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MEMORANDUM Nº 227/2012 10/12/2012
The EBCAM’s Memoranda are issued with the sole purpose of provide daily basic business and economic information on Africa, to the 4,000 European Companies affiliated with our Members, as well as their business parties in Africa. Should a reader require a copy of the Memoranda, please address the request to the respective National Member. See list of National Members at www.ebcam.org.
SUMMARY: ONE) – AFRICA EXPECTS SMOOTH GROWTH IN TOURISM – Page 2 TWO) - CHINA WANTS PEACE IN AFRICA – Page 2 THREE) – MIXED PROGRESS FOR ACP-EU TRADE AGREEMENTS – Page 4 FOUR) - SMALL-SCALE FARMERS HAVE NO TIME TO LOSE IN ADAPTING TO CLIMATE CHANGE – Page 4 FIVE) – IFAD SUPPORTS EAC’S EFFORTS TO BECOME FOOD SELF-SUFFICIENT – Page 4 SIX) – AFRICAN GOVERNANCE INDEX SHOWS DECLINE – Page 5 SEVEN) – NIGERIA: HOW FEDERAL GOVERNMENT IGNORED NEW EVIDENCE ON BAKASSI – Page 6 EIGHT) – SOUTH AFRICA: SHABANGU (MIN. MINERAL RESSOURCES) TELLS ANC TO DROP NATIONALISATION – Page 8 NINE) – UGANDA ATTRACTS MORE INDIAN INVESTORS – Page 9 TEN) – NIGERIA’S UNDER-PERFORMANCE ON THE MO IBRAHIM INDEX – Page 10 ELEVEN) – SOUTH AFRICA: PETROSA EAGER TO PRESS ON WITH OIL REFINERY AT COEGA – Page 11 TWELVE) – ANGOLA JOINS THE SOVEREIGN WEALTH FUND CLUB – Page 11 THIRTEEN) – SWAZILAND FISHERY LAWS OUTDATED – Page 13 FOURTEEN) – TANZANIA: MINISTRY - NOT ANYONE CAN ANNOUNCE OIL, GAS FINDS – Page 13 FIFTEEN) – MALAWI 'REFERS LAKE BORDER DISPUTE WITH TANZANIA TO AU' – Page 14 EBCAM NEWS –
AFRIKA-VEREIN - Page 14 European Business Council for Africa and the Mediterranean The European Private Sector Organisation for Africa’s Development
2 ONE) – AFRICA EXPECTS SMOOTH GROWTH IN TOURISM Africa will be in a good position among other world continents in tourism as the number of foreign tourists visiting several African countries is growing to double in coming years. Through financial support and growing investments in hotels and air transport, there has been an increase in number of tourists visiting Africa every year, the UN World Tourism Organization (UNWTO) predicts. UNWTO Secretary General Dr. Taleb Rifai said Africa should expect to receive 134 million tourists by the coming 18 years. He said when addressing participants of the First Pan African Conference on Sustainable Tourism Management in African National Parks and Protected Areas in Tanzania that the African continent stands at a better position to build its tourism. “Everybody is traveling. It has become a human right to move and travel across the world for business, education, and leisure,” Rifai said. Nature-based tourism or eco-tourism is a large and growing global industry, partially dependent upon the attributes of the natural environment and biodiversity made up of wildlife and scenery which represent one of Africa’s strategic competitive advantages as a destination. Though the world has entered an age of travel, Rifai said Africa still gets less than five percent of world tourism gains. New partnerships between Africa and the rest of the world after this conference should impulse rekindling of park management structures in order to maximize the economics and social benefits of tourism to local communities, Dr. Rifai said. Africa’s tourism is currently growing at a respectable average rate of 7.2 percent. One out of every 20 jobs in Africa is in the tour and travel industry, UNWTO said. Available statistics indicate African continent received about 50 million tourists last year - a mere fraction of the world total. But supporting and investing in tourism would add more benefits through multiplier effects. “The majority of African countries, mostly sub-Sahara African states are embracing tourism as a potential tool for economic development and poverty alleviation tool,” said senior regional tourism adviser with the UN Economic Commission for Africa (UNECA), Geoffrey Manyara. Eastern African economies have tourism contributing significantly to economic growth and development by over seven percent to their GDP with the exception of DR Congo. Over the decades, tourism has e perienced continued growth and deepening diversification to become one of the fastest -growing economic sectors in the world. Modern tourism is closely linked to development and encompasses growing number of new destinations. These dynamics have turned tourism into a ey driver for socio-economic progress. Republic of Mali had expressed its commitment to launch a tourism strategy that would help building its bad image, and re-develop its rich historical and cultural heritages sites, once lost their glory through civil strife. (eTN)
TWO) - CHINA WANTS PEACE IN AFRICA China could soon expand its involvement in peace and security issues in Africa, according to government officials, researchers and academics from both the Asian giant and resource-rich continent who met at the second China-Africa Think Tanks Forum in Ethiopia. Mulugeta Gebrehiwot, the director of the Institute of Peace and Security Studies in Ethiopia that organised the forum, told IPS that it should not come as a surprise that China is interested in peace and security on the African continent. “There is nothing that is not touched by peace and security. Whether you’re (loo ing) for investment collaboration, economic operation or anything else. Peace and security has to be in place. Because that’s
