NIGERIA EXCLUSIVE INTERVIEW “We have retaken control” Vice-President Yemi Osinbajo says that the laxity of the PDP era is over, as he talks security, education and growth
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From left to right: King Mohammed VI, Muhammadu Buhari, Louise Mushikiwabo, Abiy Ahmed, Vladimir Putin, Christine Lagarde, Cyril Ramaphosa, João Lourenço, Donald Trump, Xi Jinping, Abdel Fattah al-Sisi and Angela Merkel.
JEUNE AFRIQUE MEDIA GROUP INTERNATIONAL EDITION Algeria 550 DA • Belgium €5.90 • Canada CA$ 7.95 • DR Congo US$ 9 • Denmark 60 DK • DOM 8 € • Ethiopia 90 Birr • France €5.90 • Germany €5.90 • Ghana GH¢ 10 • Italy €5.90 • Kenya KES 410 • Morocco 40 DH • Netherlands €5.90 • Nigeria 800 NGN • Norway NK 70 • Portugal €5.90 • Rwanda RWF 6,000 • South Africa R40 (tax incl.) • Spain €5.90 • Sweden SEK 70 • Switzerland 9.90 FS • Tanzania TZS 10,000 • Tunisia 5.4 DT • Uganda UGX 10,000 • UK £4.50 • United States US$ 6.95 • Zambia 48 ZMW • Zimbabwe US$ 4 • CFA Countries 3,500 F CFA • Euro Zone €5.90
NIGERIA EXCLUSIVE INTERVIEW “We have retaken control” Vice-President Yemi Osinbajo says that the laxity of the PDP era is over, as he talks security, education and growth
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People to watch, key data and analysis to guide you through the political and economic year ahead
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From left to right: King Mohammed VI, Muhammadu Buhari, Louise Mushikiwabo, Abiy Ahmed, Vladimir Putin, Christine Lagarde, Cyril Ramaphosa, João Lourenço, Donald Trump, Xi Jinping, Abdel Fattah al-Sisi and Angela Merkel.
EXCLUSIVE INTERVIEW
“We have retaken control”
Vice-President Yemi Osinbajo says that the laxity of the PDP era is over, as he talks security, education and growth
THE AFRICA REPORT # 106 - DECEMBER 2018-JANUARY 2019
JEUNE AFRIQUE MEDIA GROUP
JEUNE AFRIQUE MEDIA GROUP INTERNATIONAL EDITION Algeria 550 DA • Belgium €5.90 • Canada CA$ 7.95 • DR Congo US$ 9 • Denmark 60 DK • DOM 8 € • Ethiopia 90 Birr • France €5.90 • Germany €5.90 • Ghana GH¢ 10 • Italy €5.90 • Kenya KES 410 • Morocco 40 DH • Netherlands €5.90 • Nigeria 800 NGN • Norway NK 70 • Portugal €5.90 • Rwanda RWF 6,000 • South Africa R40 (tax incl.) • Spain €5.90 • Sweden SEK 70 • Switzerland 9.90 FS • Tanzania TZS 10,000 • Tunisia 5.4 DT • Uganda UGX 10,000 • UK £4.50 • United States US$ 6.95 • Zambia 48 ZMW • Zimbabwe US$ 4 • CFA Countries 3,500 F CFA • Euro Zone €5.90
NIGERIA EDITION Algeria 550 DA • Belgium €5.90 • Canada CA$ 7.95 • DR Congo US$ 9 • Denmark 60 DK • DOM 8 € • Ethiopia 90 Birr • France €5.90 • Germany €5.90 • Ghana GH¢ 10 • Italy €5.90 • Kenya KES 410 • Morocco 40 DH • Netherlands €5.90 • Nigeria 800 NGN • Norway NK 70 • Portugal €5.90 • Rwanda RWF 6,000 • South Africa R40 (tax incl.) • Spain €5.90 • Sweden SEK 70 • Switzerland 9.90 FS • Tanzania TZS 10,000 • Tunisia 5.4 DT • Uganda UGX 10,000 • UK £4.50 • United States US$ 6.95 • Zambia 48 ZMW • Zimbabwe US$ 4 • CFA Countries 3,500 F CFA • Euro Zone €5.90
Africa in
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06 EDITORIAL The human factor 08 LETTERS COVER CREDITS: INTERNATIONAL EDITION: MAP; BAYO OMOBORIOWO/AP/SIPA; BRUNO LEVY FOR JA; PANG XINGLEI/XINHUA-REA; ELIOT BLONDET/POOL/REA; IMF; SIMON DAWSON/BLOOMBERG VIA GETTY IMAGES; AMPE ROGERIO/AFP; ROMUALD MEIGNEUX/POOL/REA; XIE HUANCHI/XINHUA-REA; CHARLES PLATIAU/REUTERS; LAURENT CHAMUSSY/POOL/REA; KC NWAKALOR FOR TAR - NIGERIA EDITION: KC NWAKALOR FOR TAR
10 YEAR IN IMAGES 14 AFRICA IN 2019 The new world order and Africa 18 QUIZ
FRONTLINE 19 THE YEAR AHEAD What to watch in 2019 From women in charge to Africa’s coding promise, including our round-up of a bumper election year ahead 37 CALENDAR
POLITICS
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98 INTERVIEW Peju Alatise The Nigerian artist chronicles her return to Lagos to open her own foundation
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53 NIGERIA Too close for comfort The Africa Report looks at the promises and performances of the top two contenders of the February 2019 presidential elections
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102 LOOKING AHEAD A guide to 2019 106 REVIEWS What we loved in 2018
COUNTRY PROFILES Your indispensable guide to the economic, political and social events that will dominate Africa’s 54 countries in 2019 108 INTRODUCTION
62 INTERVIEW Obiageli ‘Oby’ Ezekwesili, presidential candidate, Allied Congress Party of Nigeria
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80 LEADERS Ben Leo, CEO, Fraym
92 INTERVIEW Richard Young, CEO, Teranga Gold Corporation
48 INTERVIEW Julius Maada Bio, President, Sierra Leone
THE AFRICA REPORT
78 AFRICA IN 2019 How to hang on to your hat
88 MOZAMBIQUE Glittering graphite
46 AFRICA IN 2019 How to spot a reformer
68 SUBSIDIES The cost of cheaper petrol
72 INTERVIEW Shingai Mutasa, majority shareholder, Masawara Holdings The Zimbabwean tycoon shares his hopes for the country’s economy and the strategies its new government must adopt
84 A big, green mining machine Morocco’s OCP Group spends big in order to grab more of the international market
40 INTERVIEW Yemi Osinbajo, vice-president, Nigeria Osinbajo discusses how free-marketism does not hold all of the answers for Nigeria, and how the APC government plans to win voters
66 PEOPLE TO WATCH The big 2019 governorship races
BUSINESS
112 AFRICA IN 2019 How to make a continental deal
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115 SOUTHERN AFRICA 135 EAST AFRICA 155 CENTRAL AFRICA 169 WEST AFRICA 191 NORTH AFRICA
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THE AFRICA REPORT A Jeune Afrique Media Group publication
BY PATRICK SMITH
The human factor
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E X E CUT I VE P UB L I S HE R JÉRÔME MILLAN
t the heart of the latest prognostications on Africa’s trajectories are the people – another 500 million, the vast majority under 30 – due to join the denizens of the continent’s cities over the next three decades. They should lay the groundwork for Africa’s great leap forward. The demographic revolution super-charging incomes, which helped transform China and is currently coursing through India, is coming to Africa. From the boom in African film, music, art and literature, all feted internationally alongside its thriving network of tech companies, the continent already has the soft power to underpin such a demographic dividend. But it is the lack of hard economic power – electricity generators, roads and ports, the backbone of an industrial revolution – that is holding back the project, even threatening to derail it. Heady talk of African lions challenging Asian tigers has dissipated among international financial institutions and even those consultancy companies whose market share is tied to a confected optimism. Instead, there are more sombre voices warning that current policies are failing. Our correspondents’ reports reflect the anger and frustration of the youth in so many countries. The latest report from the Mo Ibrahim Foundation sounds the loudest alarms on jobs and education. It points out that Africa’s national economies have grown by 40% on average over the past decade but with no real improvement in what Ibrahim calls sustainable economic opportunities. “We see it as a loss,” Ibrahim tells The Africa Report. “The commodity windfall didn’t benefit the people.” It could also have been
used to finance an overhaul of school systems. “Our education system needs a revolution,” says Ibrahim. “We don’t need more bureaucrats. We need technical schools to adjust our system to the jobs market. If you want to build roads and power grids, who’s going to do this?” It’s hard to see that many governments – apart from Ethiopia, Morocco and Rwanda, perhaps joined by Nigeria and South Africa due to their economic weight – will coordinate the policies needed for such leaps in modernisation and industrialisation to create the needed jobs. Off the agenda Africa’s of the World Bank and Inter national companies Monetary Fund in the should have wake of the structural the scale adjustment-era, industrial policy is back in to serve the Africa. Again, the market and reason is people. A new report from South beat the Africa’s Institute for competition Security Studies argues that as 60% of Africa’s imports are manufactured goods, local companies should have the scale and skills to serve the market and beat competition. Although ICT’s contribution to African economies works out at less than 5% of gross domestic product on average, the report says, its rapid expansion could allow pupils from cities to the most remote areas to access world-class learning materials. It is difficult to overstate the ambition needed. Such a shift to local hubs of nimble manufacturing operations amounts to an economic, even a political, revolution. Yet a failure to push for change would be far riskier.
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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 O CI AT E E D I T O R MARSHALL VAN VALEN R E S E A R CH & P R O D UCT I O N OHENEBA AMA NTI OSEI RE G IO NA L E D I T O R CRYSTAL ORDERSON (SOUTHERN AFRICA) A RT & L I F E E D I T O R BILLIE ADWOA MCTERNAN S UB - E D I T O R ALISON CULLIFORD ERIN CONROY P R O O F R E A D I NG KATHLEEN GRAY CHLOE BAKER A RT DI R E CT O R MARC TRENSON DESIGN VALÉRIE OLIVIER (LEAD DESIGNER) SYDONIE GHAYEB CAMILLE CHAUVIN CHRISTOPHE CHAUVIN (INFOGRAPHICS) R E S E A R CH SYLVIE FOURNIER P HO T O G R A P HY CLAIRE VATTEBLED FRANÇOIS GRIVELET XAVIER ROUSSEAU SALES A JUSTE TITRE Tel: (33) 9 70 75 81 77 contact-ajt-sifija@ajustetitres.fr CONTACT FOR SUBSCRIPTION: Webscribe Ltd Unit 4 College Road Business Park College Road North Aston Clinton HP22 5EZ United Kingdom Tel: + 44 (0) 1442 820580 Fax: + 44 (0) 1442 827912 Email: subs@webscribe.co.uk ExpressMag 8275 Avenue Marco Polo Montréal, QC H1E 7K1, Canada T : +1 514 355 3333 1 year subscription (10 issues): All destinations: €39 - $60 - £35 TO ORDER ONLINE: www.theafricareportstore.com A D VE RT I S I NG 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 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
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GHANAIANS RISING THROUGH THE OIL RANKS
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DRC After Kabila, youur guide to the exit plan
• South Africa: Perfect storm for land reform • Ghana: The rollercoaster slows • Telecoms: Jumia’s battle for e-commerce
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he resolution of the [Ghana-Côte d’Ivoire] border dispute couldn’t have come at a better time. With the improvements in the oil price ATIKU ABUBAKAR as well, the country is starting to see some energy “I will injected back into the oil industry [‘Ghana: Local make Nigeria content has to be a priority’, TAR105 Nov 2018]. work On the subject of local content, it is impressive to see again” companies like Tullow and their contractors make efforts to walk the talk. I have witnessed locals rising through the ranks and being trusted with very active roles in management as well as engineering. There is still room for improvement. The agencies in charge of enforcing these regulations need to continuously monitor the companies in the sector and ensure their active commitment to maximising local content. Lawrence Adu-Gyamfi, Ghana NIGERIA
The PDP candidate revs up his presidential campaign
JEUNE AFRIQUE MEDIA GROUP
Abraaj would not have invested in Abraaj. The fact that their investee companies are still running smoothly and credibly raising funds is testament to this. Abraaj grew to great heights because they were good deal-makers, and they certainly proved that there are lucrative returns in ‘growth markets’. Their ultimate undoing was in lax internal systems that undid any trust or credibility they had earned. Wadzi Katsidzira, Principal Consultant, Taumba Advisory
INTERNATIONAL EDITION
Algeria 550 DA • Belgium €5.90 • Canada CA$ 7.95 • DR Congo US$ 9 • Denmark 60 DK • DOM 8 € • Ethiopia 130 Birr • France €5.90 • Germany €5.90 • Ghana GH¢ 12 • Italy €5.90 • Kenya KES 700 • Morocco 40 DH • Netherlands €5.90 • Nigeria 1300 NGN • Norway NK 70 • Portugal €5.90 • Rwanda RWF 6,000 • Sierra Leone LE 15,000 • South Africa R40 (tax incl.) • Spain €5.90 • Sweden SEK 70 • Switzerland 9.90 FS Tanzania TZS 10,000 • Tunisia 5.4 DT • Uganda UGX 10,000 • UK £4.50 • United States US$ 6.95 • Zambia 48 ZMW • Zimbabwe US$ 4 • CFA Countries 3,500 F CFA • Euro Zone €5.90
WOMEN IN BUSINESS
The presence of women in the business world at all levels plays an important role in the socio-economic WINE AND ASPIRATIONS of the aspirations and the condition of development of a country [‘50 a generation of young and economically influential women in business’, TAR102 Bobi Wine is shaking up Ugandan disenfranchised Ugandans, with July/Aug 2018]. There is still a lot to be politics – paradoxically, due to matters an outlook that is totally disconnected done in this area. The status of women that are actually beyond his doing from those who lead the country today. in society, their level of education, Hashim W. Mulangwa, Uganda supportive legislation, promoting [‘The Question’, TAR105 Nov 2018]. Bobi Wine is clearly a charismatic, ambitious work-life balance, improving attitudes young leader. As the ‘Ghetto President’ to hierarchy, and economic stability he has a good understanding of issues all contribute to the success of women GOOD DEAL-MAKERS, that affect young, desperate Ugandans in business. […] It is commonly reported BAD MANAGERS (mostly urban youth), a moderate that boards that have achieved a gender grasp of the policy solutions that could Strong governance and professionalbalance show significantly higher isation of operations are just address some of these challenges, and performance than boards that haven’t. as important for emerging market his politics are clearly rooted in values Therefore governments, institutions private-equity funds as they are for that speak to empowering Ugandans and corporations should use a variety and holding their leaders accountable. the companies they invest in [‘The fall of strategies to encourage more women of Abraaj’, TAR103 Sept 2018]. Based But the potency of Bobi Wine’s to hold strategic positions. Ndeye Selbé Mbonj, Financial Audit on its own due diligence yardstick presence on the Ugandan political and Project Management, Senegal scene lies in the fact that he is a symbol for financial controls and governance, 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: LASTING SOLUTIONS LIMITED, Anthony Origi, +254 723 320 108, a.origi@yahoo.com – NIGERIA: NEWSSTAND AGENCIES LTD, Marketing manager, +234 (0) 909 6461 000, newsstand2008@gmail.com; MAGAZINE CIRCULATION NIGERIA LIMITED (MCNL), Distribution manager, +234 (0)803 727 5590/805 357 0984, mcnl3@yahoo.com – SOUTHERN AFRICA: SALES AND SUBSCRIPTIONS: ALLIED PUBLISHING, Butch Courtney; +27 083 27 23 441, berncourtney@ gmail.com – TANZANIA: MWANANCHI COMMUNICATIONS, Milli Makula, +255 716 500 500, mmakula@tz.nationmedia.com – UGANDA: MONITOR PUBLICATIONS LTD, Micheal Kazinda, +256 (0)702 178 198, mkazinda@ug.nationmedia.com – UNITED KINGDOM: QUICKMARSH LTD, Pascale Shale, +44 (0) 2079285443, pascale.shale@quickmarsh.com – UNITED STATES & CANADA: LMPI, Sylvain Fournier, +1 514 355 5610, lmpi@lmpi.com – ZAMBIA: BOOKWORLD LTD, Shivani Patel, +260 (0)211 230 606, bookworld@realtime. For other regions go to www.theafricareport.com zm – ZIMBABWE: PRINT MEDIA DISTRIBUTION, Ian Munn, +263 778 075 147, ianmunn@mweb.co.zw
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Changing the narrative on the continent, Africans in the headlines sent out a message of strength, unity, peace and prosperity in the course of 2018, at home and abroad
MARCH PUTTING FLESH ON PANAFRICAN BONES Rwandan President Paul Kagame, who is also the current chairman of the African Union (AU), managed to push through the African Continental Free Trade Area (CFTA) Agreement during the 10th Extraordinary Session of the AU.
