“In the case of African resource deals, offshore funds have been shown to conceal questionable transactions,” says Burgis. “In the 1980s, bribes were literally cars full of cash and you handed the key to the official you were trying to bribe.”
“Bribery now is much more sophisticated, and has become harder to define as bribery if it’s (through) offshore transactions or people being given equity shares in offshore companies…You have to crack open a lot of offshore secrecy to see the conflict of interest that lies at the heart of them.”
The era of global finance has opened African markets to a new generation of mysterious traders. Burgis spent years on the trail of elusive Chinese businessman Sam Pa, who has cycled through multiple aliases while making deals across the continent from Angolan oil to Zimbabwean diamonds. Pa is believed to lead the secretive Queensway investor group, and Burgis claims he has represented the Chinese state, although the government denies this.

Breaking the chain

Burgis is skeptical that resource industries can ever be reformed.
“There is a troubling possibility that it’s not possible to put natural resources in these countries to work for the common good,” says Burgess. “(Almost) everywhere that receives a significant share of its income from oil or mining is badly run and often violent — it’s in the nature of these industries to cause these problems.”
Botswana and South Africa have befitted from moving up the value chain — developing high-skilled industries from natural resources rather than just exporting raw materials, such as diamond polishing or manufacturing metallic goods. Burgis believes that diversifying economies away from a single resource — as President Buhari’s government in Nigeria is attempting to do — can mitigate the effects of dependency.
He suggests another option is to keep resources in the country and implement high tariffs to protect domestic industries, but African leaders have been reluctant to adopt such measures.
“We have a world trading architecture with strict rules on imposing tariffs,” says Burgis. “African countries have adopted the market orthodoxy that led them to pare down states and embrace global economic competition — in which they are overwhelmingly the losers.”

Collective complicity

Responsibility for the plight of resource-dependent nations goes beyond traders and dictators. The global economy still requires a huge supply of raw materials that originate in Africa, creating an imperative to maintain the existing, destructive model.
Burgis applauds steps such as the Kimberley Process for preventing ‘blood diamond’ trade, but feels that developed nations could go much further.
“The lesson for those in the West who want to address the damage from oil and mining industries, and the corruption that goes with them, is ‘put your own house in order,'” he says. “There has been a tendency to lecture African rulers (but) the problems are in the world financial system.”
The author suggests a global public registry of companies and trusts to counter the use of shell companies in illicit deals.
“That financial secrecy is available is not Africa’s fault,” says Burgis. “Address the part that sits within the global system, which can be regulated from Western capitals.”
The nature of the global supply chain means that complicity with the crimes around resource extraction extends from African dictators all the way to a European mobile phone buyer.
At every level, delusion is a powerful barrier to change. Burgis recalls a meeting with a leading figure of Angola’s kleptocratic regime, who argued passionately that he was protecting his people from even worse abuses.
“It’s human nature,” says Burgis. “Nobody thinks they are the bad guy.”
*Source CNN
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Africa looks to extend new disaster insurance to Ebola-like epidemics
February 2, 2015 | 0 Comments

By Daniel Flynn in Dakar*

ebolareutersAfrican countries want to extend a new catastrophe insurance fund, which made its first payout of $25 million this month, to include protection against epidemics in the wake of the devastating Ebola outbreak.

The African Risk Capacity (ARC) agency, a specialised body of the African Union, launched a scheme last year to insure against natural disasters.

It is an effort to break Africa’s reliance on foreign aid and address the impact of climate change by using innovative financial techniques.

The ARC paid $25 million in its first year of operations to Senegal, Mauritania and Niger to mitigate the effects of a severe drought in the arid Sahel region south of the Sahara — well above the $8 million in premiums paid by those countries.

The other African nation to take out a policy, Kenya, paid $9 million but received no insurance payment.

Richard Wilcox, the ARC’s director general, said that its success so far had encouraged 12 countries to sign up for policies for the second year.

African states, he said, have also approached ARC to develop insurance against epidemics after the Ebola outbreak in West Africa killed more than 8,800 people in Guinea, Liberia and Sierra Leone — severely damaging their economies.

“The scale of the Ebola crisis in those three countries was a wake-up call to everybody,” Wilcox said, and his agency was working with virologists and other experts to design a system of coverage.