3 the central instrument that eeps the environment for any other interaction and collaboration together,” Gebrehiwot said. Senior officials and prominent scholars including Ethiopia’s Deputy Prime Minister Deme e Me onnen and vice-president of the China Foreign Affairs University Professor Zhu Liqun attended the forum in Bishoftu, some 45 ilometres from the country’s capital, Addis Ababa. Chinese officials pointed out that the Asian giant’s non-interference policy should not be interpreted as indifference to the continent’s peace and security. “Our non-interference policy in Africa does not mean we have an indifferent attitude towards African issues. We oppose some countries that in the excuse of care for another interfere with African internal affairs,” Director-General Lu Shaye from the Department of African Affairs at the Chinese Foreign Ministry told IPS. He said that China would not intervene readily in the affairs of another country and their involvement would be to merely support regional organisations and institutions on the continent. “In the past we provided funds to support the African Union (AU), in the future we will strengthen this support. We’ll have cooperation with the AU and other regional organisations to have a better understanding on this issue. And we will accelerate our support to the AU and other regional organisations,” Lu Shaye said. Until now, China’s role in Africa has mostly focused on economic development. Last year, China-Africa trade amounted to 166 billion dollars, according to statistics from the Chinese Ministry of Commerce. China’s approach of non-interference has provided Africa with much needed funding without the strings that some western powers attach to loans for Africa, and has resulted in the fast construction of large infrastructure projects, according to experts. A research article in Standard Ban ’s Guide to Transactional Ban ing in Africa 2012 by Bridgette Liu and Richard Stocken titled “The role of China’s construction industry in Africa’s infrastructure development”, stated that Chinese companies now dominate the African construction sector, with a market share larger than those of France, Italy and the United States combined. “Revenues of construction companies in central and southern Africa grew by 31.7 percent to 27.52 billion dollars in 2009. North Africa grew 30.8 percent to 29.29 billion dollars. At the same time, the share of Chinese enterprises in the African market rose significantly from 26.9 percent in 2007 to 42.4 percent in 2008 and bac to 36.6 percent in 2009,” the article stated. The article also noted “Chinese state-owned financial institutions such as China Exim Bank and China Development Bank have become large-scale lenders in Africa, rivalling the World Bank and the International Monetary Fund (IMF) in terms of development finance outreach.” Much has been written about the World Bank and IMF loans to Africa. A 2006 briefing paper by Oxfam International titled “Kic ing the Habit” stated that because the two organisations use their aid to push economic policy reforms such as privatisation and liberalisation on poor countries, in Mali, “where far from leading to economic growth and poverty reduction, conditions have hiked electricity prices and are likely to hurt cotton farmers as well as delaying aid flows and undermining country ownership of policies.” China’s President Hu Jintao announced two months ago that his country would invest 20 billion dollars more in Africa. But he also stated that China would take new measures to support the cause for peace and development in Africa. Policies are already being drafted to indicate how China will improve is participation. While China is Africa’s biggest trade partner, it already is the largest contributor of peace eepers to Africa among permanent members of the United Nations Security Council. But the role of China in Africa is often seen as a controversial one. China’s funding of the new AU building headquarters in Addis Ababa has sparked debate among non-African critics about whether the new economic world power was buying its way into the continent. Western countries have warned on frequent occasions that China’s participation in Africa has colonial tendencies. Or that the Asian country supports oppressive regimes and is trying to take advantage of Africa’s natural recourses. United States Secretary of State Hilary Clinton said during her latest Africa trip in August, that the U.S. stands up for human rights and democracy “even when it might be easier or more profitable to loo the other way, to eep the resources flowing.” However, Dr. Mehari Taddele Maru, an independent peace and security expert in his conference paper titled “China-Africa Relations: Areas of Reform for a Sustainable Partnership”, disagreed and stated that China’s reputation in Africa is positive as African countries feel that their Asian partners respect other people, cultures and states.