MARCH BURYING THE HATCHET Kenya’s President Uhuru Kenyatta and his arch-rival, opposition coalition leader Raila Odinga, publicly shook hands, turning the country into a land with few dissenting voices. Weeks earlier Odinga had staged a mock swearing-in of himself as president. THE AFRICA REPORT
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NASIEF MANIE/POOL/AFP
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NOVEMBER MINORITIES RULE Ilhan Omar, a Somali-born former refugee, continued her political rise as one of two Muslim women to win seats in the House of Representatives in the US mid-term elections. The Democrat offers a beacon of hope in an increasingly racist America.
SIMON MAINA/AFP
FEBRUARY DEPLORABLE STATE OF THE NATION Cyril Ramaphosa’s first job as president of South Africa after the resignation of Jacob Zuma over ‘state capture’ allegations was to give the delayed State of the Nation address. Ramaphosa promised to restore faith in institutions and tackle unemployment.
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AUGUST FAREWELL TO ANNAN The world mourned Ghanaian diplomat and United Nations secretary general Kofi Annan, who died aged 80 on 18 August. The first sub-Saharan African to lead the UN and a Nobel Peace Prize winner, he united leaders around the globe who paid tribute to his legacy.
THE AFRICA REPORT
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OCTOBER AFRICA SHINES IN LONDON The sixth edition of 1-54, the African contemporary art fair founded by Touria El Glaoui, drew 18,000 visitors in five days, showcasing 43 galleries and over 130 artists from Africa and its diaspora. Collectors were in a buying mood with some galleries selling everything by the end of the opening day.
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AUGUST EGINA SETS SAIL After months in dock at the Ladol free trade zone port in Lagos, the Total SA ‘Egina’ floating production, storage and offloading oil vessel (FPSO) moved out to the oilfield. The facility will process 200,000bpd, adding 10% to Nigeria’s total oil production.
OCTOBER WOMAN AT THE TOP Sahle-Work Zewde became Ethiopia’s first woman president after being voted in unanimously by the country’s two houses. In a largely ceremonial role, she will work with Prime Minister Abiy Ahmed, who has appointed half his cabinet posts to women. THE AFRICA REPORT
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14 OPINION
AFRICA I N
The new world order and Africa
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daunting agenda – cash, conflict and jobs – awaited presidents and foreign ministers flying into Addis Ababa for an extraordinary summit of the African Union (AU) in early November. The backdrop was the geo-economic shift over the past decade, establishing China as Africa’s leading trading partner, and India, Russia and Turkey coming up fast behind with the European Union (EU) states treading water and the US falling behind. At the end of the summit’s agenda were a couple of items about Africa’s strategic partnerships: how should the continent get the most benefit out of this latest upsurge of economic and diplomatic interest. There’s little agreement on tactics, let alone strategy. There are high hopes for the continent’s big idea, the African Continental Free Trade Area (ACFTA), representing a market of 1.2 billion and a $3trn economy. But one of the tasks facing the summiteers in Addis is how to make this single market a practical reality. Some at the AU headquarters want to lead on negotiations and strategy, but others are pushing the interests of the regional economic organisations or even nation states. Continental solidarity is being tested again in negotiations with the EU for a successor to the Cotonou treaty, dating back four decades. The ministers’ meeting in Addis was meant to resolve this. The same argument, that Africa would get a better deal negotiating as a single unit, is playing out in dealmaking with other partners. Africa’s foreign suitors, old or new, would rather cut bilateral deals seeking advantages from differing local conditions. Apart from the old picture of corporate penetration, the landscape shows that all of the great economic players are now in rivalry with one another when it comes to Africa. Canny African policymakers could play one off against the other. But the plenitude of seemingly attractive and ‘quick offers’ have fostered a generationoflazypolicymakers.Whatisrequiredisnot only imaginative and diversified youth employment in creativeandmanufacturingindustries,butimaginative and creative negotiators working in concert. Certainly, the growing capacity of well-briefed AfricanofficialstonegotiateinMandarinwithChinese companies and officials has been a huge advance
– but it’s not just China. Only a technocratic and concerted response from Africa will succeed in the face of blandishments from all corners of the globe. Crafting that policy response has been made far tougher by the weakening of the international social contract. The prospects of greater integration and supranational governance – whether through the United Nations (UN), International Monetary Fund (IMF), World Bank or continental organisations – have dimmed. The nation state is on the rise again. The rulesbased international order is declining. A new round of rivalries between the world’s biggest economies is a doubled-edged sword for African states. The fightback of the West to retain its foothold in Africagivesrisetonewposturingandnewpropaganda. Africa’s indebtedness to China is the subject of a great new scare. In fact, African indebtedness to all external parties sees about 20% owed to China, about 35% to multilateral institutions such as the IMF and World Bank, and the remainder to private funds and banks. The new trade wars are yet to hit China’s capital capacity as yet. Reserves of up to $3trn will insulate China’s economy from the first phase of US tariffs. China’s growth of 6.5% a year is something many Western countries would envy. Largesse towards Africa should continue. Although the Forum on China-Africa Cooperation in September saw the usual promises of liquidity from Beijing, Zimbabwe’s President Emmerson Mnangagwa went away disappointed having failed to secure budgetary support. Beijing, it seemed, wanted evidence of more stringent fiscal probity.
The fightback of the West to retain its foothold in Africa gives rise to new posturing and propaganda And the trade imbalance between the two continents remains stark. Raw materials go from Africa to China. Cheap manufactures go in the other direction. The fundamental flaws in this relationship can be fixed only by an increase in African manufactures. Otherwise, raw materials will be all Africa has to offer. It’s not just China that has failed to encourage African manufacturing. The US insistence that THE AFRICA REPORT
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OPINION 15
it should send second-hand clothes duty-free to Africa is seen in Kigali as holding back Rwanda’s textile industry. Despite that quarrel over textiles, US policymakers have been responding belatedly to the rise and rise of China-Africa trade. The Better Utilization of Investments Leading to Development Act, being pushed through Congress, will set up the US International Development Finance Corporation: an institution that looks a lot like some of China’s. African leaders voted with their presidential jets this year, flying to the China-Africa summit in Beijing in far greater numbers than they attended the UN General Assembly a few weeks later. That panicked the EU into hashing out a new Africa strategy in October.
all the same. ‘Fighting hunger’, used as the rubric, becomes the entry point for agri-business. At the centre of Europe’s plans for the continent are its negotiations with African states on migration. The new agreements are premised on raising living standards. That’s a formidable project that requires
For Africa’s policymakers, Turkey’s growing role is another important piece on a crowded chessboard
Individual member states have followed their own priorities. Germany’s Compact with Africa is a vehicle for European firms to succeed in Africa. Companies like Nestlé profit, selling their products in ‘affordable’ miniature sizes – a technique also used by South African supermarket chains to attract township customers. The declared objectives of Germany’s so-called Marshall Plan for Africa are to build production chains: to encourage manufacturing and diversify national economies. When it comes to agro-industry, for instance, the bulk purchase of lands, the poorly regulated labour market and the marginalisation of youth seeking brighter futures make for a picture of ‘responsible’-seeming exploitation, but exploitation THE AFRICA REPORT
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the creation of 18 million new jobs by 2035 and spending of about $75bn a year on infrastructure. None of this will automatically constrain a population due to grow to 2.5 billion by 2050. Where else should African policymakers look? There are many new players in the Africa game. Turkey has launched commercial flights to Somalia, a bold move. It has opened more than a dozen new embassies in Africa in the past decade and is getting enmeshed in the politics of the Horn of Africa. For now, it is unclear whether Turkey’s interest will go beyond seeing Africa as a periphery to the Mediterranean and Middle East of President Recep Tayyip Erdoğan’s new ‘Ottoman’ dream. For Africa’s policymakers, Turkey’s growing role is another important piece on a crowded chessboard. In what is looking like a 21st century scramble for Africa, playing one team off against another will stretch the resourcefulness of the continent’s diplomats.
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18 Questions for 2018 Think you have had your finger on the pulse of African news? The first five people to answer all the questions correctly will receive a year’s subscription to our digital edition. Please send your answers to: quiz@theafricareport.com by 1 February.
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Which of Britain’s Prime Minister Theresa May’s skills were mocked on social media during a visit to Africa? a) Dressing b) Dancing c) Negotiating Brexit d) All three
Who did not die in 2018? a) Hugh Masekela b) Winnie Madikizela-Mandela c) Kofi Annan d) Robert Mugabe
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Which government made it illegal to criticise government statistics in 2018? a) Egypt c) Tanzania d) Angola
2
RODGER BOSH/POOL VIA REUTERS
What did Kanye West give to Uganda’s President Yoweri Museveni on his first trip to the continent? a) A pair of Yeezy sneakers b) A Kim Kardashian-branded iPhone c) An autographed ‘Make America Great Again’ cap
3
Investigative journalist Anas, who uncovered a huge scandal in Ghanaian football, is famous for what? a) Not divulging his sources b) Not showing his face in public c) Not brushing his teeth
4
Which of South Africa’s former finance ministers quit after admitting to meeting with the controversial Gupta family? a) Trevor Manuel b) Pravin Gordhan c) Nhanhla Nene
5
Which US one-hit-wonder from the 1980s with a link to the continent came back as a meme in 2018?
6
Which ‘developmentalauthoritarian’ state is a proud sponsor of a Premier League side? a) Ethiopia b) Rwanda c) Morocco
7
Which US late-night host got in a spat with the French ambassador over the ‘Africanness’ of the World Cup’s winning team?
8
Ethiopia’s Prime Minister Abiy Ahmed did push-ups in front of soldiers to stop them from what? a) Trying to kill him b) Declaring war on Eritrea c) Redecorating his office
9
14
Which incumbent president failed to enthuse voters when he proposed this deal: “If I win the next election and I survive the next four years, I will do better”. a) Muhammadu Buhari b) Abdelaziz Bouteflika c) Paul Biya d) Teodoro Obiang Nguema
15
Which African country became the first to quit and then rejoin the International Criminal Court? a) Burundi b) Zimbabwe c) Gambia
Which country got its own version of the viral video ‘This is America’, with lines like “Never ending recession o/When looter and killers and stealers are still contesting election o”?
16
10
In stricken Zimbabwe, what did presidential candidate Nelson Chamisa say he would build as a key campaign promise? a) Solar-powered money printers b) Giant swimming pools c) Bullet trains d) All of the above
17
11
18
A Chinese investor was arrested in 2018 for calling which African president a “monkey”? a) Joseph Kabila b) Faure Gnassingbé c) Uhuru Kenyatta
After annual AfDB meetings in bustling India and South Korea, where will the next meetings be held?
