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Rwanda Focus Stepping out of the neighboursâ€™ shadows

Ă‹ Nigeria: Can Buhari put out Delta blaze? Ă‹ Kenyatta/Ruto: End of the Bromance Ă‹ Power: Green energy is the real deal

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Growth

After the crash,

the fightback African leaders try economic nationalism to beat the commodity trap INTERNATIONAL EDITION

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Rwanda Focus Stepping out of the neighbours’ shadows

CONTENTS

• Nigeria: Can Buhari put out Delta blaze? • Kenyatta/Ruto: End of the Bromance • Power: Green energy is the real deal

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THE AFRICA REPORT # 79 - APRIL 2016

Growth

After the crash,

the fightback African leaders try economic nationalism to beat the commodity trap

GROUPE JEUNE AFRIQUE

INTERNATIONAL EDITION

Algeria 550 DA • Angola 600 Kwanza • Austria 4.90 € • Belgium 4.90 € • Canada 6.95 CAN$ • Denmark 60 DK • Ethiopia 75 Birr • France 4.90 € Germany 4.90 € • Ghana 8 GH¢ • Italy 4.90 € • Kenya 410 shillings • Liberia $LD 300 • Morocco 40 DH • Netherlands 4.90 € • Nigeria 600 naira Norway60 NK • Portugal 4.90 € • Sierra Leone LE 12,000 • South Africa 40 rand (tax incl.) • Spain 4.90 € • Switzerland 9.90 FS • Tanzania 9,000 shillings Tunisia 5.4 DT • Uganda 9,000 shillings • UK £ 4.50 • United States US$ 6.95 • Zambia 30 ZMW • Zimbabwe US$ 4 • CFA Countries 3,000 F CFA

BUSINESS

04 EDITORIAL Fearmongers in the frame

72 ERITREA Dig deep The Bisha mine is the first in what the government hopes is a renaissance in the mining sector, despite resistance from activists

06 LETTERS 08 THE QUESTION

BRIEFING 10 SIGNPOSTS

12 INTERNATIONAL 14 PEOPLE 20 CALENDAR

FRONTLINE

76 AVIATION Air Madagascar loses altitude 78 LEADERS Qalaa Holdings’ Karim Sadek

22 THE CRASH AND THE FIGHTBACK Beating the commodity trap From Sierra Leone to South Africa, African countries are regularly tossed on the seas of natural resource prices. Is there any way to break the cycle?

82 Green is the real deal Solar power and other renewable energy sources are fast approaching cost parity with fossil fuels, leading to a blossoming of projects in Africa

30 NIGERIA Delta force again Pipeline bombs and political violence underlie a new threat to the nation’s unity

86 POWER AFRICA Obama’s signature policy fails to wow 88 INTERVIEW Tanzania’s Tanesco boss, Felchesmi Mramba

36 KENYA A broken Bromance

COVER CREDITS: BAUDOUIN MOUANDA FOR JA; AP PHOTO/SIPA; VINCENT FOURNIER/JA

42 INTERVIEW Egypt president Abdel Fattah el-Sisi 47 SOMALIA Drones and elections

ART & LIFE

90 PHOTOGRAPHY Adorn - what lies beneath An Ivorian photographer explores Senegalese beauty 94 BRIEFS Johannesburg’s Market Theatre celebrates its 40th anniversary, plus new Addis art space

48 SUDAN The opposition after al-Turabi 48 CENTRAL AFRICAN REP. New man, new plan

96 TRAVEL Mole National park in northern Ghana

COUNTRY FOCUS 51 RWANDA Bet it all on the firm While the country has pushed hard in recent years to develop a vibrant private sector, skills and market size remain obstacles THE AFRICA REPORT

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81 HANNIBAL Pipeline politics DOSSIER: POWER

POLITICS

40 EGYPT Sisi versus the civil service

80 FINANCE The end of South Africa’s ‘Big Six’

98 DAY IN THE LIFE Sheetal Kotak lifts trophies

This issue carries an insert between 34-35 for selected countries

EDITORIAL

THE AFRICA REPORT A Groupe Jeune Afrique publication

BY PATRICK SMITH

57-BIS, RUE D’AUTEUIL – 75016 PARIS – FRANCE TEL: (33) 1 44 30 19 60 – FAX: (33) 1 44 30 19 30 www.theafricareport.com

Fearmongers in the frame

menacingly authoritarian triumvirate think that it’s their turn. Canny, malign and experts in the politics of fear, the US’s Donald Trump, France’s Marine Le Pen and Russia’s Vladimir Putin believe history is on their side. Of the trio only Putin holds power today. But the other two are having an inordinate influence on politics in their own country and beyond. On the record, Trump, Le Pen and Putin hugely admire each other. Unsurprising. They read from the same script. They’re strong on posturing and salesmanship; weak on policies and substance. But no problem, they fill the gaps with demagoguery laden with ethnic and religious slurs. Building walls, picking on minorities and advocating torture and state-sponsored killings. Initially, liberals in the West treated the trio like drunks at a funeral: terribly embarrassing but eventually everyone goes home. Except they don’t. The populist trio and their followers plan to stick around. They thrive on being under-estimated: it plays to their sense of fighting an effete establishment and boosts their ratings. All this poisons the political climate, but does it matter specifically for Africa? Firstly, there are the direct effects of the ultranationalism being peddled by the trio and their imitators in Europe. Far-right parties are ramping up sentiment against refugees and migrants of any description. Racial and religious attacks are rising. As governments dodge their responsibilities for the conflicts in Iraq, Libya and Afghanistan, they are trying to appease the new populists with tough new immigration laws that flout international conventions. Given

C HA I R M A N A ND F O UND E R BÉCHIR BEN YAHMED P UB L I S HE R DANIELLE BEN YAHMED publisher@theafricareport.com E X E CUT I VE P UB L I S HE R JÉRÔME MILLAN

the multi-cultural and pluralist nature of most Western societies, attempts by ultra-nationalists to shut down international educational and commercial links will fail, but they will make life tougher and duller in the process. Just as important is the demonstration effect. As an agonised political scientist wrote in Foreign Policy at the beginning of the year, “Why does the West think it has the answers to others’ democratic shortcomings?” His conclusion that Africa there is a race into the political sewers is not is hard to counter. short of its That could have own tuba dangerous fallout in Africa, which is thumping not short of its own ethnotub-thumping ethnonationalist politicians nationalist capable of stirring politicians crowds to violent action. As the effects of the crash in commodity prices on state revenues and people’s livelihoods start to spread across Africa, the populist politicians – with a Trump-ism here and a Le Pen-ism there – will try to take advantage. But the bulwark against these alarming trends has to be political and organisational. The rhetoric and the rants have to be countered on the streets, on the internet and in the parliaments. Perhaps the most promising signs are demographic and generational, in the West and in Africa. Time and again, the toughest opponents of the populist-authoritarians are the youth. The current economic system is undermining their future, but they are not buying into the fearmongering and simplistic solutions proffered by thug politicians. ●

edit editorial@theafricareport.com THE AFRICA REPORT

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M A R K E T I NG & D E VE L O P M E NT ALISON KINGSLEY-HALL E D I T O R I N CHI E F PATRICK SMITH M A NA G I NG E D I T O R NICHOLAS NORBROOK editorial@theafricareport.com A S S I S TA NT E D I T O R CHARLIE HAMILTON A S S O CI AT E E D I T O R MARSHALL VAN VALEN BU S I NE S S E D I T O R MARK ANDERSON E D I T O R I A L A S S I S TA NT OHENEBA AMA NTI OSEI R E G I O NA L E D I T O R S CRYSTAL ORDERSON (SOUTHERN AFRICA) BILLIE ADWOA MCTERNAN (GHANA) S UB - E D I T O R ALISON CULLIFORD P R O O F R E A D I NG KATHLEEN GRAY A RT DI R E CT O R MARC TRENSON DESIGN VALÉRIE OLIVIER (LEAD DESIGNER) SYDONIE GHAYEB CHRISTOPHE CHAUVIN (INFOGRAPHICS) P R O D UCT I O N PHILIPPE MARTIN CHRISTIAN KASONGO R E S E A R CH SYLVIE FOURNIER P HO T O G R A P HY PIERANGÉLIQUE SCHOULER O NL I NE PRINCE OFORI-ATTA SALES SANDRA DROUET Tel: (33) 1 44 30 18 07 – Fax: (33) 1 45 20 09 67 sales@theafricareport.com CONTACT FOR SUBSCRIPTION: Webscribe Ltd Unit 8 The Old Silk Mill Brook Street, Tring Hertfordshire HP23 5EF United Kingdom Tel: + 44 (0) 1442 820580 Fax: + 44 (0) 1442 827912 Email: subs@webscribe.co.uk 1 year subscription (10 issues): All destinations: €39 - $60 - £35 TO ORDER ONLINE: www.theafricareportstore.com D I F CO M INTERNATIONAL ADVERTISING AND COMMUNICATION AGENCY 57-BIS, RUE D’AUTEUIL 75016 PARIS - FRANCE Tel: (33) 1 44 30 19-60 – Fax: (33) 1 44 30 18 34 advertising@theafricareport.com A D VE RT I S I NG D I R E CT O R NATHALIE GUILLERY WITH JEANNY CHABON R E G I O NA L M A NA G E R S ÉLODIE BOUSSONNIERE IBIJOKE FABORODE PASCALE LALLEMAND PRINTER: SIEP 77 - FRANCE N° DE COMMISSION PARITAIRE : 0720 I 86885 Dépôt légal à parution / ISSN 1950-4810 THE AFRICA REPORT is published by GROUPE JEUNE AFRIQUE

LETTERS For all your comments, suggestions and queries, please write to: The Editor, The Africa Report, 57bis Rue d’Auteuil - Paris 75016 - France. or editorial@theafricareport.com

LAGOS: BIG DREAMS MUST INCLUDE HOUSING FOR ALL

Africans investing in Africa

• Ghana/Côte d’Ivoire Growth engines • Lagos Maximum City • African Union Candidate games

N ° 7 8 • M A R C H 2 016

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The CEOs

or a city whose population is approaching the 25 million mark [‘Lagos: Maximum city’, who bring it home TAR78 Mar 2016], it is surprising how little attention politicians or planners have paid to the question of mass housing. The city’s transportation infrastructure has historically been a problem for all Lagosians. The failures of our electricity infrastructure form a drain on all households and enterprises. Decent housing, by contrast, is a social good that Lagosians either enjoy or lack individually. This may go some way towards explaining the low status of the mass housing question in visions of the future city. Sustainable, efficient, modern housing is certainly a problem for the poor; but since the working poor actually form the vast majority of Lagosians, mass housing should be a priority for the city and it should be approached as an innovation opportunity for those who would lead and design future Lagos. Abosede George Associate Professor, Columbia University Think global, invest local: backing continental projects

From left to right: Gavin Dalgleish, MD of SA agribusiness ILLOVO Ismaïl Douiri, Co-CEO ATTIJARIWAFA Bank Ade Ayeyemi, Group CEO ECOBANK Tabitha Karanja, Kenyan CEO of Keroche Breweries

GROUPE JEUNE AFRIQUE

INTERNATIONAL EDITION

Algeria 550 DA • Angola 600 Kwanza • Austria 4.90 € • Belgium 4.90 € • Canada 6.95 CAN$ • Denmark 60 DK • Ethiopia 75 Birr • France 4.90 € Germany 4.90 € • Ghana 8 GH¢ • Italy 4.90 € • Kenya 410 shillings • Liberia $LD 300 • Morocco 40 DH • Netherlands 4.90 € • Nigeria 600 naira Norway 60 NK • Portugal 4.90 € • Sierra Leone LE 12,000 • South Africa 35 rand (tax incl.) • Spain 4.90 € • Switzerland 9.90 FS • Tanzania 9,000 shillings Tunisia 5.4 DT • Uganda 9,000 shillings • UK £ 4.50 • United States US$ 6.95 • Zambia 30 ZMW • Zimbabwe US$ 4 • CFA Countries 3,000 F CFA

participation: predictable tariff regimes, simplified licensing procedures, standardised ‘technology-based’ power purchase agreements or realistic energy planning tools. Creditworthiness of the continent’s power utilities is a challenge. Ageing grid networks hold back the potential of newly installed capacity from in-country generation and regional interconnection power trade. The potential for renewable energy could be vast in Africa, but we need to address issues along the whole value chain to realise that ‘watt’. Antony Karembu Policy and PPP Advisor, AfDB’s Sustainable Energy Fund for Africa (SEFA)

NOT-SO-NEW WAVE

The article ‘Pushing out the comfort zone’, [TAR77 Feb 2016] oversimplifies the ‘new wave of North African due to a lack of cooperation between EAST AFRICA IS STALLING governments in the East African filmmakers’ against ‘Arab soap operas ITS OWN GROWTH Community, the region has not fully and films’. All over the world superficial, Your Top 500 companies report opened its borders to allow the free meaningless films prevail over deep, [TAR77 Feb 2016] should not blame movement of goods and people. individualistic films. Furthermore, Kokil K. Shah under the guise of bravery, this new the drop in commodity prices for undermining the ‘Africa Rising’ story. wave of filmmakers seems to choose Africa should first take into account their topics for the sake of provocation. the internal factors that stand in the way WATTS UP, AFRICA? Is real courage showing the of economic growth. Let’s take the East fundamental flaws of autocratic In your article ‘Electricity: Who’s African region, where many countries regimes ruling North Africa or the got watts?’ [TAR76 Dec/Jan 2016], there superficial flaws of their societies, albeit are due to hold elections this year. Local and foreign investors have halted is significant focus on the electricity through a well-written story? Also, the financing of projects until they know generation problem, but little mention let us not forget that Youssef Chahine, Nadia el Fani and to a lesser extent whether there will be a new government of sector-specific issues that prevent that ‘watt’ from entering the grid. The Hassan Benjelloun began addressing and whether the new administration continent requires the right enabling will provide a favourable business these deeper topics long ago. Salim Benjelloun environment to improve private-sector climate for investors. Furthermore, HOW TO GET YOUR COPY OF THE AFRICA REPORT On sale at your usual outlet. If you experience problems obtaining your copy, please contact your local distributor, as shown below. ETHIOPIA: SHAMA PLC, Aisha Mohammed, +251 11 554 5290, aisham@shamaethiopia.com – GHANA: TM HUDU ENTERPRISE, T. M. Hudu, +233 (0)209 007 620, +233 (0)247 584 290, tmhuduenterprise@gmail.com – KENYA: NATION MEDIA GROUP, Antony Mutunga, +254 (0)20 328 8000, amutunga@ke.nationmedia.com – NIGERIA: NEWSSTAND AGENCIES LTD, Solomon Otinwa, +234 (0)709 8123 459, newsstand2008@gmail.com – SIERRA LEONE: RAI GERB ENTERPRISES, Mohammad Gerber, +232 (0)336 72 469, raigerbenterprise@ gmail.com – SOUTHERN AFRICA: RNA DISTRIBUTION, Butch Courtney, +27 (0)11 602 9800, butchc@mad.co.za • SUBSCRIPTIONS: RAMSAY MEDIA, Karin Mulder, +27 860 100 204, subs@ramsaymedia.co.za – TANZANIA: MWANANCHI COMMUNICATIONS, Emmanuel J Lyimo, +255 716 500 500, elyimo@tz.nationmedia.com – UGANDA: MONITOR PUBLICATIONS LTD, Micheal Kazinda, +256 (0)702 178 198, mkazinda@ug.nationmedia.com – UNITED KINGDOM: COMAG, Mark Swan, +44 (0)1895 433791, Mark.Swan@comag. co.uk – UNITED STATES & CANADA: LMPI, Sylvain Fournier, +1 514 355 5610, lmpi@lmpi.com – ZAMBIA: BOOKWORLD LTD, Shivani Patel, +260 (0)211 230 606, bookworld@ For other regions go to www.theafricareport.com realtime.zm – ZIMBABWE: PRINT MEDIA DISTRIBUTION, Ian Munn, +263 778 075 147, ianmunn@mweb.co.zw

ADVERTISERS’ INDEX CONTOUR GLOBAL p 2; IE SINGAPORE p 5; LIQUID TELECOM p 7; ADEXEN p 9; SPENCER STUART NORSAD p 9; CNN p 13; ECOBANK RWANDA p 16; CHANNELS INC. p 21; TAR DIGITAL EDITION p 35; REP. OF TOGO p 38; REP. OF COTE D’IVOIRE p 43; RWANDAIR p 50; ESRI RWANDA p 56; SAHAM ASSUR. RWANDA p 59; CRYSTAL VENTURES p 61; TRACTAFRIC EQUIP. RWANDA p 67; HARLEY-DAVIDSON p 67; CARNEGIE MELLON UNIVERSITY p 69; BIOTHERM ENERGY p 85; AMSCO p 85; ENERGYNET SAEIS p 85; DDP OUTDOOR p 89; CWC GHANA SUMMIT p 89; CWC NOG p 99; STANDARD BANK p 100

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THE QUESTION To respond to this month’s Question, visit www.theafricareport.com. You can also find The Africa Report on Facebook and on Twitter @theafricareport. Comments, suggestions and queries can also be sent to: The Editor, The Africa Report, 57bis Rue d’Auteuil, Paris 75016, France or editorial@theafricareport.com

YOUR VIEWS:

After condemning the violence in Burundi and voting to send in a peacekeeping force, in January the African Union caved in to Pierre Nkurunziza, whose third term as president is the cause of the country’s unrest

I think it’s essential to promote some good democratic values and prevent leaders from creating a family-owned state […] so let the AU get on with it! Sekiziyivu David

Should the AU give ‘cling-on’ presidents the red card?

Yes FRANK HABINEZA President, Democratic Green Party of Rwanda

The African Union (AU) should stop giving red carpets to cling-on presidents in Africa. Presidents who cling on to power after manipulating and changing their countries’ constitutions in order to become life presidents should be given a red card and should not be invited by the AU to its assemblies. Their continued involvement in the AU promotes the culture of impunity and encourages other presidents to do similar evils. The AU should consider these cling-on presidents, in the same way it considers coup d’état leaders. This will help to promote democracy, peace and good governance in Africa. We have seen that when presidents cling on to power they are always removed violently, either by mass demonstrations like in Burkina Faso, Egypt and Tunisia, or coup d’état attempts like in Burundi. All these scenarios lead to loss of life among innocent people, especially young people, and disturb peace and stability, both in the country and all neighbouring countries, and the region at large. If the AU would give a red card to these presidents and the United Nations did the same, the situation would change for the better. These presidents would find no hideout and would be forced to respect their countries’ constitutions and have peaceful transfers of power. ●

No JOSEPH RWAGATARE Rwandan writer

From a narrow perspective of form, the question of African leaders clinging on to power is a legitimate concern. But seen in a wider context, the issue of longevity only distracts from a meaningful discussion of governance and democracy in fundamental ways. First, framing it that way puts out of the equation the very object of good governance: citizens. It is as if they don’t exist or matter, or have no mind of their own. Yet citizens have a say and make choices about who governs them and how they are governed. Their choices matter and must be respected. Second, power is presented as an end in itself. The correct discussion should be about what power is used for. If it is taken to mean responsibility and used to transform societies, create prosperity and improve citizens’ well-being, it is power put to the service of the nation and is defensible. But if it is for the enrichment of an individual or his family, whether a leader stays for one or 10 years it is wrong and must be condemned. Third, focus on longevity diverts attention from the important question of leadership. The crucial point is the quality of leaders: whether they possess the vision and ability to effect socio-economic transformation, not how long they stay in power. Finally, people make choices of governance based on what works for them and addresses their specific circumstances. Ultimately they are the judges of what is best for their country. ●

They’ve allowed Mugabe to go on and on and on. First get rid of him and his destruction of the nation and then move to the new boys. Leon R. Johnson The AU is very toothless, to the extent that even its mandate is not enforced. Yona de Man Don’t be surprised to see Dlamini-Zuma seeking to change the AU Constitution to remain Chairperson. Africa and power? It boggles the mind. Value Machinjike Yes! The AU must find a way of tackling this directly or risk being irrelevant across the Nick A. continent. There is no way Nkurunziza will make a U-turn. Only heavy sanctions can make him come to terms. Atemangwatlewoh F. The AU can’t do either when the majority of African leaders, given the chance, will sit still in office. Shayera Dark If the AU could they would. HlombelamaHlubi

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Your HR Business Partner for Africa Expatriate Recruitment Recruitment of African Profiles & Local Content policies support HR Consulting & Staff assessment Executive Search Manpower supply Paris (France) Lagos (Nigeria) Accra (Ghana) Luanda (Angola) Abidjan (Ivory coast) Casablanca (Morocco) +33 1 71 19 47 32 contact@adexen.com www.adexen.com

PEOPLE

FU U TU U RE OFAFRICA

AAR RE TTHE HE Oil & Gas

Finance

Energy

Industry

Martime

Telecom

Construction Agro Business

BRIEFING

SIGNPOSTS

KENYA Soldiers in the Kenya Defence Forces fighting

in the Africa Union Force in Somali pay homage to their fallen comrades, killed in an attack by Al-Shabaab.

APPETITE AWAKENED BOTTOM OF THE MARKET

he 13 March attack on a beach resort in Côte d’Ivoire that killed 22 people widened the geographical reach of the Islamist rebels of Al Qaida in the Islamic Maghreb (AQIM). Taking advantage of West Africa’s porous borders, the lack of coordination between governments and the dependence of countries like Mali on external support for security, AQIM and other Islamist groups have continued to attack soft targets such as popular tourist sites and large natural resource companies. As with the Nigerian government’s initial reactions to the Boko Haram rebel group, responses to the rise

HAITI Policewomen from Nepal, Madagascar and Colombia in the United Nations force celebrate International Women’s Day on 8 March.

Soft targets, new strategy

In conjunction with GeoPoll, The Africa Report asked 100 Nigerians across the country the question: Will new FIFA boss Gianni Infantino be good for African football? Yes No Don’t know

Delegates dance at the ‘Next Einstein Forum’.

TERRORISM

As the commodity crunch and weakening currencies cause panic across African mining and oil companies, other firms are preparing to pounce. Private-equity outfits have put together a $4.3bn war chest for investing in cut-price companies. In 2015, merger and acquisitions hit their highest volume since 2015, say Control Risks. Could 2016 see even more?

3 . $4

SENEGAL

of Islamist organisations in West Africa have been at times slow to coalesce and counterproductive. About a week before the 13 March assault, officials from Burkina Faso, Chad, Mali, Mauritania and Niger met to agree to set up rapid-reaction units to face the threat posed by Islamist terrorists. With militant groups from Al-Shabaab in Somalia to the Islamic State in Libya showing their ability to adapt their tactics – from controlling territory to targeted assassinations – West Africa’s security forces are now looking at how they can respond to the current problems and their possible future mutations.

55%

38%

GeoPoll is the world’s largest mobile surveying platform and sample provider in Africa, enabling companies and organisations to gather quick, accurate and in-depth insights. To conduct your own mobile survey using GeoPoll’s easy-to-use platform visit Research.GeoPoll.com.

ISSOUF SANOGO/AFP

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BRIEFING

BENIN A supporter of Pascal I. Koupaki in the 6 March polls.

KENYA The crowded fishing community of Migingo island

NIGER Supporters of incumbent president Mahamadou Issoufou are hoping to put their candidate back into power, though the 20 March run-off could be a close race.

on Lake Victoria is claimed by the Ugandans, who even arrested Kenyan electoral commission agents.

THOMAS MUKOYA/REUTERS; SEYLLOU/AFP; HECTOR RETAMAL/AFP; PIUS UTOMI EKPEI/AFP; CARL DE SOUZA/AFP; JOE PENNEY/REUTERS

“I took the decision… to end political life in 2018 ” myy p Angola’s President José Eduardo dos S Santos says he will not run again. He will have run the country 9 years. for 39

US MILITARY PRESENCE DRONES AND BOOTS ON THE GROUND

France

The US is ramping up drone strikes in Africa, and positioning a rapid response base across the Mediterranean in Southern Spain.