4 While China’s improved role in peace and security in Africa could be beneficial for the continent, it could also be rewarding for China. “China’s cooperation with Africa will become a problem in the future if civil wars continue to e ist,” Professor Liu Hongwu, the director of the Institute of African Studies at Zhejiang Normal University, told IPS. Experts at the forum pointed out that peace and security was broader than security focused around violent clashes. It also focuses on food security and fighting the epidemic HIV/AIDS and other diseases. Hongwu added that the Chinese are not only focused on maintaining peace by training soldiers: “We can also improve the ability to keep security by training countries in sectors such as finance, education and technology.” China currently trains more than 6,000 African personnel in various sectors and provides over 5,500 government scholarships to African countries. (IPS)
THREE) – MIXED PROGRESS FOR ACP-EU TRADE AGREEMENTS Long-running talks on Economic Partnership Agreements (EPAs) between some members of the African, Caribbean and Pacific (ACP) Group and the European Union move ahead at a mired pace, despite best efforts on both sides. At the last joint ministerial trade meeting in Brussels at the end of October, the ACP Co-Chair, Fiji’s Minister of Trade and Industry, Mr Aiyaz Sayed Khaiyum, called for a review of European ambitions, after nearly a decade of negotiations. Since the early 2000s, 36 ACP countries have been negotiating with the EU as seven regional blocks. So far, only the 15-member Caribbean region has completed a comprehensive EPA, while several other countries have signed and ratified interim deals. European Trade Commissioner Mr Karel De Gucht told the meeting: “We have achieved less than I e pected a year ago, and worse - we have achieved less than was possible.”(ACP Secretariat)
FOUR) - SMALL-SCALE FARMERS HAVE NO TIME TO LOSE IN ADAPTING TO CLIMATE CHANGE The speed and intensity of environmental change is outpacing the capacity of smallholder farmers to manage the effects of a variable climate. Losses and damages from extreme weather continue to increase, as the pattern of droughts, floods and tropical storms becomes ever more unpredictable. As a result, crop failures and livestock deaths are causing economic losses, raising food prices and undermining food security with ever-greater frequency in parts of sub-Saharan Africa, Asia and other regions. At the same time, rural livelihoods are being undermined by the effects of water stress, land degradation and loss of biodiversity. To build resilience against these hazards, smallholders need technologies and financing that help them improve production and reduce climate risks. IFAD’s newly operational Adaptation for Smallholder Agriculture Programme (ASAP) aims to help 8 million rural people become more resilient to the impacts of climate change. The programme is a tool to scale up and integrate climate ris resilience across IFAD’s appro imately US$1billion per year in new investments. ASAP represents a renewed, concerted effort to tackle climate risk issues in rural development and reduce risks and shocks for rural poverty reduction. (IFAD)
FIVE) – IFAD SUPPORTS EAC’S EFFORTS TO BECOME FOOD SELF-SUFFICIENT The president of the Rome-based International Fund for Agriculture Development (IFAD), Mr. Kanayo Nwanze, has assured full support to the East African Community (EAC) in their efforts to fight hunger and become food self-sufficient. IFAD’s President stated that EAC would be their top priority in 2013, adding that his senior officials would be dispatched to discuss areas of co-operation in revamping food production in the region. A five-year Action Plan was adopted by the 9th Extra-Ordinary Summit of EAC Heads of State, the highest
5 decision making body, earlier this year. The aim of the Action Plan is to significantly increase the production of strategic food security commodities through access to inputs and promotion of cross border production in the region. The EAC is also establishing an early warning system to monitor food shortages (East African Community)
SIX) – AFRICAN GOVERNANCE INDEX SHOWS DECLINE The Mo Ibrahim Foundation has released its 2012 African Governance index, an annual study that this year showed worrying slides among Africa’s economic powerhouses and in Zimbabwe. The foundation was also due to announce which former African leader won the coveted $5 million African good governance award. On that front, the foundation had a surprise. No winner? And the world’s largest prize for e cellence in African governance goes to … no one. It’s not the first time this has happened. Nor, says Mo Ibrahim Foundation board member Jay Naidoo, is it surprising. “The award is not just for ordinary service, it is for e ceptional service," said Naidoo. "And the criteria that the board and that the prize committee uses, no one has exceeded and achieved exceptional service in terms of contributing to social cohesion, in terms of integrity, in terms of transparency, the way that they delivered services to people. "And the board said that it is not sufficient to say we have give the prize out, itself it’s a very important and powerful political message to say that we do not believe that anyone is entitled to this prize in this year,” added Naidoo. Standards Ibrahim, the Sudanese telecoms billionaire who started the award in 2006, said Monday in London that the prize committee refused to compromise on its standards. The committee also declined to give an award in 2009 and 2010. In addition to showing exceptional leadership, the award stipulates that the winner be democratically elected and that he or she leave office voluntarily after serving only a constitutionally mandated term. Those qualities are rare among African leaders. Many of the continent's leaders serve for decades before dying in office. Zimbabwean President Robert Mugabe is an example: he has led since 1980 and says he wants to stay in power. On Monday, Ibrahim singled out the 88-year-old Mugabe, saying his leadership prevented the resource-rich southern African nation from being an African powerhouse. Possible contenders This year there were two popular contenders for the prize: former Zambian president Rupiah Banda, who gave up power to election winner Michael Sata; and former Senegalese president Abdoulaye Wade, who gave up power to election winner Macky Sall -- though Wade notably changed the constitution to allow himself to run. Former winners of the Ibrahim prize include Joaquim Chissano of Mozambique, Festus Mogae of Botswana and the Pedro Pires, former president of the tiny island nation of Cape Verde. The foundation also released its annual index of African governance.