In high-profile cases, Egypt arrested women for publicly criticising what? a) The quality of the Nile River’s water b) Sexual harassment c) The way President Sisi’s mum prepared ful d) A and B Consumers in Morocco are boycotting brands of which three types of products? a) Water, yogurt and petrol b) Cars, mobile phones and beer c) Harissa, rice and aeronautical spare parts
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What to watch in
2019 By Alison Culliford, Marshall Van Valen, Nicholas Norbrook, Oheneba Ama Nti Osei and d Patrick Smith
20 FRONTLINE | WHAT TO WATCH IN 2019
economy Africa is not prepared for the end of cheap money
N
the 2008 global financial crash. The quantitative easing of rich-country governments took domestic interest rates close to 0%, pushing big investors far into frontier markets to find yield. But today conditions are not the same: “Investors are going to be demanding far higher risk premia, for example, to get involved in local currency debt markets against a backdrop where the dollar continues to strengthen,” says Razia Khan, chief economist for Africa for Standard Chartered bank (see page 112). It means countries with a credible fiscal position will still be able to tap
igeria, Algeria and South Africa all go to the polls in 2019. Together, they represent nearly half of Africa’s gross domestic product (GDP). We probably will not see a hat-trick of reformist governments emerge, but the trio illustrate three big, interrelated trends that will govern Africa’s macroeconomic landscape in the coming year: governance, debt levels and the role of commodities. African administrations will be under a microscope over the next few years. Many countries need to refinance loans – a legacy of the cheap-money era after
SUB-SHARAN AFRICA: GROWTH TAXONOMY 11
Improved Ethiopia
9
Established
Côte d’Ivoire Guinea
7
the market; others will struggle to raise finance. For the IMF, the solution was already clear back in May: “With debt vulnerabilities rising in the region, sub-Saharan African countries will need to further rely on sustainable sources of financing, making domestic revenue mobilisation one of the most urgent policy challenges for the region.” Those deathless words – revenue mobilisation – are in fact the beating heart of governance and the social contract: tax and the subsequent delivery of public goods. South Africa knows a thing or two about it, having seen its award-winning taxagencydestroyedbycorruptionunder former president Jacob Zuma. President Ramaphosa’s firing of Zuma appointee Tom Moyane as South African Revenue Service commissioner in November bodes better for the tax collector. But the window for Ramaphosa to push through reforms with popular support is small. Beyond South Africa, things are even less glorious. Nigeria’s paltry
Tanzania
Senegal GuineaBissau Kenya Mali
Ghana Uganda
Niger Cameroon
5
DRC
The graph shows how well countries performed recently (vertical axis) to how they did in the past (horizontal axis)
Rwanda
Stuck in the middle
Mozambique
Madagascar Malawi Botswana
Zimbabwe
Lesotho 1
-4
0 -1
Namibia
Rep. of Congo Burundi
Liberia
Nigeria
South Africa 4
8
Chad Sierra Leone
12
16
35
Angola
-3
Slipping
Falling behind -5
GDP growth, 1995-2008 -7
Falling behind
Slipping
Stuck in the middle
Improved
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SOURCE: WORLD BANK
GDP growth, 2015-18
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WHAT TO WATCH IN 2019 | FRONTLINE 21
COMMODITY PRICE FORECASTS (US$ nominal, 2010=100) 130 110 90 70 50
Energy Metals Agriculture
30 10
2006
08
10
12
14
16
18 19 20
GDP GROWTH, SUB-SAHARAN AFRICA (%) 2000-17 average
6
Sub-Saharan Africa
Angola, Nigeria and South Africa
SSA excl. Angola, Nigeria and South Africa
2016 17 18
2016 17 18
2016 17 18
4
SOURCE: WORLD BANK
2
0
-2
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Speaking to and for the future
O
ne in every five Africans is between the ages of 15 and 24 years old. That is a quarter of a billion young people who are coming of age. Much has been made of the lack of jobs on the continent, and nearly two-thirds of Africa’s unemployed are young people. Even in South Africa, one of the most sophisticated economies, 55% of youth do not have a job. Much, too, has been made of the lack of educational facilities to train the next generation. Nigeria has an estimated 13.2 million children out of school. This has serious consequences for those betting on an African industrial revolution. UNESCO says Africa on average has 79 engineers per million people, compared to 650 in Brazil, and 4,500 in the US. Less tracked is the impact that this large cohort of disenfranchised youth will have on politics, outside of European hand-wringing over migration (see page 30). The raw rage of young people in North Africa led to the overthrow of regimes: the match that ignited Mohamed Bouazizi’s petroldoused body sparked a turbulent period from which genuine change – in Tunisia – and more of the same – Egypt – has emerged. But, elsewhere, politicians are getting better at directing the anger. First among equals, comrade Julius Malema of South Africa ditched his role as court jester for the African National Congress to take a more incendiary line as leader of the Economic Freedom Fighters (EFF), catalysing the anger of the ‘born free’ generation. He has managed to push radical land reform far higher up the political agenda than anyone thought possible a few years ago, not to mention playing kingmaker in a few municipalities. Echoing the red berets of the EFF, the Ugandan musician and member of parliament known as Bobi Wine, 36 years old, has focused the discontent of Kampala’s urban poor. His criticism of President Yoweri Museveni, 74, has earned him beatings and ever-greater fame. Campaigning is changing, too. Joshua Osih, perhaps not a youth candidate at 49, but young by African standards, led a digital-first campaign using social media to help to unseat President Paul Biya. He was unsuccessful, but for how long will Cameroon be run by an 85-year-old, when in just a few years one in two Cameroonians will have a smartphone? Certainly the trend for younger leaders who can connect with young populations is not going away. The huge crowds of youth rallying for Prime Minister Abiy Ahmed, 42, of Ethiopia shows a new guard is on the way in.
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youth
tax-revenue-to-GDP ratio of 6% remains amongst the lowest in Africa. David Cowan, head Africa economist at Citibank, says that in nearby Ghana “there are two million tax payers but nine million people with mobile phones. They should be paying tax!” He is clearly not worried about his popularity in the watering holes of Accra. If demand for commodities outpaces debt-servicing rates, commodity exporters should be more insulated from revenue worries. But there are possible worlds where this does not hold up: for example, one in which a US-led trade war knocks global demand. Standard Chartered’s Khan says virtually no one is planning for this as a core scenario. But, should it happen, many African countries are ill-prepared. “We’re likely to see the impact on commodity prices being transmitted fairly rapidly, and that would come at a very unfortunate time for many of the region’s economies,” Khan concludes.
Class disruptor Julius Malema has grown up into a contender
22 FRONTLINE | WHAT TO WATCH IN 2019 9
elections
1 8 3
5
2019 poll prospects across the continent 7
A
ll eyes are on the outcome of big votes with high stakes in both Nigeria and South Africa in the first half of 2019. Those votes are bellwethers for the political and economic direction of the continent. Meanwhile, elections in Mozambique and GuineaBissau will show if long-running conflicts there are on the path to resolution.
government from having to make too many tough economic choices. With the vast powers of incumbency that he has access to, Bouteflika – who is 81 and has been in power since 1999 – is unlikely to face much of a challenge at the ballot box in April 2019. He has yet to say he will run, but ruling Front de Libération Nationale officials have called for his sixth consecutive candidacy.
Algeria
Ailing president Abdelaziz Bouteflika is not loosening his grip on the levers of power in Algiers just yet. He has been showing his strength by sacking some security chiefs and hopes that a high oil price will continue to insulate the
5
2
Botswana
Thecountryheadstonationalelectionsin October 2019, and President Mokgweetsi Masisi and the Botswana Democratic Party will likely face their toughest test yet. The legislative polls will be the key
Nigeria
The February 2019 presidential vote in Nigeria does not look like a slamdunk for any of the candidates. President Muhammadu Buhari won the 2015 election on a wave of hope that he would wipe out corruption, defeat the Boko Haram militants and improve the economy. Based on local firm NOIPolls’ survey data, Buhari hit his record high approval rating of 80% in October 2015, which then sank to 41% in May 2018. The government has not defeated Boko Haram and deadly farmer-herder clashes have rocked the Middle Belt. Buhari’s administration is now rolling out infrastructure and new micro-loans in a big pre-election spending boost. People’s Democratic Party (PDP) candidate Atiku Abubakar is back in the party fold and pitching himself as the candidate of business. Mirroring US President Donald Trump’s arguments, Atiku says that the government should remove regulations and interfere less in the economy. But the PDP has done little since getting voted out of the presidency to impress voters, with its state control largely limited to its base in the South East. Both candidates are from the north and are seeking to widen their appeal: that is why Atiku picked former Anambra State governor Peter Obi as his running mate and Buhari is still relying on the mobilising capacity of former Lagos State governor Bola Tinubu and former Rivers State governor Rotimi Amaechi.
BAYO OMOBORIOWO/AP/SIPA
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4 2
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race, as Botswana’spresident is chosenby the national assembly. The Umbrella for Democratic Change, led by Duma Boko, has the tough task of maintaining party unity while negotiating an alliance with the supporters of former President Ian Khama,whoareangryatMasisi’scriticism of his predecessor. If Boko is unable to keep his alliance together, his attempts to unseat Masisi could quickly crumble. 3
Guinea-Bissau
The current parliament’s mandate has already expired, but whether the presidential election occurs in 2019 depends on if the country can organise the delayed legislative elections that were due to take place on 18 November. The Economic Community of West African States insists that the elections are necessary to get the country out of its political gridlock, since President José Gomes Mário Vaz is at odds with his own party’s leadership in parliament. With schisms in the ruling Partido Africano da Independência da Guiné e Cabo Verde, it is not yet clear if Vaz will be his party’s candidate again. The Partido da Renovação Social, the leading opposition party in parliament, also has yet to select its presidential candidate. 4
Malawi
Elections due to take place in the middle of the year are set to be a bruising contest between President Peter Mutharika and his former vice-president, Saulos Chilima. Corruption and the future of the agriculture-based economy are set to be big topics out on the campaign trail. There are currently no polls that measure the two principal candidates’ popularity, but Chilima has more ground to
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makeupbecausehejustlaunched his own party in mid-2018 and faces the Democratic Progressive Party, which has been around since 2005. Both candidates are now looking for alliances that could strengthen their chances.
Mozambique
Despite President Filipe Nyusi’s weakness in the face of ruling-party hardliners and Frelimo’s tanking of the economy with secret loans for dubious purposes, he is likely to win October 2019’s race. The big unknown is how well the former rebellion and armed group Renamo will do in legislative and provincial polls as it pushes for decentralisation and keeps the possibility open for a return to conflict if the government does not follow through on an agreed peace deal. It will also be Renamo’s first election under the leadership of Ossufo Momade, who replaced long-serving Renamo president Afonso Dhlakama, who died in May 2018. Momade is sticking to his negotiating positions and insists that Renamo forces be integrated into the powerful Serviço de Informações e Segurança do Estado security services as part of the peace deal. 7
Senegal
President Macky Sall likes his chances of winning re-election in the first round of the February 2019 presidential vote. Legal woes have knocked out
Tunisia
Since the overthrow of President Zine el Abidine Ben Ali, no party has maintained enough power to achieve much of its agenda. The unity government
10
Namibia
Barring any surprises, President Hage Geingob will win re-election in Namibia’s 2019 general election. He will be campaigning on policies supporting land reform and black economic empowerment. If all goes to the governing South West African People’s Organisation’s plans, Geingob will step down at the end of the term and open the way for party vice-president Netumbo Nandi-Ndaitwah to become the country’s first female president. McHenry Venaani, leader of the oppositionPopularDemocratic Movement, is campaigning on pocketbook issues, saying that the government’s economic policy is a failure and it spends too much money on the security services. 8
9
CHINATOPIX/AP/SIPA
6
his two main challengers, former Dakar mayor Khalifa Sall and Karim Wade, the son of former president Abdoulaye Wade. Khalifa Sall’s lawyers are trying to drum up international support for their client, saying his trial was orchestrated for political purposes. They insist that he will still run in the February 2019 race. Meanwhile, new electoral reforms make it much harder for independent and small-party candidates to run, which also favours Sall. In Sall’s favour are the fact that the opposition’s strongest candidates are out of the running and the economy is growing strongly.
between the centrists of Nidaa Tounes and Islamists of Ennahda fell apart in late 2018, and they and smaller parties will be competing for control of the presidency and legislature. President Béji Caïd Essebsi of Nidaa Tounes may run again and face a former ally, prime minister Youssef Chahed, and Ennahda’s Rachid Ghannouchi. The May 2018 muncipal elections showed that no party is likely to win an outright majority in the legislature. Ennahda took control of the mayor’s office in Tunis, but only gained 28.6% of the vote nationally. Nidaa Tounes came in second with 20.9%. Whoever wins the upcoming vote will inherit a weak economy and an active civil society. Trade union movements oppose the government’s attempts to implement reforms that would raise the cost of living and privatise state-owned companies.
South Africa
South Africa’s May 2019 general elections are set to be a referendum on the reformist policies of President Cyril Ramaphosa, who took over from the unpopular Jacob Zuma in February 2018. The governing African National Congress (ANC) has won a majority in every election since the first democratic polls in 2014, and neither of the leading opposition parties have been making much headway. However, the ANC took just 55.7% of the most recent vote, the municipals of 2016. While the ANC is now cherrypicking some of Julius Malema and the Economic Freedom Fighters’ (EFF) big ideas, the Democratic Alliance is struggling under the leadership of Mmusi Maimane after the bruising battle over the forcing out of Cape Town mayor Patricia de Lille. Issues like land reform, education and healthcare are high on party platforms, but in reality the government that takes over in 2019 will have to tackle an economy that is struggling and where state-owned enterprises are a major drag on the treasury. If he wins, Ramaphosa will be looking to toe a line between launching the painful reforms that the economy needs – like sacking workers from bloated parastatals – and the populist policiesthat placate the ANC and the leftists in the EFF. With much of the blame for the parlous state of South Africa’s finances heaped on Zuma and his allies, voters will also be looking for the government to make good on ferreting out corruption with some high-profile prosecutions. •
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boycott T
Moroccans hit French company Danone to hurt the ruling elite
public spheres of influence. French firm Danone dropped its prices as a result of the protests and reported a 40% drop in sales in the second quarter of 2018, followed by a 35% drop in the third quarter. Also in 2018, in Mali and Senegal consumers got together to boycott Orange, complaining the French telecoms operator was abusing its strong market position to deliver poor service and high costs. Orange controls more than 50% of the Senegalese market. While in Mali the movement fizzled out, in Senegal cheaper deals were seen almost immediately.