Botswana Côte d’Ivoire D.R.C. Gabon Ghana Kenya Namibia Nigeria Congo Senegal South Africa Uganda Zambia

SOURCE: MOODYS

VATICAN POOL/GETTY IMAGES

CASH IN THE PHONE AHEAD OF THE CURVE

Mobile Account (% age 15+) Sub-Saharan Africa Average Global Average

Africa is leading the world in adoption of mobile phone banking - and East Africa leads the pack.

Portugal

SPAIN

KILLER DROUGHT LITTLE RELIEF IN SIGHT

LLibya Saudi Arabia

Egypt

Mali

NIGER Niamey N

BURKINA Ouagadougou g g Benin Togo Ghana

SOURCE: THE INTERCEPT

e Côte d’Ivoire

C CHAD N’Djamena N

Nigeria

DJIBOUTII Lemonnier- Chabelleyy South Sudan

C.A.R.

Gabon

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SOMALIA S OM

ETHIOPIA A Arba Minch h

CAMEROON MEROO Equ. Guinea

Yemen

Eritrea

Sudan

wanda Rwanda Burundi Tanzania

KENYA Nairobi

Baledogle aledogle d INDIAN IN OCEAN (on ships) Kisma K Kismayo

Manda anda d Ba Bay

SEYCHELLES ELLES

The brutal drought that hit South Africa last year has left an estimated 16bn rands’ worth of damage. Some farmers lost up to 80% of their cattle in KwaZulu-Natal province, and an estimated 5% of the national breeding stock of both pigs and cows had to be slaughtered. The government has made 400m rand available in drought relief funds – a small fraction of what is needed to reboot the agriculture sector.

BRIEFING

INTERNATIONAL 1

5 2

TRADE

60%

In a sign of the global slowdown affecting SouthSouth trade, there was a 60% fall in exports from China to Brazil this January compared to the same period last year. Economists predict that the Brazilian economy will record growth of -2.95% in 2016.

UNITED STATES

Trade wars

In a scenario that few predicted a year ago, ‘insurgent’ candidates have changed the political dynamics in the race to replace President Barack Obama. Both Republican presumptive nominee Donald Trump and the Democrats’ Bernie Sanders – who won big in Michigan to keep the race against Hillary Clinton alive in March – tap into a rich vein of anger. Both train their rhetoric on trade deals that they say have made the working class worse off while enriching elites. This has forced frontrunners like Clinton onto the defensive. When she was secretary of state, Clinton said she hoped the proposed Trans-Pacific Partnership (TPP) trade deal would be “the gold standard in trade agreements to open free, transparent, fair trade [...] the kind of environment that has the rule of law and a level playing field”. In recent debates, however, she distanced herself from the TPP. Trump rallies, characterised by subtle and not-so-subtle racism, also contain hefty diatribes about free trade pacts. In North Carolina in March, the real-estate mogul said: “All this free trade, you know what, it is free trade for them, not for us. We’re losing our shirts.”

BOLIVIA

End of the line

President Evo Morales has backed down from an attempt to win a fourth term. In late February he lost, by a narrow margin, a constitutional referendum that would have potentially allowed him to rule till 2025. Morales was elected in 2005 on a wave of Latin American social reform and has remained a popular figure, spending money from the gas industry on infrastructure and redistributing wealth while maintaining annual growth at around 5% over the past decade.

NORTH KOREA

Testy relations with Pyongyang North Korea shot yet another rocket over Japan in February – in what is thought to have been a disguised ballistic missile test – and the fragments of the projectile splashed down into a tense and militarised South China Sea. This followed the detonation of what Pyongyang is calling a hydrogen bomb in early January. These events have had the rare effect of unifying the resolve of the US and China on the matter, with harsh United Nations sanctions imposed on North Korea on 2 March. In response, North Korean leader Kim Jong-un announced the country has developed nuclear weapons small enough to be placed on the tip of ballistic missiles.

UNITED KINGDOM

“[The] biggest domestic risk to financial stability” In early March, Bank of England governor Mark Carney weighed in to the debate over the possibility of Britain leaving the European Union.

THE AFRICA REPORT

ANTHONY DEVLIN/AP/SIPA

EDMUND D. FOUNTAIN/THE NEW YORK TIMES-REDUX-REA

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PEOPLE

SPOTLIGHT

Tom Moyane Moyane, the head of South Africa’s tax agency, is in a pitched battle with finance minister Pravin Gordhan over how the government investigates fraudsters and the future of the country’s ruling party IN THE RUNUP to the infamous African National Congress (ANC) conference at Polokwane in 2007, where President Thabo Mbeki was defenestrated by a section of the ANC keen to install his deputy Jacob Zuma as leader, the security services were politicised in the war between the two men. Now, it is South Africa’s previously unimpeachable financial institutions that are taking a battering, as factions in the ruling party struggle to maintain control. At the heart of the latest clash for the soul of the ANC stands newly reappointed finance minister Pravin Gordhan and South African Revenue Service (SARS) head Tom Moyane. The treasury and tax office relationship is vital. If money is the lifeblood of an economy, then the treasury and tax authority are twin pistons in the heart, pulling cash in and pumping it out. In the year through March 2015, tax revenue came in R14.7bn ($964.2m) below budget, and the treasury expects an R11.6bn shortfall in the current fiscal year. Standard & Poor’s cut its outlook on South Africa’s BBB- credit rating, the lowest investment grade, to negative in December, and Moody’s officials are visiting Pretoria ahead of a decision.

TOP TAX MAN 21 January 1953 Born in South Africa 2003 Named to the board of state-owned energy company iGas 2005 Became chief executive of the Government Printing Works 2011 Appointed commissioner of the correctional services 2014 Became SARS commissioner

LEON SADIKI/CITY

So what is the beef between Moyane and Gordhan? The fight between them centres on a restructuring of SARS. During his own tenure as SARS commissioner from 1999 to 2009, Gordhan helped build the revenue service into an impressive institution, getting tax dodgers to pay billions and bringing millions of people into the tax base to triple tax revenue.

“ The [UN] Secretary General

During this time, with the blessing of then finance minister Trevor Manuel, SARS set up a specialised unit to investigate criminal networks. This so-called ‘rogue unit’ included some of Gordhan’s close allies who have deep political ties going back to the ANC’s underground days. That is what Moyane, appointed by Zuma in September 2014, is trying

“ People tend to think that

has dropped his neutrality and impartiality and has shown a guilty indulgence with a puppet state ”

being the son of a president will bring more advantages, but it’s actually not [the case] ”

The Moroccan government does not agree with Ban Ki-Moon’s call for a referendum of self-determination in Western Sahara.

President Ali Bongo Ondimba defended a new programme to provide equal opportunities in Gabon. THE AFRICA REPORT

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BRIEFING

Good times

“The country

has been robbed at gunpoint”

Forum for Democratic Change president Mugisha Muntu criticised the February presidential vote in Uganda. THE AFRICA REPORT

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TOKYO SEXWALE South African reality TV show boss Tokyo Sexwale did not manage to win around African delegates in the vote to be FIFA president. The former Gauteng premier received zero votes from his peers in late February.

MAJD MASTOURA Tunisia’s Majd Mastoura won the Silver Bear for best actor at the Berlin Film Festival for his role in Mohamed Ben Attia’s Hedi. The film, set in the throes of the North African uprisings, also won an award for best debut picture.

MOISE KATUMBI The former governor of Katanga Province in the DRC has rallied support behind his bid to become next president of the country. The ‘G7’ group of politicians who are now behind him include Olivier Kamitatu and Gabriel Kyungu.

UCHE SECONDUS In February, the former acting leader of Nigeria’s PDP was arrested by the Economic and Financial Crimes Commission for illegally obtaining 23 luxury cars worth more than N300m from businessman Jide Omokore.

RONALD KABUUBI/CITIZENSIDE

Crystal Orderson in Cape Town

GENZEBE DIBABA Ethiopian athlete Genzebe Dibaba broke the women’s world indoor mile record in Stockholm with a time of 4:13.31, beating the 4:17.14 set by Romania’s Doina Melinte in 1990 – a year before Genzebe was born.

to dismantle. Moyane has defied an order from Gordhan to halt his proposed restructuring of the tax body, and a number of senior executives have packed their bags in protest. SARS spokesperson and Gordhan’s right-hand man Adrian Lackay told a parliamentary commission last year that there was no ‘rogue unit’ and that the unit Gordhan formed was not created to spy on Zuma. The infighting is having an effect on staff. A SARS employee who spoke on condition of anonymity tells The Africa Report that morale is low: “The restructuring is stressing everyone because no one knows if they still have a job. It’s hard to keep focused,” the source explains. Moyane was a surprise appointment in the sense that he has little tax or finance experience. What he does have is impeccable connections to Zuma. Moyane left for exile to Mozambique, and he worked in the ANC intelligence wing, then run by Zuma. He even babysat Zuma’s children during the days of exile. The fight between Gordhan and Moyane comes just months after Zuma shook confidence with his surprise dismissal of finance minister Nene (TAR77, Feb 2016). Within days he had dismissed Nene’s replacement. Because of the huge backlash, Zuma appointed the respected Gordhan to calm the markets. Zuma is currently dealing with allegations about the influence of the wealthy Gupta family. This dynamic may help Gordhan in his battle of wills over Moyane. In a recent investor roadshow, Gordhan said: “Mr Moyane is merely the administrative head of an entity, and you cannot equate a minister in a government with the head of an administration.” ●

JOSE PEDRO DE MORAIS The central bank governor of Angola resigned following months of currency weakening and rising inflation. The country’s economy has been badly hit by falling oil prices and Luanda is in talks with the IMF over a possible bailout.

Bad times

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BRIEFING

OPINION

B Bassey Ikpi

Poet, writer, presenter and mental health advocate P

Lagos – a hard city to live in, and even harder to die in

heard the violently off-key choir of the church next door before I even considered opening my eyes. The static fuzz from the ancient PA system swirling through the apartment told me two things: I was awake and I was alive. Lagos was unbearably hot that morning. Lagos was always hot, but this particular morning I could feel the wet of my tank top clinging to my back and shoulders. My hair had managed to unwind itself from the Medusa mass of a top knot constructed at some point the night before. The distant taste of whisky clung to my tongue like an inappropriate suggestion. If it wasn’t for the empty receptacle still on the floor next to me, I wouldn’t have even remembered drinking it straight from the bottle. What I remembered was that I needed something to wash away the Ambien. The sleeping pills had begun only to encourage sleep. The whisky, I discovered one restless night, helped chase the anxiety that travelled the space between my chest and belly, encouraging an unbearable trembling. I have been on one medication or another for the past 10 years and a glass of wine a few hours before or after my night meds was okay. But using whisky to wash down those same pills wasn’t smart, and I knew it. The neglected bottle of water standing next to the empty whisky bottle knew it too. Both bottles were standing side by side, caps off, like a metaphor for making good choices. Knowing that it was too late, I reached for the water bottle and downed its full contents without taking a break. The water entered my body like a prayer answered.

I just wanted to sleep. That I did, but there was no satisfaction in the victory. I woke up on the floor and stayed there staring at the blank space between the window and the wardrobe. The church next door moved on from static singing to a barely audible sermon. I could never understand why Lagos churches opened their doors and pointed speakers out towards the street at any hour of the day. This religion, by force, was added to the long list of reasons I could no longer stay here.

Because there was no hangover to punish me for last night, it felt like an empty gesture – the small talk of self-destructive patterns. There was nothing about last night that was damaging really. I could ignore the empty whisky bottle and the half-open bottle of sleeping pills. Nobody knew. I was still here, but I couldn’t understand the feeling volleying around my head. It felt like I had been denied something I didn’t know I wanted. I was awake, and this awake was a disappointment. This time in Lagos had been difficult. It felt like everything I touched turned to lead and sank into the earth. Even the most promising prospects that gave me permission to hold hope in my palms would suddenly disappear into nothingness. This place was not easy to negotiate. Everyone told me to give it time. “You know Lagos is not easy nau. It will happen.” But a year had passed and nothing had happened. There was no home, no money, no

In a country that wouldn’t let me say ‘depression’ I felt isolated and strange promise – just the realisation that being here was a mistake and the strong head that led me here in the first place was the same strong head too ashamed to go home a failure. I was a failure. I’ve lived with depression most of my life but always held a sliver of hope between my teeth. But in a country that wouldn’t let me say the word ‘depression’ let alone have it, I felt isolated and strange. I tried to see a therapist, but he had spent more time talking about himself. And when he did find enough space to pause and allow me to speak, I could feel the judgment coating his every word: “But you’re a fine girl from America. If you were married, then you would have more to focus on than just yourself.” I walked out of that office into an awaiting car, knowing that I would have to rely on myself and the medication shipped in from the United States once a month. There was no way I would see a therapist in this country. THE AFRICA REPORT

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ZEBEDEE

So here I was, four months later in a flat not my own, contemplating what life would look like without me in it. I had done the research: people would mourn for a month or two, family and friends six months to a year but eventually everyone would get over it. They would remember me on birthdays and holidays, but they would live on. I didn’t know how much longer I could, not with this pain living in my bones. I stood up a bit too suddenly, and the room rushed towards me like an angry crowd. I headed to the bathroom to… I don’t know. Wash my face? Brush my teeth? Stare at myself. I am always being told that I look at least 10 years younger than my age. I always smile and thank people, attributing it to my water intake and good genes. But staring into the hollow of my face, I didn’t look young. I looked unfinished. It’s probably better that I didn’t die last night. Death deserved something more top shelf: a Johnnie Walker Black goodbye. Not a bottle of cheap, picked up from the dirty shop down the road. The bottle was so dusty that upon hearing my American accent, the shop boy’s face fell into a mask of shame and embarrassment. He apologised over and over for the state of the store as if I would carry this inTHE AFRICA REPORT

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formation back to America and disgrace his family. “Please, ma,” he said over and over, “make I find a clean bottle or maybe you get Andre?” gesturing towards the rows of sparkling wine behind me. “No worries,” I tried in my best slow, vaguely Naija pidgin. “Just take cloth, clean am. Make you no trouble yourself for N600.” I handed him a N1,000 note and told him to keep the change. His eyes lifted in gratitude, and he tripped over his small English to thank me: “God will bless you real good, ma.” I found a smile somewhere in the wreckage to offer him then turned and joined the street noise outside. After the disappointment of the appearing morning, I thought about what would have been written if I hadn’t woken up. They would say it was because I didn’t go to church or because I was unmarried or that I was under spiritual attack. Like the young Nigerian pharmacist who had leapt off a bridge in the States, the story they would tell here would be different. They would say that I had been ill: typhoid or malaria. I would be buried quietly and quickly and no one would speak of it. I stood at the mirror attempting to see what the world would see. I saw fatigue and a despair that had entered my soul and perched there awaiting instructions. “I’m tired, but it is rude to die in someone else’s house.” ●

BRIEFING AFRICA HOTEL INVESTMENT FORUM 5-6 April LOMÉ | TOGO As business and tourism expand in Togo, this conference looks at the hotel investment opportunities in the whole region. africa-conference.com/togo

CALENDAR

DJIBOUTI PRESIDENTIAL ELECTIONS 8 April As President Guelleh seeks a fourth term in office, opposition parties have announced they will take part in the poll, after two previous boycotts.

WORLD TRAVEL MARKET AFRICA 6-8 April CAPE TOWN | SOUTH AFRICA Leading B2B exhibition bringing together the inbound and outbound African travel and tourism markets. wtmafrica.com

GHANA SUMMIT – OIL, GAS & POWER 20-21 April

DARFUR | SUDAN After five years of waiting Darfurians finally get to vote on the permanent status of their region.

ACCRA | GHANA cwcghana.com

WORLD BANK GROUP & IMF SPRING MEETINGS 15-17 April

EAST AFRICA PROPERTY INVESTMENT SUMMIT 6-7 April NAIROBI | KENYA eapisummit.com

DARFUR STATUS REFERENDUM 11-13 April

WASHINGTON DC | US imf.org

ANNUAL INVESTMENT MEETING (AIM) 11-13 April DUBAI | UAE African speakers include Dell Corporation’s Michael Ansah, Mawuena Trebarh, CEO of the Ghana Investment Promotion Centre, and Senegal’s sovereign wealth fund CEO Amadou Hott. aimcongress.com

TANA HIGH-LEVEL FORUM ON SECURITY IN AFRICA 16-17 April BAHIR DAR | ETHIOPIA tanaforum.org

FESTIVAL INTERNATIONAL DE LOUISIANE 20-24 April LOUISIANA | US Roots, reggae and zydeco down in the bayou. festivalinternational.org

LONDON MARATHON 24 April LONDON | UK Eliud Kipchoge returns to defend his title, with competition from fellow Kenyan Wilson Kipsang. virginmoneylondonmarathon.com

AVCA CONFERENCE 25-27 April ADDIS ABABA | ETHIOPIA Over 500 delegates from 30 countries will convene in Addis Ababa to discuss Africa’s private equity and venture capital potential. avcaconference.com

MOZAMBIQUE MINING, ENERGY, OIL & GAS 27-28 April XINHUA/ZUMA-REA

CHAD PRESIDENTIAL ELECTIONS 10 April Thirteen candidates are seeking to oust incumbent President Idriss Déby, who is running for a fifth term after 26 years in power. This attempt will most likely be the last for the country’s main opposition leader, 68-year old Saleh Kebzabo, as a result of the 70-year age limit imposed by the constitution.

MAPUTO | MOZAMBIQUE mozmec.com

WORLD ECONOMIC FORUM ON AFRICA 11-13 May KIGALI | RWANDA The WEF is in Rwanda for the first time. See our country forcus starting on page 51. weforum.org

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FRONTLINE Sierra Leone, which earns 85% of its foreign exchange from mineral exports, has been devastated; economies as big as South Africa’s and Nigeria’s are also struggling. Now, leaders and activists are trying more nationalist tactics against the resource curse By Patrick Smith in Freetown and Crystal Orderson in Cape Town

ommodity price crash. Endemic corruption. Rebellion. Mutiny. Coup d’état. Invasion. Anarchy and atrocities. West African, British and UN intervention forces. Peace talks. Special court tries rebel leaders. New mining investors. World’s fastest-growing economy in 2013. Ebola outbreak. Mining companies stop production, and two companies collapse. World’s fastest-shrinking economy in 2015. Commodity price crash. How many other countries have been hit by such an unrelenting cycle of attacks and setbacks over the past three decades? Five years ago, a boom was on the horizon. West Africa was the new frontier for iron ore, and Sierra Leone was at its epicentre. Reckoned to have over 10% of the world’s reserves of high-quality iron ore, West Africa would soon be exporting more than 500m tonnes per year. Instead, the economies of Sierra Leone and its neighbours, Guinea and Liberia, are on hold after the world price of metals crashed in the past year. These economies, and many others across Africa, are locked in the commodity trap with few alternative sources of income. Two of the biggest mining ● ● ●

Growth

After the crash, the fightback

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FRONTLINE | GROWTH: AFTER THE CRASH, THE FIGHTBACK

companies in Sierra Leone went out of business last year and a third is at a standstill as thousands of workers were laid off. So what went wrong? From his fourth-floor office a stone’s throw from the giant Cotton Tree, which dates back to the founding of Freetown in 1792, Herbert M’cleod, one of Sierra Leone’s leading economists, sets out his prognosis: “It is bad policies and bad management that have brought us here […]. The way out is to link the mining business with the wider society, with jobs, training, electricity, roads. The mining sector cannot be left on autopilot […]. It has to be integrated into the rest of our development plans.” Beyond the $1.5bn that iron ore was set to generate from royalties and other taxes each year, there should have been a huge boost to the local economy as companies set up to service the industry. “That didn’t happen in the way we wanted it,” M’cleod explains. Part of the problem was the type of companies that came in. “As a post-conflict country with weak institutions, our mining industry attracts high-risk investors and bottom-feeders.” ●●●

BOUGHT PROMISES

The government was faced with a cruel choice, says M’cleod: “Wait for the worldclass companies who take their time to come in […] or buy the promises of immediate mine development, revenues and jobs that the smaller and lessknown players offer.” President Ernest Bai Koroma’s government chose the latter. Companies such as Frank Timis’s African Minerals and another British-listed outfit, London Mining, arrived in Sierra Leone a decade ago, winning mineral rights across vast areas and generous tax concessions while facing little operational scrutiny. Of the two companies, Timis’s proved the savvier operator and the faster to take advantage of strong prices for iron ore, which reached a high of $190/tn in 2011. Iron was trading for about $57/tn in March 2016. Timis persuaded China’s Shandong Iron & Steel Group to take a 25% stake in the project and invest some $1.5bn to develop the mine in early 2014. Eventually, a combination of the Ebola outbreak – which froze much of the country’s economy – chronic mismanagement and the 2015/2016 commodity price crash pushed both African Minerals and London Mining out of business. The closures cost more than 15,000 jobs for those

The slump DEBT African bond issuance continues ($bn) 7 * Sub-Saharan Africa, excl. South Africa 6 5 4 3 2 1 0 2007 2008 2009 2010 Congo Nigeria

Ethiopia Rwanda

Gabon Senegal

2011 Ghana Tanzania

2012

2013

Côte d’Ivoire Zambia

2014

Kenya Mozambique

2015 Namibia Angola

Weakening currencies push debt service costs up 0 2 4 6 8 10 12 14 16 18

Zambia Namibia Ghana Gabon Côte d’Ivoire Uganda Senegal

Commodity exports as % of merchandise exports

Kenya Angola Rep. of Congo Rwanda Tanzania

0%-20%

Ethiopia

20%-40% 40%-60%

Nigeria 0

20 40

% of GDP yoy (top)

80 100%

60%-80%

% yoy (bottom)

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directly working for the mines and tens of thousands more for people providing equipment and services. Timis’s mine started producing lowgrade ore – known in the trade as ‘mud’ – at Tonkolili in November 2011. As operations began, the value of the company’s share price skyrocketed on the London Stock Exchange’s Alternative Investment Market to $3.5bn. As others were caught up in the breathless pace of the commodity supercycle, activists and trade unionists asked awkward questions about how Sierra Leone’s iron ore industry was being run. For the government, the numbers from the International Monetary Fund (IMF) and World Bank told a good story: gross domestic product grew from 6% in 2011 to 15.2% in 2012 and then to 20.1% in 2013, making Sierra Leone the world’s fastest-growing economy.

Abu Brima, executive director of the Network Movement for Justice and Development, urges Sierra Leoneans to look beyond the headline figures: “How much is our country really earning in terms of jobs and investment? These arevaluableresourcesthatwereparcelled out to companies with little or no track record […]. There was no bidding process and minimal accountability. The companies who got the licences also got huge tax concessions, which hit the revenues due to the government.” Not only was the country losing muchneeded revenue, Brima adds, but the mines were not being managed in a way that would create jobs and develop the economy: “Expensive sub-contractors were brought in from outside for tasks that locals could do.” At the same time, problems were mounting at the mines. Elsewhere in the THE AFRICA REPORT

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could start blasting […]. People had to relocate to areas where the farming was not as good. The walls of their houses were cracked, and afterwards there were water shortages but no compensation.” Making a case for change to the government or the mining companies is an uphill struggle, according to Brima and Finda Kandeh. With commodity prices and export revenues crashing, they say thegovernmenthaslittleinterestintaking on the mining companies. On some issues,thereseemstobecollusionbetween state officials and the companies.