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Naidoo started with the good news: he says the index shows there has been clear progress and improvement in African governance in the past decade. He also cited improvement in gender issues. “The not-so-good news is the fact that the economic powerhouses of Africa, namely Nigeria, South Africa, Egypt and Kenya have shown a decline in certain sectors, particularly around the issue of law, in terms of human rights, in terms of security," said Naidoo. "And I thin that’s not really good news for us, because they are the ones e pected to pull the African continent out of the global economic crisis.” Rankings South Africa topped the powerhouse group at fifth place. But Nigeria, the continent’s most populous nation, fell to an all-time low on the rankings, at 42nd place. Nigerian is struggling with the rise of an Islamist group that has killed well over 1,000 people in the past two years, many of them police and government officials. Once again, tiny Mauritius nabbed the top spot among 52 ranked nations. At the bottom, predictably, is Somalia. Even to a casual observer, Somalia performs poorly on all four of the foundation’s four criteria for good governance: safety and rule of law, participation and human rights, sustainable economic opportunity and human development. The ran ing doesn’t include Mo Ibrahim’s nation of Sudan, or the newly independent South Sudan. The foundation says it doesn't have comprehensive data on either nation. (Voice of America)
SEVEN) – NIGERIA: HOW FEDERAL GOVERNMENT IGNORED NEW EVIDENCE ON BAKASSI Contrary to the claims by the Federal Government that there were no new facts on which it could base its request for a review of the International Court of Justice (ICJ) ruling that ceded the Bakassi Peninsula to Cameroun, it has emerged that there was indeed new evidence that could have strengthened Nigeria's bid to reclaim the peninsula, but it was ignored. In announcing Nigeria's position on the matter, Attorney General of the Federation (AGF) and Minister of Justice, Mr. Bello Adoke, had said that Nigeria had not discovered a decisive fact that was unknown to it before the ICJ judgment, which could have helped its review. But according to a draft legal brief prepared by the Bakassi Support Group, based on the advice of Mrs. Cherie Blair, wife of former British Prime Minister, Mr. Tony Blair, there were several grounds on which Nigeria could have anchored its case. This is just as the National Human Rights Commission (NHRC) Chairman, Dr. Chidi Odinkalu, has called on the Federal Government to push for an urgent review of the Green Tree Agreement (GTA) between Nigeria and Cameroun over the oil-rich peninsula to avoid a war between the two countries. A copy of the legal brief, exclusively obtained by THISDAY yesterday, detailed the new evidence which the Federal Government ignored to include the non-completion of the Anglo-German Treaty of 1913 on which the ICJ based its judgment to cede Bakassi to Cameroun and the non-inclusion of the Bakassi people in the 1961 plebiscite conducted to allow some communities determine whether they would stay in Nigeria or Cameroun. The new facts contained in the legal brief confirmed THISDAY's exclusive story published on October 5. The 12-page legal brief, on which work began in July, was prepared to help Nigeria beat the deadline for filing its case before the matter became statute barred on October 10. Article 61 of the ICJ Statute permitted the request for a review of a judgment "when it is based upon the discovery of some fact of such a nature as to be a decisive factor, which fact was, when the judgment was given, unknown to the court and also to the party claiming revision, always provided that such ignorance was not due to negligence." The application prepared for the revision of part of the ICJ judgment on the delimitation of the boundary of the Bakassi Peninsula noted that the new evidence was discovered in the past six months; and was therefore, unknown to the parties in the case in the prelude to the 2002 judgment of the court.
7 The document drew the court's attention to the fact that the Anglo-German Agreement of March 11, 1913 on which it based its decision on the boundary between Cameroun and Nigeria was invalid because it was never signed and therefore, should not have been relied upon at all. It supported its submission with an extract from the memoirs of the last German Ambassador to England, Prince Lichnowsky, entitled 'My Mission to London: 1912-1914', which showed that the agreement was not signed. The ambassador had narrated how the brewing hostilities between England and Germany in the prelude to the First World War had stalled the signing of the treaty. It also cited the report in an Australian newspaper that quoted the Foreign Minister of Portugal at that time, Mr. Antonio Caetano Maciera, as denying that the agreement was completed. The document had also argued that there was evidence to show that the right to self-determination of the Bakassi people was not fully exercised under the 1961 plebiscite. It said the 1961 plebiscite, a key feature of the de-colonisation process overseen by the United Nations, failed to include most of the Bakassi Peninsula. "As a result of the flawed plebiscite process, the peoples of the Bakassi Peninsula were denied their fundamental right to choose to be part of Nigeria, and thereby self-determine their political status and freely pursue their economic, social and cultural development. The result of that failure is that the region and its people were absorbed in the joining of Southern Cameroun and the Republic of Cameroun. "Nigeria raised this point during the original court proceedings. The court nevertheless determined that Nigeria had provided insufficient evidence of this point. "Within the last six months, discovery of documentary evidence that demonstrates the absence of the Bakassi region from the plebiscite of 1961 has become known. "Annex 3 provides a copy of the Southern Cameroun's Plebiscite Order in Council of 1960, No. 1655. In Article 3 of this document, a schedule of the 26 districts to be included in the plebiscite is listed. Only one of the plebiscite districts that of Isangele, is within the Bakassi Peninsula. "Annex 4 provides the results of the plebiscite of 1961 voting in the form of an extract from the Southern Cameroun's Gazette, dated 18 March 1961, Vol. 7 No. 14. "This document also indicates an absence of Bakassi participation apart from the results of the Isangele voting district where 241 votes were cast in favour of joining Nigeria and only two in favour of joining Cameroun. "Additionally, overall in the Kumba South West region, which is closest to Nigeria, preference for joining Nigeria was demonstrated. "Had the ICJ anticipated the demonstration of the right of self-determination by the Bakassi people, which has now manifested itself together with the subsequent abuses by the local Camerounian authorities of their way of life and human rights, they could only have decided that the plebiscite of 1961 was flawed and redrawn the boundaries accordingly," the document said. It, therefore, had urged the ICJ to adjudge and declare that there were new facts to warrant a review of its judgment on Bakassi and to reconsider its October 10, 2002 judgment so that a new judgment would determine that "sovereignty over the Bakassi Peninsula is vested in the Federal Republic of Nigeria". In a related development, Odinkalu in calling on Nigeria to push for an urgent review of the GTA, told THISDAY that unless both countries tackle the human tragedy unfolding in Bakassi, amid growing maritime piracy and militia threats, the area could become the site of Africa's next inter-state war. According to him, Nigeria took a significant step earlier this month towards resolving its long-running dispute with Cameroun when it stated publicly that it would honour the ruling that awarded the territory to the French-speaking country. He said: "But the risks over this issue remain; the leaders of both countries must now take urgent steps to avoid a chain of events that could lead to renewed military confrontation. "Reflecting a new tone of narrow nationalism on the issue, Nigeria's media has mostly treated the government's position on the ruling from the International Court of Justice (ICJ) as a form of capitulation, running headlines such as, 'Nigeria finally gives up on Bakassi'. "Beyond the media backlash, there are worrying developments around Bakassi." While applauding the decision by the Federal Government not to request a review of the ICJ ruling, he said it was the most sensible option to take. Odinkalu, who recently visited the peninsula, said that despite its rich endowments in natural resources, Bakassi remained a desperate place. According to him, Bakassi has no significant economic life, few schools and its people have abysmal skills.