Kenya, too, has seen commercial boycotts that strike at the heart of politics. In November 2017, supporters of presidential candidate Raila Odinga called on Kenyans to boycott companies linked to the regime of President Uhuru Kenyatta after a disputed election. Dairy company Brookside, owned by presidential brother Muhoho Kenyatta, was targeted, as was Safaricom, which is owned by the government and has a partnership with Kenyatta-owned bank CBA. The Kenya boycott fizzled out and Odinga buried the hatchet with Kenyatta, but a new round of tax hikes is already stirring up anger as consumers make their power known.
A new life for NEPAD
C
to provide logistics hubs and transport to serve landlocked neighbouring markets and their own hinterland. The troubles of Kenya’s standard-gauge railway(seepage145)have gotpolicy-makersthinking
there must be a better way to plan for giant projects meant to serve the region. So will countries find a way to work together in the year ahead? Or will they repeat the winnertakes-all competition seen
VINCENT FOURNIER/JA
ount r i e s g oi ng head-to-head in an infrastructure race can lead to a lot of wasted time and effort. Along the east, west, northern and southerncoastsofthecontinent, countries are racing
THE AFRICA REPORT
infrastructure
he Boston Tea Party that led to US independence is a reminder that governments and companies should not underestimate consumers who have a political message to send. The same holds true in Africa today. Morocco’s regime bent but did not break during the North African uprisings, but that does not mean that people are not angry – regular mass protests in the impoverished Rif region are testament to that. But in April, something new spread across the country: internet-driven consumer boycotts of water (Sidi Ali), dairy products (Danone) and petrol stations (Afriquia) over eye-watering prices and the companies’ connections to the ruling elite took political and business leaders by surprise. After a few stumbles from the government in its handling of the situation, the protesters sharply reminded officials that their actual job is to improve the life of all Moroccans. The boycott neatly targeted the overlap of private and
YOUSSEF BOUDLAL/REUTERS
Power of the purse
with Morocco’s TangerMed port in North Africa, or the scramble to build ports and railways in East Africa and the Horn? A possible driver for cooperation comes in the form of the rebranding of the previously independent New Partnership for Africa’s Development (NEPAD) as the African Union Development Agency. With less money flowing into the continent, the year ahead will be a test to see if the continental body can get more governments looking beyond national interests to something that builds up regional and continental networks while making stronger business sense. •
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The foremost international meeting for African CEOs, bankers and investors
Shaping the future of Africa
Save the date 7th edition
KIGALI
25 & 26 March 2019
www.theafricaceoforum.com
CO-HOST
ORGANIZERS
28 FRONTLINE | WHAT TO WATCH IN 2019
women
Developing developers
A
coders
Lonely at the top: Ethiopia’s SahleWork Zewde
TIKSA NEGERI/REUTERS
n unexpected drag on the global economy in recent years is the increasing cost of software developers and coders. A developer can cost between $50 and $200 per hour’s work. Companies worldwide are realising they need to upgrade legacy computer systems to stay competitive, governments are building ever more massive data-management systems, consumers are spending more and more time and money on their smartphones. In the US alone, there are more than 200,000 open job offers for developers; but only 30,000 computer science majors graduate there each year. “With our population, we are going sort that out for you!” jokes Bosun Tijani, co-founder of Lagos’s CoCreation Hub in Yaba, speaking at a Franco-African business forum in July. France has since announced a $76m start-up fund for African countries – which will have training and co-operation components, and is part of a broader Digital Africa initiative. And Tijani has a point: Ni g e r i a n c o d e r s a re everywhere. The product of one of Nigeria’s bestknown start-ups, Andela, is developers. After a well-publicised cash injection from Facebook founder Mark Zuckerberg, Andela has recently signed a deal to build a pan-African development hub in Rwanda to pump out a new generation of coders for the outsourced labour pools of the future: straddled across European time zones, able to work overnight for the US market and with large populations of French and English speakers. There is, of course, competition. But also demand to meet. “You have Portugal; you have Bulgaria. You have a lot of players in the coding space, but Nigeria will certainly see robust growth,” says Aubrey Hruby, chief executive of the Africa Expert Network. “Andela has priced up the cost of coding talent so much that I know Nigerian firms that hire outside because they can get cheaper coders,” she says.
The snakes and ladders of gender in African politics
T
he historic wins for women in the 2018 US midterms suggest the tides are turning for women in politics around the world, and Africa will not be left behind. “Our women ministers will disprove the adage that women can’t lead,” said Ethiopia’s Premier Ahmed Abiy in October. His cabinet is 50% women, including defence minister Aisha Mohammed Musa and former house speaker Muferiat Kamil, who heads up the new peace ministry. In appointing UN veteran Sahle-Work Zewde as its first female president, Ethiopia’s parliament also produced the continent’s only current female head of state, albeit in a largely ceremonial role. If Rwanda’s President Paul Kagame is unwilling to give his seat up for anyone, woman or man, his country leads the world in the representation of women in parliament with more than 61%. Namibia also scores highly with 46%, and as the first female vice-president of the ruling party, SWAPO, its deputy prime minister Netumbo Nandi-Ndaitwah is well positioned to become the country’s leader in a future election. Consultants McKinsey warn that gender in politics is not a mere game of numbers, however, any more than it is in the workplace. ‘‘In the [African] public sector, approximately half of women cabinet ministers hold social welfare portfolios, with arguably limited political influence, that do not open doors to top leadership roles,’ says a 2017 report from the firm. In Nigeria the problem lies not so much in cabinet roles as in the governorship of the country’s 36 states – where serious power resides. Oby Ezekwesili, a chartered accountant and prominent activist who championed the #BringBackOurGirls campaign in 2014 is one of three women among over 30 candidates vying for the top job in the upcoming February 2019 presidential elections. It is certainly encouraging, but with no woman ever having been elected as a state governor the idea that the country will rally behind the former World Bank official as their president seems far-fetched. Nonetheless, Ezekwesili’s candidature raises hope that women are increasingly challenging the male monopoly and creating their own seats at the table of African politics. THE AFRICA REPORT
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Supporting the transformation of Africa
HEALTHCARE
CONSUMER GOODS
TECHNOLOGY & ENERGY
– ©: I-Stock
MOBILITY
www.cfaogroup.com
30 FRONTLINE | WHAT TO WATCH IN 2019
education
to lack of provision, poverty is now identified as an overwhelming factor. Free high school education was an election pledge for Ghana’s Nana Akufo-Addo. Launching the policy in 2017, hesaidtheprogrammewould cost less than the price the country would pay for having an unskilled and uneducated workforce. Akufo-Addo has already got 472,000 new entrants into high schools through his ‘double-intake’ system but faces criticism that the country wasn’t ready and can’t afford it. Debates in most African countries have moved beyond whether public schools need strengthening to how to fund it. Economist Ernest Areetey, a former chancellor of the University of Ghana, says free education will cost the country 3.3bn ($683,000) in the next academic year, not including teachers’ salaries – almost triple the 1.3bn allocated in the budget. Countries lagging behind in educational performance are watching with keen interest to see if Ghana and Sierra Leone can pull things off in 2019.
A free and compulsory policy-making challenge for African governments light on problems of poor teacher training, the lack of classrooms and the need for school feeding programmes. According to UNESCO, in sub-Saharan Africa one-fifth
of children between six and 11 are out of school, one-third between 12 and 14, and 60% between 15 and 17. Though the reasons are various, rangingfromconflicttocorruption
migration
In Nigeria fear of terrorist attacks is one of many threats to education
HANNIBAL/DPA/AFP
G
hana and Sierra Leone (see page 48) are the latest African governments to expand the provision of free and compulsory state education, shining a
Outsourcing ‘Fortress Europe’
T
he numbers may have fallen – by October 2018 around 80,000 migrants had reached Europe compared to 300,000 in 2016 – but European countries are still preoccupied with migration control. Efforts to persuade EU leaders to revamp the bloc’s migration and asylum rules – the so-called Dublin Regulation – have been stuck for several years. Consequently, Europe’s politicians have prioritised keeping migrants from their shores. AtasummitinJune,European leaders mooted the idea of African countries hosting ‘regional disembarkation platforms’ for migrants rescued at sea, but African leaders – uniting around an African Union position paper – rejected the idea out of hand. The European Commission has
now dropped the concept, officially at least, but talks between Brussels and North African countries on more ad hoc arrangements are ongoing. Discussions with Abdel Fattah al-Sisi’s Egyptian government have moved quickly. He takes over the chairmanship of the AU from Rwanda’s Paul Kagame in January, and is making migration the topic for his first AU summit. Foritspart,theCommissionisseeking to tackle ‘the root causes of migration’ via a string of private investment-focused programmes. Of the €89bn earmarked for external spending in the EU’s 2021-2028 budget 10% is said to be available for migration-related programmes, although EU budget negotiations will dominate 2019 and that figure could end up being much higher. THE AFRICA REPORT
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Agenda 2063 seeks to deliver on a common and shared set of 7 aspirations:
Aspiration 1:
Agenda 2063 is the blueprint and master plan for transforming Africa into the global powerhouse of the future. Agenda 2063 is Africa’s strategic framework that aims to deliver on Africa’s goal for inclusive and sustainable development and is a concrete manifestation of the pan-African drive for unity, self-determination, freedom, progress and collective prosperity pursued under Pan-Africanism and African Renaissance.
H.E. President Paul Kagame Chairperson of the African Union signing the African Continental Free Trade Area Agreement in Kigali, Rwanda.
A prosperous Africa based on inclusive growth and sustainable development.
Aspiration 2:
An integrated continent, politically united and based on the ideals of Pan-Africanism and the vision of Africa’s Renaissance.
Aspiration 3:
An Africa of good governance, democracy, respect for human rights, justice and the rule of law.
Aspiration 4:
A peaceful and secure Africa.
Aspiration 5:
An Africa with a strong cultural identity, common heritage, shared values and ethics.
Aspiration 6:
An Africa, whose development is peopledriven, relying on the potential of African people, especially its women and youth, and caring for children.
Aspiration 7:
Africa as a strong, united, resilient and influential global player and partner. development.
Flagship Projects of Agenda 2063
Why Agenda 2063? The need to envision a long-term 50 year development trajectory for Africa is important as Africa needs to revise and adapt its development agenda due to ongoing structural transformations; increased peace and reduction in the number of conflicts; renewed economic growth and social progress; the need for people centered development, gender equality and youth empowerment; changing global contexts such as increased globalisation and the ICT revolution; the increased unity of Africa which makes it a global power to be reckoned with and capable of rallying support around its own common agenda; and emerging development and investment opportunities in areas such as agri-business, infrastructure development, health and education as well as the value addition in African commodities The Vision and African Aspirations for Agenda 2063 Agenda 2063 is founded on the African Union (AU) Vision of “An Integrated, Prosperous, and Peaceful Africa, driven by its own citizens and representing a dynamic force in the International arena.” In addition to the various activities to be implemented at continental and Member State level, Agenda 2063 proritises several flagship projects whose implementation is seen as key in accelerating Africa’s growth.
Find out more about the AU and Agenda 2063 by visiting www.au.int
African Union Headquarters P.O. Box 3243, Roosvelt Street W21K19, Addis Ababa, Ethiopia Tel: +251 (0) 11 551 77 00 Fax: +251 (0) 11 551 78 44
32 FRONTLINE | WHAT TO WATCH IN 2019
Raise your hands up high if you love African cinema!
T
he year 2019 will be one for marking how far the local industry has come, especially at the 50th anniversary of the Fespaco film festival in Ouagadougou (pictured above). Homegrown films, from Nollywood to the likes of Kenyan arthouse hit Rafiki, as well as international blockbusters are finding new audiences at home and abroad. The 2018 movie Black Panther was not only an affirmation for those who identify as African the world over, but for the cinema industry in Africa, showing the public is coming back to the big screen. In francophone West and North Africa, the French groups Vivendi and Pathé-Gaumont have been opening new multiplexes to feed the growing appetite for cinema experiences. The number of cinemas in francophone African countries is on course to skyrocket from 62 now to more than 180 over the next five years. For many younger citizens this has been their first taste of cinema. From the 1980s onward, hundreds of colonial-era cinemas fell into disrepair or were converted into churches, garages and supermarkets. Since 2017 Vivendi, through its CanalOlympia network, has opened eight cinemas in seven West African cities, including Dakar, Ouagadougou and Yaoundé. More than 90,000 tickets sold in 2017 expanded three-fold at the beginning of 2018 with the craze for Black Panther, and the company does not see this as an anomaly, but as a return to the business of cinema-going. The cinema chain maintains that its ticket price of 1,500CFA francs ($2.60) is affordable. Pathé-Gaumont, meanwhile, with 750 cinemas in France, has started with North Africa, opening an eight-screen multiplex in Tunisia in the first half of 2018. It has its sights on Dakar, where the Senegalese government itself has committed to renovating and digitising four cinemas. Côte d’Ivoire, too, is aiming to take the French on at their own game. In Abidjan, oil executive Jean-Marc Béjani has rehabilitated the legendary Majestic cinema and opened two others, and the government has allocated €1.3m ($1.5m) a year to a cinema industry fund. Only 30-40% of that is currently available due to treasury problems. But by helping to finance Ivorian films and encouraging the opening of more screens, the Ouattara administration hopes the country will become the cinema leader in francophone Africa.
Court calls
cooperation
WILL THE WIND OF CHANGE that brought Ethiopia and Eritrea to agree an historic peace blow through the region? Top diplomats at the African Union are trying to build on it. They are reinforcing the Peace and Security Council and the Africa Standby Force, and finding ways to work better with sub-regional security organisations. Their efforts will centre on the shaky peace agreement between President Salva Kir and Riek Machar in South Sudan and shoring up the regional force backing the Somali government.