COMMODITIES Composition of commodity exports (by region, 2012-2013, left axis %) 100

2,500

2,000

1,500

1,000

500

Africa

Latin America and the Caribbean

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Asia

Commodity export value, right axis C in billion US$

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Minerals, ores and metals

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NEW POLICY

600 500

Agricultural raw materials Minerals, ores and metals Crude oil

400 300 100 0

2002

2004

2006

2008

2010

2012

2014

2015

SHARE PRICE COLLAPSE 3,411.26

529.23

Anglo American

Glencore

1,630.73

Tullow Oil

2,729.01

423.38

2,046.75

317.54

978.44

1,364.50

211.69

652.29

682.25

105.84

326.14

Jan. Jan. Jan. Jan. Jan. 12 13 14 15 16

1,304.58

Jan. Jan. Jan. Jan. Jan. 12 13 14 15 16

African Minerals’ concession area, police were accused of carrying out a bloody crackdown in Bumbuna in April 2012 against striking workers. At the centre of it was Moses Gbondo, general secretary of the Mining and Allied Services Employees Union. He tells The Africa Report that he and his colleagues had established an alternative to the long-standing United Mineworkers’ Union, which had not organised credible leadership elections in decades. “The workers at the African Minerals mine [in Bumbuna] were striking about conditions and protesting that they had not been allowed to join the trade union of their choice,” he explains. STRIKERS GUNNED DOWN

The situation spun out of control, according to Gbondo, as it had in the deadly Marikana clashes at Lonmin’s platinum mines in South Africa in 2012. THE AFRICA REPORT

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SOURCE: UNCTAD, WORLD BANK, THRID WORLD NETWORK-AFRICA, BLOOMBERG, WSJ

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It is more about realism, insists deputy mines minister Abdul Ignosi Koroma when asked why the mining contracts were so generous to the companies: “We have to look at the marketplace. When no one wants to explore because the prices are low […] of course the contracts will not be good.” The government’s dealings with African Minerals were based on practical necessity, he argues. “They did the aeromagnetic surveys [and] produced data eventually showing reserves of 12.8bn tonnes of magnetite ore. No one else would take that on.” Koroma is confident the mining sector will bounce back over the next five years: “We are due to announce our new core mineralspolicynextmonth[April],which should reassure investors and increase revenues for government.” Officials drawing up the new policy consulted widely with companies, community and workers representatives, said Koroma, adding that the sector would be more efficiently managed. Last year the government established the National Minerals Authority as a professional agency to implement and monitor policy but also to improve the accountability of the sector. Although

“The security guards and police started shooting, killing one worker and wounding several more.” For Esther Finda Kandeh, who runs a campaign group, Women on Mining and Extractives, the shootings at Bumbuna are part of a wider pattern of repression in the country’s With export revenues crashing, the mines. “We’re trying to imgovernment has little interest in prove conditions for women taking on the mining companies in mining, their chances of jobs in the sector […]. Curthe government is not comprehensively rently, they just get low-level roles in services or cooking. We want to get them renegotiating contracts in the wake of the price crash, it will scrutinise new conbetter-paid administrative jobs as well.” Finda Kandeh’s organisation also reptracts far more avidly, bringing in legal advisers from the African Development resents women living with their families Bank and other agencies. in mining areas who complain they are Iron ore production is due to restart at arbitrarily forced to move at short nothe Tonkolili mine, which is now 100% tice: “In the Tongo field last year, in the owned by Shandong. Its legal adviser told diamond areas, the companies forced us the company has been discuss- ● ● ● many people from their homes so they

FRONTLINE | GROWTH: AFTER THE CRASH, THE FIGHTBACK

The fightback Guinea President Alpha Condé has seized on the advice of billionaire trader turned philanthropist George Soros, who says crashing prices mustn’t stop mine development. In Condé’s “use it or lose it” policy the state takes a 20% stake in all mines and will investigate claims of grand corruption in the awards of the licences at Simandou, the world’s biggest iron ore reserve. Guinea holds nearly a third of the world’s reserves of bauxite

Nigeria President Muhammadu Buhari has three goals: track down the oil money stolen by previous governments, make the state oil company efficient, and invest heavily in agriculture. Sceptical of IMF calls to devalue and liberalise trade, he pushes a nationalist strategy to use the country’s plentiful oil, gas and minerals to boost local industries. 45 40

Nigerian Stock Exchange

35 30 25

10 Mar.: 25,923.77

2012 2013 2014 2015 2016

Zambia

low interest rates in rich countries. That drove capital into developing economies: marketcapitalisationoftheJohannesburg Stock Exchange nearly tripled between 2009 and 2014; capital markets in Nigeria, Ghana and Kenya followed suit. Capital flows are turning negative for the first time since 2006. In 2015 there were net outflows from developing economies totalling $600bn – about a quarter of that is coming out of Africa. The biggest outflows have been through the banks: international banks are set to cut their credit debt service and weaken currencies, deplete reserves and depress asset prices. This adds up to serious damage to the real economy in Africa. All this is a dangerous cocktail for the ANC government, but also for companies based in South Africa. Johannesburgbased British mining company Lonmin is in chronic financial trouble, which it At the bottom of the commodities food chain, artisanal diamond miners in Sierra Leone

CARNAGE

When many copper mines suspended production Zambia was dealing with a tricky succession. Due to fight another election this year, President Edgar Lungu wants to persuade mining companies to restart operations. Lungu’s main opponent Hakainde Hichelema is close to Anglo American and promises big reforms in mining. Burgeoning borrowing (debt as % of GDP) 2005 (pre-forgiveness) 2006 (post-forgiveness)

2015

Ghana Mozambique Zambia 0

● ● ● ing grants to community organisationsandseverancepaymentstoworkers. Only Sierra Rutile’s mineral sands operation, run by John Sisay, a cousin of President Koroma, has been making money and increasing production. But that is not enough to steer the economy out of the doldrums. It is forecast to grow just under 1% this year, according to the IMF. Inflation is set to rise at five times that rate, partly due to the weakening exchange rate of the leone against the United States dollar. The arguments over resource nationalism, land use and beneficiation, which are getting more insistent in Sierra Leone, have been central to politics in South Africa for the past decade. This is partly because of competition for working-class support between the African National Congress(ANC)partyingovernmentand the radical Economic Freedom Fighters (EFF) under Julius Malema, who wants nationalisation of the mines without compensation. Sometimes, corporate South Africa struggles to differentiate betweenMalema’sradicalsandtheANC’s resource nationalists. That was clear at this year’s Mining Indaba, which drew between 6,000 and 7,000 participants to Cape Town in February to meet the industry’s major corporate and political figures. Once one of the world’s top mining countries, South Africa is fast slipping down the rankings, said officials at the Indaba. Some 47,000 mining jobs were cut in the sector between2012and2015. Theonce-mighty Anglo American Corporation, which now includes the former diamond cartel De Beers, plans to lay off 85,000 of its workers worldwide over the next five years, which will shrink its workforce to 50,000.

100

Mark Cutifani, chief executive of Anglo American, told the Indaba about the carnage in the mining industry wrought by the price crash. At the beginning of 2013, the market capitalisation of mining companies listed on London’s FTSE 100 index was $555bn; by 1 January this year, it had fallen to $169bn. Global mining stockshadlost$1.4trninvaluesince2011. To that pattern can be added the effects of the worst slowdown in emergingmarket economies since 2009. Africa is being hit not just by lower commodity prices but by capital outflows. From 2009 to 2014, some $2.2trn flowed into developing economies, partly because of quantitative easing and historically THE AFRICA REPORT

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blames on falling demand for its platinum; its workers blame mismanagement. In August 2012, police shot dead 44 people at Lonmin’s Marikana mine after a bitter dispute for recognition by the Association of Mineworkers and Construction Union (AMCU). MARIKANA STILL HAUNTS

Soft-spoken Thumeka Magwangqana chairs Sikhala Sonke, which supports the widows whose husbands died in the massacre, and says the community is hauntedbytheshootingsandthethreatof more job losses: “The last time we heard about any retrenchments here in Marikana was in January. I have heard stories of a mine like Samancor closing, and they are retrenching hundreds of people. This is terrible. We just do not know what the future holds, and it’s very stressful for us and the workers. The widows of the Marikana massacre are now working at the Lonmin mine [they replaced their husbands] and they have said nothing to them now about any retrenchments.”

John Capel, executive director of the to politics. The latest policy proposals BenchMarksFoundation,whichmonitors to spread the benefits of the country’s corporate performance, faults companmineral riches are rattling all but the ies for failing to provide for mineworkers most robust and innovative investors. during price slumps: “[The mining comBotswana, where close collaborapanies] went through a platinum boom tion between government and Anglo in the last 20 years and made returns of American/De Beers has assisted the over 30%, but they never set up an emerdevelopment of a diamond-cutting and gency fund for the bad times.” He adds: polishing industry, is held up as an example of practical resource nationalism. “It is always workers who face the brunt in a commodity downturn. At least 45,000 Sierra Leone’s M’cleod, who worked in [platinum] jobs have been lost since 2007,now perhaps Miners went through a platinum 50,000 or more.” boom, but never set up an Companies should think emergency fund for the bad times harder about how they can use platinum in local manGaborone for many years, said the local ufacturing processes, Capel argues, to environment – with its excellent transcreate more economic linkages. For now, he says, companies seem to recognise port, communications and energy profew responsibilities, either to the workvision – had very specific advantages. ers they are laying off or to the degraded “Local content policy should environment they leave behind when strengthen local business to be more competitive when bidding for contracts,” they end their operations. Mining has been at the centre of South M’cleod argues, “rather than specifying Africa’s history and is inextricably linked percentages of local content in mining operations.” The key, he adds, was sustainability: local companies should take on only those tasks they can do now but build up capacity to do more later.

TOMMY TRENCHARD/DEMOTIX/CORBIS

PUSH MANUFACTURING

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South Africa, with its developed infrastructure and links to global markets, should be poised to move from the shipment of unprocessed minerals to a more diversified, manufacturing-led economy. And the government could offer critical help here, according to Iraj Abedian, chairman of Pan-African Capital Holdings: “The rand exchange rate has made South Africa a manufacturing economy that is cheaper than China […]. South African policy-makers need to make the environment more stable so that manufacturing can get off the ground.” Mbuyiseni Ndlozi, an EFF member of parliament, also calls for diversification. He says he wants to see a strong state role: “There is a mining crisis. We have to move beyond commodities […]. The most labour-intensive sector you should invest in as government is agriculture.” Anglo American’s Cutifani says the forces for change in the resource businesses go far beyond commodity prices: there is the rise of disruptive technology, the gear change in China’s economy that will influence both the type and volume of raw materials needed, and climate change that will affect the viability of some natural resource operations.

FRONTLINE | GROWTH: AFTER THE CRASH, THE FIGHTBACK

New approaches, according to Cutifani, could include measures to make communities involved in mining more sustainable. The growing use of digital technology and data will make mining smarter and more cost-effective but it will employ far fewer people. Another wake-up call came from Michael Power, a scenario guru for Investec Asset Management: “Unlike a few years ago, many are now feeling depressed about Africa’s economic prospects, with the current problems reflecting changes in conditions exacerbated by local structural and cyclical issues,” he told corporate chiefs at a private breakfast during the Mining Indaba. Investors have to realise “that the Africa story is not just about buying into local consumer stories that reflect good demographics, urbanisation and the spread of consumer finance, aided by the mobile phone,” hesaid.Hepredictedtherewould be five game-changers this year: China, commodities, currencies, creditworthiness and climate change. INDIA NEXT

The next upturn in the global economy and mining is likely to be driven by India, said Power, but that could take another seven years or so. That prognosis is of great interest to East Africa, whichfocuses on the hyper economies of China and India across the Indian Ocean. PowerarguesthatEastAfrica’seconomies – partly because of their advanced regional integration led by Kenya, Uganda and Rwanda – are a good fit with Asia. Their economies are more diversified, less oil- and mineral-dependent than most others, with serious manufacturing in Ethiopia and Kenya, and they are at the centreoftheglobalmobile-moneyrevolution that started in Africa. Regional integration and technological innovation are alsocriticalforRwanda,restrictedbothby its small domestic market and limits on the growth of its agricultural sector. The region – with Ethiopia’s Grand Renaissance Dam, Kenya’s geothermal power, Tanzania’soffshoregasandplentyofsolar and wind power potential – is also fast moving towards energy independence. All this is pushing policy-makers in resource-dependent economies in other regions to look more closely at trends in East Africa, as regional economies are drawn together to make more viable markets in an effort to cut their chronic dependence on revenues from commodity exports. ●

OPINION

Yao Y Graham G

oordinator, Third World Network-Africa Co

African mining needs a vision

he expansion of mining and natural resource exploitation has been a critical factor in the highest levels of growth in Africa for more than 30 years. The resource sector’s success in attracting foreign investment has often led to it being held up as a poster child for economic liberalisation. The wider context for this is the structural shifts in the global economy, which are centred on the rise of China as a major consumer of raw materials. But the commodity boom has also exposed the limited developmental possibilities of mining regimes across Africa, especially the ways

To date, African governments have been focused on improving the state’s share of mining revenue through law reform and the renegotiation of contracts. In the wider debate about mining and Africa’s development, improved fiscal returns are seen as the first steps to a more ambitious and longer-term agendaofdiversificationandstructural transformation. This agenda for structural economic change and the fightback against dependence on commodity exports is set out most comprehensively in the Africa Mining Vision (AMV). It was adopted as a policy document by the heads of state in the African Union in 2009

The commodity booms exposed the limited developmental possibilities of mining regimes in which fiscal regimes are biased in favour of foreign firms, giving greater power to foreign capital over African economies. Not only did the mineral and oil price boom reinforce Africa’s traditional place in the international division of labour as suppliers of raw materials to industrial economies, it has also deepened Africa’sdependenceonthosecommodity exports. The dangers that come with this – the falls in export earnings due to price crashes – have been sharply highlighted by the current economic crisis.

and was buttressed with an action plan in 2011. It envisages mining as “a key component of a diversified, vibrant and globally competitive industrialising African economy”. The AMV also responds to criticisms from civic activists, workers and community groups about governance, rights and environmental violations. The principles of the AMV now form part of agreed regional development plans and are being integrated in national policy in Africa’s mining economies. For these principles to work out in practice, they need national and

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GROWTH: AFTER THE CRASH, THE FIGHTBACK | FRONTLINE

regional policy space. However, the orientation of reforms of the Western-dominated international trade and investment regime over the past three decades has reduced the scope for independent national and regional policies. At the same time, it has expanded the range of policy issues affected by frameworks such as the World Trade Organisation, the United States African Growth and Opportunities Act, successive aid and trade arrangements with the European Union and bilateral investment treaties. Critics of the radical liberalisation of the mining sector argue that despite generous incentives to investors, it has not generated the hoped-for revenues or jobs, and national economies have become ever more dependent on commodity exports. Mining has remained an enclave sector with weak links to wider national and regional economies. The tripling of mineral prices between 2000 and 2011 generated unprecedented levels of profits for mining companies. Between 2003 and 2011, profits grew by an average of 20% per year. Average net profits of the biggest mining firms went up by 64% between 2005 and 2006 alone, but African governments received only a small share proportionately. Although the AMV acknowledges the value of mineral taxes for development, it argues for a shift away from the rentcentred strategy. Instead, it sets a framework for mineral-based manufacturing and structural transformation of Africa’s mineraldependenteconomiesand for their better integration into diversified and industrialised regional economies. The AMV seeks to promote upstream (mining, capital goods and services), downstream (refining and manufacturing) as well as sidestream (power, communications and THE AFRICA REPORT

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water) linkages. It recognises the importance of indigenous ownership of enterprises. TheAMVrecognisestheimportanceofpromotinglocalownership of mining and related enterprises. Cooperation among Africans needs to replace the competition that has characterised the FDI-

Those who question the prospects of the Africa Mining Vision have a point. The road to the AU Summit that adopted it is littered with the faded pages of plans and resolutions on the continent’s development that died soon after the ringing speeches marking their birth.

Mining has remained an enclave sector, with weak links to wider national and regional economies driven mining boom, if the AMV is to become a reality. The jobs directly created by Africa’s artisanal and small-scale mining sector (ASM) are several times those created by large foreign-owned mines. One of the concerns of the AMVistobringASMfromthemargins to the centre of national and regional mining policies so as to optimise its economic and social contribution,whilstaddressingthe many environmental and health issues associated with the sector.

The economic problems caused by the current downturn in demand for and price of minerals, however, underline the AMV’s logic.AcrossAfrica,governments are seeking short-term responses to these structural-cyclical problems. However, citizens’ demand for the types of polices set out in the AMV predate the conversion of their governments to reforms during the boom years and may prove the force that saves the AMV’s agenda from the junk pile of history. ●

POLITICS

NIGERIA

Delta force By Rosie Collyer in Port Harcourt

hen environment minister Amina Mohammed announced on 5 March that President Muhammadu Buhari would shortly visit Ogoniland, the heartland of the Niger Delta militancy, there was a sharp intake of breath. The Buhari government intends the visit to make a political point and counter accusations that it wants to cut funding to the region. In December, the federal government is due to end the Niger Delta amnesty programme, with its payments and skills-training programmes

for militants. Amnesty payments have brought some peace to the region over the past six years, but political temperatures are heating up amidst a fresh spate of attacks. In Gokana Local Government Area in Rivers State, a shoot-out in late February between soldiers and militants loyal to Solomon Ndigbara, also known as General Osama Bin Laden, left many dead. Some 250km away in the creeks of Delta State, soldiers were also raiding villages in the Gbaramatu Kingdom in pursuit of Government Ekpemupolo – alias Tompolo – perhaps the richest of the former militant leaders. Tompolo, who has kept a low profile since Buhari’s election, is now wanted by the Economic and Finan-

cial Crimes Commission (EFCC) on multiple fraud charges. Like other militants, Ndigbara and Tompolo are grappling with the Buhari government’s robust approach to the Delta and security matters in general. “During Goodluck Jonathan’s presidency, militant leaders were placated with multimillion-dollar contracts,” says Jude Isiayei, director of the Coastal Heritage and Economic Watch civic organisation. “He [Tompolo] has at least three governors in his pocket. Buhari and the All Progressives Congress (APC) are not comfortable with that,” adds Isiayei while sitting on a boat sailing up the Forcados River in Delta State. Just a few kilometres away is Tompolo’s mansion in his ancestral village. THE AFRICA REPORT

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again Buhari is going to Ogoniland to launch an environmental clean-up project – one of the biggest in the world – drawn up by the United Nations Environment Programme(UNEP).Somewillapplaudhim, but hard-headed activists will take more convincing about the sincerity of the federal government’s intentions. After the fighting in Gokana, some critics accused theBuharigovernmentofreturningtothe days of military occupation in Ogoniland. Leading activist Legborsi Saro Pyagbara called on the UN to investigate the clash. SARO-WIWA LEGACY

Niger Deltans point out that their region produces most of the country’s oil, but it has been among the country’s most neglected areas. One of the most promTHE AFRICA REPORT

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Early 2016 has been marked by an uptick in violent clashes and attacks on oil pipelines. With the end of the amnesty in view, President Buhari faces stark choices in the Niger Delta

inent Ogoni activists, Ken Saro-Wiwa, together with eight others, was hanged more than 20 years ago for defying the military government of General Sani Abacha. Memories of the Abacha repression, as well as the political divisions in the Delta, run deep. The devastation wrought by the oil industry, along with the destruction of fishing grounds and farmland, is an international disgrace, far eclipsing the damage caused by the Deepwater Horizon oil spill in the Gulf of Mexico in 2010. There, BP has paid out some $20bn in compensation under huge pressure from the United States government. In comparison, victims of the environmental destruction in the Niger Delta have seen only paltry sums from

Militants in 2009; will they return to the mangroves when amnesty payments end this year?

the oil companies and the government to address the far greater damage. That may be changing. UNEP’s involvement in the Ogoniland clean-up has highlighted the catastrophe internationally. Royal Dutch Shell agreed to pay $80m in compensation to the Bodo fishing community in January after a London court found it had neglected its duty to protect the area from oil spills. More such cases are looming in London. And in February, a Dutch court ruled that Nigerian farmers can sue Shell in the Netherlands for compensation in environmental despoliation cases. The claimants argue their cases in Nigerian

VÉRONIQUE DE VIGUERIE/GETTY IMAGES REPORTAGE

POLITICS

courts – where Shell prefers them to be heard. They stretch on inconclusively and can be subject to heavy political and corporate influence. The Niger Delta remains resolutely in favour of the opposition People’s Democratic Party (PDP) of former President Jonathan. After a series of election reruns and court rulings on malpractice, the PDP still holds six out of the eight governorships in the region. MURKY IN THE DELTA

It is just about a year since Buhari won a landmark election victory against Jonathan, who was the first president to hail from the Niger Delta. Despite threats of mayhem and mass protest from loyalists to the PDP and Jonathan, hell did not break loose in the Delta. Even militant leaders, especially those who had done well under Jonathan’s presidency, kept their counsel. Initially, Tompolo struck a non-partisan stance, saying he would judge the Buhari government on its merits. But it quickly became clear that Buhari’s anti-corruption sweep would target some of the murky political-security networks that operated in the Delta under PDP rule. As the receipient of a $100m maritime security contract awarded by Jonathan’s

government, Tompolo was a likely target for the EFCC investigators. He was living in some style in Warri, the capital of Delta State. Last August, the EFCC charged him with defrauding the Nigerian Maritime Administration and Safety Agency of millions of dollars. The police have unsuccessfully tried to bring Tompolo to court four times. At first, Tompolo’s lawyers counterclaimed, suing the government for the wrongful confiscation of his property. Then they raised technical objections about the way the officials served him a warrant. Now, there is radio silence and no sign of Tompolo. Six years ago, Tompolo commanded a ragtag force of around 5,000 militants; today, most of those men receive a government stipend of $300 per month as part of the amnesty programme first floated in 2008. The amnesty’s aim was to end a decade of conflict and sabotage in the region. The policy has been fairly successful. Bridget Affiah, a peace activist working with communities in and around the Gbaramatu Kingdom, explains: “Former militants don’t want to take up arms again. They are too comfortable.” She adds: “Tompolo has too much to lose now. […] People in glass houses

Rivers State governor Nyesom Wike has to tread carefully after killings in Yeghe in Onelga show the situation is volatile

shouldn’t throw stones.” Indeed, Tompolo’s spokesman insists that he has no ambitions to return to the fray: he issued an angry denial insisting that Tompolo had never threatened to start blowing up pipelines again if the EFCC continued to pursue him. Both sides are being cautious in the current pursuit of Tompolo. However, there have been several new incid-

OPINION

Max Siollun Historian and author of Oil, Politics and Violence: Nigeria’s Military Coup Culture (1966-1976)

Is the half a yellow sun rising again?

or many of Nigeria’s 170 million people, most of whom are under 30, the bitter civil war triggered by Colonel Emeka Ojukwu’s bid to win independence for Biafra in 1967 is half-forgotten history. But the Indigenous PeopleofBiafra(IPOB)movement is reviving calls for an independent state.

A new generation of activists is rallying to the Biafra cause, and the political establishment has started to warn about its danger to the country’s unity. President Muhammadu Buhari, who fought in the civil war like his military contemporaries, says the campaign for Biafra is a non-starter.