8 He said: "The majority of Bakassi inhabitants are Nigerian nationals. When the full transfer of sovereignty to Cameroun scheduled to take place in 2013 happens, the people of Bakassi will be faced with a choice as to their nationality, since Cameroun does not permit dual nationality. "Those who choose to remain Nigerians will become aliens on their own land. Although the Green Tree Agreement promises to respect their rights to citizenship and residence, there is no obligation on Cameroun to grant residency permits to anyone." (This Day)
EIGHT) – SOUTH AFRICA: SHABANGU (MIN. MINERAL RESSOURCES) TELLS ANC TO DROP NATIONALISATION Mining Minister Susan Shabangu has warned the ANC to axe nationalisation at its Mangaung conference if it wants to save the economy. The high-level meeting took place at the same time as the country was hit by another international vote of no confidence in the economy. Standard & Poor’s (S&P) downgraded South Africa’s credit rating by one notch on Friday, saying the continuing mining stri es and growing “social tension” would “increase spending pressure and reduce the country’s fiscal fle ibility”. The downgrade follows the move by Moody’s, which last month cut the country’s credit rating and also downgraded the top-five ban s over concerns about the government’s ability to solve economic problems. A financial analyst has warned that South Africa was moving closer to “non-investor” status. “The negative outloo reflects our view that the medium-term political, economic and fiscal ramifications of South Africa’s social tensions could deteriorate beyond our current e pectations,” S&P said on Friday. Although not naming nationalisation, the ratings agency suggests the ANC’s future policy frameworks will likely be influenced by the mining strikes. “We see an increased li elihood that the ANC will ta e on board more populist elements for its policy framework in the lead-up to the 2014 presidential elections,” S&P said. Former ANC Youth League leader Julius Malema’s calls for the nationalisation of mines have enjoyed wide support from striking mine workers. Shabangu, meanwhile, has been travelling the world in the wake of the Marikana massacre to allay fears about this and other violent wildcat mining strikes and to restore investor confidence in South Africa. After attending Friday night’s meeting, Shabangu told City Press that investors were not only concerned about the ongoing mining stri es, but were “jittery” about the issue of nationalisation and in particular the fact that strikes were spilling over to gold, coal and other sectors of the economy. While the ANC rejected the issue of wholesale nationalisation at its midyear policy conference, the party deferred the final decision to nationalise “strategic assets” to Mangaung. “The biggest issue when it comes to policy issues is whether Mangaung will nationalise (mines). We’ve dealt with that issue, but (investors) continue to raise it,” Shabangu said. “We are confident that when we come out of Mangaung, we will be able to put this matter aside and it will bring and instill much more investor confidence.” Independent financial analyst Ian Cruic shan s said South Africa was “no longer the shining e ample of a well-managed democracy on the continent”. The downgrade moved the country a step closer to “non-investor” status and would defer potential investors from investing any further money in the country, he warned.