ISSOUF SANOGO/AFP
film
Peace moves
Beninese director Sylvestre Amoussou wins an award at Fespaco 2017
CAMPAIGNS FOR AN international anti-corruption court are set to gather steam in 2019. Richard Goldstone, a former justice of the Constitutional Court of South Africa, is leading the charge, along with integrity groups in Africa, Asia and South America.
Tax takes
AFTER MUCH RHETORIC about cracking down on tax cheats who cost the global economymorethan$240bn per year, international organisations are joining forces. The EU has barred 17 tax havens in the aftermath of the Panama Papers scandal, and the OECD and UNDP have set up Tax Inspectors Without Borders.
Fake news THE SPREAD OF DISINFORMATION across social media platforms is concentrating minds in Nigeria and South Africa ahead of elections in 2019. Facebook subscribers, who number over 25 million in Nigeria and 19 million in South Africa, have been subjected to a barrage of false information about political parties, ethnic and religious groups. At their worst, Facebook postings have led to political violence, according to an investigation by theBBC.Nowthecompanyismonitoring news feeds with local partners.
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WHAT TO WATCH IN 2019 | FRONTLINE 37
calendar AFRICAN UNION SUMMIT January
AfDB ANNUAL MEETINGS 20-24 May
ADDIS ABABA | ETHIOPIA au.int
MALABO | EQUATORIAL GUINEA Back on African soil after Ahmedabad and Busan. afdb.org
MALAWI PRESIDENTIAL ELECTION 21 May
WAIPEC 23-24 January LAGOS | NIGERIA The West African International Petroleum Exhibition and Conference. waipec.com
SOUTH AFRICA GENERAL ELECTION May GUINEA-BISSAU PRESIDENTIAL ELECTION To be confirmed
INVESTING IN AFRICAN MINING INDABA 4-7 February
AFRICA ENERGY FORUM 11-14 June LISBON | PORTUGAL Global forum bringing together all the stakeholders in Africa’s energy future. africa-energy-forum.com
TOTAL AFRICA CUP OF NATIONS (AFCON) 15 June – 13 July CAMEROON The first 24-nation tournament kicks off in Cameroon. www.cafonline.com
DRC MINING WEEK 19-21 June LUBUMBASHI | DRC drcminingweek.com
NIGERIA OIL & GAS 1-4 July ABUJA | NIGERIA cwcnog.com
74TH UN GENERAL ASSEMBLY 17-30 September NEW YORK | US un.org
WORLD BANK/IMF ANNUAL MEETINGS October imf.org
AFRICA OIL WEEK To be confirmed CAPE TOWN | SOUTH AFRICA africa-oilweek.com
AFRICA COM To be confirmed CAPE TOWN | SOUTH AFRICA africa.comworldseries.com
CAPE TOWN | SOUTH AFRICA miningindaba.com
NIGERIA PRESIDENTIAL ELECTION 16 February ERIC LARRAYADIEU/CEO FORUM/JA
SENEGAL PRESIDENTIAL ELECTION 24 February MO IBRAHIM GOVERNANCE WEEKEND April
AFRICA CEO FORUM 25-26 March KIGALI | RWANDA
ABIDJAN | COTE D’IVOIRE mo.ibrahim.foundation
The city of Kigali plays host to the Africa CEO Forum for the first time this March. In its 7th edition, the high-level meeting, which has earned its stripes as the continent’s premier private-sector event, is expected to gather at least 100 speakers and 1,500 participants from more than 70 countries, providing cutting-edge content and unmatched networking opportunities with top professionals in various industries. The annual highlight, the Africa CEO Forum Awards, will celebrate the best of African business, rewarding leaders and companies in categories including Private Equity of the Year, Most Promising Company of the Year and the highly coveted prize, Africa CEO of the Year. theafricaceoforum.com
ALGERIA PRESIDENTIAL ELECTION April THE AFRICA REPORT
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SÈMÈ CITY, THE INTERNATIONAL KNOWLEDGE AND INNOVATION CITY Sèmè City brings together higher-education and vocational training institutions, research centers and incubators. Sèmè City also includes an open innovation park to enable learning by doing, problem-solving and incubation through practical workshops and collaborations between various actors. This one-of-a-kind smart campus is planned on 200 hectares, in a peri-urban area of Benin in West Africa.
Education
Research
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WE ARE HIRING! Are you a passionate and creative visionary? Do you have an analytical and ingenious mind? Can you thrive in a environment of collective intelligence? Join this vibrant “made in Africa” innovation ecosystem Contribute to the development of Sèmè City, a fertile ground for research, vocational training and innovation in STEM fields as well as design and environmental studies Experiment innovative “smart city” solutions such as sustainable housing, green buildings, renewable energies, urban agriculture, waste water use, energy effciency, smart grids, soft mobility or circular economy Interact with a growing community of emerging talents from Africa and beyond who relentlessly challenge the status-quo Foster a new model of entrepreneurship that is transformative, socially-impactful and inclusive
Our objective is to create 190 000 new jobs by 2030 including at least 30% self-employed and 40% by women
semecity@presidence.bj
semecity.com – facebook.com/semecity @semecity
40
INTERVIE W
Yemi Osinbajo Vice-president, Nigeria
Selling our crown jewels isn’t the solution Ahead of the February 2019 elections, Nigeria’s vicepresident talks to The Africa Report about how freemarketism does not hold all the answers for Nigeria and how the APC government plans to win voters on issues like corruption, security and devolution
T
Interview by Eromo Egbejule and Patrick Smith in Abuja
his has been a testing three years for Yemi Osinbajo – an economic recession, proliferating security crises and now a resurgent opposition rallying for what most politologues think will be one of Nigeria’s closest-run elections. As soon as the election campaign opened on 18 November, Osinbajo set off on a regional tour to convince Nigerians to vote for his All Progressives Congress (APC). Osinbajo is not a natural politician
and his careful delivery and considered statements are out of kilter with the revival of populist politics. The Africa Report caught up with Osinbajo at the Presidential Wing at Abuja airport, just after he had attended the dedication of the Dunamis International Gospel Centre. Osinbajo soon snapped back into campaigning mode, with his critique of the opposition’s manifesto. Then he was ready to jump on a plane to address more meetings in Lagos. Osinbajo’s outreach to people at town hall meetings and his criticism of those trading in identity politics have won
him a growing respect. A former law professor and a pastor of the Redeemed Christian Church, Osinbajo now comes across as the cool-headed technocrat. But that is not the whole story. Politics runs through his veins – not the partisan barracking style of politics, but one of organising communities to change society. Osinbajo is married to the granddaughter of nationalist leader Obafemi Awolowo. He sees the rapid development in those early independence years as holding important lessons for today’s political class. Since Osinbajo took over the vice-presidency in May 2015, he has been put in charge of stabilising the economy against a backdrop of crashing oil prices and militant attacks in the Niger Delta. “A good man in a crisis,” said one of his colleagues, without much fear of contradiction. And the crises have piled up. For much of 2017, there was intense speculation about the state of President Muhammadu Buhari’s health after lengthy trips to London for treatment. Osinbajo temporarily took over as acting president in his absence and won more good reviews. As he and Buhari take to the campaign trail, Osinbajo will need all his powers of persuasion. Buhari’s campaign director Rotimi Amaechi says that people will need to feel there is more money in their pockets. But the recovery
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FROM LAW TO POLITICS 8 March 1957 Born in Lagos 1978 Graduated with a bachelor’s degree in law from the University of Lagos 1997 Named head of the public law department at the University of Lagos 1999 Appointed Attorney General for Lagos State 2007 Became a senior partner at Simmons Cooper Partners
KC NWAKALOR FOR TAR
29 May 2015 Became vicepresident of Nigeria
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42 POLITICS
has been slow. The economy The opposition presPRESIDENTIAL ELECTION is set to grow at 1.9% this year, idential candidate Atiku RESULT MAP 2015 slower than the birth rate. Abubakar is promising SOKOTO Osinbajo has been stepping that his e conomic KATSINA up social investment prostrategy will promote YOBE JIGAWA BORNO ZAMFARA grammes, which he says have growth and be driven KANO by the market. brought 13 million Nigerians KEBBI into job creation schemes, a I don’t see anyGOMBE free school meals programme thing original about what KADUNA BAUCHI as well as a cash transfer he [Atiku] is saying or in ADAMWA NIGER programme for 300,000 his policy documents. He very poor households. takes a few things from PLATEAU With a population our Economic Recovery KWARA NASARAWA nudging 200 million, it and Growth Plan (ERGP), TARABA OYO is a question of scale. a few sound bites here and EKITI OSUN KOGI BENUE If the government is there. We very strongly ONDO OGUN doing the right thing, believe in markets, and we ERUGU EDO LAGOS is it doing enough of the have always believed in a EBONYI ANAMBRA right thing for enough private sector-led economy. All Progressives Congress (APC) CROSS DELTA IMO ABIA RIVER People’s Democratic Party (PDP) people? Or will the opposition under If you look at the ERGP, one of the key issues is how to flag-bearer Atiku Abubakar start to land BAYELSA RIVERS AKWA IBOM sell down some of the government’s some killer blows? Few are prepared to deeper fiscal place large bets either way. shares in our joint ventures. federalism and a clear vision for development are the TAR: What are the big issues for you Then do you favour a radical privatikeys to addressing most of the chalin this election campaign? sation programme? lenges the nation faces. YEMI OSINBAJO: Corruption, security The opposition saying that they’re The APC empanelled a committee and the economy. We have stemmed going to sell 90% of the Nigerian National chaired by governor Nasir El-Rufai Petroleum Corporation is neither here grand corruption, by which I mean the of Kaduna State to look at the issues. nor there. Between 2010 and 2014, the direct looting of state resources, the inThey came up with recommendaflation of contracts and various schemes country realised $383bn from oil and tions on geographical restructuring, like the ‘strategic alliance’ contracts in we can’t see the infrastructure that was revenue allocation, devolution of meant to be built. So, if at that time all the oil and gas sector set to divert state powers, the form of government and of our assets had been sold in some resources for personal gain. residency of citizens in states, and In terms of security, in direct contrast purported free-market operation, we increased community participation. to the hand-wringing, self-pity and The proposals are being deliberated in would have been in an absolute mess corruption which typified the People’s a wide-ranging and inclusive manner, today. At the moment we have all these Democratic Party (PDP) response to and we will be coming out with the joint ventures, the government is the Boko Haram, this administration official stance of the party. principal party in these joint ventures. has retaken the 14 local The real issue is fiscal prudence, good government areas that governance, ensuring that we are able In terms of security, our decisive were under the control to deal with corruption – especially positive action can be compared of Boko Haram and has fiscal corruption. with an era of supine helplessness I don’t think it’s a matter of just throwrestricted their attacks ing open everything. The first question to a limited geographical Could restructuring speed up ecothat ought to be answered by the oparea. Whereas in the past, people in nomic growth? places as far away as the Federal Capital position is what happened to all of the Stronger more autonomous states resources that we’ve earned all this time? Territory slept with one eye open in fear Why do we think that selling the crown of attacks by the terrorist grouping. Of will lead to faster growth for the states course, there is still a lot more to be and consequently for the whole. Greater jewelstodayisasolutiontotheproblems? devolution of powers is the way to go: We think that a gradual process putting done in terms of security in general, in place strong systems to ensure good enabling state police and more control but the benefits of decisive positive over natural and other resources. The governance is the way to go. action are there to be compared with Lagos State government, between 1999 an era of supine helplessness. and 2007 in particular, undertook a polSo you oppose shock therapy? icy of seeking to deepen the autonomy When the opposition talks about deWhat is your reaction to the calls to of the state and fiscal federalism by restructure the federation and devolve regulation, I mean these are the same more power from the centre? litigation. I was then attorney general people who say they want to deregI reject the idea that geographical of the state. In several cases before ulate the downstream oil sector and restructuring will magically solve our the Supreme Court, we challenged then they’re going to fix petrol prices problems. Good governance, honest the federal government’s fiscal and at N80-90. There is absolute confusion management of public resources, administrative hegemony. as to how they intend to execute THE AFRICA REPORT
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44 POLITICS
their economic policy. Their policies are not thought out. They are simply taking a look at our economic programme and trying to see what can be tweaked here and there. If you say, I want to deregulate, then you are saying let the markets determine the price. But your government has retained a fuel subsidy regime? We were determined to ensure that the abused subsidy regime was corrected. The reason why subsidies have earned such a bad name is because we had several companies that were purportedly supplying petrol to the markets, so they would say they brought five cargos whereas they brought only one but they would claim subsidies for five. So there was what was called the subsidy scam and several companies and individuals are still being prosecuted. Under the former regime, this scam was pervasive. What we have tried to do is to attempt to deregulate, but not completederegulation.Sothepetrolprice moved from 87 naira to about 145 naira a litre which is where it is today. It’s not a situation where different companies are coming with their claims and all of that. This is purely a government-funded subsidy and there is no room for abuse. Do you think this fuel subsidy is a good use of state resources? Most countries subsidise something or the other. You may have to subsidise agriculture or something else to enable the economy to go the way you want, empower people in the way that you
Yemi Osinbajo’s outreach to people at town hall meetings has won him a growing respect
want. Today we know that if there is a sudden shock and the subsidy is completely removed, transport prices, housing prices and food prices will go up. So the subsidy in our view holds down those prices. We think that this economy does not need a shock right now by removal of subsidies and the cost-push inflation which will result. We are doing quite a bit in terms of funding. Giving micro-credit loans, loans to industry and giving loans to traders to improve consumer spending and all of that.
I’m one of those who believe that any purist, monetary theories belong in the realm of academia, not in practical economics. You’ve got to look at your circumstances, you’ve got to look at what is going on and you’ve got to make your calculations. The IMF has its own doctrines and ideas. But it’s not a one-size-fits-all. You can’t make the same recommendations to Ghana as you would make to Croatia. I think that there are substantial differences in the way that we want to approach the economy and calculations that we are making. So I am not certain that their recommendations ought to be accepted. There is rising concern about the quality and availability of education in Nigeria. How are you addressing this? Under its Every Child Counts policy, the government will focus on public education with the aim of democratising digital, functional skills and science, technology, engineering, arts and mathematics literacy. The main tools utilised will see an uptake in coding, animation, robotics, design thinking and other computational skills, as well as critical thinking, collaboration, project management and skills that prepare children for the world of work. The plan will also target a nationwide retraining effort to ensure teachers are able to impart the skills to revolutionise the sector. The third plank of the plan aims to remodel 10,000 schools per year to deliver the required outcome.