Notwithstanding, thousands of protesters have demonstrated, clashing with security forces as they try to rally the South East to their cause. They have printed and distributed symbols of independence such as currency, passports and of course the old Biafran flag – half a yellow sun shining against a green, black and red backdrop. Nigeria’s civil war was one of the most horrendous post-colonial schisms in Africa. More than a million people died, and 90% of them were civilians. Successive military regimes running Nigeria between the civil war’s end in 1970 and the return to civil rule in 1999

ruthlessly suppressed ethnoregional and separatist sentiment. With civil rule, the lid came off the pressure cooker and a multitude of ethnoregional demands exploded onto the political scene. Many Igbo nationalists were chastened by defeat and suffering in the civil war. They had lost the economic and political advantages they had in the 1960s. Some say they have been punished for their attempted secession by exclusion from Nigeria’s mainstream. Disaffection with the Buhari government is growing in south-east Nigeria. Supporters of the Biafra cause list their gripes at length: corruption, misrule, poor in-

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Just days after the news, a previously unheard-of group – the Niger Delta Avengers – issued a statement online claiming responsibility. Coastal Heritage and Economic Watch’s Isaiyei, who has been working in the creeks for the past 15 years, says “there is no certainty that this group [Niger Delta Avengers] exists. It could be one of two things: a group has formed in anticipation of taking over from Tompolo now that he is on the run, or the group has been fictitiously created to get Shell off the hook.”

ents on the oil pipelines, attributable either to sabotage or a massive leak in the network. The most serious blowout was announced by Shell on 14 February along the Trans Forcados Pipeline, which can transport as much as 400,000 barrels per day (bpd) of crude from the Forcados terminal. Before the blow-out, the pipeline was due to transport an average of 250,000

frastructure and unemployment. They hold the federal government responsible for these ills and see a country of their own as a refuge where they can start afresh. A Biafra supporter in his forties berated me on the need for partition: “How long must we live with marginalisation? How long must we continue to be mistreated?” He accepted that Nigeria’s circumstances make peaceful partition impossible. Such sentiments have spurred Nigeria’s intelligence services into action. They have rounded up several IPOB activists including its leader Nnamdi Kanu, who was arrested and charged with treason last October. He THE AFRICA REPORT

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bpd – that’s more than a tenth of the country’s daily production. Shell immediately blamed the blowout on sabotage. It is in its interest to do that: Shell bears no legal responsibility for the environmental damage caused by an act of sabotage. It has to pay compensation only when claimants can prove it was negligent in its upkeep of the pipelines.

is still being detained despite court orders for his release. Paradoxically, Biafra’s greatest power may not lie in the South East but in its capacity to act as a catalyst for fragmentation in other regions. If the Biafran campaigners achieve any success, it could have a domino effect in the South South with separatist outfits like the Movement for the Emancipation of the Niger Delta, and in the South West with Yoruba groups like the O’odua People’s Congress. Not everyone shares the younger generation’s zeal for Biafra. A retired Igbo man in his seventies told me he declined to support the Movement for the Actualization of

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POISONED WATERS

Local people have their own ideas about what caused the leak at the Trans Forcados Pipeline. But what is certain is that still more oil from Shell’s ageing pipeline is leaking into the Forcados River – much to the fury of local fishermen. “We have stopped going out to fish after we noticed crude oil in the water,” explains Ghanaman Uzormor as he repairs his nets on the beach. Crashing prices have eaten into revenue right along the value chain: whether it is multinational oil companies hiring local service companies or local gangs siphoning off oil to process in illegal makeshift refineries. ● ● ●

the Sovereign State of Biafra because he did not want to be associated with “extremist” groups. He sighed heavily and said of Biafra supporters: “They have not thought this through […] one month is not enough time to describe everything that happened last time….” In the Biafra sequel, the class and demographics are different from the first time around in 1967-1970. In 1967, the Igbo elite spearheaded the Biafra agitation. This time it is being led by the Igbo street. In Rivers State a woman named Ify haughtily described the Biafra protesters as “taxi drivers, mechanics and market traders”.

Most Biafra protesters were born long after the civil war. This younger generation heard their parents’ and grandparents’ tales of suffering, but as they did not experience the war, they do not have their ancestors’ fear of a relapse into conflict. Part of the new Biafra story is the radicalisation of youth culture. Similar groups of disenchanted and working-class people are getting involved in radical politics in the South South and the North East. These demands for greater autonomy or secession will continue until the federal government gets the message: that it must address the fundamental structural deficits in the Nigerian state. ●

POLITICS

The Niger Delta, source of Nigeria’s oil and source of instability

and 50 gunmen killed more than 20 people at Onelga, beheading three in the dead of night. “I don’t know why they took my brother’s head with them. Maybe it was for ritual purposes or perhaps the idea was to scare us,” says Bishop Eleanya Ugorji at a wake for his father, who died three weeks after the Onelga attack. “Ekwela [his brother] was a politician with APC. Before that, he was the leader of a cult group. I think his death has something to do with these things,” the bishop says.

ABUJA

NIGERIA

BENIN

Maiduguri

Ondo Lagos

Edo

Abia Gulf of Guinea

Delta

Imo

HUMAN SACRIFICE CAMEROON

Akwa Ibom

Bayelsa Niger Delta states

Cross River

Port Harcourt

Oil fields

200 km

● ● ● Some of the gangs are turning to other tactics, such as hijacking seagoing vessels. As the money gets tighter, political rivalries are getting fiercer. The bloody clash in February between soldiers and the followers of militant leader Ndigbara cost the lives of several children and market traders caught in the crossfire. The military’s Joint Task Force (JTF) says it received an emergency call to come to Yeghe town, the home base of Ndigbara in Ogoniland. They added that he had been stockpiling weapons for use in the rerun of local and national assembly elections due on 19 March in Rivers State.

PARTY FUNDING

Like Tompolo, Ndigbara fled from his compound well before the military moved in. Again like Tompolo – who provided funding for PDP candidate Ifeanyi Okowa’s bid for the governorship of Delta State – Ndigbara “has donated considerable resources to the PDP’s election campaign,” according to Legborsi Saro Pyagbara, president of the Movement for the Survival of the Ogoni People, the group founded by Ken Saro-Wiwa in the 1990s. Rivers State governor Nyesom Wike, who had his election victory of last year confirmed in the courts in March, is

SOURCE: STRATFOR

Cultism is rife across southern Nigeria. What was once an Afrocentric revivalist movement for university students and artists spearheaded by playwright Wole Soyinka in the 1970s has since morphed into territorial blood-letting by rival groups that use symbolism and rituals from traditional faiths. In Rivers State, cultism is often bound up with politics. “Politicians know what the electorate fears most in rural areas: cults that claim to draw their powers from human sacrifice,” says Felix Allen, an associate professor and director of the Centre for Ethnic and Conflict Studies at the University of Port Harcourt. Governor Wike belatedly visited Onelga two weeks after the gruesome killings. He called for calm and blamed cultists for the attack, without attributing a motive. He was far quicker to go to Yeghe and earn some political kudos from local voters after the shoot-out there.

treading carefully. He criticised the JTF for the shoot-out in Yeghe, but he has to live with that force. The military and police come under federal control, although a state governor has the right to run a small security force. In the end Wike called for calm and a proper investigation. Buhari has said nothing about the recent spate of killings in Rivers State. That is something he will have to address on his coming visit to Ogoniland. But on the state level, the APC is very vocal about what party publicity secretary Chris As crashing oil prices cause Finebone calls “targeted the money to get tighter, political killings of APC politicians and supporters political rivalries get fiercer orchestrated by PDP thugs with the full knowledge of the party’s With the second-largest state budget top brass.” He spoke to The Africa Report in Nigeria, Rivers State is in a better while travelling to the town of Onelga position than other states to deal with the deepening economic pressures. As in a 10-seater vehicle with two hired policemen. The five soldiers providing the man running Rivers, Wike is now a military escort from the local governone of the leading PDP politicians in the country and has to set his priorities ment area boundary remained in sight throughout the visit. accordingly. Although he won a governorship election that ranked among Tensions have been high in Onelga for months. “Over one hundred people the most violent last year, his interests were killed here during the presidmay now be served by ratcheting down violence in the state. That will mean ential and gubernatorial elections, difficult conversations with some of yet there haven’t been any arrests, let alone convictions,” laments Finebone. the bully boys who started the fighting Then, on 12 February, between 40 in the first place. ● THE AFRICA REPORT

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POLITICS

KENYA

A broken bromance There are signs that the unlikely alliance formed between Kenyatta and Ruto in 2013 may not last far beyond presidential elections in 2017

DON’T MESS WITH MY MAN

Member of parliament (MP) Johana Ngeno tells The Africa Report: “We are telling Uhuru that we elected him and Ruto so that they can sort out their cases at The Hague. How come Uhuru is now off the hook and our son, William Ruto has remained there? We know who fixed Ruto. We now have to tell Uhuru that he should not look for votes in Rift Valley so long as you have not helped Ruto win his case.” Beyond tensions over the ICC, the Ruto and Kenyatta camps have used corruption allegations as ammunition in their

RTIS/AP/

SIPA

he political friendship between President Uhuru Kenyatta and deputy president William Ruto has been one of circumstance. The pair joined together in the unlikely but victorious Jubilee electoral alliance in 2013, despite Ruto having supported Kenyatta’s bitter rival Raila Odinga in the previous poll, and the impact of the post-electoral violence of 2007 and 2008, where the Kalenjin – Ruto’s ethnic group – had massacred members of Kenyatta’s Kikuyu ethnic group. Nevertheless, it had seemed the pursuit of power healed all wounds, and Kenyans watched agog after the unveiling of the first cabinet as the two men left the dispatch box hand in hand and wearing matching outfits. The ‘bromance’ – a play on words to describe a close friendship between two men – did not take long to unravel. The firstboneofcontentionwasthetrialsboth men faced at the International Criminal Court (ICC). Both were accused of organising elements of the post-election violence that claimed more than 1,000 lives, charges that both deny. Kenyatta’s case was dropped in December 2014, but Ruto’s is still underway, creating tension between them. Kalenjin community leaders regularly voice their concern that while Kenyatta used state power to clear his name, he has abandoned their man.

BEN CU

largely behindthe-scenes conflict. Both sides claim the other is engaged in massive looting of state resources. Serious problems erupted in March 2015. President Kenyatta tabled in parliament a ‘list of shame’ containing 175 names of corrupt individuals in government. According to a top Ethics and Anti-Corruption Commission (EACC) official, Ruto was not aware of the list and only had a glimpse of the names a few minutes before Kenyatta released it. There was a reason for keeping Ruto in the dark: most of those on the list were his top allies. These included Ruto’s chief of staff, Maryanne Keitany, and cabinet secretaries Davis Chirchir, Felix Koskei and Kazungu Kambi. Several of the top civil servants and parastatal chiefs affected were appointments from the United Republican Party (URP), Ruto’s side of the ruling Jubilee coalition. On Uhuru’s side of the coalition, there were just two major

names: cabinet secretaries Michael Kamau and Charity Ngilu. The URP hit back. A key Kenyatta ally and confidante, Anne Waiguru, was soon embroiled in a corruption scandal involving the National Youth Service (NYS), with URP MP Alfred Keter laying an impeachment motion against her. President Kenyattadispatched spokesman Manoah Esipisu to defend her, and the EACC cleared her in record time. She was, however, eventually forced to fall on her sword in November 2015 after four months of calls for her resignation by opposition MPs, led by Raila Odinga. CORRUPTION AT THE HEART OF IT

If this were just a small spat between rival leaders, the Jubilee coalition could perhaps limp on. But Kenya faced administrative gridlock. Kenyatta and Ruto were locked in a stand-off for eight months over a reshuffle to replace dropped cabTHE AFRICA REPORT

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POLITICS

of the boss. If that was the intention to link Ruto with the scam, it has failed miserably. I don’t want to imagine suggestions that our coalition colleagues may be in the loop.” Duale took to Twitter to land his blows: “She [Waiguru] better stop playing games with the theft of public funds in the false hope that those who stole will escape punishment.” The nomination of new ministers opened another battle front. Serving MPs were named in the new cabinet and were now required by law to quit their parliamentary seats. For Charles Keter, nominated to the energy portfolio, this triggered a by-election in his Kericho County senate seat. KALENJIN CALCULATIONS William Ruto (right) and Uhuru Kenyatta have a good line in camaraderie for the cameras

inet secretaries. This was a period where the currency weakened drastically and a series of bank failures shook public confidence in the financial system. And the feud now continues. When Waiguru implicated Ruto’s allies in the NYS scandal in a February 2016 affidavit, Ruto was furious. The NYS affair has revealed the proxies in the conflict. Ruto called Kenyatta, who was in Israel, to protest at what he said was unfair targeting of his people by The National Alliance (TNA), Kenyatta’s side of the Jubilee coalition. That evening, Ruto assembled his trusted troops at his office in Nairobi’s Karen area to come up with a strategy to counter claims made in court that top URP leaders, led by majority leader in Parliament Aden Duale, Ruto’s personal assistant Farouk Kibet, finance cabinet secretary Henry Rotich and Ruto’s close associate Kipchumba Murkomen looted the NYS. At the meeting, it was evident that the gloves were off. Attendees argued that Waiguru’s affidavit had been a TNA stitch-up. The three-year bromance between Ruto and Kenyatta had suffered a direct hit. By targeting his close associates, Ruto felt Waiguru was acting on instructions of Kenyatta or his advisers THE AFRICA REPORT

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at State House. Kenyatta’s key advisers include the president’s political adviser and fixer Nancy Gitau, constitutional affairs adviser Abdikadir Mohamed and Njee Muturi, the solicitor general. Interviewed by The Africa Report, Murkomen shielded Ruto from exposure. “I don’t see myself as an annexure

The electoral paraphernalia from 2013 points to happier times

That was a political problem for Ruto, as the Kalenjin political community – upset by his decision to merge the URP into the newly formed Jubilee Alliance Party (JAP) in 2015 – partly swung its weight behind the Kenya African National Union, the historically Kalenjin party of former president Daniel arap Moi, who had been a political godfather to Ruto. Dissatisfied URP faction members say they were herded into the merged party where their bargaining power for jobs, development and resources are diminished. Moi’s son Gideon and former Ruto ally (but no relation) Isaac Ruto are behind the rebellion in the Rift Valley, where Kericho is located, which could dent the deputy president’s chances of succeeding Kenyatta as president. Ruto has managed to put out the fire, for now: the 7 March Kericho by-election was settled in favour of JAP candidate Aaron Cheruiyot. But the bromance watchers will be looking to see if Kenyatta’s proxies play on the Rift Valley uprising in the future. What Ruto has not managed to do is create a convincing reason for Kenyatta to keep him beyond the 2017 national elections. The political calculation that Kenyatta will make is similar to that which got him into power: using Ruto to bring the Kalenjin vote to create an unassailable advantage. But Ruto, keen on succeedinghisboss,willrequireKenyatta to consolidate the Kikuyu vote in return – one of the reasons he was so keen on merging the two strands of the Jubilee alliance into the JAP. Given the parlous state of relations between the pair, will Kenyatta want to repay the favour? ● Honoré Banda in Nairobi

AV I AT I O N

T TOGO

 The entrance hall of the new Gnassingbe Eyadéma International Airport terminal in Lomé which will enter into service in 2016.

GNASSINGBE EYADÉMA AIRPORT IN LOMÉ

An international hub airport for a regional capital Lomé International Airport’s new terminal is set to open for business in 2016. This new ultramodern addition to the airport endows Togo with the capacity to respond to increasing air cargo traffic and a growing number of travellers, drawn to the country’s expanding economy and revitalised tourism sector. It offers African airline Asky a first-rate base from which to develop its domestic, regional and international flights and connections. Asky Airlines has made Lomé its hub airport from whence it flies to 22 African destinations.

Lomé now home to Africa’s ultramodern hub Togo’s return to the international arena and the repositioning of its capital as a key financial centre in West Africa has enabled the country to resume business and conference tourism, one of the driving forces of its economic development. Proof the industry is picking up is the increase in traffic through the Lomé-Tokoin airport, which has doubled in ten years, going from 300,000 passengers in 2004 to 600,000 in 2013, according to figures from the International Civil Aviation Organisation (ICAO). In anticipation of the development of this sector, as well as a boost in leisure tourism, the government of Togo embarked on the construction of a brand new airport terminal, due to open its doors in 2016. Financed

through a loan of $150 million from China Eximbank, construction work began in August 2012 and is being carried out on three levels near the current airport.

A SMOOTH, COMFORTABLE TRAVEL EXPERIENCE Covering an area of 21,000 m ², the new terminal at the Gnassingbe Eyadéma International Airport will boost passenger and air freight; from 600,000 to 2.5 million people for the former and 15,000 tons to 50,000 tons for the latter. Equipped with new stateof-the-art features such as 24 check-in counters, five boarding bridges and three baggage conveyors, passengers are guaranteed a comfortable, smooth airport experience unmatched anywhere else in the sub-region. With this in mind, several international airlines have already entered into discussions with local aviation authorities to serve the capital of Togo.

ADVERTORIAL



A “Smart City” near the airport Togo’s capital city, Lomé, already a destination of choice for many international financial institutions when setting up their African headquarters, has plans to build a new business centre. Located in the Lomé II district, near the Gnassingbe Eyadéma Airport, this African “Smart City” project is being designed by Togolese architect Dontou Dérou. The aim is to create a world-class centre, on a thousand hectares, that will host public administration departments, offices, conference centres, hotels, residential buildings and shops, as well as cultural and sports facilities.

Founded in Lomé in 2007 by a group of African entrepreneurs and with African capital, Asky Airlines has already made the Lomé-Tokoin airport its transit base. The upcoming opening of the new terminal at the Gnassingbe Eyadéma International Airport is an asset for the airline in terms of passenger volumes and transit facilities. In June 2015 the airline had already announced that, since the beginning of its operations in 2010, passenger numbers on its routes had reached the two million mark.

succeeded in overcoming the African aviation crisis that was sparked off by the Ebola outbreak in 2014.

DEVELOPING ITS ROUTE NETWORK Asky’s management is about to lengthen its list of destinations by adding Nouakchott in Mauritania, and Cape Verde, while increasing the number of flights on existing routes. It is also assessing destinations that are potentially desirable for its customers, such as Johannesburg, Paris, London and Beirut.

CONFIDENT IN THE VALUE OF PAN AFRICANISM Since its beginnings, Asky Airlines has relied on technical support from African star of the skies Ethiopian Airways, which has already transited its flight to Brazil through Lomé. It intends supporting Asky in the development of its route network and there is even a flight to the USA on the cards (see box). Confident in the virtues of sub-regional cooperation in the face of competition from non-African airlines, Asky Airlines recently cemented a commercial partnership with Air Burkina. ■

A YOUNG, STRONG AIRLINE

 In situ view of Lomé’s future Gnassingbe Eyadéma International terminal, which is set to increase airport capacity to 2.5 million passengers a year.

Asky Airlines currently operates 150 weekly flights and covers 22 destinations across 19 countries in West and Central Africa. It records an average of 10,000 passengers a week and has a punctuality rate of 85%, which can be compared to that of some of the best airlines in the world. Its long-term vision takes into account the strong growth prospects for air traffic in Africa over the next thirty years. Strong and solid, despite being a young airline, Asky

Open sky between Washington and Lomé

 The 5-star 2 Février Hotel, Lomé’s long-time flagship business hotel, will re-open its doors in 2016 under Radisson Blu management.

After three years of negotiations, Togo and the United States signed a bilateral “Open Skies” agreement in April. The agreement allows any Togolese airline and any US airline to fly between any point in Togo and any point in the United States. “This historic agreement represents an important step forward in the United States’ government’s goal to improve the investment climate and support economic development in Togo”, commented the US ambassador in Lomé. It could encourage US companies to make Lomé the hub airport for flying to other African capitals that are already served by Asky Airlines.

LIBERTÉ

PAT RIE

L VAI TRA

CONTACTS Société aéroportuaire de Lomé-Tokoin (SALT) BP 10 112, Lomé, Togo Tel.: (+228) 22 23 60 60 http://aeroportdelome.com/tg Asky Immeuble BIDC-CEDEAO BP 2 988, Lomé, Togo Tel.: (+ 228) 22 20 88 18 www.flyasky.com

DIFCOM/DF - PHOTOS : DR SAUF MENTION.

Asky has great ambitions for Lomé’s airport

POLITICS

EGYPT

Sisi versus the civil service President Abdel Fattah al-Sisi has faced his first challenge since the new parliament convened, and it comes from his traditional support base

Sisi and interim president Adly Manands were shackled with stethoscopes, and pictures of detainsour before him. The constitution states ees in scrubs and white coats that the laws must be ratified within 15 covered banners calling for their release. days of the new parliament’s opening These were the surprising images seen session or be automatically repealed. at one of the largest general assemblies Within this tight window, the assembly ever convened by the Egyptian Doctors’ of representatives went on a marathon Syndicate in early February. of reviewing, debating, and approving Groups of Egyptian doctors had esmost of the laws brought before them. calated their action against the interior ministry, a conflict that had been simBONUSES ATTACKED mering for weeks after reports circulated Had it been ratified, the Civil Service of police officers attacking physicians Law would have impacted millions of at a public hospital in the Matariya public-sector employees by halting district of Cairo. Thousands of doctors bonuses and slowing wage increases and supporters crammed inside the on already low incomes. It would reunion building and overflowed onto strict promotion mechanisms, while the outside steps and the street. They also augmenting the often unchecked demanded accountability, security for powers of managers and administrators. hospitals and doctors as well as guarAccording to Amr Adly, a nonresident scholar at the Carnegie Middle antees that similar incidents would East Center, the bigger reason behind not be repeated. The conflict between parliament’s rejection of the law is this the doctors and the government has ongoing “tension between reforming rumbled on into March. the state bureaucracy and destabilThere is not much political opposising the base of political support.” He ition in Egypt these days, especially after the crushing of the Muslim Brothviews the move more as a way of securerhood. The government is packed ing the stability of the regime: “These with Sisi’s supporters. But opposition to the adminisOn the anniversary of the tration is coming from an2011 uprising, security forces other source: state workers. In late January, a president patrolled the streets of Cairo who previously has had the reforms were meant to considerably legislature on his side suffered his first amend the relationship between the defeat in parliament. The Civil Service new political leadership and the state Law, a contentious piece of legislation passed via decree by President Sisi employees or civil servants, and these very people are the most coherent base – who had sole legislative authority of the current regime”. from the date he took office in June Supporters of the law hail it as a long2014 until the new legislature held its awaited step on the way to reforming first session on 10 January 2016 – was a large, cumbersome and inefficient rejected by a majority of parliamentarians and sent back for amendments. workforce. Opponents say it does little The handling of the bill is a challenge to protect the rights of employees who for Sisi, who wants to slash spending have traditionally relied on long-term and shake up government while mainjob security. When it was passed by taining his base of popular support. Egypt’s newly seated parliament’s first A health worker protests police task in early January was to review more brutality towards two doctors in a than 300 laws passed in its absence by mobilisation on 12 February

decree in March 2015 the law was wildly unpopular among a significant portion of the population and protests against its implementation had been steadily escalating. At a protest that gathered thousands in August 2015, Sameh Mahmoud, an employee with the Sales Tax Authority, told independent news website Mada Masr: “We will continue to escalate our protests if our demands are not met in terms of amending this poorly formulated and unjust law.” This was protest action the likes of which had not been seen since 2013, and the movements had a potential to mobilise on an even wider scale. They are “around 50% of total wage labourers and constitute the formal sector, which gives them an edge when it comes to collective action,” says Adly. Moreover, they are “functionally very important.

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POLITICS

This is not a private factory in the middle of nowhere. People would feel the impact of their strikes immediately.” Nor can the sensitivity of the timing be ignored. Parliament was forced to consider the law just a few days before the fifth anniversary of the 25 January 2011 uprising. The government had already put in place a widespread campaign to thwart any attempts at commemorating the day. SECURITY PRESENCE

Prior to 25 January, security forces covered central Cairo, conducting random searches and raids on residential apartments downtown and in surrounding neighbourhoods. The day itself was devoid of any action reminiscent of the uprising. Streets were low on pedestrians and high on security forces, both uniformed and plain clothed. It has become a rare sight to see thousands take to the streets united in their demands and in defiance of one of the main state institutions. The mobilisation

against the Civil Service Law highlights There is only a small number of opa slow resurgence of sectoral demands positionists in the legislature, as the and protest action driven by a growing make-up of parliament is heavy on both former regime affiliates and staunch number of grievances affecting groups of people who feel victimised by the supporters of the current leadership. government’s policies. Together, they have quickly given the Public-sector employees have been green light to numerous controversial a strong power base for Sisi and the laws, including a vaguely worded and broad anti-terrorism law and another regime, and parliament’s rejection of the law was in sharp divergence from its that gives the president power to remove support for the government. According heads of supervisory bodies, such as the to Adly, the rejection reveals the “tension between The civil servants’ mobilisation reforming the state bureauhighlights a slow resurgence cracy and destabilising the base of political support.” of demands and protest action The same is not true of head of the Central Auditing Organisathe factions of society that had decried tion, Hisham Geneina, who has spoken the numerous other controversial laws decreed by Sisi. Many had hoped these out about government corruption. laws would open a serious debate in parPresident Sisi supports the Civil liament. But the late 2015 parliamentService Law as a means to slash spending, as the government has been burnary elections had a lower turnout than ing through its foreign reserves to finmost polls Egypt had organised since the 2011 uprising, signalling both voter ance deficit spending amidst the drop fatigue and a return of political apathy. in oil prices. For the past three years, Egypt’s government has had to contend with frighteningly depleting financing weighed down by dwindling foreign reserves, a dormant tourism sector and dried up foreign and local investment. In a bid to save the rapidly depreciating currency, tight capital controls and stricter customs regulations have been imposed, both of which have hurt business activity and will eventually cause inflationary pressure.