“Technically, this is much harder than the weather risk because with weather we have 30 years of reliable data. Disease outbreaks are much rarer.”

The World Bank estimates the three countries hardest-hit by Ebola will lose $1.6 billion in economic output this year.

Mining companies have suspended expansion plans, agricultural production has slumped and tourists have avoided the region.

ARC was capitalised using $200 million from the British and German development institutions.

That money will be paid back without interest in 20 years time, allowing the ARC to offer below-market premiums to African states.

By pooling disaster risks across east and west Africa, which have uncorrelated rainfall patterns, the ARC is also able to undercut commercial insurers.

On top of drought coverage, the fund will offer cyclone and flood insurance next year.

By making use of reinsurance, ARC was only liable for the first $15 million in payments this year — meaning that it received $2 million more in premiums than it paid out.

On an average year, it would expect to do even better, Wilcox said.

*Source theafricareport

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The Rockefeller Foundation and Tony Elumelu Foundation announce Africa winners of the Impact Economy Innovations Fund
February 13, 2014 | 0 Comments

The winners were selected from a highly competitive pool of hundreds of applicants from across Africa

The Rockefeller Foundation and the Tony Elumelu Foundation (http://www.tonyelumelufoundation.org) have announced the winners of the Africa Impact Economy Innovations Fund (IEIF).

Tony Elumelu

Tony Elumelu

Launched in April 2013 at the Africa Impact Investing Forum supported by the Rockefeller Foundation and the Tony Elumelu Foundation, IEIF provides grant capital for entrepreneurs with projects that create jobs in underserved sectors, and supports proposals geared toward enabling capital solutions, fostering entrepreneurial ecosystems and promoting impact investing industry infrastructure.

Funded by the Rockefeller Foundation and the Tony Elumelu Foundation, the winners were selected from a highly competitive pool of hundreds of applicants from across Africa, and represented several sectors across the continent including Finance, Agriculture, Policy & Research and Information Technology.

Administered by the Global Impact Investing Network (GIIN), the rigorous selection process was undertaken by a committee which included Malik Fal, Managing Director of Omidyar Network Africa; Emmanuel N. Nnorom who was at the time, CEO of UBA Africa and currently the President of Heirs Holdings Group; Amit Bouri, Managing Director of the Global Impact Investing Network; Eme Essien Lore, Senior Associate Director at the Rockefeller Foundation Africa Regional Office,; and Dr. Wiebe Boer, CEO of the Tony Elumelu Foundation.

Making the list of winning applications were Investisseurs & Partenaires (Senegal), Renew LLC (Ethiopia), M.Lab Africa (Kenya), Policy and  Economic Research Council (Tanzania), Doreo Partners (Nigeria),  GIMPA Centre for Impact Investing (Ghana)  and SliceBiz  (Ghana).

The vision for the winners is to enable through their various projects, opportunities for additional entrepreneurship activities across Africa to thrive. “The winners were selected for their work in bridging the gap between African businesses and financing options. We, at the Foundation are excited to be part of the process of supporting interventions that contribute to sustained economic development across the continent.” Dr. Wiebe Boer, explained

Upon receipt of the grant, several winners expressed renewed commitment to providing support services to their stakeholders with the additional supporting resources at their disposal.

“The IEIF grant will assist us to augment our portfolio of services with improved interventions for social enterprises and enable us increase the potential for success for start-ups that go through our incubation program.” said John Kieti of M.Lab, the grant winner from Kenya.

“Thanks to this funding, we can now focus on our core mission of creating alternative finance pathways for the next generation of African Start-ups through a micro-investment platform. This funding is by far our most remarkable opportunity to date and we intend to fully leverage the advantages to deliver some key outcomes for the Ghanaian and African start-up ecosystem,” added William Senyo the CEO of SliceBiz, one of the winners from Ghana.

Eme Essien Lore, Senior Associate Director at the Rockefeller Foundation, Africa Regional Office expressed enthusiasm for IEIF’s contributions to the global network of global investors.  “The business ideas we received through the IEIF reflect the extensive entrepreneurial potential that exists in Africa.  Our Foundation continues to believe that impact investing can transform the development landscape across the continent and we welcome opportunities such as the IEIF to prove that.”