Atiku has said he would floatthenairaifhewinsthe This economy does not need a shock presidency. What would right now by removal of subsidies happen if he went through the policy like that? and the inflation which will result First is that it’s not up to This week the government floated him. At the central bank we have a mona $2.8bn eurobond. How sustainaetary policy committee that determines many of these parameters and there’s the ble is this borrowing, given the high percentage of state revenues spent on central bank governor. I’m surprised that he [Atiku] would say that. debt service? We believe that we should as much Our debt-to-GDP [gross domestic product] profile is quite low: The public as possible allow in the markets where the naira is concerned. If you look at our debt-to-GDP ratio stood at 18.4% by ERGP and several of our other policies, the middle of this year. We are reducing we’ve pushed in that direction. We also the debt overhang that has been stifling investmentandgrowth.UptoN2.2trillion think that it has to be gradual. ($6.1bn)indebtisowedtostates,contractors, electricity distribution companies, The International Monetary Fund the export expansion grant, on judgment (IMF) has been highly critical of debt and pensioners, amongst others left Nigeria’s exchange rate policy. What’s your response? unpaid [by the last PDP government]. THE AFRICA REPORT
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AFRICA I N
How to spot a reformer
W
hen you scan the political horizon for reformers, it is the helter-skelter advance of 42-year-old Abiy Ahmed, since he was appointed Ethiopia’s prime minister on 27 March, that stands out. But as a leader trying to reform his country’s political, economic and security systems all at the same time, Abiy is not alone. His fellow fast-track reformers – Cyril Ramaphosa in South Africa and João Lourenço in Angola – have another 20 years apiece of experience in frontline politics. But they too are dealing with the type of threats confronting Abiy as they try to crack down on vested interests, retrieve stolen funds and find ways to boost investment in education and health. Allthree–Abiy,RamaphosaandLourenço–saythat without determined reforms, their countries face a destabilising decline. But they are all making powerful enemies. When disgruntled soldiers marched into Abiy’s office in Addis Ababa on 11 October, their ostensible mission was to negotiate better pay. A week later, Abiy told parliament that the soldiers had wanted to derail his reforms. And some had wanted to kill him. Abiy, a former lieutenant-colonel, had defused things by calling in television cameras and organising a strenuous session of push-ups. In the following days, Abiy announced a new cabinet, half of whom were women and many young technocrats. He then appointed the country’s first woman president, Sahle-Work Zewde, a renowned diplomat. The next act of the saga – the arrest of Brigadier General Kinfe Dagnew near the Sudan border – was also relayed on Ethiopia’s state television. The arrest in November of Kinfe, ex-managing director of the military’s METEC company, along with several other senior officers and intelligence officials was a decisive consolidation of Abiy’s power. Both Ramaphosa and Lourenço had to push through changes in police and security organisations before they could tackle the vested interests siphoning off state funds. Both had allies in the security system. By the time Lourenço won the presidential election in August 2017, some generals had accused outgoing leader José dos Santos of grand corruption. One suggested that his daughter Isabel should face trial. Lourenço’s record as defence minister came in useful.
Since January, Lourenço has appointed 62 admirals and generals and retired 58 of the old guard. Now he wants to halve the country’s military juggernaut, the 100,000-strong Forças Armadas Angolanas. Defence eats up gargantuan amount of money – 21% of state spending – dominated by a clique of securocrats and business oligarchs. That largesse compares poorly with 11.3% of state spending for education and 7.4% for health. Ramaphosa faced a more diffuse security threat althoughhewonthepresidencyoftheAfricanNational Congress (ANC) at the party’s elective conference in December 2017. Jacob Zuma had planned to stay as state president until elections due in 2019. As a former chief of the ANC’s intelligence organisation, Zuma had seeded all the key state institutions – police, judiciary, revenue collection and parastatals – with security operatives as well as his political allies. Ramaphosa, who helped negotiate the country’s liberal-democratic constitution, is struggling to purge those institutions. His first success came as pressure was mounting on Zuma to quit the presidency in February. A special investigations unit raided a sprawling Johannesburg mansion belonging to the Gupta family, Zuma’s favoured business associates, on St Valentine’s Day. It was a sign that Ramaphosa had amassed enough allies in the police and security services, as well as the national prosecution agency. Six hours later, Zuma resigned after a rambling interview with the state broadcaster. Seizing control of the security services is necessary but not sufficient to launch fast-track reforms. Unlike Lourenço and Rampahosa, who succeeded
Seizing control of security services is necessary but not sufficient to launch fast-track reforms unpopular leaders accused of corruption, Abiy took over from a leader, Hailemariam Desalegn, who had resigned having failed to persuade the securocrats of the necessity of radical reform. Although Lourenço and Ramaphosa can claim to have popular mandates of a sort, Abiy’s power derives from winning 108 votes from the ruling party’s 170-member council. Days after he took THE AFRICA REPORT
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over the premiership, Abiy went on the road addressing crowds and speaking to officials in the Somali, Oromo and Tigray regions. It took months of coalition-building in Ethiopia’s nine regions before Abiy made his most audacious move. That was his peace ouverture to Eritrea – in the face of opposition from the Tigrayan-dominated high command. Following that up with a flight to Asmara to open direct negotiations with President Issayas Afewerki upped the risks but got results. Families were reunited, and communications and flights between the two states restarted, resulting in an economic uplift for both sides. Abiy has several more challenges – such as reforming the federal system and opening up the economy to private capital – before he organises elections in 2020, which he promises to be the country’s freest ever.
focus on the economic agenda: navigating out of the financial crisis with debt levels at over 70% of gross domestic product and inflation nudging 25% before long-delayed reforms of the oil, gas and agriculture sectors. Finding a way to retrieve an estimated $30bn held outside the country would help.
Ramaphosa’s strategy is less centralised than Abiy’s or Lourenço’s, but has been slower
Lourenço’s strike rate is lower but significant. In both Angola and Ethiopia, the lack of institutions holding government to account means that progressive changes depend on centralised power, above all of the committed leader. If the chief rows back, the process stutters. Lourenço prepared well for the ruling party’s congress, winkling out functionaries still loyal to the former president and his family. The party congress in SeptemberpushedoutDosSantos,whohadwantedto stay as party leader for another year, and overhauled the political bureau. That has freed Lourenço to THE AFRICA REPORT
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As South Africa has much stronger institutions and a more modern economy, Ramaphosa’s strategy is less centralised than Abiy’s or Lourenço’s. But it has beenslowerandmoreproblematic.Popularsentiment hit peak-Ramaphoria in March. Then it undulated as Zuma allies showed their grip on the ANC machine. They reminded Ramaphosa that he may control the party at the centre but not in the provinces. Ramaphosa’s friends now say they underestimated the extent to which corrupt business interests penetrated state institutions under Zuma. Ramaphosa’s response, reminiscent of the Rainbow Nation era under Nelson Mandela, is to set up commissions investigating state capture, tax collection and the Public Investment Corporation. Before elections due next year Ramaphosa must deliver on demands for land reform, but perhaps trickiest of all, he has to reform the structure of the ANC, where his own support base is open to challenges.
48 POLITICS
Julius Maada Bio
President, Sierra Leone
The World Bank and IMF are necessary evils The former military leader and current president talks to The Africa Report about cleaning up government, his free universal education programme and development finance
M
arching towards the dais for a town hall meeting with his fellow Sierra Leonians in Brussels, President Julius Maada Bio’s military gait is unmistakeable. It is a legacy of his days as a brigadier general and coup-maker with attitude. He is one of that all-too-small band of military leaders – such as Mali’s Amadou Toumani Touré and Nigeria’s Olusegun Obasanjo – who have organised elections and handed power to a civilian successor. That was 22 years ago. The plot moved on. Bio swapped military fatigues for a well-cut black dashiki and took a master’s degree in political science at American University in Washington DC. Now duly elected head of state after a hard-fought contest, he is on a mission to remake Sierra Leone’s international image and raise funds for his government’s development programme. The Brussels trip was successful. Meetings with Bio, his finance minister Jacob Jusu Saffa and top European Union officials such as the European Commission’s president, Jean-Claude Juncker, yielded €73m ($83m) in aid. Before that, the government
reopened negotiations with the International Monetary Fund (IMF) – which had cut relations with the previous government – for a $200m credit. The government will need every dollar of that to fund Bio’s flagship education policy – free and compulsory primary and secondary schooling for every Sierra Leonian child. That is for 2.14 million pupils in 8,907 schools, according to the latest government statistics. Bio’s commitment to education is personal. He explained to a colleague that he was one of paramount chief Charlie Vonie Bio’s 35 children. “In fact I was the 33rd child. That’s not the greatest start in life.” But a stint with his elder sister Agnes, a school teacher, and seven years at a boarding school set him up first as a student at Fourah Bay College and then for the military academy at Benguema. Another important influence is his wife Fatima Jabbe-Bio, who has written screenplays and acted in Nollywood blockbusters alongside Genevieve Nnaji. These days, Fatima spends more time promoting girls’ education and women’s rights at national and international forums. Since his election in March, Bio has pushed ahead with some
BIO’S BIO 12 May 1964 Born in Tihun, Sierra Leone 1987 Graduated from Sierra Leone’s military academy 1996 Launched a short-lived coup that overthrew Valentine Strasser 2005 Joined the Sierra Leone People’s Party 2012 Ran for the presidency and lost 31 March 2018 Won the presidential election in a second-round run-off against Samura Kamara
THE AFRICA REPORT
political dexterity, trying to form a nationally representative government but lacking a majority in parliament. He appointed a judicial commission to review questionable contracts and retrieve looted state funds overseas. That will help but will not offset Bio’s inheritance from Ernest Bai Koroma’s government: state liabilities of $3.7bn and a mining industry on hold. Balancing the bookswillmeansomesharpcutsin statespending,perhapstothepublic service payroll, if Bio is going to deliver on his strong commitments on education and health. TAR: You have taken over the presidency of a very polarised country. How are you dealing with that? JULIUS MAADA BIO: I started by the appointments I made, making sure that all the regions
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COLIN DELFOSSE FOR TAR
The IMF, the World Bank, these are necessary evils in Africa. As it is, we cannot generate enough revenue to be able to do the things we want to do at home and also embark on our development processes. So the IMF gives us a clean bill of health, to tell the world that this is a credible government that you can deal with. That’s all it does. So the European Union, for instance, has budget support but they will not give that until the IMF gives the indication. So far, we have effectively been able to manage ourselves and discipline ourselves to raise revenue within the country.
are really represented in the cabinet and no preferential treatment is given to any group of people, either on a regional or ethnic basis. Besides that, we have promised that there is going to be an independent commission for the purpose of making sure that we remain together as a nation, that politics or ethnicity or region should not divide us. Do you think the constitution gives too much power to the executive and not enough to the other branches of government? Anything that will lead to tyranny or authoritarianism we should avoid. We’ve gone down that road before, and we’ve seen that it doesn’t work well for the country. We have what you guys would call a hung parliament, and we’ve been able to push through most of our legislative THE AFRICA REPORT
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agenda so far. We have engaged [the other parties] constructively, we have appealed to them – the sense of unity, the sense of nationalism and patriotism – to make sure that they look at the bills that we are presenting to them. These are meant to make things work for everybody; for
“If we are to be fit for purpose as a nation, as individuals, we need quality education” example, on free education, we are not picking and choosing who gets it. It’s for the whole country, absolutely universal. When you told the Brussels town hall meeting that the IMF was returning to Sierra Leone, that got some cheers. Did that reaction surprise you?
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How did you win the argument that free and universal primary and secondary education must be top priority? I’ve argued even before the election that for us, in the 21st century, education is an existential issue. We cannot be a useful part of the 21st century if we do not have an educated population. We may have health, infrastructure, agriculture, the mining sector and all of these other sectors, but if we are to be fit for purpose as a nation, as individuals, we need to make sure that we have quality education. So we have ourselves committed more than 21% of our budget to finance education. People talk of a new scramble for Africa with more countries and companies competing for contracts. Has that competition in any way helped you negotiate better deals? These are the early days as a government. We are still trying to make sense of the very confused situation we inherited, especially agreements that were not in the interest of Sierra Leone, like the one for the Mamamah airport, which we have to cancel. Now we have new proposals and we are looking at those very critically to make sure that whatever agreement we go into is for the best interest of our country – making sure it’s a win-win arrangement. I’ve been to China, as you know, and there are various
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proposals looking at different projects. On the fringes of the UN General Assembly in New York, we met quite a lot of other groups interested in Sierra Leone. So we are taking a step back, preparing the ground, and making sure that there’s due diligence on any of these proposals to make sure that this new scramble for Africa serves the best interest of us as a nation. You want to boost farm production. Are you also in favour of land reform? Cautious land reform [...] A national land policy is being developed. I say cautious because we have to realise that this is the only property that the poorest of the poor have. If we have to take that away from them, we have to do so with a certain assurance that they are going to benefit from that. If we take the only thing they have, they are going to move to the cities and become a social menace. We have to think through this very carefully to see how we can really use the land as part of the development process. The land ownership or land tenure system should not be a drag on the developmental process. That’s something that we have to get our heads around at the moment.
Your transition team produced a devastating report on the economy, listing many contracts that had been badly negotiated, some due to corruption. What action are you taking? There will be a commission of inquiry, headed by seasoned judges. They are independent. We are going to give them the freedom to investigate the way they should. You also have the anti-corruption commission, which has been set up at least getting onto 20 years now. That has its own mandate and is still investigating. It reached a point when corruption became fashionable. That is what we want to remove, the impunity aspect of it, so it doesn’t become an embedded culture. This is a national security issue. If we don’t tackle corruption, then we shouldn’t be talking about development.