MOHAMED EL-RAAI/ANADOLU AGENCY/AFP

SIXES AND SEVENS

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The low oil price has hurt government revenue but has made it easier to make cuts to energy and other state subsidies, which represent a large part of the national budget. In an attempt to bolster his credentials as a reformer, Sisi said during the civil service debate that “Egypt needs maybe one million out of seven million public employees”. The public-sector wage bill constitutes between 25% and 30% of total government expenditure. While the proposed Civil Service Law undergoes its process of amendment, there is no public debate happening around the new draft, and the tweaking is being done by law-makers behind closed doors. If it re-emerges in a controversial form, Sisi’s government will have to choose the carrot or the stick in dealing with a sizeable portion of its workforce and its power base. ● Amira Salah-Ahmed in Cairo

POLITICS

INTERVIEW

Abdel Fattah al-Sisi President, Egypt BRENDAN SMIALOWSKI/AP/SIPA

We can’t ignore the impact of the regional situation With the strength of political Islam in the region, Egypt’s President says democracy and human rights must be balanced against concerns for security

though the constitution allows you only one more four-year term in office. Do you intend to modify it? Egypt has changed, and its people won’t accept someone they don’t want to remain in power. Egyptians are not docile.

TAR: For your supporters, what matters most is not the 25 January 2011 revolution which ousted Hosni Mubarak but that of 30 June 2013 when you overthrew Mohamed Morsi. Is there any link between these two events? ABDEL FATTAH ALSISI: I believe that the willingness to change and the democratic aspirations of the Egyptian people have gradually gained momentum. Since 2014, we’ve held a constitutional referendum and presidential and legislative elections, all of which were transparent and without any interference from the state. Egyptians were able to choose freely. We have already made good progress on the goals we have set for 2020 and 2030, which include creating infrastructure, roads and housing. We have put an end to the electricity crisis that adversely affected Egypt for eight years. […] Our work in the region of the Suez Canal has created industrial zones covering 40m square metres at the northern entrance of the canal and 200m square metres at the southern entrance on the Red Sea.

Your government is regularly criticised for human-rights violations and for undermining democracy. Has Egypt again become a police state? A great deal of these criticisms are unjust. We can’t ignore the impact the regional situation has on our country. We can’t forget that Egypt was governed by political Islam which aims at nothing else but to dominate and to fight. Have people

You say you are giving yourself 10 years to reach your goals even

The Egyptian people have not forgotten that there was a threat of civil war forgotten about the 30 million Egyptians who revolted again the Morsi government in 2013? Have they forgotten that on 3 July 2013 we invited all political forces to cooperate and to participate in this new political journey, but some decided to respond with terror against the state and its agents? Have they forgotten that the situation was threatening to degenerate into civil war? The Egyptian people have not forgotten. We therefore have to find a balance between

our delicate internal situation, a critical regional context and the respect of human rights. The political and security tensions do not encourage investors and tourists to go to Egypt. That is exactly the strategy of political Islam, to target the Egyptian economy and especially the tourism sector, which employs millions of Egyptians. How are they and their families supposed to feed themselves now? The people want stability and security. In order to achieve this key objective and return to growth, it is important to differentiate between safety requirements and human rights. The overall political and economic situation today is very different from that of Western countries. Imagine if we count one extremist for 1,000 individuals. That would be equivalent to an army of 90,000 extremists in Egypt! What do we do then? The views of some Western countries on how to meet these type of challenges are sometimes incomprehensible. You still depend on financial aid from Saudi Arabia and the Gulf countries. Can you imagine getting by without them in the future? It’s difficult to live depending on the assistance of others, however disinterested it is. ● Interview by Laurent de Saint Périer and François Soudan in Cairo

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Côte d’Ivoire

ADVERTORIAL

hanks to its political stability and the recent reforms it has implemented, Côte d’Ivoire !as "#sto"#d inv#sto" confid#nc#. T!# co%nt"& is ma'in( "apid p"o("#ss to "#ac! t!# am)itio%s ta"(#t s#t )& P"#sid#nt A*assan# O%atta"a: ma'in( Côt# d’Ivoi"# an #m#"(in( co%nt"& )& 2020 and t!# (at#wa& to W#st Af"ica, a ma"'#t wit! a pop%*ation of ov#" 300 mi**ion. To ac!i#v# t!is, t!# 2016-2020 Nationa* D#v#*opm#nt P*an (NDP) wi** "ais# 30 t"i**ion CFA f"ancs wo"t! of inv#stm#nts, t"ip*# t!# amo%nt of t!# p"#vio%s p*an (2012-2015 NDP), and #na)*# Côt# d’Ivoi"# to )#com# a committ#d m#m)#" of t!# int#"nationa* comm%nit& of d#moc"atic, d#v#*op#d co%nt"i#s.

Modernisation, Industrialisation and Consolidation

Côte d’Ivoire > Modernisation, Industrialisation and Consolidation

Looking into the future Côt! d’Ivoi"! is movin# into its n!xt p$as!, contin%in# t$! wo"& don! '!tw!!n 2011 and 2015. T$! past fiv! )!a"s $av! $!*p!d to ma&! %p fo" *ost tim!, '! it in t"anspo"tation, !d%cation, $!a*t$ o" p"ovidin# !*!ct"icit) and pota'*! wat!" to t$! "%"a* pop%*ation. Mo"! t$an 2 mi**ion jo's have since been created and income for the %nd!"p"ivi*!#!d $as imp"ov!d. Wit$ t$! n!w mandate received from Ivorians in October 2015, P"!sid!nt A*assan! O%atta"a $as s$own a commitm!nt to acc!*!"at! t$! co%nt")‘s mod!"nisation.

Renewed vitality for rapid growth Toda), Côt! d’Ivoi"! is "!apin# t$! '!n!fits of t$! fi"st Nationa* D!v!*opm!nt P*an (2012-2015 NDP). T$! co%nt") "ais!d 10t"n CFA f"ancs wo"t$ of inv!stm!nts fo" t$! const"%ction of n!w inf"ast"%ct%"!, t$! imp*!m!ntation of s!v!"a* vi#o"o%s "!fo"ms and an imp"ov!d '%sin!ss c*imat!; a** of w$ic$ $av! st"!n#t$!n!d t$! p"ivat! s!cto". T$!s! m!as%"!s $av! "!viv!d t$! !conom) and '"o%#$t 'ac& inv!sto"s.

 President Alassane Ouattara during his inaugural speech, in November 2015.

S!v!"a* fla#s$ip p"oj!cts of t$! 2016-2020 NDP $av! a*"!ad) '!!n %nv!i*!d (s!! 'ox). T$! d!tai*s of t$! P*an a"! '!in# fina*is!d, '%t w! a*"!ad) &now t$at it int!nds to "ais! 30t"n CFA f"ancs in inv!stm!nts, an amo%nt consid!"!d !xc!ssiv! ') som!. T$!s! a"! t$! sam! individ%a*s w$o didn’t '!*i!v! t$at t$! 10t"n anno%nc!d in t$! 20122015 NDP in 2012 was attaina'*!, '%t w! mad! it. It is at t$is « cost » t$at Côt! d’Ivoi"!’s ann%a* #"owt$ $as "!main!d in t$! 8-10% "an#! ann%a**) fo" fo%" cons!c%tiv! )!a"s.

 The aim is to convert all agricultural products. © OlIVIer POur JA

ADVERTORIAL

MAINTAIN STRONG ECONOMIC GROWTH T$! n!xt fiv! )!a"s wi** '! c"%cia* to p"o#"!ss and to ma&in# Côt! d’Ivoi"! an !m!"#in# co%nt") ') 2020. Fo" !conomists, ‘!m!"#in#‘ "!f!"s to a d!v!*opin# co%nt") wit$ a $i#$ #"owt$ "at!, a $i#$ *!v!* of ind%st"ia*isation and ind%st"ia* p"od%cts, op!n to t$! o%tsid! wo"*d and t$at $as a #"owin# *oca* ma"&!t. T$is is t$! "oadmap fo" t$! comin# )!a"s.

30trn CFA francs in investments

Processing products before export

 Abidjan by night. Electricity production increased by 50% between 2012 and 2015.

As t'! wo"#d’s top !xpo"t!" of cocoa, Côt! d’Ivoi"! aims to (!com! t'! #a"%!st p"oc!sso" of cocoa (!ans, ov!"ta)in% t'! N!t'!"#ands. Its %oa# is to t"ansfo"m t'! !nti"! cocoa (!an p"od&ction (#!ss t'an 'a#f is p"oc!ss!d toda$), and do t'! sam! fo" pa#m oi#, nat&"a# "&((!" and fo" s&(sist!nc! c"ops s&c' as "ic!, mai*! and cassava. It is o(vio&s t'at to !ff!ctiv!#$ ca""$ o&t t'!s! c'an%!s, s&ffici!nt !#!ct"icit$ %!n!"ation is "!q&i"!d. b!tw!!n 2012 and 2015, p"od&ction capacit$ inc"!as!d ($ n!a"#$ 50%, f"om 1,100 M!%awatts (MW) to 1,600 MW. b$ 2020, 4,000 MW 'as to (! %!n!"at!d, t'! !q&iva#!nt of Ni%!"ia’s c&""!nt p"od&ction (a pop&#ation of 175 mi##ion).

EXPAND THE INDUSTRY AND ADD VALUE TO AGRICULTURAL PRODUCTS Focus on industrialisation  The port of Abidjan, gateway into West Africa.

D!spit! Côt! d’Ivoi"!’s "!#ativ!#$ st"on% ind&st"ia# s!cto" – t'! s!cond in W!st Af"ica –, #!ss t'an 'a#f of its !xpo"ts a"! #oca##$-t"ansfo"m!d p"od&cts. D!v!#opin% t'! ind&st"$ wi## t'!"!fo"! '!#p to inc"!as! t'! va#&! of !xpo"ts, c"!at! mo"! jo( oppo"t&niti!s and %!n!"at! mo"! incom! fo" t'! pop&#ation. T'! ind&st"ia# !ffo"ts wi## a#so p"io"itis! a%"ic&#t&"!, w'ic' s&ppo"ts two-t'i"ds of t'! pop&#ation and cont"i(&t!s to a#most 30% of nationa# w!a#t' c"!ation (gDP).

2016-2020 NDP: 10 key investment projects

rom 21st to 22nd March, Abidjan will host the AFRICA CEO FORUM, hosted important international gathering of CEOs from the largest African companies. Launched in Geneva in 2012, the forum took place on the African continent for the first time. On this occasion, Côte d’Ivoire will unveil 10 key investment projects that represent a total amount of more than $1bn. The purpose of these projects is to boost energy investments, port activities, industry and transports, all

of which are key sectors that will secure the country’s industrial development. This concerns, in particular:  the energy sector: the construction and operation of two biomass plants to optimise the potential of the country’s renewable energies and to meet its demand for electricity supply  the industrial sector: development of the country’s two main shipping ports (Abidjan and San Pedro) to encourage the setting up of industrial and logistics units

the transport sector: the construction and operation of the motorway extension linking Abidjan to GrandBassam, to facilitate traffic flows towards the east of the country (particularly towards Nigeria) and to boost tourism development in the seaside resort of Assinie  finally, the creation of a new 940-hectare industrial area in Abidjan accommodating companies or industrial groups which can develop high value-adding activities.



Côte d’Ivoire > Modernisation, Industrialisation and Consolidation

ESSENTIAL DATA & KEY INDICATORS POPULATION1 LIFE EXPECTANCY AT BIRTH3 LAND AREA (sq. km)1 GDP (current $US)1 GDP PER CAPITA (current prices)1 IMPORTS IN $BILLIONS4 EXPORTS IN $BILLIONS4 FOREIGN DIRECT INVESTMENT2 INFLATION5

22.16 million 51.5 318 000 $34.25 billion $1,545.9 $12.5 billion (2013) $12 billion (2013) $462 million 1.6%

GDP GROWTH (%)5  gDP grOWTh (%) 7.9

8.2

7.6

ADVERTORIAL

8.7  gDP ($bn)

31.1

33.7

31.3

34.3

2013

2014

2015*

2016*

Sources: 1World Bank 2014 & 2015 statistics; 2United Nations Conference on Trade and Development (2014, inflows); 3Human Development Index (2015); 4 UN Comtrade 2014; 5IMF World Economic Outlook Database, 2015 estimate.

and Mon!ta"* union (WAeMu), t#! F"ancop#on! s%'-"!&ion. Its !conomic d*namism #as a st"on& "ipp$! !ff!ct on t#! !nti"! "!&ion and !v!n Ni&!"ia. As pow!"f%$ d"iv!"s of d!v!$opm!nt, t#! two co%nt"i!s #av! com'in!d t#!i" !ffo"ts to d"iv! fo"wa"d t#! const"%ction of t#! A'idjan-la&os moto"wa*, a pivota$ asp!ct of t#! "!&ion’s f%t%"!.

PROVIDE THE POPULATION WITH OPPORTUNITIES FOR A BETTER TOMORROW Modern day men in a modern country T#! fina$ o'j!ctiv! of t#! 2016-2020 NDP, w#ic# is a$so its p"ima"* foc%s, is to off!" Ivo"ians oppo"t%niti!s fo" a '!tt!" tomo""ow. T#! 'att$!s wi$$ '! wa&!d on s!v!"a$ f"onts. T#! pov!"t* "at! w#ic# wo"s!n!d d%"in& t#! d!cad! of c"isis #as d!c$in!d sinc! 2011. un!mp$o*m!nt "!mains #i&# #ow!v!", !sp!cia$$* amon& t#! *o%t#. T#! conso$idation of fa"min& activiti!s and t#! d!v!$opm!nt of n!w !xcitin& ind%st"ia$ activiti!s a"! n!c!ssa"* to c"!at! mo"! jo's and to increase income for all social classes in 'ot# %"'an and "%"a$ a"!as. T#! NDP wi$$ a$so ta(! t#! n!c!ssa"* st!ps to t"ain t#! *o%t# and p"!pa"! t#!m fo" t#! '%sin!ss wo"$d. It wi$$ a$so &iv! wom!n a stat%s wo"t#* of a mod!"n co%nt"*, w#!"! t#!* can p$a* a "o$! in its !conomic d!v!$opm!nt. A$$ t#!s! conditions com'in!d wi$$ !na'$! Côt! d’Ivoi"! to %nd!"&o si&nificant t"ansfo"mation in t#! n!xt fiv! *!a"s.

DIFCOM/DF - PhOTOS: © All rIghTS reDerVeD AND leSS NOTeD.

und!" t#! $!ad!"s#ip of P"ésid!nt O%atta"a, Côt! d’Ivoi"! #as onc! a&ain '!com! a "!$!vant nation on the African and international scene, both on t#! po$itica$ and and !conomic f"ont. T#! "!t%"n of t#! Af"ican D!v!$opm!nt ban( (AfDb) to its "!&ist!"!d #!ad offic! in A'idjan in S!pt!m'!" 2014, aft!" 11 *!a"s in !xi$! in T%nis, is a cas! in point. Ot#!" !xamp$!s a"! t#! financia$ s%ppo"t "!c!iv!d f"om t#! int!"nationa$ comm%nit* in 2011 to "!viv! t#! !conom* and t#! s!v!"a$ op!"ations mad! in "!&iona$ o"&anisations (WAeMu, eCOWAS, Af"ican union,...). T#an(s to t#!s!, t#! co%nt"* #as '!com! a t"%! m!$tin& point of p"of!ssions and c%$t%"!s as mo"! and mo"! !xpat"iat!s a""iv!. In t#! $on& t!"m, t#! stim%$%s p"o&"am fo" t#! to%"ism s!cto" wi$$ !na'$! Côt! d’Ivoi"! to w!$com! an inc"!asin& n%m'!" of visito"s, d"awn to t#! wid! "an&! of "!ma"(a'$! sit!s t#! co%nt"* #as to off!". Conv!ni!nt$* $ocat!d at t#! &at!wa* to W!st Africa, Côte d’Ivoire already maintains close links wit# its n!i&#'o%"s in t#! W!st Af"ican economic

 The 78-member states flags fly over the African Development Bank building in Abidjan.

Expanding progressively into international markets

POLITICS

Al-Shabaab attacks have been on the rise

SOMALIA

Drone of elections Al-Shabaab remains undefeated as the country prepares for a national poll

he international forces fighting the Somali Islamist rebels of Al-Shabaab are struggling. Shabaab forces recaptured several strategic towns in recent months. The group, which is known to exaggerate death tolls when claiming attacks, said it had killed 130 soldiers and seized tonnes of weapons in a siege on Kenya’s El Adde military base in Gedo region on 15 January. The group continues to carry out targeted assassinations of lawmakers in Mogadishu, most recently on 9 March, when a car bomb exploded outside a tea shop popular with the city’s police, killing three officers. An Al-Shabaab operative detonated a bomb on a Daallo Airlines flight from Mogadishu to Djibouti on 2 February, prompting an emergency landing and underlining the group’s ambitions to carry out attacks outside Somalia. The US claimed its biggest single victory in its eight-year campaign against Al-Shabaab on 5 March, when one of its drones hit the group’s Raso Camp training facility, killing about 150 fighters. Washington trumpeted the attack as a tactical success that eliminated “an imminent threat”: “The removal of those terrorist fighters degrades Al-Shabaab’s ability to meet the group’s objectives in Somalia, including recruiting new members, establishing bases and planning attacks on US and African Union Mission in Somalia (AMISOM) forces,” Josh Earnest, the White House press secretary, told reporters. Early last year, Al-Shabaab posted a video on social media encouraging attacks on shopping malls in the US, Canada and the UK. But rather than highlighting US success in gathering intelligence and hitting the group where it hurts, analysts say the THE AFRICA REPORT

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attack illustrates Al-Shabaab’s growing strength. “The group could assemble 150 people in one spot and was not afraid to do so,” said J. Peter Pham, director of the Africa Center of the Atlantic Council, a Washington-based think tank. “These are not signs of a group that is supposedly on the run or defeated.” The African Union force, which commands about 22,000 troops, is facing fresh questions over its slow progress. It has been fighting Al-Shabaab for seven years. And while it has driven the terrorist group from Somalia’s capital, it has yet to drive them from all its centres of power, despite promising to do so by the end of 2015. “That suggests that there are some problems with the mission management,” Matt Bryden, director of the Sahan Research think tank tells The Africa Report. Friction between partners Kenya, Somalia and Ethiopia has led to tactical disagreements and ultimately stifled the mission. Bickering over which contingent should take on Al-Shabaab in Jamaame and whether or not Ethiopian troops should have been deployed to Kismayo has hindered progress, explains Bryden, who is the former coordinator of the UN Monitoring Group for Somalia and Eritrea. To make matters worse, the European Union, which pumped $1.2bn into AMISOM between 2007 and 2015, began to reduce its contribution to the mission’s wages by 20% at the start of the year. Heads of state attending a summit on AMISOM in Djibouti on 28 February still painted a rosy picture of the mission’s future. “Somalia is moving to a form of elections that has not happened in 47 years,” said Somalia’s Number of President Hassan Sheikh Mohamud at the years that the close of the summit. “This is a major indicAfrican Union ator of the success of the AMISOM mission.” force has A free and fair contest could help imbeen fighting prove Mogadishu’s relationship with state in Somalia governments and bring them into the fight against against Al-Shabaab. “Much of the frontline Al-Shabaab engagement with Al-Shabaab is happen-

MOHAMED ABDIWAHAB/AFP

ANALYSIS

POLITICS

ing at this state level rather than at the national level,” says Bryden, noting that forces from Jubaland, Galmudug and Daraawiish are actively fighting the Islamist group. But a deadlock remains over the electoral model, with Puntland in disagreement with the rest of the country, meaning that things could remain the same for a while. “If we don’t have a political transition in August”, says Bryden, “then AMISOM and its partners and the funds that they are throwing at this problem are going to endure for a long time to come.” ●

failed in his effort to distance himself, his party and other Islamists from the regime. Paradoxically, a unified Islamist movement poses a greater threat to Bashir than any other political force in the country. If the Islamists were to turn outright against him, the regime would tremble, as disciples of political Islam populate the officer corps. The most serious coup attempt was orchestrated in 2012 by frustrated Islamists in the group known as the Sa’ihoon. Today, like the Islamists, almost every political party or armed group is in factions. This is especially true of the two traditional sectarian parties that dominated Sudan’s politics for most of Sudan’s history: the Umma and Democratic Unionist parties. Run as a family business, these two parties are now shells of their former selves. For example, besides the main National Umma Party led by former prime minister Sadig al-Mahdi, there is Umma-Reform and Renewal, the Umma-Federal Party, the Umma Party-Unity, and the Umma Party-General Leadership, often led by disgruntled relatives. The myriad armed groups fighting in Darfur, South Kordofan and Blue Nile suffer from fractures, too. The groups opposed to Bashir have been unable to shift the balance of power because they are unable to develop a basic consensus on how Ahmed Kodouda in Khartoum to deal with the regime. ●

Mark Anderson

Is al-Turabi even more powerful now that he has gone?