The Global Impact Investing Network (GIIN) will play an administrative role to manage the IEIF on behalf of the Tony Elumelu Foundation and the Rockefeller Foundation.

Impact investing includes those investments aimed at solving social or environmental challenges, while generating a financial return. The impact investing industry has the potential to steer significant capital to market-based solutions in sustainable agriculture, affordable housing, affordable and accessible healthcare, clean technology, financial services for the poor, and other sectors addressing the world’s most pressing problems. Impact investments can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending upon the circumstances.

For more than 100 years, The Rockefeller Foundation’s mission has been to promote the well-being of humanity throughout the world. Today, The Rockefeller Foundation pursues this mission through dual goals: advancing inclusive economies that expand opportunities for more broadly shared prosperity, and building resilience by helping people, communities and institutions prepare for, withstand, and emerge stronger from acute shocks and chronic stresses. To achieve these goals, The Rockefeller Foundation works at the intersection of four focus areas – advance health, revalue ecosystems, secure livelihoods, and transform cities – to address the root causes of emerging challenges and create systemic change. Together with partners and grantees, The Rockefeller Foundation strives to catalyze and scale transformative innovations, create unlikely partnerships that span sectors, and take risks others cannot – or will not. To learn more, please

Founded in 2010, The Tony Elumelu Foundation (http://www.tonyelumelufoundation.org) is an African-funded philanthropic organization focused on promoting entrepreneurship in Africa by enhancing the competitiveness of the private sector. The Foundation creates impact through business leadership and entrepreneurship development programmes, impact investments, research, and policy advocacy

The Global Impact Investing Network is a non-profit organization dedicated to increasing the scale and effectiveness of impact investing. Impact investments are investments made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return. They can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending upon the circumstances. The GIIN builds critical infrastructure and supports activities, education, and research that help accelerate the development of a coherent impact investing industry

*APO

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Africa: Testimony of Isaiah Washington, Founder, The Gondobay Manga Foundation
May 12, 2012 | 0 Comments

Following is testimony of Isaiah Washington, Founder of the Gondobay Manga Foundation, before the House Subcommittee on Africa, Global Health and Human Rights:

Good afternoon. I’d like to thank Chairman Chris Smith and Ranking Member Karen Bass for inviting me to testify before this Subcommittee today. I think the Increasing American Jobs Through Greater Exports to Africa Act of 2012 is an important means of making U.S.-Africa trade more beneficial to Americans, which will make the African Growth and Opportunity Act (AGOA) and other trade measures aimed at increasing U.S.-Africa trade more attractive to those who are not directly involved in African issues. [Image via Wikipedia.org]

I am particularly interested in the impact this bill can have on encouraging the African Diaspora in America – both the traditional Diaspora members such as myself and those who more recently came to this country. Since I discovered my own connection to the Mende and Temne people in Sierra Leone, I have felt compelled to contribute to the reconstruction of Sierra Leone, which is recovering from a destructive civil war.

The Gondobay Manga Foundation that I have established works cooperatively with Sierra Leoneans to achieve interventions that meet their genuine needs and not just engage in activities to satisfy my need to help. We have collaborated to build schools and provide clean water. More broadly, we are working with top universities in the United States and abroad to establish internships that will spur academic and community involvement.

Topics and specialties being pursued include: African-American Studies, the History of the Trans Atlantic Slave Trade, the Plight of Child Soldiers, Agricultural Development & Mechanized Farming, Hospital Administration, Women’s Health Issues, Tropical Disease Research and Urban Planning.

My efforts are part of a growing trend of members of the African Diaspora reconnecting with their homelands or the homelands of their ancestors. I have looked to the example of the late Reverend Leon Sullivan, who spent a great deal of his life connecting African-Americans and others to countries in Africa. Organizations he founded, such as Opportunities Industrialization Centers International and the International Foundation for Education and Self-Help, have helped members of the Diaspora and others to volunteer their skills to teach young people in Africa or take part in training programs for African entrepreneurs and farmers.