9 “The li ely outcome is that the rand will wea en more, everything we import will cost more and you’ll have to pay more for it, including a barrel of oil,” said Cruic shan s. Zuma called on business and labour to wor together to find solutions “so that we can revert to the primary task at hand to build the country, build the economy and improve the quality of life”. He was “seriously concerned” about the violent nature of recent stri es and said labour disputes “do not need to degenerate into violent confrontations”. Shabangu said investor confidence was low as a result of the stri es. “The most difficult thing for everybody who invests is you invest with the intention of having returns and that’s the ey issue that has dampened the spirit of the investors. “One of the biggest challenges for investors was the protracted stri es. It has been a cause for concern because it’s not a once-off; it is sort of spiralling in the mining industry. It was platinum, then gold, then coal. So indeed, it is a cause for concern. These are some of the issues they were concerned about.” She said Friday’s meeting was a step in the right direction to restore investor confidence. “It’s not going to be easy. It’s going to be very difficult for us, but I am confident that the first step we are taking is right. “We also have a responsibility to assure investors that what has occurred will not happen again and… that when they come into South Africa, their money is protected.” Cosatu general secretary Zwelinzima Vavi confirmed that the meeting discussed the S&P and Moody’s downgrades. He praised Zuma for showing leadership in convening an urgent meeting to rescue the economy. “If anything, the statement says to the country that there is leadership and that leadership is concerned about the state of affairs,” Vavi said. He expressed relief that the meeting, which lasted for more than three hours, condemned the violent strikes and urged law enforcement agencies to curb the illegal action. Another meeting will ta e place on Wednesday, where the country’s final response to the impending economic crisis will be announced. National Union of Mineworkers general secretary Frans Baleni, who attended the meeting, said they also discussed the high remuneration of mining bosses. “We now that ratings agencies react on the basis of perceptions, not facts. The important thing is that the leaders of South Africa should send positive messages, not negative signals,” he said. Baleni added: “If we don’t do anything and things continue as they are, we could find ourselves in a recession. Therefore, it requires that it shouldn’t be business as usual.” AngloGold Ashanti chief executive Mike Cutifani confirmed discussing the issue of executive pay at the meeting. “We said we will go bac and raise those messages with our constituency. It’s too early to tal about what it means,” he said. He said the investment downgrade was a serious matter, saying matters such as unprotected strikes were major issues for investors. “If we allow the current situation to continue, thousands of jobs will be lost.” (City Press) NINE) – UGANDA ATTRACTS MORE INDIAN INVESTORS The Uganda government has promised tangible support to the Indian community eyeing Uganda as their immediate investment destination, Amelia Kyambadde the Trade and industry minister said.
10 Speaking to the Confederation of Indian Industry and the members of the visiting Indian delegation in Kampala on Oct. 16, the minister said despite the presence of some challenges in starting and running business in Uganda, the government was ready to support foreign investors to succeed in business. Among the challenges Kyambadde mentioned the bureaucracy involved in registering and starting a business, the need for better infrastructure say roads, railways and a volatile economic environment among others. "We shall do whatever it takes to support you," she told the-would be investors, adding Uganda had a potential market of over 34million people plus the other foreign market. "We do offer investment incentives for instance import duty exemptions among others," she added. The minister explained that Uganda is politically stable and has a liberalised economy, something that gives hope for business growth. Most Indian investors take Uganda to be politically unstable following their expulsion by former president Idi Amin in 1970s. Available data indicate that the volume of bilateral trade between Uganda and India has increased from $220.3million in 2009 to $306.4million in 2011 with most analysts expecting the volumes to grow with time as the two economies continue to thrive. Uganda's economy grew at 3.2% in the fiscal year that ended on June 30, 2012 down from 6.7% expansion in the year earlier due to the volatile economic environment charactirised by high inflation and the depreciation of the shilling against foreign currencies. Analysts are expecting positive economic growth in the medium term after inflation falling to single digits [5.4% in September]. (The Independent)
TEN) – NIGERIA’S UNDER-PERFORMANCE ON THE MO IBRAHIM INDEX The latest Mo Ibrahim Index of African Governance (IIAG) showed that Nigeria fell to the 43rd overall position, from 41st in 2011, out of a possible 52 countries. Nigeria’s drop is due to insecurity and highlights a gradual retrogression for the nation since 2008 – Nigeria was 40th in 2010, 35th in 2009, and 39th in 2008. Nigeria had the lowest ranking in the area of personal safety, which is a sub-category under safety and rule of law, with a score of 11 out of a possible 100 and a ranking of 51 out of 52 countries. The average African score in personal safety was 44. The variables used for measuring physical integrity rights and personal safety include the prevalence of torture, extra-judicial killings, political imprisonment and disappearance, political persecution and political terror. Also included are the prevalence of violent social unrest, the safety of the person, which is measured as the level of criminality against individuals, the violent crime prevalence (both organised and common crime), and a measure of human trafficking and forced labour. This decline in personal safety is of grave concern to us, because it paints a picture of a nation that is gradually descending into a state of chaos and where the rule of law is absent. Impunity of non-state actors who are capable of inflicting terrible violence on the citizens is a grave source of concern. Nigeria’s security challenges cut across the country, from insurgency in the North, which has claimed up to 3,000 lives since 2009, to so-called “oil bun ering” and kidnappings for ransom by criminal gangs in the South. Human Rights Watch (HRW), in a recent report on Nigeria, noted that Islamist sect Boko Haram and Nigerian security forces might well have committed crimes against humanity during three years of conflict that has killed at least 2,800 people. Crimes against humanity are offences that can lead to prosecution by the International Criminal Court (ICC). This is cold comfort for innocent Nigerian citizens caught in the crossfire. We reiterate that good governance and human development are correlated. Hence, the Nigerian state must live up to its responsibility. A broad and deep reform of the police and judiciary is important. (Singapore’s legal system is honest because judges are well paid, but are also severely punished if found corrupt.)