Since his election in March, President Bio has been on a mission to raise the funds he needs for his government’s development programme
Nigeria is sceptical about Morocco joining the Economic Community of West African States. What’s your view? The Nigerians can better answer that question. I don’t know the source of their hesitation. As the regional hegemon, if you have another country coming in there, you may have reasons to be concerned. How concerned are you about security on the border between Sierra Leone and Guinea, with problems such as militia groups and smuggling? I’m not aware of any group [basedinSierraLeone]thatisgoing on to create problems in Guinea. We have challenges around the border areas, but they’ve been about smuggling. As much as we can we are trying to bring sanity, to check those activities. You speak French and we understand you’re planning to open an embassy in Paris. Is this part of a tilt to the Francophone world? We don’t want to pick and choose. Our preoccupation is development. If we have to get it from China, we’ll go for it; if we have to get it from France, we’ll go for it. We want to forget about those boundaries that have separated us in the world.
Some foreign businessmen operating in Sierra Leone, such as Frank Timis and Beny Steinmetz, have attracted widespread criticism. Do you think more scrutiny is necessary? We want to make sure that we don’t attract or entertain rogue elements as far as the business community is concerned. There are just too many things to investigate in Sierra Leone at the THE AFRICA REPORT
moment, so we want to proceed very cautiously. Where there are people who need to be investigated, irrespective of where they are, we have a law based on the international system. People can always be called upon to account for transactions that we think were not in the best interest of the country. These are not easy things to deal with. We are fighting strong actors who have the money to resist and to fight back. But we are determined to bring the people’s money back. We don’t want to be distracted by this, which is why we’ve made it a judicial inquiry. We are going to charge forward with the pledges – free quality education and agriculture – and deliver on our promises.
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Nigeria
PIUS UTOMI EKPEI/AFP
Me, myself and I: Atiku Abubakar on the campaign trail
Too close for comfort The Africa Report looks at the promises and performances of the two top contenders for the February 2019 presidential race as they trade insults, outline their platforms and rally their regional bases. For analysts on both sides the election boils down to who do people trust to get Nigeria out of its doldrums By Eromo Egbejule in Lagos and Patrick Smith
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wenty years after the return to civilian rule, Nigerians will be voting in national elections next February that could shape the country’s direction for decades. Without decisive action, Nigeria and its oil-dominated economy risk getting stuck in a pattern of chronic underperformance, despite the formidable entrepreneurial skills of its people. To reach anywhere near their potential, dynamic new farming and food-processing companies, together with telecoms and creative and digital
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THE SOUTH WEST IS KEY
Although the two main parties – and their candidates, President Muhammadu Buhari of the All Progressives Congress (APC) and Atiku Abubakar of the People’s Democratic Party (PDP) – accept this prescription, the election turns on which side people trust to raise and manage the tens of billions of dollars needed to jump-start this economic transition. At the start of the year, Buhari and the APC had a commanding lead in the opinion polls, due not only to his strong support in the north but also because the opposition PDP was in disarray. A group of high level defections from the ruling party, along with backing for Atiku from some of the top northern generals, has swung things in the opposition’s favour. Political insiders reckon that the APC will take a commanding lead in the North East and the North West; the PDP will do the same in South East and South South. In the North Central region, which has been plagued by clashes between herders and farmers
INFLATION AND REAL GDP GROWTH (annual percent change)
20
Inflation rate, average consumer prices
15 10 5 Real GDP growth
0 -5 2000
2005
2010
that are sometimes exploited and exacerbated by politicians, the PDP could make some big gains over its 2015 performance. But the critical swing region will be the South West, where the APC won by 2.4m votes to the PDP’s1.8m in 2015. If the PDP can put on another million votes in the North Central and South West, boost the turnout in its base regions and make inroads into the north – its candidate Atiku is from the North East – it may be on the road to victory. After the economy went into recession in 2016 in the wake of the oil price crash, the risks of a longer slowdown are evident. In March, the Washington DC-based Brookings Institution reported that Nigeria had overtaken India as the country with
Corruption, character and the role of the citizen APC activists are already gearing IF BUSINESSES, LARGE AND SMALL, up to attack the PDP’s Atiku want to influence the election, the role of the talakawa (citizen) is more Abubakar over how he built up finance for his companies while problematic, says Idayat Hassan, director of the Centre for Democracy directing the Nigeria Customs Service, his naming in a Senate and Development in Abuja. Along investigation over malfeasance linked with other activists, Hassan has been urging the national assembly to pass to a petroleum industry training fund, and his links to William J. Jefferson, electoral reforms to clamp down on vote rigging. Corruption will a US congressman jailed for bribing Nigerian politicians in 2007. be centre stage in the polls, Hassan As those claims swirl, Hassan says: “The All Progressives Congress [APC] and its supporters selling the says, voters may be left with a choice [Muhammadu] Buhari between “fighting candidacy will insist corruption [Buhari] or bolstering the economy on his unimpeachable [Atiku].” Like many anti-corruption credentials but others, he sees a clear new voters registered dividing line between the also that the People’s in the 16 months to top two candidates in Democratic Party August 2018, bringing is a failed branch that terms of both character the electoral roll up to 84 million people plundered the country.” and policy. E.E. & P.S.
14.5m
SOURCE: INEC
SOURCE: WORLD ECONOMIC OUTLOOK (OCT. 2018)
enterprises, will need heavy investment in the business environment and the wider economy. That means much higher spending on education and training, together with a herculean building programme of roads, railways and power stations.
2015
2020
the highest number of people living in extreme poverty, with 87 million, compared to India’s 73 million. That grim trend, and how to reverse it, will be a recurring theme in the campaign. Everyone agrees that economic imperatives overwhelm all others, but differences over policy, even on the structure of government, are wider than ever. For Deji Adeyanju, convener for the Concerned Nigerians group, “the election is a referendum on poverty and hunger […] because things have never been this bad before”. Alongside the economic pressures, Adeyanju reckons the government has failed on security and human rights, referring to an attack by the Boko Haram militia on a school in Dapchi in north-east Nigeria in February as well as its handling of the army clashes with Shia Muslims, who had been protesting against the continued detention of their leader, Ibrahim Zakzaky. Amnesty International says that more than 40 people were killed in the Zakzaky demonstrations; the Nigerian army puts the casualties at nine. HELD BACK BY CIRCUMSTANCE
In the face of growing criticism from civil society groups, President Buhari is doubling down on his pledges to diversify the economy, combat corruption and defeat violent extremists. Those policies gave him an overwhelming victory in the 2015 elections. Reality turned out differently after he took power with the first two years of his government held back by crashing oil prices and his own ill health. Information minister Lai Mohammed tells The Africa Report that, despite the tough conditions, Buhari has delivered on “the pocketbook issues in the election”: supporting farmers
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to boost rice, maize and sugar ports have been broken. Our telephone production and stepping up spending companies are no longer a law to themon roads, bridges and power stations. selves. Banks can no longer make a fortune out of sitting on government “And the PDP still has a bad reputation on security, corruption and building funds – your money,’ he writes. infrastructure,” Mohammed says. Yet, on the ground the progress is Rotimi Amaechi, the former governor slow. A report by the Lagos Chamber of of Rivers State who is now transport Commerce and Industry in September said Nigeria’s economy was losing minister and director of Buhari’s about N6.5trn ($18bn) a year in direct re-election campaign, concedes it revenues and lost business due to will be a much harder-fought election than the last but he reckons it will bureaucratic red tape, congestion, and come down to a matter corruption at the ports, of confidence in Buhari. despite the government’s reform programme. That, insists Amaechi, is In agriculture, encourstill running high in the north and in the key swing aging rice farmers as a Amount Nigeria raised region of the South West. means to diversify the in eurobonds from the In a strange twist of economy is making slow London market on 14 political positioning, progress, too. Local rice November to help fund the budget deficit production has increased Abba Kyari, Buhari’s by more than 50% to 3.7m chief of staff, conjures tonnes over the past six years. But that up an ongoing struggle between the is just over half of domestic demand, government and Nigeria’s establishwhich means a shortfall of 3.4m tonnes. ment and associated vested interests. In the medium term, the slack will be In an spiky opinion column headed taken up by investors such as Olam and ‘Nigeria is changing for the better and Aliko Dangote, who is setting up plants our failed elite has every reason to be terrified’, Kyari writes about ‘the legacy to process more than a million tonnes of of corruption and incompetence’ of the rice a year. In the short term, however, PDP, which ruled Nigeria from 1999with rice imports due to be banned at 2015 (see www.theafricareport.com). the end of 2018, much of the shortfall may come from rice smuggled across SLOW PACE OF REFORMS the border from Benin. Speeding up that After listing some of the government’s shift to local agricultural production will require still more investment in big transport projects, Kyari claims the government is winning the battle against better seeds, roads, warehousing and vested interests: ‘Cosy cartels at our farming and processing equipment. SOURCE: REUTERS
$2.86bn
Buhari promises to take Nigeria the ‘Next Level’, though first he has to get back to baseline
The Buhari government’s other economic policy instincts have prompted deeper scrutiny, such as its ambiguous position on fuel subsidies (see page 68). Formally, the government said it would abandon universal subsidies, which have been misused in the past by local traders, and target help towards the neediest people. It also promised much greater accountability in the oil and gas industry. So the government may be embarrassed by a Senate investigation into the state oil company’s use of dividends of $1.1bn from a gas export subsidiary to finance subsidies on fuel this year. FUEL EVEN CHEAPER?
Presidential candidate Atiku Abubakar and the PDP have their own policy contradictions. In the first few days of the campaign, Atiku promised to lower fuel prices, although, thanks to the subsidy, Nigeria already has one of the lowest gasoline prices in the world. Yet, in the party’s manifesto it pledges to deregulate the downstream oil sector, implying an end to subsidies. Atiku’s slick 63-page manifesto, premised on the slogan ‘Get Nigeria working again’, sets out his promises: market-driven economic policies, deregulation and much more privatisation. It looks geared to attract the party’s business supporters,
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Security
3.4/10
Initial gains in the fight against Boko Haram have since been overturned. Military formations and aid workers are being attacked. A farmer-herder crisis in the Middle Belt and a kidnapping scourge in the North West add to general insecurity nationwide.
Exchange rate
2.4/10
Corruption
5/10
The Treasury Single Account is a long-term reform whose benefits will be visible with hindsight. Nevertheless, Buhari loses credit for backing Kano governor Umar Ganduje, exposed on video for taking kickbacks. Members of the presidential cabinet have also been exposed in shady deals. None have been prosecuted so far, and few corruption cases have been concluded.
Protecting the value of the naira despite a collapse in revenue after the crash of the oil price in late 2014 burned through tens of billions of dollars. Some economists complain that the central bank is printing money to keep the administration afloat. The naira traded at 158 to the US dollar in 2015 and is now at 363.
Power
4.2/10 An additional 2,000MW of generating capacity is due to come online, but earlier in the year as many as seven firms generated zero megawatts. Firms complain that the government is forcing them to reduce tariffs instead of letting the market determine them.
THE BUHARI-OMETER After internal debate, we are happy to provide this wholly unscientific scorecard of Buhari’s first term. A score of zero is bad, and 10 is great. Do you agree?
Jobs
Join the debate at www.theafricareport.com
3.4/10 In December 2017, the Nigerian Bureau of Statistics announced that the economy had shed 7.9 million jobs between 2015 and 2017. It also reported that the combined unemployment/under-employment rate was about 42% of the population.
Roads/rail
6.8/10
The government has embarked on a flurry of projects, including completing projects initiated and partly executed by the previous government. The AbujaKaduna railway is now operational. A few other projects, including the Lagos-Ibadan railway – which has stagnated for years – are on course to be finalised in the first months of 2019.
Devolution
2/10
The federal and state governments are an unhappy fit. State governors wield great power and budgets, but they want more. Buhari and his deputy, Yemi Osinbajo, seem to have different opinions on this. Buhari favours the status quo while Osinbajo is exploring what greater devolution might look like.
Education
4/10
The number of out-ofschool children is 13.5 million, says UNICEF. The jury is still out on whether the school meals initiative will increase enrolment figures.
both to finance Atiku’s campaign and to back his government should he win power. Among its proposals is a plan to make Nigeria’s corporate taxation the lowest in Africa. That includes swingeing cuts to state expenditure, especially on recurrent items, and a near abolition of capital controls. Wooing private capital through incentives would be a key economic imperative. The manifesto talks about ‘orderly privatisation’ – selling off the government’s four refineries and the electric power transmission system, reducing the state’s role to oversight. To that, it adds some hugely ambitious targets, such as lifting at least 50 million people out of extreme poverty by 2025 and creating at least 3m jobs annually. CULTURAL REVOLUTION
But it stops short of some of the more radical policies that Atiku set out in his recent interview with The Africa Report (TAR105, Nov 2018): selling down the government stake in the country’s oil fields and allowing the states to collect 100% of oil revenue on which they would pay tax to the federal government. The manifesto lambasts the Buhari government for allowing the naira to lose 120% of its value against the US dollar, with its complex multi-tier exchange rates. But it does not commit Atiku to implementing his preferred policy of allowing the naira to float. In an extended section on state restructuring, the manifesto talks about a ‘sweeping cultural revolution’. Its political logic is that decision-making would move as close as possible to the point of service delivery. Yet it skirts around any precise commitment on the sharing out of the country’s wealth, mentioning ‘a new revenue allocation formula to be negotiated across the board’. Then it argues: ‘Nigerian states are poor not because they are not receiving a fair share of oil money but because they are not receiving a fair shot at true federalism.’ For activists such as Adeyanju, the constitutional reform plans play well: “[Atiku] is committed to restructuring, and I believe most of the things he is proposing are doable […]. He has shown a commitment to doing things differently.” Information minister Mohammed is more sceptical about the centrality of
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Lapses in learning NIGERIA, THE COUNTRY WITH – which funds 90%-95% of their the world’s third-largest population needs – and granted autonomy to run of primary-school aged children as semi-private enterprises: “Until – 29.6 million in 2015 – also holds the universities are repositioned like their unenviable record of having the most counterparts abroad they will continue out-of-school children. According to lean on government and be in this to UNICEF figures, that is 13.5 million crisis.” He continues: “Even if there – more than the entire population is no looting […] they can never live of neighbouring Benin. up to the requirements Good teachers have, for them to rank high meanwhile, become among the universities needles in a haystack. in the world.” In the 1980s and 1990s, Former World Bank of Nigeria’s 13.5 the repressive stance of vice-president million unschooled military regimes caused Oby Ezekwesili, who children are girls, with a lot of professionals is contesting for the the highest proportion to flee Nigeria. With country’s presidency in the northern states a downturn in economic in the 2019 polls, fortunes and the loss in value of agrees: “Our government will grant the naira, another brain drain episode full autonomy to public universities is presently underway. In 2017, […]. This cowardly control of controversial Kaduna state governor our universities does us no good. Nasir El-Rufai triggered an uproar We would continue to fund our public by firing 22,000 teachers after 83% universities with grants that will of their cohort scored less than 25% be linked to performance, results in maths and literacy exams. and accountability.” The higher education sector is also Oladele Akogun, chair of the underserving Nigeria’s future work Education Data, Research and force. Steve Nwokeocha, executive Evaluation in Nigeria initiative, says director of the Africa Federation political will and sustainable solutions of Teaching Regulatory Authorities, are necessary to create a significant sees state control as the problem. shift in the sector. The pessimism The professor of education tells is not unfounded, as Nigeria's history The Africa Report that universities is replete with examples of reforms should be weaned off the “feedingdiscarded after regime change E.E. bottle relationship” with government and cabinet reshuffles.