I used Reverend Sullivan as a model for achieving sustainability—one village, one region, and one country. In November 2007, my foundation opened its first school, Chief Foday Golia Memorial School, in the Njala Kendema village for 150 students in grades K-5. The new school, named in honor of the former leader of the village, replaces two grass huts not suited for occupants. Since then, others in the Diaspora have built wells and undertaken other projects for the benefit of African people. Some have used remittances to their home countries to meet the needs of their families. Increasingly, both the traditional Diaspora and the recent Diaspora here in America have looked toward investing in Africa.

A report released a few years ago by Merrill Lynch, a leading international investment company, indicated that while Africa offers investors tremendous opportunities, there is too little available information on African markets, and by extension, the companies listed on those markets. LiquidAfrica.com is one of the few sources of information on African exchanges and their listed companies, but it is not as widely known as other sources of investment information.

Magazines such as Fortune, Business Week and even Black Enterprise do not cover African exchanges or companies on a consistent basis with the result that American investors remain largely unaware of available opportunities. Return on investment in Africa has averaged nearly 30% over the last decade. On African stock exchanges, the most profitable sectors are banks, real estate and hotels and tourism.

Recently, the International Monetary Fund rated the Nigerian Stock Exchange as the best in the world in terms of returns. The Nigerian exchange beat fellow exchanges in developing countries such as South Africa, Turkey, India, Brazil and United Arab Emirates. In fact, the Nigerian exchange beat out the New York Stock Exchange and the London Stock Exchange, purely on rate of return, in the IMF report. Of course, the Johannesburg Stock Exchange is still the African market capitalization leader at $561 billion.

The advances on African exchanges occurred within a broad range of companies, including banking (such as the Mauritius Commercial Bank), telecoms (such as Zimbabwe’s Econet), industrials (such as Nigeria’s Dangote Cement) and breweries (such as East African Breweries of Kenya). There are many others waiting for the partnerships and investment to reach the next level that this bill could provide, creating jobs and wealth for countless Africans.

The African American market in the United States is a good match for African investment destinations, being increasingly sought after by investment companies due to rising purchasing power. America’s largest racial minority had a combined purchasing power of $318 billion in 1990. Eighteen years later, that purchasing power had grown to $913 billion and is predicted to reach $1.24 trillion by 2013.

According to a 2005 study by Juice Market Research, African American investors were “considerably more likely than the general population of investors to have a variety of investment products such as stocks, bonds, mutual funds and annuities.” Prior to the global economic meltdown, this tendency attracted companies such Charles Schwab, Smith Barney, American Express and Merrill Lynch, which has formed partnerships with African American professional associations and other groups to encourage investment by this group of investors through their firms.

Higher-income African American investors reached a peak in terms of percentage of investing in the early years of this new century. An estimated 74% of African Americans who earned more than $50,000 owned stocks in 2002, closing the gap between them and similarly situated white investors, whose percentage reached 84% that year. Many of these gains have been eroded by the global recession. Still, African American investors continue to invest in real estate rather than stocks, even in a difficult economy. The consensus is that this is largely due to a lack of knowledge about other investment opportunities, which would certainly include African investments.

This is why I am establishing the Hira International Investment Group. The mission of HIIG is to help transform first Sierra Leone and then the rest of West Africa in stages by strategically leveraging financial and human capital to profitably and ethically develop land, natural resources and human resources. HIIG will identify and apply the necessary resources to achieve its mission by utilizing its own expertise and connections, while providing experts on a project basis. HIIG also will create alliances with qualified companies and organizations to accomplish specific tasks. Since I started my foundation and began to become more involved in Sierra Leone, I have had numerous inquiries about business opportunities in Sierra Leone from investors around the world. Your bill could encourage American investors to recognize and take advantage of the opportunities in Sierra Leone and the rest of West Africa.

I chose Sierra Leone as the starting point because that is where my ancestors are from. West Africa is the region of Africa from which most members of the African Diaspora here in America originated. There is so much work to do in this region of Africa that I am willing to leave other regions for those who have the desire to invest and partner with African businesses.

This bill could be the catalyst to open the floodgates of American investment and business-to-business relationships with African partners that will fulfill the promise of AGOA and create more development than any aid program could ever hope to achieve. Thank you for introducing this bill, and I urge you to do all you can to pass it.

Source: United States House Of Representatives (Washington, DC)Website: http://www.house.gov/

Hearing took place on April 17 2012

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