SUDAN

Splinter upon splinter With al-Turabi gone, will the opposition rise to the challenge?

udan’s cacophonous political forces – Islamists and secularists, heads of sectarian parties and commanders of armed groups alike – showed a rare moment of unity when they uniformly eulogised Sudan’s leading Islamist, Hassan Abdallah al-Turabi, who died in March. After coming to power in the 1989 National Salvation Revolution as one of the most organised and fervent political forces in Sudan, the Islamists have lost their mastermind. Indeed, few people have dominated Sudanese political life like the sheikh who, at 84, was orchestrating his last act: unifying Sudan’s Islamists. Since coming to power over a quarter century ago, the regime in Khartoum has employed a divide-and-rule strategy to weaken the opposition, wooing and splitting parties. Ironically, Turabi, who brought President Omar al-Bashir to power, fell victim to these same tactics. Islamists in Sudan, like all the other political forces, are divided, with the two largest factions being al-Bashir’s National Congress Party and Turabi’s Popular Congress Party, which were created after a 1999 split between the two men. Turabi’s death is likely to galvanise his party and other Islamist factions that are outside government. It could also increase their urgency to unify with the ruling party. They could seek to cooperate with the regime because Tourabi

ABD RAOUF/AP/SIPA

CENTRAL AFRICAN REPUBLIC

Touadéra’s tasks The new president has to deal with rebel fighters and his new allies

ne of the top priorities of the new government of President Faustin-Archange Touadéra is to rebuild. He was elected with 63% of the vote, beating Anicet Georges Dologuélé in the second round of the vote on 14 February. But before that, Touadéra’s government is focused on “a true policy of reconciliation”. The day after his victory was announced, he proclaimed: “I will not make any decisions based on social, religious or ethnic origins.” That is something that transitional president Catherine Samba-Panza had said in 2014 and failed to deliver on. Over the past three years, the foundations of trust between communities has weakened. The majority of the Central African Republic’s (CAR) Muslim population has fled the country. Tens of thousands who have remained live in enclaves across the country that are protected by UN peacekeepers. While Taoudéra has not yet proved his reconciliation credentials, he has shown that he can be a uniter. He rallied 23 presidential candidates from the first round – including heavyweights like former prime minister Martin Ziguélé – to his side. One of Dologuélé’s allies who requested anonymity explains: “There are strong personalities and political aspirations that are at odds. Touadéra will need a firm grip to maintain his voice and his choices.” Touadéra is not known for his strong stands, but will need some in order to distance himself from former President François Bozizé. Oumarou, who lives in the PK5 neighbourhood of Bangui, explains: “Touadéra is the intellectual heir of Bozizé. You cannot be prime minister for five years THE AFRICA REPORT

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POLITICS

without supporting the president’s policies. I fear he does not have the ability to unite us, but we will see.” In late March, the chatter among the political class focused on the question of who would become prime minister. Touadéra has not yet shown his hand. To name a premier, he is going to need a majority in parliament, as most successful legislative candidates ran as independents. Léa Doumta, the vice-president of the Conseil National de Transition, says that appearances can be deceiving: “Are they really independent? No, they were supported by candidates who now are now behind Touadéra. His parliamentary majority – he has it already.” She adds: “You should not underestimate the new president. He is discreet, but he knows all of the political class. It is his biggest advantage.” On the economic front, the mining and agriculture sectors have slowed to a near halt. CAR is one of the poorest countries in the world and the new government says it intends to fight endemic corruption in public finances. This is the former mathematics professor’s strong suit. Roland Marchal, an academic

focused on Central Africa, explains: “Touadéra is well liked by CAR’s civil servants as it was while he was prime minister that salaries were paid through the banking system as a means to ensure that they were paid regularly.” Sortingoutpublic finance will notbe enoughtocalm tensions. Once the country’s armed groups were chased out of Bangui, they took up leading roles in some lucrative trades in far-flung parts of CAR. One example is Ali Darass, a leader of the Union pour la Paix en Centrafrique, which is an arm of the former rebel group Séléka. He is now taxing coffee producers, gold miners and cattle traders in exchange for armed protection. In the centre of the country, where Darass operates, the UN mission is nowhere near as strong as the former rebels. During the election, Darass said he “will always be there to assure the security of the population. The new government will have to negotiate the conditions for my departure.” As such, the process of disarmament, demobilisation and reintegration will be a key area for the government over the next few months. ● Anthony Fouchard in Bangui

ANANSI Lady and the veep

Win some, lose some ANOTHER PRESIDENT LOATH to retire is Djibouti’s Ismaïl Guelleh, who is up for re-election on 8 April for another term after 17 years in office. The divided opposition in the Union pour le Salut National should prove easy for the powers of incumbency to beat. Some politicians are calling for a boycott because the government has not followed through on its promises of reform after the post-2013 election crisis. The government of Djibouti’s court case in London against oppositionist Abdourahman Boreh proved to be more difficult to beat, however. In March, the court threw out the “politically motivated” case, in which the government sought $130m in damages due to Boreh’s supposedly corrupt role in a port project, a claim that it did not prove. THE AFRICA REPORT

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THE BATTLE LINES BETWEEN Zimbabwe’s first lady Grace Mugabe and vice-president Emmerson Mnangagwa seem pretty well drawn. The veep had previously used Mugabe’s allies in the so-called Generation 40 grouping of ambitious politicians such as Saviour Kasukwere to crush another rival, Joice Mujuru, with endless reshuffles edging her allies out of cabinet. Now he appears to be hoist on his own petard, as his own placemen find themselves dumped out of positions of power. President Robert Mugabe sacked war-veterans minister Christopher Mutsvangwa in March and the ruling ZANU-PF suspended three provincial chairpeople close to Mnangagwa.

One step forward, five back THE REPUBLIC OF CONGO’s President Denis Sassou Nguesso prepared to face a marginally revived yet still divided opposition in presidential elections on 20 March after

changing the constitution to allow himself another turn in office. The leading opposition umbrella group announced that it had created the Commission Technique Electorale to hold the electoral authorities to account. However, the FROCADIDC coalition presented five presidential candidates, showing that it has not been able to overcome the problems of ego needed to challenge a stay-put president.

Bongo chooses not to choose THE GABONESE PRESIDENT Ali Bongo Ondimba has decided to have no campaign director for the upcoming presidential elections, to general surprise. This is possibly to avoid stoking jealousy in the ranks, as anyone with such a leading role in the run-up would have a good shout to be prime minister once the elections are won. Instead, nine regional directors will have to rally the troops in their respective areas. Absolutely no danger of one-upmanship and competitiveness there then. ●

COUNTRY FOCUS Rwanda

JUAN HERRERO

At B2R Training Center in Kigali a student jumps for joy on winning a scholarship

Bet it all on the firm In a country where poverty and illiteracy are still high, a growing tech hub is supporting a new generation of quick thinkers keen to rewrite Rwanda’s story through start-ups. The government has recognised its potential for the economy with an innovation fund and public-private partnerships By Abigail Higgins in Kigali

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wandans gathered around TV sets across the country last October as they watched dozens of young East Africans compete for start-up capital from top investors. Face the Gorillas, a local take on the popular Japanese reality show Dragons’ Den – where entrepreneurs try to convince judges that their ideas are ripe for funding – is the just the latest iteration of East Africa’s entrepreneurship fever. From a mobile-money platform for Rwandans in the diaspora to send remittances home, to on-demand ● ● ●

COUNTRY FOCUS | RWANDA

services for Kiswahili television shows in Tanzania and grocery delivery e-commerce sites, the business ideas of young East Africans had angel investors from across the continent lining up in the hope of funding their ideas. Despite being small, landlocked and lacking in natural resources, Rwanda has averaged economic growth of more than 7% per year over the past decade, making it the twelfth-fastest-growing economy in the world. As terrorist attacks hit Kenya, political chaos spirals in Burundi and corruption slows the wheels of progress in Uganda, Rwanda is emerging as an attractive place for investors and entrepreneurs to set up shop in East Africa. For ease of doing business, the World Bank ranks Rwanda 62nd out of 189 countries, a dramatic improvement from its 2006 ranking when it came in 139th place. This is significantly higher than neighboring Kenya, which ranks at 108, and Tanzania, which came in at 139. In fact, Rwanda ranks third in Africa. The government is trying to meet an ambitious goal to become a middleincome country by 2020, and Rwanda has implemented the most business regulatory reforms in sub-Saharan Africa since 2005, according to the World Bank. These reforms include removing the need for new companies to open a bank account, making electronic filing of taxes simpler, reducing the cost of electricity and allowing startups to register online for free. ●●●

UGANDA

Lake Kivu

DEM. REP. OF CONGO

TANZANIA

KIGALI

R WANDA

BURUNDI

50 km

RWANDA IN NUMBERS POPULATION URBAN POPULATION (% of total)

28%1

LIFE EXPECTANCY AT BIRTH

64.52

INFANT MORTALITY (per 1,000 births)

47.12

FDI, INFLOWS (current US$)

$267.7m3

GDP (current US$)

$7.89bn1

GDP GROWTH (annual %)

7%1

INDUSTRY, VALUE ADDED (% of GDP) INFLATION, CONSUMER PRICES (annual %) INTERNET USERS (per 100 people)

14.4%1 1.3%1 10.61

SOURCES: WORLD BANK 20141, AFDB 20142, UNCTAD 20143

11.34 million1

ELECTRICIT Y Total production of electricity (kWh)

476,142,374 413,141,377 392,984,907 345,496,093

276,079,191

2010

2011

2012

2013

2014

TOURISM Evolution in tourist arrivals

1,219,529

1,122,150 1,061,308 908,009

666,001 2010

2011

2012

2013

2014

scale just isn’t there,” says Aly-Khan Satchu, a Kenyan investment expert. The alarm has been sounded about Rwanda’s serious skill shortage to support the growing economy. Rwanda ranks 108th out of 124 countries on the World Economic Forum’s human capital report – behind Kenya, Tanzania and Uganda. Education “remains an area Rwanda policy-makers really need to pay attention to as they are behind their continental peers,” says Augustine Chipungu, a research analyst at the Legatum Institute, a public policy think tank in London. The average African spends one year in secondary school, but in Rwanda the average is only 0.1 years, according to Chipungu. However, most analysts agree that the East African Community (EAC) – which comprises Burundi, Kenya, Rwanda, Tanzania and Uganda – is among the most successful trading blocs on the continent, meaning that Rwanda’s small and landlocked economy does not have to be a huge barrier for businesses looking to access other East African markets. Governments in the region are working on the central

SKILL SHORTAGE

SOURCE: RWANDA STATISTICAL YEARBOOK 2015

But the challenges faced by Rwanda are grave. Today, 44.9% of the population lives below the poverty line and only 65.9% are literate. And for all the government’s success, tight political control raises questions about stability down the road. In December, Rwandans voted to amend the constitution to allow President Paul Kagame, who has been in power since 2000, to run for the presidency again. The country also faces fundamental challenges in competing with neighboring economies, namely in education, investment and governance. Rwanda’s gross domestic product of $7.9bn pales in comparison to Kenya’s $60.9bn and Tanzania’s $48.1bn. Rwanda also lags very far behind in foreign direct investment, at $291.7m in 2014, with Tanzania at $2bn and Kenya at $944.3m. “It’s a matter of scale and at the moment the THE AFRICA REPORT

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RWANDA | COUNTRY FOCUS

and northern corridor projects to improve regional infrastructure and better link landlocked countries to ports on East Africa’s coasts. East African affairs minister Valentine Rugwabiza told reporters in 2015 that since Rwanda joined the EAC in 2009 Kenyan businesses had invested more than $450m in the Rwandan economy, making Kenya the country’s top foreign investor. For the most part, the investors have been banks and retailers seeking to meet local demand rather than using Rwanda as a base of operations in the EAC. Rwandan companies are expanding more slowly than their counterparts in the region, but the EAC governments are working on how to reduce non-tariff barriers and facilitate intra-regional business ties. READY AND WILLING

Aphrodice Mutangana is the general manager of kLab, a bright and airy tech innovation hub in Kigali. Started in 2012, kLab already has 200 members and 45 companies. Along with the city’s tidy sidewalks and proliferating skyscrapers, it is a symbol of the remarkable progress Rwanda has made in its short history of

stability since the 1994 genorelationship is the Rwanda cide. He says that the number Development Board (RDB), of new businesses continues to which has worked to streamrise rapidly: “Rwandan entreline government services preneurs are really, really willthat are related to investing to start their own business.” ment. “[The RDB] is really Mutangana, who is an enbecoming a one-stop centre, cutting out as much burtrepreneur himself, founded Rwanda’s eaucracy as possible,” says the Incike initiative, a crowdlabour costs sourcing website that supports Ashish Thakkar, founder are 10% survivors of the genocide, as and chief executive of Mara higher than well as Foyo M-Health, an apGroup, a pan-African investin neighbouring Ethiopia plication that provides basic ment company that works in SOURCE: FT 22 African countries. health information, such as “The government has dosage and side effects for medication and dieting information for really functioned […] like a private chronic diseases, over mobile phones. enterprise, like a company with measurables and matrices in place to see “That story of the 1994 genocide how they can constantly keep improvagainst the Tutsi makes everyone want ing,” says Thakkar. “It’s a fantastic place to build this country and to make proto attract talent. It’s very receptive in gress,” says Mutangana. Rwanda has announced plans to start terms of policy. It was just quicker and an innovation fund this year that will easier to get things done [here] than target small and medium-sized enteranywhere else.” In 2014, the company RwandaOnline prises, mostly run by young people. Platform Limited entered into a 25The fund has a $100m target, a third of year public-private partnership with which will come from the government the government to “digitise all governand the rest from the private sector. Rwanda’s government and its private ment-to-citizen and government-tosector are closely linked. Central to this business services,” says Alistair Muhire, a spokesman for the company. And members of the private sector often see their goals as closely linked to those of the government. “RwandaOnline’s vision is to be the catalyst for the transformation of Rwanda through technology,” Muhire says.

JUAN HERRERO

A DREAM OF CHANGE

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Tech innovation hub kLab was started by Aphrodice Mutangana, who says the history of genocide motivates young people to build and make progress

Nadia Uwamahoro, one of the entrepreneurs at kLab, has been involved in the country’s entrepreneurship network for a long time. “It started actually when I was in primary school, when I was 11,” she says. “It’s like you look at things and you dream about changing them.” Today, Uwamahoro is the managing director of Data Systems Limited, a software development company. Rwanda has been an ideal place to start and grow her business, says Uwamahoro, who has also worked in Burundi and Uganda. “I would say that in Rwanda the entrepreneurship is very much more supported than in the neighbouring countries,” she points out. “In Burundi, it’s much more difficult because everything seems to be slower and there is a mindset about software that isn’t [the same]. And then also for Uganda, transparency is difficult. There’s a lot of corruption.” ●

COUNTRY FOCUS | RWANDA

INTERVIEW

John Rwangombwa

Governor, Central Bank of Rwanda

Services will remain key The Rwandan economy is growing strongly thanks to tourism and construction. The banking industry is healthy and attracting new investors TAR: What will drive growth in 2016? JOHN RWANGOMBWA : In 2016, I think services will remain key. We expect to do better in tourism because of the big meetings that we are having, on top of the normal tourism we have every year, and we expect to see trade continuing to perform well. Construction will drive growth, too. Despite the challenges we had this year, we still think that agriculture will do well. And the ministry of agriculture has plans to really support agriculture during the course of the year. We were targeting our growth at 6.3%, but depending on how it unfolds we might do much better. We still have that cloud of instability or gloomy global economy. We expect our commodity prices to stay low, but the good thing is that we expect to continue benefiting from reduced petroleum-product prices. How has the Rwandan franc’s depreciation hit the economy? [The impact] is not yet that big because normally the concern with depreciation is when it filters into inflation. Because our trading

partners were hit more than we were hit, overall our real exchange rate in fact appreciated, so we did not see this spilling into inflation. How do you plan to minimise foreign-exchange risk? I think part of it is the adjusted growth rate at 6.3% instead of 7%. The other option is to limit slightly foreign-exchange demand. For instance, the private sector grew at 24% last year. This year, we are targeting it to grow at around 16%. We see this measure reducing the demand on foreign exchange. We are talking with the International Monetary Fund (IMF). We want to put in place a precautionary facility just in case we need to draw or borrow from them. What measures are you planning to put in place to restore and preserve foreign-exchange reserves? We have still about four months of import cover […]. We had 6.8 months in 2012. When we had problems, it dropped to 4.5. It has gone down to around 4.1 now. While it has been reducing, we do not see it as a big issue today that is going to cause a crisis. That

A CAREER IN NUMBERS

is why I said we are engaging the IMF for precautionary purposes.

FEB 2013 Appointed Central Bank Governor of Rwanda

How would you assess the profitability of the banking sector in 2015? This was one of the best years for the banking sector overall. We have had profitability of the sector improving every year. Last year, we had all banks making profit at some point. [Before that] we had the new banks – Kenya Commercial Bank Rwanda and Equity Bank Rwanda – still incurring losses from 2014, then we had Banque Populaire du Rwanda (BPR) that had challenges. Overall, the net profit after tax for the banking industry rose by 27.5%, from Rfr33.75bn ($44m) at the end of December 2014 to Rfr43.04bn at the end of December 2015. Return on assets and return on equity increased to 2.1% and 11.2%, respectively, from 1.9% and 10.5% in 2014. Having new entrants also helps. We now have one microfinance bank turned into a commercial bank and another big investor coming into BPR and merging with BRD Commercial Bank, so we already have a strong base and

2009 Becomes Minister of Finance and Economic Planning 2005 Made permanent secretary to the ministry of finance 2005 Accountant General at the ministry of finance

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RWANDA | COUNTRY FOCUS

this will just help to increase or improve the performance of it. To what extent are you expecting to see consolidation in the banking market? The new banks that were still struggling to cover their costs have now covered their costs. Most of the banks are now profitable, and all the banks have been growing their assets and their portfolios healthier than we have had in the past years, at around 6.6%. The merger of BPR and BRD Commercial is good, but I do not think it is a big deal. The big deal is that we have a big investor that is coming to BPR, one of our big banks. We expect it to yield results going forward. We have high hopes that the investor is going to consolidate BPR as the biggest retail bank in the country and therefore have a good impact on financial inclusion. The stability is really good, and we do not expect to see mergers as such because there are no banks that are having challenges that need to be taken over. Rather, some banks may grow to the extent where they need some capital and then bring in foreign investors THE AFRICA REPORT

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to bring in capital. But generally speaking, we see a stable and growing banking industry. Looking ahead, in the face of increasing competition, what direction do you see lending rates taking in 2016? The competition [in the banking sector] today is healthy, and it will have more results when the borrowers themselves take advantage of this competition. Today, because the banks were

“The big deal is that we have a big investor coming to BPR. We expect it to yield results” still facing more or less the same structural issues, they are all happy to price higher. No bank wants to cut costs for purposes of attracting more customers because they have issues to deal with so they need to cover their costs. As the operational environment of the banks improves, then that is when we are going to benefit on the pricing side. Already there are banks that give loans at 13-14% […]. Maybe two to five years down the road, we will see

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the competition start to impact on the pricing of these products. What can be done to help push banking penetration further, particularly in rural areas? I think it is already happening. We are happy that information and communication technology has helped banks to leapfrog in the penetration agenda. We see banks now going to rural areas using banking agents, and this is helping to bring the unbanked into the banking industry. We have started seeing banks linked with telecom companies developing products where customers of mobile money that did not have bank accounts can be attracted to open up bank accounts. Technology is an avenue that we see is going to help us bring many more people into the banking industry than we had before. There are products that banks are developing with the telecom companies, including micro-savings that will lead to micro-loans, and therefore this brings many people into the net of the banking industry. ● Interview by Honoré Banda in Kigali

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MAPPING AFRICA Esri’s Geographic Information System Understanding location is as crucial for managing private sector assets as it is for governments balancing sustainable urbanization and development with environmental protection and resilience. Esri supplies the key technology to understand location: Geographic Information System (GIS) software.

KenGen is the leading electric power generation company in Kenya. With a new280MWprojectinOlkaria,renewable geothermalenergynowaccountsformore than 50% of the electricity consumed in Kenya. KenGen uses GIS for the accurate inventory of all its assets, including the asset’s locations and conditions as well as relationships to the environment. This geo-inventoryfacilitatesthemaintenance of the extensive production network and reduces both downtime and impact on the environment.

The Rwanda Natural Resources Authority uses GIS in a national land use planning portal – allowing the public, researchers, NGOs and government officials to easily access land-use plans and other spatial data on the web. «Transparency and making data accessible for the public are important aspects of democracy,» according the Land Project of the US Agency for International Development (USAID), which also printed maps from the portal and trained more than 2000 local leaders to use and interpret the maps.

Rwanda’s Minister of Natural Resources (right) and the Mayor of Huye District (left) at the Launch of the Maps

With urbanization, energy and mining planned and mapped, GIS helps to preserve our cultural and natural heritage, by allowing organizations such as the Tanzania National Parks, to manage and regulate protected areas, including the fauna and flora, wildlife habitats, natural processes, wilderness quality, and scenery.

Olkaria Geothermal Energy

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In South Africa’s Bushveld Igneous Complex – an area contributing nearly 80% of today’s global platinum production – Lonmin platinum mines rely on GIS. It is with GIS that data from the company’s many systems and data bases – from mine planning, surveying, scheduling, and resource management – are fused together to provide management with the full picture of mining operations and output.

Wildebeest migration in the Serengeti

Esri Rwanda Ltd. KG 5 Ave, Nr 18, Kacyiru P.O. Box 6867 Kigali, Rwanda www.esri.rw

UNITED WE MAP AFRICA Modern maps do much more than point to location. They help us understand our world. Maps are vital for building “The Africa We Want”— one with better land administration and planning, health, security, water management, and infrastructure. Esri, the world leader in mapping software, is present in 30 African countries. Esri’s geographic information system (GIS ) technology is used by government agencies, NGOs, educational institutions, international organizations, and the private sector. Esri helps people make and analyze maps for critical efforts such as capacity building and raising awareness.

COUNTRY FOCUS | RWANDA

Foster + Partners’ domed design for a droneport

FOSTER + PARTNERS, AND THE NORMAN FOSTER FOUNDATION

TRANSPORT

isation that has been helping with the overall design of the drone network, to build a larger droneport that will allow larger drones to ferry medical supplies around the country. “Redline aims at The country is going ahead with an initial test setting up in Rwanda a centre of excelof drone technology that could transform the delivery lence in drone technology, which will include a training component and a of goods in Rwanda and beyond research and development componwanda could bolster its role as for health supplies and a Blueline for ent,” Nsengimana adds. If the first project bears fruit, 40 more a transportation hub now that commercial transportation services. droneports could spring up across plans for a drone airport and The Kigali government says that deRwanda. The government is involved delivery services are under way. The ploying the drones to transport blood in parallel negotiations with the Redgovernment struck a deal in February does not require a huge financial inthat will lead the country to host Africa’s line Foundation’s partners led by Afrovestment. Zipline has not disclosed first airport for cargo drones. As part of the cost of the project, and the governtech, the École Polytechnique Fédérale de the agreement, Zipline International, a ment says that while it does not have Lausanne, the Norman Foster FoundaUnited States-based robotics company, tion and Foster + Partners architects. The to provide for any of the upfront costs will supply unmanned aerial vehicles partners say profits from the it has, however, provided 3ha in Southern Province’s Blueline could be used to and build three airports in Rwanda’s Muhanga District in Southern Province. Ruhango District as an inmake up any shortfalls in The drones will carry bags of blood the financing of the Redline. vestment incentive. In the meantime, the government Rwanda’s policies have for use in blood transfusions, which has updated regulations on helped to foster innovawould be the first time such a project unmanned aerial vehicles. tions in ICT, according to has ever been attempted. the Global Information Work on the project will begin this When it launches FINANCIAL MODEL Technology Report 2015 year and the airports are aimed for in 2020 the Redline drone project will Information and compublished by the World completion in 2020. The government be able to carry says that the first materials for the conEconomic Forum. It ranked munication technology blood supplies to struction of the drone airports – known Rwanda first globally in (ICT) minister Jean Phil44% of the country. as droneports – will be shipped by May government success in ICT bert Nsengimana tells The Africa Report that financing promotion to drive social of this year. The first tests of the system SOURCE: ZIPLINE could take place in August. the drone project has been and economic transformAt first, drones with a wingspan of 3m a pressing concern: “We have a full fination. Although drones do not appear that can carry a payload of 10kg will be ancial model well mapped out, and we in the government’s SMART Rwanda thought it provided a very clear business dispatched. By 2025, there should be Master Plan 2020, a blueprint for the sense. It was very important that we do drones with a 6m wingspan capable of country’s growth in the coming years, not start with a loss-making case […]. it does set out promises to “use informcarrying 100kg. Upon completion of ation and technology to deliver better It is almost at break even.” the Zipline development, drones will The government has also announced services, create jobs and transform be able to send supplies to 44% of the a partnership with the Redline Foundthe Rwandan society and economy”. ● country’s territory. The government’s Honoré Banda in Kigali ation, a Swiss-based charitable organdrone programme envisages a Redline

Drones for development

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INTERVIEW

Tongai Maramba Chief executive, Tigo Rwanda

We have a dynamic environment The Tigo Rwanda boss says handsets need to be much more affordable to encourage the adoption of 4G services, but the market is opening up

IGH

RV E

vider licence. For example, you have supermarkets that are offering 4G. So it makes for an interesting, dynamic environment.” The government says opening up the market will drive mobile internet prices down as it seeks to get more of its 4.2 million unique mobile subscribers online. At the end of 2014, just 9% of these people were using 3G and 4G mobile phones to access the internet, according to the telecoms trade group the GSM Association (GSMA). This is expected to increase to 24% by 2021, the GSMA says. Maramba, however, estimates that between 500,000 and 700,000 Rwandans own smart-

wanda is expected to nearly triple the percentage of mobile internet users in the next five years as the government rolls out state-ofthe-art 4G infrastructure in a bid to unlock the economic benefits of mobile-money services and increased connectivity. Kigali unveiled an e-government portal in 2013 that allows citizens to apply for birth certificates, driver’s licences and ID cards online, making internet access a key means for citizens to access governmentservices.Thegovernment has also financed fourth-generation (4G) infrastructure, which is currently the fastest commercial mobile internet network. The economic benefits of boosting access to mobile internet are clear. It can raise business productivity, get people into the formal banking sector and help to improve the quality of education. The continent’slargesttelecoms companies have started to get in on the action, offering super-fast internet to their customers. Butitisnotjustthebig players that are touting 4G. Tongai Maramba, the chief executive of TigoRwanda,explains: “You don’t just have telecom operators offering retail data access, you also have anyone who has an internet service pro-

phones and about two million are using their phones to get online. Part of the reason for Rwanda’s low mobile internet penetration rate is that the handsets needed for internet access are expensive. “That’s been the main challenge so far with smartphones and 4G. We just haven’t been able to get the device down to the level where we can really drive it to the mass market,” Maramba says. “As long as the prices remain beyond $50, I think we will struggle.” He says that while Tigo is waiting for 4G to hit the mainstream, it is targeting corporate users and individuals who might be looking for home data plans. “We get only 10%ofourbusinessfromcorporate clients, but of course we have ambitions to grow that,” he adds. “We see4Gasaninterestingproposition to bundle into corporate offers.” MOVIES AND MORE

The popularity of video-ondemand services has buoyed hopes that more consumers will flock to 4G. Maramba says many customers use 4G mobile internet to access social media websites and apps like Facebook and Twitter. He adds that more studies are needed to understand demand for telecoms services: “The truth is I don’t think we have the answer yet. I don’t think we really know what people are using 4G for,” he says. “In terms of individuals and personal use, I think there’s an exciting potential for home use. So you can bundle mobile products with homedataandsomecontent,” says Maramba. “I think there’s going to be a lot of opportunity there because fixed lines are priced so high. 4G is the affordable alternative to a fixed line for a number of users.” In February, Tigo Rwanda said it would help to increase the number of women using mobile financial servicesfrom39%ofthepopulation to 45% by 2020. “Women direct up to 90% of their income to their families and communities. Increasing women’saccesstomobilefinancial services will in turn allow them to improve their quality of life, that of their families and that of their communities,” says Maramba. ● Mark Anderson

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Crystal Ventures Ltd How

Is Creating Wealth & Improving Lives in Rwanda

rystal Ventures Ltd (CVL) is an investment company established in Rwanda in 1995 and rebranded to its current name in 2009.