11 Adequate security for life and property and a police that is pro-active in the fight against criminal gangs, murderers and terrorists in our midst will engender trust, not jungle justice. Sadly, it seems we have become a country where jungle justice is the court of default resort. The lynching of four young students at the University of Port Harcourt is a reminder that the Nigeria Police is broken. Rebuilding it demands urgency. It must be tackled wholeheartedly and not by lip service. It is also in our interest, if we wish to continue to attract investors. Otherwise we will continue to be embarrassed by such rankings. (Business Day)
ELEVEN) – SOUTH AFRICA: PETROSA EAGER TO PRESS ON WITH OIL REFINERY AT COEGA South Africa would build a state-owned petroleum refinery in the Eastern Cape port of Coega, PetroSA CEO Nosizwe Nokwe said. While there has been widespread agreement within the government about the need for a refinery to reduce dependence on imported petroleum products, a decision had not yet been made by the government to proceed with construction. Plans for building a refinery in the Eastern Cape were first announced in 2007 by then PetroSA CEO Sipho Mkhize, who said at the time that the cost would be about R39bn to build a refinery that could produce about 200,000 barrels of crude oil per day. During the parliamentary energy committee questions session on Wednesday, Democratic Alliance energy spokesman Lance Greyling said he had reservations about the location as it had no infrastructure, and this could add up to R50bn to the overall costs. "In PetroSA’s mind it might be a foregone conclusion, but it really needs to make sense from a financial point of view because the money is going to have to be raised somewhere; Treasury is going to have to be involved, we going to have to take loans," he said. Spea ing on the sidelines after yesterday’s presentation to Parliament, Ms No we said while it was the state’s prerogative to decide the go ahead and the location, it was PetroSA’s responsibility to decide on the size and production of the refinery. She refused to give any comment on cost estimates, saying a feasibility study, which would have details, would be completed by December. Ms No we said China’s state-owned oil company Unipec was still involved in the feasibility study. She refused to say if any plans had been made on how to get the refined products from Coega to the major inland markets such as Gauteng, and she would not commit herself to how the products would travel between Coega and Durban. Ms Nokwe said PetroSA was working with Eskom to find a way to power the refinery, but that there was a possibility that shale gas from the Karoo may be used. Mr Greyling also questioned PetroSA’s business plans, saying most parastatals were loss-making. "Clearly (we) need to question PetroSA’s investment decisions — whether they are in PetroSA’s interests or in the interests of South Africa. " For the year ended March, PetroSA posted a R1.4bn rise in net profit — a 54% increase on the 2010-11 year. PetroSA chief financial officer Nkosemntu Nika said that over time the expansion programmes would improve the firm’s balance sheet. (BD Live)
TWELVE) – ANGOLA JOINS THE SOVEREIGN WEALTH FUND CLUB Forget sovereign debt for a moment. This is turning into the year of sovereign wealth, with Angola becoming the latest African country to create a fund to invest some of the proceeds of growing oil riches. The sovereign wealth fund – known as Fundo Soberano de Angola (FSDEA) – will start with $5bn in assets, and look to invest primarily in sub-Saharan Africa. Angola joins Nigeria and Tanzania in launching or planning to launch a SWF in 2012. The SWF will target the infrastructure and hospitality sectors, as according to FSDEA’s statement “they represent significant wealth creation opportunities across sub-Saharan Africa and also offer the potential for
12 a higher growth multiplier for the Angolan economy.” Other sectors also on the hit list include agriculture, water, power generation and transport. José Filomeno de Sousa dos Santos, one of the FSDEA directors said: “The launch of the FSDEA is a historic moment for Angola, as the government continues to transform and grow the country’s economy… we are committed to promoting social and economic development by investing in projects that create opportunities that will positively impact the lives of all Angolans today and to generate wealth for future generations.” According to the SWF institute, there is currently $5.1tn in SWF assets globally, around 58 per cent of which is derived from oil and gas revenues. Africa represents only 3 per cent of SWF assets, compared to far larger funds from the Middle East and Asia, especially China. The largest SWF by assets is Norway’s, with $650bn in assets. Here is the Africa breakdown: Africa sovereign wealth funds
Country
Sovereign Wealth Fund Name
Assets $bn
Inception
Origin
Libya
Libyan Investment Authority
65.0
2006
Oil
Algeria
Revenue Regulation Fund
56.7
2000
Oil
Botswana
Pula Fund
6.9
1994
Diamond & Minerals
Nigeria
Nigerian Sovereign Investment Authority
1.0
2011
Oil
Gabon
Gabon Sovereign 0.4 Wealth Fund
1998
Oil
Mauritania
National Fund for Hydrocarbon 0.3 Reserves
2006
Oil & Gas
Equatorial Guinea
Fund for Future Generations
0.08
2002
Oil
Tanzania
?