The company was founded to meet challenges of economic recovery and take advantage of growth opportunities in a virgin environment. The founders were among the pioneers of Rwandaâ€™s private sector and took on the task of jump-starting the heavily dilapidated private enterprise. Having made a few good investments, especially in telecoms, the company earned decent returns that were reinvested to create what is now the biggest investment company in the country.

14th Floor, Grand Pension Building, Kigali, Rwanda info@cvl.co.rw www.cvl.co.rw CVLRwanda

Our main investments are NPD, Real Contractors, CVLD, East African Granite Industries (EAGI), Ruliba Clays, Inyange Industries, ISCO Intersec Security, Bourbon Coffee, Mutara Enterprises , Capital Brokers, Nexus & BCI Groupe. CVL thrives on application of modern & appropriate technologies whilst also attracting the best management talent to stay ahead of competitors in all its businesses. CVL invests both on a profitability (unexplored high risk sectors) and quasi social basis by pursuing opportunities that have attractive returns but also with a significant socioeconomic profile. Typical preferred projects are those that can deliver a minimum return on investment of 15-20% with an investment horizon from 5 to 15 years or until the sector matures with a clear and profitable exit option.

Your Goals Your Future Your Home

ADVERTORIAL

Work at the largest investment company in Rwanda. careers@cvl.co.rw www.cvl.co.rw

Civil Works

Fleet Services

Kigali Street Lighting Project

NPD is among the leading providers of civil engineering services, construction products and construction equipment leasing in Rwanda. Their services include: • Road works • Bridge construction • Dams • Stadiums • Street lights • Walkways & Drainage The company has also expanded to Kenya providing its core services in civil engineering works. www.npd.co.rw

Real Estate Development

Kagarama Apartments

Kiyovu Villas

CVLD manages CVL’s real estate development activities. The Crystal Ventures Group has been a leading player in real estate development over the past decade through its subsidiaries Real Contractors and NPD Ltd. The company also has a sizeable portfolio of land of just over 45 hectares that is strategically located in and around Kigali. Services that CVLD offers include: • Real estate development • Property management • Built sizeable consultancy www.cvld.rw

Construction

School of Finance & Banking

Ngoma Hotel

Real Contractors Ltd is a company that deals in construction, mechanical, electrical engineering and infrastructure services. Real Contractors also offers both mechanical and electrical engineering services through installation and maintenance services. Some of the specific offerings include plumbing, air conditioning, fire detection and fire fighting, lifts (elevators), mechanical ventilation, lightening protection, electrical installation, street lighting, and LAN installation.

www.realcontractorsltd.com

Building Materials

EAGI granite was used to floor the new Kigali International Airport check-in & departures zones

EAGI granite was used to floor the new Kigali City Council offices

EAGI is owned by Building Materials Investments Limited (BMI Ltd) – a joint venture between Crystal Ventures Limited and Rwanda Social Security Board. EAGI granite quality and unique range of tone, which comes in 7 distinct colours, has created demand from high end developers from the regional markets. As a result, EAGI has expanded operations to Kenya & Uganda. EAGI’s products include: • Floor and cladding tiles • Kitchen, vanity and counter tops • Garden benches, tombstones and cobblestones www.eastafricangranite.com

Clay Works

Masaka Hospital

Kira Hospital in Burundi

Ruliba Clays is the leading clay works company in Rwanda with its head office & factory located in Kigali. Ruliba has undertaken iconic projects in Rwanda & neighbouring countries including: • Gacuriro Vision 2020 Estate (Roofing, walling, flooring, partitions) • Masaka Hospital (Roofing, walling, flooring, partitions) • Nyakinama Military Academy (Roofing, walling, flooring, partitions) • The Marriot Hotel (walling & partitions) • Kira Hospital in Burundi (Roofing, walling, flooring, partitions) www.ruliba.com

Food Manufacturing & Processing

Inyange Industries

Inyange Industries Products

Inyange Industries is among the leading food manufacturing and food processing companies in Rwanda with a wide range of products from juice, water and milk products. Its rapid growth resulted in the construction of a USD 60 million production plant in Masaka in 2012 which has seen the company’s capacity increase tenfold and the brand become a household name in Rwanda. The company also participates in the poverty alleviation program – HIMO – by providing milk to help counter malnutrition challenges. Inyange products are ISO Certified. www.inyangeindustries.com

Security and related services

Hospitality

We engage eco-friendly farmers from the top 5 coﬀee growing regions in Rwanda.

Virunga

KIGALI Muhazi

Akagera

Kivu

Grade A cherries are selected and prepared exclusively for Bourbon Coﬀee Outlets.

Roasted in our very own outlets, Bourbon coﬀee reaches you at its freshest state.

Kizi Rift

From crop Take a journey through the regions.

to cup

Available to take home

ADVERTORIAL

ISCO Intersec Security fleets

Established in 1995, ISCO Intersec Security is the leading provider of security services in Rwanda. ISCO Intersec Security provides forward thinking solutions that have been streamlined and digitized to allow for efficient and timely operational standards. Services include: • Guarding services • Alarms & Access Control • Fire Prevention & Fire Fighting Equipment • Cash-in-Transit & Cash Processing Services • Courier & Logistics Management • 4G CCTV Solutions ISCO Intersec Security is ISO certified. www.isco.co.rw

Bourbon buys its coffee directly from farmers

Bourbon Coffee is an international brand of specialty coffee and the first retail brand to originate from Africa. It was established to present the finest Arabica coffees from Rwanda. The name, “Bourbon Coffee,” originates from the Bourbon variety of Arabica coffee beans, which has grown wild in Rwanda for over a century. Bourbon coffee beans are known for their deep, buttery chocolate flavors, as well as their sweetness and very light fruit overtones. www.bourboncoffee.rw

Trading

Conference Tables

Executive Desks

Mutara Enterprises Ltd was registered as a private trading company in 1995. Spurred by the need to reconstruct, rehabilitate and refurbish public and private structures, the company, in 1996, refocused its core offering to furniture sales introducing quality modular furniture that was easy to import for local assembly. Their products include: • • • •

Office furniture & partitioning Vertical blinds Air conditioning Covered carports

Mutara Enterprises is ISO certified. www.mutaraenterprises.com

Aviation Services

Flight Dispatch Services

Trip Planning Services

NEXUS is an independent Flight Operations Services provider. It’s headquarters are based in Saudi Arabia with a back-up Flight Operations Centre located in Bahrain as well as a new Africa base in Rwanda. NEXUS aviation experience spans almost 25 years and during this period, they have served some of the most elite clients in the Middle East and Africa. Since inception, NEXUS has established numerous vendor relationships and partnered with highly respected international companies including leading aviation training company FlightSafety International, international security services company FAM International and the largest Middle East aviation consultancy firm MAZ Aviation Consultants. www.nexus.aero

Financial Services

Capital Brokers manages insurance for the Hydrodam projects.

Capital Brokers is the insurance broker for the Rwanda Airforce

Capital Brokers is a brokerage firm that provides a broad array of insurance brokerage, consulting as well as risk management services. It caters for a wide spectrum of customers ranging from individuals, commercial and industrial sectors. Some of the insurance brokerage services offered include: • Motor vehicles • Industrial all risk • Cash in transit and safe • Third party liabilities or public liability • Medical cover www.capitalbrokers.rw

Investment

Energy & Infrastructure projects are part of the investment plans

BCI Groupe is an investment company based in Congo Brazzaville with a focus on civil engineering, energy and trading. CVL owns 60% with the remainder being shares of Telsa Sarl who are Congolese shareholders as part of its strategy to include local shareholders in our expansion program. BCIG aims to be one of the most reputable investment companies in Congo-Brazzaville with a significant impact on the social economic development of the country.

RWANDA | COUNTRY FOCUS

MANUFACTURING

Stitching together the industrial fabric A Chinese textile company is an early supporter of the government’s drive to diversify export revenue and create jobs for low-skilled workers

WDA

wanda is counting on C&H Garments, a Chinese-owned company that launched operations in the country last year, to boost local textile production, help diversify the country’s exports and serve as an example to other manufacturers in the landlocked East African country. The C&H Garments is training textile government sees the textile and apworkers and plans to increase parel industry as a quick win in terms its workforce to 1,000 this year of creating jobs, thanks to its ability to absorb entry-level labour. a Chinese group has expressed interest C&H is due to invest up to $10m in in working with the government to dethe next five years at its textile plant in velop the Bugesera Industrial Park and the Kigali Special Economic Zone. The company, which is now making T-shirts attract Chinese enterprises to set up in Rwanda and supplies United Statesshop in Rwanda. The park is located based retail stores Walmart and Target, in the district south of Kigali, and the government issued a tender for the dehas invested in equipment including velopment of its first 100ha in late 2014. computerised sewing machines, and currently employs about 300 local work“Wehopethatinthenextcoupleofyears ers. It plans to hire more people as it we will see more Chinese groups coming to Rwanda. The Chinese diversifies its operations relocation is mainly in the and increases its capacity to supply both regional and area of labour-intensive international markets. manufacturing facilities,” C&H’s goal is to employ Kanimba explains. 1,000 Rwandans by the end Chinese of 2016. In the medium BEYOND THE BEAN investment This investor interest term, the number could in Rwanda comes at a time when the rise to at least 3,000, as the between 2010 company signed an agreecountry is under pressure and 2015 ment with the government to diversify its sources of SOURCE: RWANDA DEVELOPMENT BOARD to increase its training proforeign exchange in the gramme. While C&H imface of declining levels of foreign aid, which accounts for approxports most of its raw materials and is imately 40% of government expenditure. focusing on training, in the long term, the plan is to build a local supply chain. Rwanda’s traditional exports – includPan Hejun, China’s ambassador to ing tea, coffee, pyrethrum, minerals as Rwanda, tells The Africa Report that well as hides and skins – continued to dominate the economy in 2015, represother firms are exploring similar projects: “[C&H] is a very good investment. enting 47.5% of total export earnings, We expect more of such investments to compared to 55.2% in 2014. come to Rwanda. We are very keen to This dependence on a few primary help with industrial cooperation.” commodities remains one of the main challengesforacountryseekingtoreduce According to François Kanimba, a high trade deficit and build resilience to Rwanda’s trade and industry minister, THE AFRICA REPORT

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external shocks. For instance, last year a combination of lower prices for its major exports, a depreciating currency and a high import bill drastically impacted the country’s international reserves. In 2015, total exports recorded a poor performance, decreasing by 6.8% in value to $558.8m from $599.8m in 2014. Yet under the government’s Second Economic Development and Poverty Reduction Strategy, the target is for exports to reach 28% annual growth in order to reduce the balance-of-payment deficit. Alun Thomas, the International Monetary Fund resident representative for Rwanda, underscores that one of the constraints that is likely to undermine Rwanda’s growth prospects this year is the lack of foreign exchange. “If you look at the global economy, there are challenges in terms of commodity demand and prices, and export diversification takes time. The challenge therefore is to maintain reserve cover at three to four months of imports,” he says, pointing out that the government has to help rein in some import demand through expenditure restraint, since the public sector is a big part of the economy and demands a lot of imports. Indeed, in recent months, the government has also been aggressively promoting a ‘Made in Rwanda’ strategy, which includes raising awareness, enhancing quality and improving the branding and packaging of locally made products. ● Honoré Banda in Kigali

COUNTRY FOCUS | RWANDA

INTERVIEW ranging fields such as artificial intelligence, robotics, the internet of things, autonomous vehicles, 3D printing, nanotechnology, biotechnology, materials science, energy storage and quantumcomputing, to name a few.” So should African countries be encouraged to ‘leapfrog’ into a new path of industrial development or should they be concerned that manufacturing may never be the same again?

JAKOB POLACSEK/WEF

Elsie Kanza Head of Africa, World Economic Forum

We are already living this new reality Ahead of the WEF Africa conference in May, Elsie Kanza talks to The Africa Report about the challenges and opportunities that the fourth industrial revolution brings

wanda has worked hard to put itself on the conference circuit. It played host to the African Development Bank meetings and World Export Development Forum in 2014, and this year it welcomes the 26th edition of the World Economic Forum’s (WEF) Africa conference on 11-13 May. This year’s conference will build on the ideas discussed at the WEF in Davos in January, in particular that of the ‘fourth

industrial revolution’, which predicts that much of the growth of the coming decades will be based on technology strengthening industrial processes. “Consider the unlimited possibilities of having billions of people connected by mobile devices, giving rise to unprecedented processing power, storage capabilities and knowledge access,” writes WEF founder Klaus Schwab. “Or think about the staggering confluence of emerging technology breakthroughs, covering wide-

TAR: The theme of the forum is connecting Africa’s resources through digital transformation. What does that mean? ELSIE KANZA: The starting point is picking up from the conversations that we had in Davos [and] raising awareness with respect to the fourth industrial revolution. [It] is all about new technology and how that’s disrupting societies, economies, business – and therefore [about] helping all stakeholders get their heads around this new reality. And then helping them to think through what it means given the current context – the opportunities and challenges. I go to great lengths to let people know we are not shifting away from the basic needs of the continent as it grapples with respect to growth and development. It’s just that we are applying a new lens so that people appreciate that it’s not an either/ or proposition. We are already living this new reality. What does it mean in terms of prioritising investments? What does it mean in terms of the potential to leapfrog in a number of areas? What does it mean in terms of where we need to build resilience to be able to manage the downside of this revolution? What areas do you think Africa could leapfrog in? I feel that there are real opportunities right across the board in every respect. If we look at agriculture, for example, and if you think about research ● ● ●

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SADDLE UP AND JOIN THE RIDE.

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COUNTRY FOCUS | RWANDA

PIERRE BOISSELET FOR JA

● ● ● that’s gone into producing drought-resistant crops. For instance, having better information that can help with planning, looking at the full value chain in terms of processing. I think many people forget that technology is a number of things: it’s not just products, it’s also processes and services. We have new opportunities with regard to logistics and shipping that are also being driven with better information and technology. We have in the healthcare system new technologies that allow for diagnosis to take place without being in a highly equipped medical centre. And with medicine, prevention is better than a cure. So if we’re able to detect issues earlier, especially epidemics, then you can take measures to control them earlier. You can now do that using handheld devices. That’s incredibly valuable. The challenge is how do we

share it? And how do we scale up what is working? [...] I’m particularly excited about e-commerce, where we are seeing a lot of Africa’s creative talent actually being monetised. But it’s not just limited to that. You are seeing it in advertising. Just the other day somebody created an app for downloading music. So there’s an incredible amount of new, emerging technologies in this space, which offers a real opportunity to address unemployment amongst youth in the continent now. That said, there is still quite a bit of work to be done in terms of the infrastructure, right? Like connecting the unconnected: the energy gap is enormous but at least now you can see there’s light at the end of the tunnel, so to speak. And given these large challenges about where the jobs are going to come from, here’s a real opportunity to have a breakthrough.

BETWEEN AFRICA AND THE WORLD 1997 Began working for Tanzania’s finance ministry 2006 Named President Jakaya Kikwete’s assistant for economic affairs 2008 Chosen for an Archbishop Tutu Leadership Fellowship 2011 Started at the World Economic Forum (WEF) 2014 Became head of Africa for the WEF

Rwanda has pioneered the use of laptops in classrooms, helping to prepare the connected workforce of tomorrow

Is it the WEF’s position that digital services can provide the kind of mass employment that previously was offered by things like manufacturing? Potentially. I think manufacturing remains important, so even with digital marketplaces you have to think about what products are being sold, ultimately. But it does make it easier to connect producers to buyers. And with new technologies such as 3D manufacturing, you also transform the face of manufacturing and production. The key challenge [is] that if you produce locally, you are in many respects limited to your local environments. Now, with digital marketplaces, your market becomes national, regional and even global – and that’s the real opportunity. Do you have any advice for policy-makers about how to ride out this commodity crunch? It’s a tale of two Africas, so to speak. Commodity-dependant economies are absolutely suffering, just like their counterparts around the world – be it governments, be it companies. For commodity-poor countries, it’s boom time, particularly if you are able to purchase oil at lower prices. We’ve seen that reflected in continued higher growth rates, particularly for countries in Eastern Africa. But this is a real opportunity for commodity-rich countries to get their acts together. When you have greater oil revenues coming in, it’s very hard to say to people: “Hey, we should be collecting taxes on property. We should be collecting taxes on customs. We should be tightening belts and minimising wastage.” Those are very difficult conversations to have when people see that, well, there’s a lot of money. Why should we have to be lean in our operations? And so, they [should] see this as a real opportunity to drive through reforms for better financial management before prices pick up again. ● Interview by Nicholas Norbrook

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FINANCE

Loans out of reach The latest FinScope survey shows 89% of Rwandans now have access to financial services, but the high interest rates keep loans out of the reach of many. Competition between banks, banking efficiency and consumer education could change this

WILL BOASE/BLOOMBERG VIA GETTY IMAGES

the meeting. While bankers and polifter Idephonse Twagirayezu cy-makers maintain that interest rates borrowed $2,600 from a comin Rwanda are much lower compared mercial bank in Kigali, he with countries in the region such as thought he was set. He used the new Kenya and Uganda, where commerfunds to buy spare parts for his fourcial banks charge as much as 27%, leseat taxi, which is his primary source of income, as well as launching a small gislators argue that it is important to shop to sell basic household items such bring down the cost of borrowing to as salt, sugar and soap. stimulate economic activity. While the central bank quotes the ofData from the Rwandan central bank ficial average lending rate at 17%, most show that industry lending rates deordinary Rwandans pay clined marginally from more. Twagirayezu, who 17.6% in December 2014 has a wife and six children, to 17% in December 2015, says he is struggling to redespite the central bank maintaining its policy rate pay his loan because the interest on his repayments of 6.5% unchanged since has eaten up all his profits. June 2014 to increase li“The loan was too exquidity and create room pensive,” Twagirayezu for banks to lend to the private sector. On the other tells The Africa Report. hand, deposit rates offered “The bank charged me Percentage of by Rwanda’s commercial 20% interest, and I had Rwandans aged to deposit my land title to banks dropped significover 15 with a bank account secure the loan. I knew it antly from an average of SOURCE: WORLD BANK 11.3% in January in 2013 to was very expensive, but I didn’t have a choice. Most 7.5% in December last year. banks have lengthy procedures which make it almost impossible to get a loan.” CUSTOMERS SHOULD NEGOTIATE Rwanda’s parliament held a special Aimable Nkuranga, the country mansession on 23 February to ask the centager for TransUnion Rwanda, the first ral bank to bring down lending rates. company to offer credit-rating informThis follows public outcry over the high ation and management in the country, cost of borrowing. “The central bank explains that consumers have a role to should help in finding a sustainable play in getting better deals: “Not everyway to solve the issue of high interest one knows that they can use a good credit rates on acquiring loans,” said member history to negotiate for better terms […]. of parliament Pierre Claver Rwaka at There is a need for public education and

42%

Borrowing at 20% means loan repayments eat up all the profits of small businesses

awareness by different stakeholders, including the central bank.” He adds: “The culture here is people think getting credit is a favour they are getting from banks […]. When they see that their project is accepted, they do not think twice. They just sign quickly, thinking the bank can refuse at some point.” Rwanda is trying to attract big regional and international banks in a bid to support infrastructure projects that local financiers are unable to fund. The government also aspires to transform the economy into a financial hub for East and Central Africa. Foreign lenders, such as Britain-based financial services group Atlas Mara, which bought a stake in Banque Populaire du Rwanda (BPR) and the BRD Commercial Bank, have recently moved in. Atlas Mara says it has invested around $21m in BPR and has plans for expansion (see page 71). Bank of Africa, the Mali-based multinational pan-African banking group, acquired a licence in October last year after it bought a 90% stake in Agaseke Bank, a microfinance institution. It is expected to rebrand and launch full operations in the course of 2016. These two entries into the market mean Rwanda’s banking sector is now home to 12 commercial banks, three microfinance banks, one development bank and one cooperative bank. THE AFRICA REPORT

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RWANDA | COUNTRY FOCUS

The central bank sees opportunities for growth if banks introduce branchless or agency banking, as key players in the sector look to rope in millions of households without access to formal banking channels. According to data from the FinScope survey released on 3 March by not-for-profit company Access to Finance Rwanda, 89% of the adult Rwandan population is already using financial products and services, up from 72% in 2012’s survey. The country has exceeded its targets: Rwanda’s flagship development strategy, Vision 2020, aimed to reach 80% financial inclusion by 2017 and 90% in 2020. ECONOMIES OF SCALE

While the entry of new banks and the extension of the banking network have increased competition and innovation, this has yet to benefit borrowers. The World Bank says in a recent report that commercial banks are still among the most important sources of financing for the country, but their investments are constrained by the maturity of their liabilities, which consist mainly of local short-term deposits. Central bank governor John Rwangombwa agrees with that analysis, saying banks “do not have long-term savings that will act as financing channels for the businesses.” But the World Bank has also offered advice on how to bolster financial inclusion and reduce the cost of financial services. “With economies of scale, banks could be more efficient, as the required fixed costs are spread over a wider operation. Thus, it is crucially important for banks to extend their reach across Rwanda’s borders, and include the currently unbanked into the banking system, to ultimately realise the benefits of economies of scale,” the World Bank’s report says. According to the World Bank’s economic update on Rwanda released at the end of February, credit to the private sector as a percentage of gross domestic product (GDP) stood at 16.6% at the end of 2014, compared to 11.6% in 2009. While the trend over the past few years is positive, private-sector credit relative to GDP remains low compared to other low-income countries. Rwanda’s bankers still have a lot more work to do to make sure that companies and individuals can access the finance they need to keep the economy growing. ● Honoré Banda in Kigali THE AFRICA REPORT

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INTERVIEW

Sanjeev Anand Chief executive, Banque Populaire du Rwanda

A great customer base

tlas Mara, a sub-Saharan Africa-focused financial services group based in Britain and founded by Bob Diamond and Ashish Thakkar, has grand designs for the Rwandan banking sector. It completed its purchase of a majority stake in Banque Populaire du Rwanda (BPR) in January and has merged it with its stake in recently acquired BRD Commercial Bank. BPR now has the most branches in the country and the second-largest total assets. Sanjeev Anand is BPR’s new chief executive, and he plans to take his experience at I&M Bank Rwanda and Citibank in Nigeria and India to expand the bank’s operations into sectors that it has previously ignored, like trade finance and corporate banking.

As you take over as chief executive, what is your strategy? The strategy is very simple. BPR has a network of 193 branches. It has approximately 600,000 customers, of which about 450,000 are active and then 150,000 are inactive customers. We have about 300,000 customers on mobile banking. That is a great customer base to work with. The first objective would be to give new products to retail customers, the 450,000 active customers. The next objective would be to activate as many as we can of the 150,000 inactive customers, and that is a huge thing. 600,000 customers is probably more than all the other banks put together, which is a very big customer base. We are virtually zero in corporate banking – we have a very small market share, not even 3-4% market share. Similarly, in small and medium-sized enterprise banking and business banking, our market share is only about 4% or 5%. We want to grow that with new products.

TAR: What is your strategy to reduce the cost of borrowing? Our goal is to reduce costs. BPR has many positives, but it also has many negative points. One of the negatives is that it has a very With a capital base of Rfr45bn, high cost of operation. that gives us a lot of ability Our cost-to-revenue ratio is something like to grow our loan book 90%, which is extremely high. And if your costs We have a very good capital base are high, it prevents you from being of Rfr45bn ($58.7m), which is the second-highest capital base in the able to offer competitively priced products to the customers. country. That gives us a lot of ability to grow our loan book. We have a virtually negligible share What does Atlas Mara’s purchase of the treasury sector. So from zero, of the bank mean to the your growth can only be positive. approximately 600,000 individual We are putting a lot of focus on the shareholders? treasury market. When they approved the We are doing nothing on the trade transaction, they have obviously finance side – on import financing, placed trust in the new investor export financing, letters of credit, – being Atlas Mara – and the collections. There is a huge governance and the management opportunity there because Rwanda team that Atlas Mara will put into is a trading economy and we are the bank to reap the full potential not doing anything there. I want of BPR. It is a trust that they have to develop that business as well. ● placed, and I hope that we are Interview by H.B. in Kigali able to live up to their expectations.

BUSINESS ERITREA

Dig deep Eritreaâ€™s hobbled economy will get a boost when new gold, copper and zinc mines begin production. Despite the commodity crisis, the government is banking on the sector to provide much-needed jobs By Mark Anderson in Bisha

Number of foreign companies exploring for resources in Eritrea

The potential role for mining to help spur Eritrea’s economy is not hard to see. The Eritrean National Mining Corporation (Enamco) gets an automatic 10% stake in every mining project, as well as the option to buy an additional 30% share, as per the Western Australian mining code, on which Eritrea based its mining laws. Eritrean state-owned companies, mainly Segen Construction Company, have also earned money building roads and staff housing from the mines. Alem Kibreab, the director general of Eritrea’s energy and mines ministry, tells The Africa Report: “The contribution that mining will make to the Eritrean economy will be tremendous. If you have four mines running and if there’s a good price of metal at that time, then the contribution will be really significant.” The African Development Bank estimates that Eritrea’s economy grew by 2.1% in 2015, up from 1.3%

growth in 2013. The World Bank put Eritrea’s 2014 gross domestic product at $3.9bn. The value of gold, copper and zinc has tumbled with the recent global downturn in metal prices. Nevertheless, with three more mines scheduled to begin production by 2018, revenue from the sector could earn the government more than $1bn per year. Alem explains: “It’s not like when gold was $1,700 an ounce, but still with the current price we are making profits because [Bisha] is a very low-cost operation.” PROFITS LEAVE IN DOLLARS

Hagos Ghebrehiwet, an adviser to Eritrea’s President Isaias Afewerki and an architect of the rebirth of the country’s mining industry, plays down the importance of the sector today. However, he argues that it will play a transformative role in the future. Hagos says that Eritrea earns about $200m per year from Bisha: “What is $200m a year in Eritrea? Nothing. Our annual fuel bill is over $300m. Food imports are about $200m,” he says. “Almost 85% of the revenues from mining are spent through foreign currency on fuel, trucks, spare parts. So it’s going out not into the economy.” Running underneath Eritrea’s arid mountain landscape is ● ● ●

Bisha is a benchmark and “has to be world class,” says the company

THOMAS MUKOYA/REUTERS

he evening sun casts a glow over the Bisha mine as the last dump trucks of the day climb up gravel tracks on their way to a refinery, where copper and zinc ore will be processed and shipped off for sale on the world market. This is Eritrea’s first operational mine and the government hopes that three more will jump-starttheeconomywhenthey come online in the next two years. Bisha has contributed more than $755m to the Eritrean economy since it began production in February 2011, according to Nevsun Resources, the Canadian mining company that owns 60% of the mine. While the government says that much of this revenue goes towards operational costs and debt repayments, there is little doubt that more mines would offer a dramatic lift to Eritrea’s economy, which is struggling under the burden of mass migration, UN sanctionsanddiplomaticisolation.

BUSINESS | COMPANIES & MARKETS

the Arabian Nubian Shield, a stretch of minerals that straddles both sides of the Red Sea. Many deposits of gold, copper, zinc and potash are buried deep in the ground. The country is attracting a host of exploration outfits and junior miners keen to discover world-class assets with the aim of selling them on to major companies down the line or bringing in investors to develop them. Eritrea’s first mine, the Bisha Mining Share Company, employs about 1,500 people and is a 24hour operation that produces 688tn of copper concentrate and 166tn of copper every day. It is expected to yield copper and zinc until 2025, but further exploration in nearby Harena and Mogoraib River could to extend its life. Cliff Davis, Nevsun’s chief executive officer, says: “We expect that the Bisha mine will go on for decades, with the state as its partner.” Next to come on stream is the Zara gold mine, joint-owned by Enamco and China SFECO Group. It is now in the commissioning phase, where project components are tested. Production is expected to begin at the end of March. That will be followed by the Asmara project, a group of three depositsontheoutskirtsofthecapital, which is set to start production by the end of the year. It is majority owned by Canadian mining company Sunridge Gold, which last year announced a $88m deal to sell its 60% stake in the project to China’s Sichuan Road & Bridge Group(SRBG).TheAsmaraproject ●●●

is estimated to contain 574,000tn of copper, 930,000oz of gold and 1.2m tonnes of zinc. The Colluli potash project, which is owned by Australian company Danakali and among the shallowest potash deposits in the world, is slated to begin production by 2018. The mine sits in the Danakil Depression, one of the hottest and lowest points on earth, where more than 6bn tonnes of measured and indicated potassium-bearingsaltshavebeen identified to date. In a sign of the mine’s huge potential, Enamco purchased an additional 40% stake, bringing its total ownership to 50% of the deposit.

Trucks carrying gold, copper and zinc ore away to refineries are dwarfed by the scale of the Bisha mine, in the mountains north-west of Eritrea’s capital, Asmara

AN INDUSTRY STALLED

In addition to Nevsun Resources and China SFECO, which are exploring near their active mines, 14 foreign firms from Canada, Australia, China, Russia, India and Sudan are exploring for mineral assets in the country, according to the mines ministry’s Alem. Eritrea’sfirstmineral exploration wascarriedoutinDebarwa,atown justsouthofAsmara,in1955,when Eritrea was still part of Ethiopia. Prospector Michael Tekele was the first person to discover a mineral deposit in Eritrea, which was a former Italian colony, then a British protectorate, and finally a province within Ethiopia until it gained its independence in 1991. Combing through the desert in Debarwa, a short drive away from Asmara, a deposit of gold, copper and zinc was found. The govern-

ment signed a deal with Nippon Mining, a Japanese firm, to build an 180m headframe to drill deep beneath the earth and extract mineral samples. About 75 holes were drilled between 1970 and 1974, as interest in the sector gathered. A coup led by Mengistu Haile Mariam then threw the country into civil war, which ravaged the region for almost three decades. Development of the mining industry stalled for decades until Eritrea won independence from Ethiopia in 1991 after the Eritrean People’s Liberation Front (EPLF) captured Asmara. In 1996, after Eritrea had gained independence,

Who’s who in Eritrea’s mining sector AT THE HELM of Eritrea’s nascent mining sector is Hagos Ghebrehiwet, chairman of the Eritrean National Mining Corporation (Enamco). Hagos is also the director of economic affairs for the ruling People’s Front for Democracy and Justice, having held the post since 1994. A close ally of President Isaias Afewerki, Hagos was posted to the US during the Eritrean liberation struggle.

Alem Kibreab, director general of the energy and mines ministry, acts as a go-between for foreign companies and government. He sets up deals and advises Enamco about deposits worth increasing its share in. Foreign investors will be closely following Seamus Cornelius, a non-executive chairman of Australian firm Danakali. It has a 50% stake in Colluli, one of the

largest potash deposits in the world. Cornelius also sits on the boards of Montezuma, Buxton Resources and Duketon Mining. Chinese interest in Eritrea’s mining sector is gathering. Sun Yun is the chairman of SRBG, which has agreed to buy a 60% stake in the Asmara project from Sunridge Gold. Zhang Linfa, chairman of the board of China SFECO Group, is overseeing the

development of the Zara mine, the next asset to become operational. Canadian mining company Nevsun Resources, which owns a majority stake in the Bisha mine, is the most influential among foreign outfits. Cliff Davis, Nevsun’s CEO since 2008, is fending off allegations of human rights abuses at the Bisha mine and has prepared an investment war chest of $434m. ● M.A.

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BUSINESS

of construction. Three former conscripts who say they worked at the mine have sued Nevsun in the Supreme Court of British Columbia in Canada, saying that the company failed to protect their human rights. ,Davis, Nevsun’s chief executive, has said he is “confident that the allegations are unfounded”. Leslie Lefkow, deputy Africa director at HRW, describes as “worrying” Nevsun’s “reluctance to admit it ever used forced labour, even in the early construction phase”.

THOMAS MUKOYA/REUTERS

JOB CREATION

SERVING THE NATION

A brutal border war between Eritrea and Ethiopia raged for two years from 1998 to 2000, killing an estimated 70,000 people. Western diplomatic sources say Ethiopia has positioned about 150,000 troops on territory awarded to Eritrea in the 2002 Algiers Agreement, which ended the war. Eritrea’s government says that its strict national service programme, which requires citizens over 18 to work for as little as 500 Nakfa a month ($30 through official rates THE AFRICA REPORT

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and $10 on the black market), is necessary for the country to defend itself against Ethiopia. But this programme is said to be the key reason that an estimated 4,000 people leave Eritrea every month, according to the UN High Commissioner for Refugees. The government says that the real number is distorted by Ethiopians and other nationalities who masquerade as Eritreans in the hope of gaining asylum in Europe. President Isaias has acknowledged that people are leaving the country, but says they leave for purely economic reasons. Eritrea’s first mine was hit by claims from Human Rights Watch (HRW) in 2013 that people working in the national service were forced to work in its early stages

Foreign direct investment in Eritrea 50 40

$39m

$41m

2011

2012

$44m

$47m

30 20 10

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SOURCE: UNCTAD

foreigncompaniesbegantoreturn. Companies like Phelps Dodge, a now defunct US mining firm called Sub-Saharan Mining and a host of Canadian companies began to scour Eritrea for mineral deposits. Since then, the government has trumpeted a unique brand of self-reliance by shunning foreign aid and instituting a national service programme to develop the country. Presidential adviser Hagos, who is also director of economicaffairsfortherulingPeople’s Front for Democracy and Justice, explains the government’s priorities: “Social justice, self-reliance, public and private investment – these are the key pillars of the Eritrean economy.”

$8m

0 2005-2007 average

2013

2014

For the mining industry to have maximum impact on the Eritrean economy, a skilled labour force has to be trained. Some say the mineral sector could help keep Eritreans in the country. According to a Western diplomat based in Asmara: “Mining is the most obvious prospect for short-term job creation in Eritrea.” Bisha is setting the benchmark for future mining projects, says Fesseha Ghebrehiwet, chief services officer at the Bisha Mining Shares Company and a former EPLF fighter. “What you see here will be replicated in other places around the country. We have to be verycareful.Ithastobeworldclass.” Critics say the government is banking on mining cash to paper over the cracks in the regime. Eritrea does not publish a national budget, and mining industry insiders say they do not know where revenue from the mining sector are spent. “It’s a black hole,” says another Western diplomat who requested anonymity. Feruz Werede, an Eritrean activist, says: “For the past several years, Eritreans have been putting up with all sorts of violations perpetrated by the government in the hope that things would get better when the economy recovers as a result of new mining revenues. But several years into the mining boom, things seem to have gotten worse and Eritreans – particularly the young – are giving up hope that the situation will improve.” She adds: “They are resorting to leaving the country to escape the regime’s grip.” ●

MAARTEN-SR

AVIATION

Air Madagascar is losing altitude The state-owned and subsidy-dependent airline is slashing costs and restructuring, but it may not be enough as the government opens the skies to its competitors

sthecompetitionheatsup, AirMadagascar’sadministrators are in a race against time to overhaul the company. The new management arrived on the back of a strike that forced out the previous board. New chief executive Gilles Filiatreault, who took up the post in October 2015, announced 400 redundancies in January. The restructuring topped the agenda at a meeting between the International Monetary Fund and the government of President Hery Rajaonarimampianina. The airline’s troubles reached new heights towards the middle of 2015. Maroantsetra, in the northeast corner of Madagascar, is a

quiet town with a frontier feel. The town is virtually inaccessible by road, so goods arrive by cargo ship and people by plane, usually three times a week with Air Madagascar. But a month-long strike in June 2015 cancelled virtually all flights on the island and left Maroantsetra more isolated than ever. ZERO CUSTOMERS

June and July tend to be the high tourist season, so the strike hit the sector hard. Max Gantner, owner of L’Hippocampe hotel in Maroantsetra and Le Lodge in the nearby Masoala National Park, tells The Africa Report: “We had zerocustomersinJulyandAugust.”

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The industrial action called for a change in leadership and an end to political interference in Air Madagascar’s day-to-day business. Over the years, the airline has become a byword for unreliability, with constant delays, cancellations and lost luggage. It runs regular deficits – reaching $76m as of January 2016 – and the European Union has blacklisted it from its airspace due to safety concerns since 2011. A source close to the subject says: “It lacks transparency, with a lot of incompetent people and a lot of cronyism.” Air Madagascar employs 200 people per aircraft, whereas the global average is 64. The board and chief executive resigned on 7 July 2015. A new board was appointed the next day, chaired by Léon Rajaobelina, special economic adviser to President Rajaonarimampianina, who was

OIL Police interview Norwegian energy firm Statoil over payments to Angola’s Sonangol THE AFRICA REPORT

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COMPANIES & MARKETS | BUSINESS

international airlines and ending Air Madagascar’s domestic monopoly. Competition is already building up: Madagasikara Airways started flying between Antananarivo and Toamasina in October and is now flying to eight domestic airports; Turkish Airlines inaugurated its Antananarivo-Istanbul route via Mauritius in December; Airlink is increasing the frequency of its flights between Johannesburg and Antananarivo and introducing direct flights between Johannesburg and the popular island resort of Nosy Be from March 2016. Conscious that this onslaught of competition from the open-èsky policy might tip Air Madagascar over the edge, the government agreed to recapitalise it to the tune of Ar128bn ($39.4m) in December. Shortly after his nomination last July, Air Madagascar chairman Rajaobelina indicated that the board would look into opening the airline’s capital to new shareholders, although the Malagasy state, which currently owns 89%, would seek to retain a controlling stake. The restructuring woes do not just concern the airlines. Along with the open-sky policy, the government has decided to put its two largest airports, Antananarivo and Nosy Be, under concession. Tourism and transport minister Andriantiana explains the rationale: “The Ivato [Antananarivo] airport dates back to the 1960s and needs to be modernised. It needs a walkway, the capacity to receive

One of the state-owned airline’s innumerable problems is how to pay for the two Airbus A340s it leased from Air France through IATA

$8m

COME ON IN, THE SKY’S OPEN

The restructuring is essential if Air Madagascar is to survive. The governmenthasstartedliberalising the country’s airspace – a policy called ‘open sky’ – welcoming new

Cost to the airline of the one-month strike in June 2015 SOURCE: TOURISM MINISTRY

Madagascar tourist arrivals 25,000 22,000 19,000

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19,789

18,503 17,253

20,490

19,718 19,501 17,284

16,000 13,000 10,000

TELECOMS South Africa operator Vodacom reveals it has abandoned plans to buy Neotel THE AFRICA REPORT

23,815

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12,991

Dec. Jan. Feb. Mar. Apr. May June July Aug. 2014 2015 2015 2015 2015 2015 2015 2015 2015

POWER Botswana may seek to sell its troubled Morupule B electricity plant

SOURCE: TRADING ECONOMICS

chairman of the board during the country’s political transition following a coup in 2009. Ulrich Andriantiana, the tourism and transport minister, says Air Madagascar is turning itself around: “The strikers and international donors wanted the state to stop subsidising the company. That’s what we’ve decided to do.” The company is notably struggling to honour payments to Air France for the leasing of two Airbus A340s.TheInternationalAirTransport Association (IATA) clearing house, which also allows airlines to sell each other’s plane tickets, handles the leasing payments. Anticipatingadefault,AirMadagascar decided in November to withdraw fromthemechanismbeforeitcould be sanctioned for non-payment.

large carriers such as Boeing 787s or Airbus A380s. And at the moment, it doesn’t meet international standards.” He adds: “We had to find a way to finance this modernisation, and we thought that the best way would be through a public-private partnership [PPP]. We needed to raise $200m. Adema [Aéroports de Madagascar] is a state company. It doesn’t have the means to raise this amount.” MERDE! NO AIRPORT

The government approved the 28-year concession to manage the airports in May 2015 to a consortiummadeupofAéroportsdeParis Management, Colas Madagascar, Bouygues Bâtiment International and Meridian Africa. But it has had a rocky start: the deal has not reached financial close yet, with a number of stakeholders, including the IATA, raising concerns over the concessionaires’ revenue model, especially the levy of €20 ($22) and €38perpassengerondomesticand international flights, respectively. The construction schedule has also slipped, with the main works at Ivato now looking increasingly unlikely to meet the November 2016 deadline, when Madagascar will host the Sommet de la Francophonie – one of the main reasons for resorting to a PPP contract in the first place. What happens next for Air Madagascar is uncertain. Until the restructuring starts to take effect, cancellations and delays are likely to continue. “I was supposed to have clients yesterday, but their plane was diverted to Sambava, so they won’t come,” says L’Hippocampe hotel’s Gantner. As for open sky, it offers precious little relief: “Madagasikara Airways says that the runway in Maroantsetra isn’t good enough for them to fly,” Gantnersighs.HisplanB?Aboatto fetch clients in Soanierana Ivongo, 240km down the coast, the last point readily accessible by road. ● Emilie Filou in Maroantsetra

REAL ESTATE $255m IPO for Egyptian property firm Rooya Group due in late 2016

BUSINESS | LEADERS

PROFILE

mid the cigarettes and coffee in the bustling foyer of the Africa 2016 Business for Africa, Egypt and the World Forum in Sharm el Sheikh in February, the affable Karim Sadek outlines the challenges that Egypt-based Qalaa Holdings dealt with since taking over the Rift Valley Railways (RVR) project in 2006. “It’s still a tough project. Our initial approach was from an engineering point of view,” says Sadek, Qalaa Holdings’ managing director for transportation and logistics. “Out of the $300m [investment], around $200m has gone into capital expenditure, from rail upgrades to infrastructure changes like bridges and culverts, locomotives and wagons, new and refurbished control systems.” The railway from the Kenyan port of Mombasa to the Ugandan capital of Kampala, dubbed the ‘lunatic line’ by sceptical press and parliamentarians in Britain when it was first mooted in the 1890s, is a colonial legacy. The RVR consortium first sought to revive and rehabilitate it in 2005. After a fight between shareholders, the initial consortium fell apart. Citadel Capital – Qalaa Holdings’ former name – then invested, and, after further tussles, ended up with a controlling stake. PEOPLE CHANGE

“I think the lesson learned is that you need to give much, much, much more attention to people change than asset change because that is an area we are still working on,” says Sadek. “RVR is years away from where we were in 2010 due to the investments. But from an operating culture, still a lot of work needs to be done.” World Bank senior economist Giuseppe Iarossi explains that rail projects are the holy grail for planners of Africa’s industrial renaissance, as they provide an inexpensive way to get manufactured goods to export markets. “Kenya’s factory floor productivity

Karim Sadek

Managing director for transportation and logistics, Qalaa Holdings

Standard gauge is not magic Kenya’s Rift Valley Railways is rehabilitating the narrow gauge line from Mombasa to Kampala but is facing headwinds as African policy-makers focus on new projects and an insistence on standard gauge lines is close to China’s, but once we account for indirect costs [such as transport] Kenyan firms lose 40% of their productivity advantage when compared to Chinese firms,” Iarossi writes. The problem in expanding rail networks is finance. Sadek explains: “The point here is we do not believe that there are economics for the private sector to build new railways […]. The cost is prohibitive. The volumes are hardly there because of historical lack of transportation infrastructure, so it’s like a vicious cycle.” This is why there are benefits in refitting old projects. “African countrieshavefundingconstraints, sobeforewelookatbuildingsomething new we would like to explore and invest in rehabilitating what you have,” says Sadek. However, politicians do not always see it the same way. “It doesn’t make the headlines, there is no ribbon cutting. It’s not a new asset,” he adds. There is no other rail freight service pulling major cargoes in East Africa today outside of the 1.7m tonnes shifted annually by RVR. That may change in the near future – with a Djibouti-Addis Ababa line under construction and a new Mombasa-Nairobi standard

THE ROAD TO RAILWAYS June 2000 Masters in international securities, investment and banking from the University of Reading, UK Jan. 2003 Managing director of the Arab Investment Company Nov. 2004 Joined Citadel Capital (now Qalaa Holdings) as a managing director 2012 Became a director of the African Venture Capital Association

gauge line planned by Chinese contractors that will be parallel to much of the RVR line. Sadek cautiously welcomes the competition: “We are not aware of the operating model that the government of Kenya will adopt for this railway. Once we are, we can start assessing how to deal with it.” Without sufficient volumes, however, everyone will find it tough. To stimulate demand for RVR’s services, Qalaa signed a memorandum of understanding in February with Egypt’s Chemical & Fertilizers Export Council, whose members will use RVR as the official inland transporter. “The biggest challenge Egyptian exporters have is shipping and transportation – starting from marine [transportation], where today there are no direct lines operating from Egyptian ports to African ports. So on the east side of the continent those [shipments], end up being consolidated in Salalah and in Dubai,” says Sadek. “Once your container has arrived at the seaport, then you have the

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