n/a
2012
Oil
13 Ghana is also looking at SWFs as a way of diversifying oil wealth, setting up two funds worth a combined $70m approximately. According to data provider Preqin, after a period in 2009-10 where SWFs were used to balance government fiscal shortfalls that have tapered off. Add in the new SWFs, and assets have risen by around 15 per cent in the last year. Sub-Saharan Africa SWFs may be small compared to the bigger players, but for the country’s involved, they are significant steps to diversify natural resource wealth.(FT)
THIRTEEN) – SWAZILAND FISHERY LAWS OUTDATED E perts have observed that Swaziland’s fishery laws are very outdated. The ACP Fish II Southern Africa Regional Manager, Leone Tarabusi, said fisheries in Swaziland were governed by the Protection of Fresh Water Fish Act of 1937 and regulations promulgated in 1973. “These laws are considered outdated and not able to give effect to Swaziland’s national food security and poverty-relief policy initiatives”, he stated. The ministry of agriculture through the fisheries section, with financial support from the EU’s ACP Fish II programme for ACP and strategic legal support from Feike of South Africa, organised a two-day consultative workshop at the end of October. Many stakeholders in the fisheries and aquaculture sectors attended the workshop, including non-governmental organisations (NGOs), subsistence fishers, fish farmers, sport fishers and representatives of various government departments and agencies. (Swazi Observer)
FOURTEEN) – TANZANIA: MINISTRY - NOT ANYONE CAN ANNOUNCE OIL, GAS FINDS The government has announced that all new oil and gas discoveries will be declared in public by the government and not by investors or any other party. Deputy Minister for Energy and Minerals, George Simbachawene said in Dar es Salaam that the move was taken in order to protect the rights of the country in the light of a move by the government to put in place a gas policy. He was speaking during the Media Editors Roundtable Dialogue hosted by the city-based NGO Agenda Participation 2000 which dwelled on the theme "Natural Resource Boom, Corruption and State Capture in Africa a case of Tanzania. How can Tanzania unleash its potential growth as a Pole for East Africa's growth." "While we aim to ensure maximum transparency and accountability, we have moved a step ahead where we have to ensure the country benefits fully from these treasures especially gas. In doing so investors are not allowed to publicize their exploration findings. It is the government that will do so," he said. The Deputy Minister said that in the existing contracts, Tanzania has 70 per cent stake in all gas and oil exploration deals and that it is taking all necessary precautions over the possibility of some investors inflating the exploration costs before commencement of production. He appealed for editors to make sure only stories from authentic sources on the gas and oil exploration development are published in their media outlets. He cautioned over misleading reports. The deputy minister mentioned an example where one media house reported that the largest amount of gas discovered so far has already been sold to foreigners. In fact, so far only one source of gas has been developed out of the 26 discovered. Mr Simbachawene noted that Tanzania cannot develop oil and gas alone since development needs a huge capital, high skills and technology. He further noted that capitalism was leading the world economy and therefore it was almost impossible for Tanzania to run the oil and gas sector without involving the world's economy which is capitalism driven. According to the deputy minister, in a capitalism driven economy, capital is the key factor. "Between 1.2m USD and 1.5m USD is needed per day in exploration activities and the exploration may take up to 10 years. So, we cannot risk such investment," he observed. Stakeholders, however, observed that more should be done to ensure the country's maximum benefits of its natural resources like gas and oil.
14 Prof Max Mmuya of the University of Dar es Salaam advised state actors and policy makers to pay maximum attention and take care of the valuable natural resources found in the country. "It seems we don't have control of our own resources and don't even know the value of the resources that we possess. We should be serious and take maximum care on that area straight away," he said. One of the editors, Mr Richard Mgamba, insisted on the need for journalists to be empowered in order to extensively report on the development and the challenges facing the energy sector particularly the gas and oil industry. He was supported by the Executive Director of the Tanzania Media Fund (TMF), Mr Ernest Sungura, who advocated for the media to give coverage on extractive industry a high priority. But on his side, Mr Mbaraka Islam blamed what he called political corruption, saying that if the vice was not eliminated it was hard for the country to record any benefits from oil and gas. (Tanzania Daily News)
FIFTEEN) – MALAWI 'REFERS LAKE BORDER DISPUTE WITH TANZANIA TO AU' Malawi's President Joyce Banda has asked the African Union to intervene in the country's border dispute with Tanzania, state media has reported. The southern African nation broke off talks with Tanzania earlier this month over the border on Lake Malawi, which is potentially rich in oil and gas. Malawi disputes Tanzania's claim to half the lake - Africa's third biggest. It has accused Tanzania of raising tension by allegedly intimidating Malawian fishermen on the lake. Last year, Malawi awarded oil exploration licences to UK-based Surestream Petroleum to search for oil in the lake, which Tanzania calls Lake Nyasa. In July, Tanzania asked the company to postpone any planned drilling. Journalists warned Mrs. Banda asked the AU to help resolve the dispute in talks with its chairman, Benin's President Yayi Boni, the Malawi Broadcasting Corporation reports. After Malawi withdrew from the talks with Tanzania, Mrs. Banda said she would refer the dispute to the International Court of Justice for a ruling. The neighbours have disagreed over their border since independence, but tension escalated last year amid reports that the lake had vast oil and gas reserves. Meanwhile, Malawi's Information Minister, Moses Kunkuyu, said the government would not tolerate journalists who used their freedom without exercising "responsibility". He was reacting to the arrest of a journalist who reported that Tanzania's ambassador to Malawi, Patrick Tsere, had been expelled because of the border dispute. The government dismissed the report as a fabrication. (BBC News)
EBCAM NEWS
15
AFRIKA-VEREIN DER DEUTSCHEN WIRTSCHAFT 7th German-African
Energy Forum, April 7th-10th, 2013, Hamburg & Hanover (see www.energyafrica.de)
Fernando Matos Rosa Brussels
European Business Council for Africa and the Mediterranean The European Private Sector Organisation for Africa’s Development Rue Montoyer – 24 – Bte 5 1000 Brussels (Belgium) www.ebcam.org
Contact: info@ebcam.org