60%
SOURCE: UNICEF
constitutional reform in the election: “It’s an elite issue in the North West and the North East. There, the economy is the concern, although talk of restructuring resonates with activists in the south.” Although Atiku and the PDP have been wooing the business vote in the south, some operators take a more judicious line on the elections. For example, Oluwaseun Smith, chief executive of Enaro Energy, has a mixture of praise, blame and recommendations for the government: “Poor fiscal policies by this administration mean it’s unable to earn enough in taxes to pay for this [electricity] subsidy. As a result, debt continues to accumulate and there’s no incentive for private capital to be invested in the industry.” At the same time, Smith congratulates the government on its policies towards companies like his, which is generating electricity off the grid. Yet he calls for more market-driven policies to raise money for public goods: “The government must change its fiscal policies to invest a lot more in education and health than it is doing now. […] Perhaps the time has come to consider imposing a federal personal income tax to raise government revenues. […] They must also allow the private sector to contribute directly to funding roads through public-private partnerships so that journey times reduce and internal trade flourishes,” he concludes.
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Obiageli ‘Oby’ Ezekwesili Presidential candidate, Allied Congress Party of Nigeria
STEPHEN LOVEKIN/SHUTTER/SIPA
The old order has delivered misery The Nigerian presidential candidate talks to The Africa Report about the education crisis and the need for the politics of ideas rather than personality
B
lunt-speaking and a passionate advocate for women’s rights, Obiageli ‘Oby’ Ezekwesili has launched a groundbreaking run for the presidency, which looks like a logical step in her professional and political career. Standing for the small Allied Congress Party of Nigeria (ACPN), she is shaking up the election by running a grassroots campaign with a dedicated band of young volunteer helpers. Oby, as she is widely known in Nigeria, should not be underestimated as a campaigner. What she lacks in establishment backers and corporate donors, she could make up for in her own enthusiasm and that of her young supporters. She shot to global fame as one of the founders of the #BringBackOurGirls campaign in 2014 demanding
that the government of Goodluck Jonathan find and rescue the more than 270 schoolgirls kidnapped from Chibok in Borno State by the Islamist Boko Haram militia. Oby and Hadiza Bala Usman, co-founder of the campaign, used social media to get the message around the world, and even US First Lady Michelle Obama was
“I would do a much better job than [Atiku] because government is not monolithic” pictured on social media brandishing a #BringBackOurGirls placard. That campaign was a major reason why Jonathan lost the 2015 election. An accountant by training, with amaster’sinpublicadministration from Harvard University, Oby has worked on development projects THE AFRICA REPORT
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for much of her career. She joined then-president Olusegun Obasanjo’s government in 1999 as head of its Budget Monitoring Unit, where she earned the sobriquet ‘Madame Due Process.’ She later served as minister of mines and then of education before leaving government to join the World Bank as vice-president for Africa. Oby is a fiercely independent campaigner. At the launching of the now governing All Progressives Congress (APC) in 2013, she warned its members that they should stand for more than chasing the People’s Democratic Party (PDP) out of power. But she is also critical of Atiku Abubakar, the PDP’s presidential candidate, with whom she clashed in government. She tells The Africa Report that Atiku did “everything to undermine due process” when he was in government. N ° 10 6
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Regardless of whether Oby and her party can break through in terms of votes in the coming election, her focus on the most pressing social and economic issues could enliven political debate and offer an alternative for the many Nigerians who say they are unimpressed by either of the frontrunning candidates – Atiku or President Muhammadu Buhari. TAR: Your party lacks the organisation and the resources of the two main parties. How will you be able to compete with them in next year’s elections? OBIAGELI EZEKWESILI: I have independence of thought and want an association of people who welcome independence of thought too. They [ACPN] have also proven themselves not to be the typical ‘small party’ because they could have melted into the two dominant parties but refused to do that. They came fourth in the 2015 elections and have been around for 11 years. They believe that this is the time for there to be a confrontation with these Siamese twins of failure. We don’t envy the APC and PDP. Who is on your campaign team and how are you funding it? Any personal resources that I have […] and we are crowdfunding. The average age of people who are members of the campaign is 27 years. They are committed on the basis of what they believe their candidate stands for. They are committed because they believe that it is time to imagine that we can build a different Nigeria. It is a battle for the soul of Nigeria. There are two sides in this election: the failed old political order and the side of those who dare to believe that we can question and uproot this decadent order that has not delivered anything but misery and poverty. You were minister of education, serving with Atiku Abubakar when he was vice-president. What is your view of his record? I would do a much better job than [Atiku] because government is not monolithic. There
are different parts of every government that you see. It is always great when all sides are working towards a common goal, but sometimes they are not. In the case of the candidate that you referred to, he detested due process. He did everything to undermine it. There are some 12.5 million to 13.5 million children out of school. What’s your response to this crisis? Only 10% of young people who have graduated secondary school or university and who enter the labour market find a job. The number in absolute terms who find those decent jobs is anything from 3 million to 4 million. You have to ask yourself about the rest of the teeming millions. Who are they? And where are they? They live on the edge of society and feel abandoned, disaffected, disenchanted. This destabilising factor – an army of people who feel abandoned – should scare anyone.
OBY'S ORBIT 28 April 1963 Born in Anambra State, Nigeria 1993 Was a co-founder of Transparency International June 2005 – June 2006 Worked as solid minerals minister
You led the Nigeria Extractive IndustryTransparencyInitiative and know about the state oil company’s losses. How can that be fixed? It is scandalous! Just a few people are getting the opportunity of political power, stifling key sectors that matter to the rest of the country. I am not the kind of leader who wants to control economic levers because I know the limits of what the state can do. I want a Nigerian economy that is run on the principles of allocative efficiency that does not permit any individual to determine the future of all other individuals. As minister of solid minerals, I changed that by having a law that threw the gates for mining licences open.
June 2006 – April 2007 Served as education minister May 2007 – 2012 Was vicepresident for Africa at the World Bank
There are security problems in most of the six geopolitical zones. The government insists Boko Haram has been technically defeated. Are things better than they were in 2015? I think it is marginally better when you think of the spectacle of fleeing soldiers and terrorist occupation that we saw in Borno, when the so-called caliphate
“Teeming millions … they live on the edge of society and feel abandoned, disenchanted” of terrorists put their flags in a number of the local governments. People who come from that region say that the terrorists don’t control territories in the way that they did before, but they live in their midst. We watched a renegade army in Borno attain the stature of a well-known terrorist group because the nation-state was sleeping at the wheel. The present government repeats the same response to the Fulani herdsmen crisis. THE AFRICA REPORT
Your manifesto also talks about ending energy poverty. How do you explain Nigeria’s electricity crisis? First, the structure is centralised and so the federal government has had the almighty power to determine everything about power. As we moved towards deregulation of the sector and shaped a market-based approach, you find that the generating companies lend themselves to market principles.
In 2016, you tweeted that that you opposed subsidy removal. Today you promise to end subsidies. Why? I have been consistent in my fight against poor governance of resources. There wasmassive poor governance of resources under the administration which had the proposal to remove subsidies. We couldn’t trust what the removal of subsidies meant under that government. The transfer of more resources into the coffers of that government was evidently going to be troubling because its record did not leave any basis to trust that the people were going to get value for money. There was much more that needed to be tackled before the removal of subsidy would be the kind of policy measure that anyone who is a market enthusiast like myself would support. Interview by Eromo Egbejule
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PEOPLE TO WATCH
The big 2019 governorship races Here are the men in the spotlight for governorship elections in five crucial geopolitical zones: the North East, South South, North West, South West and Middle Belt
Babagana Umara Zulum
Nyesom Wike
The governing All Progressives Congress (APC) easily won the presidential vote in Borno State in 2015, so there is not much doubt that APC gubernatorial candidate Babagana Umara Zulum will win control of the state at the forefront of the conflict with the Islamist militants of Boko Haram. Current governor Kashim Shettima, who is stepping down to run for the Senate, picked Zulum as his successor. Shettima praised his management as commissioner for reconstruction, rehabilitation and resettlement and said he never used the position for personal enrichment. With the People’s Democratic Party (PDP) split in the state after a fractious primary and President Buhari popular for a more robust security response, Zulum looks like he will get the chance to have a bigger impact on how the state begins to rebuild.
D LR VE IG H T S R ES E R
Umar Ganduje Bribe claims and ballot boxes
AL
President Buhari is relying on a high turnout in the north and is counting on Kano State to mobilise for the governing APC. Kano State governor Umar Ganduje was the target of an October campaign that promised 15 videos showing him taking bribes from contractors and stuffing the cash in his babanriga. The former deputy governor has threatened to sue the local media that published the videos and denies he took bribes. The APC is not looking to ditch Ganduje because Kano has the highest number of registered voters in Nigeria and is home to the popular former governor Rabiu Kwankwaso, who is a member of the opposition PDP.
Samuel Ioraer Ortom Nomads and conflict
Power of the PDP purse The defeat of the PDP in the 2015 elections and the subsequent defection of many of its heavyweights left a gaping hole in the party’s finances and a leadership deficit. Enter Rivers State governor Nyesom Wike, first a friend then a foe of his predecessor, Rotimi Amaechi, who is now director of President Buhari’s campaign. Wike became a kingmaker in the run-up to the PDP primaries unsuccessfully lobbying for his friend and fellow governor Aminu Tambuwal of Sokoto to be its presidential candidate. He is seeking re-election in the face of a divided opposition.
Babajide Sanwo-Olu Lagos upstart Lagos State, the country’s richest, is a crucial stronghold for the APC. Current governor Akinwunmi Ambode lost the backing of APC grandees including Lagos godfather Bola Tinubu, and after a nasty campaign ceded the 2018 APC primary to Lagos State public servant and former banker Babajide Sanwo-Olu. He is promising to turn a page on the top-down policies of his predecessors, which led to the the eviction of poor communities to make way for new property developments, telling local media in October that he will be “a listening governor”. Announcing his run, Sanwo-Olu said he will “revamp the environment that has become a cause of serious anxiety to Lagosians and relieve Lagos of the persistent gridlocks that have made our lives brutish and nasty”. He faces Jimi Agbaje, the PDP candidate who lost against Ambode in 2015.
PIUS U
TOMI E
KPEI/A FP
The Benue State governor is one of the politicians known for going where the opportunities are. After serving as then president Goodluck Jonathan’s industry minister, he abandoned the PDP and won a run for governor on the APC ticket in 2015. He is now running for re-election as a member of the PDP. He has been one of the most critical voices about the government’s handling of the herder-farmer conflicts in the Middle Belt, which became Nigeria’s most deadly conflict in 2018. He says that senior federal government officials worsened the conflict and that the APC is using government anti-corruption bodies for partisan gains. Benue is a crucial swing state that backed the PDP in the presidency in 2011 and switched to the APC in 2015.
ALL RIGHTS RESERVED
Ready to rebuild the north
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68 COUNTRY FOCUS | NIGERIA
ALL RIGHTS RESERVED
A significant amount of money has been spent on power sector reforms over the years
SUBSIDIES
The cost of cheaper petrol The government spends a huge amount of money subsiding the electricity and petrol sectors, but in the end is it worth the cost? Party presidential candidate Atiku After the government of Muhammadu Abubakar and others have been critiBuhari stopped a costly and corrupt subsidy programme managed by his cising the Buhari team for the rising cost of subsidy spending and the opacity in predecessor, Goodluck Jonathan, it their management, which could be used has been keen to suggest that it is out to carry out corruption. of the subsidy game. What the government calls its spending may have changed, but it still pays CALLS FOR CHANGE the bill to insulate Nigerians from the Subsidies are also a hot topic because it full cost of petrol prices. Instead of payis politically unpopular to reduce them and force consumers to pay more. When ing subsidies to importers, as was done the Jonathan government announced under Jonathan, the Buhari government has made the national oil that it would abolish the company responsible for fuel subsidy in 2012, he fuel imports and swallowfaced massive street proing the difference between tests and relented on how its costs and the price much to cut them. Nigeria could spend at the pump. As the price of oil rises, this much in total With global oil prices risthere is more pressure for subsidy payments by ing from $49.49 per barrel the government to cut the end 2018, far beyond earlier projections since Buhari took office in subsidies or raise fuel prices, either of which would 2015 to as much as $70.28 be harmful to the government party’s this year, Nigeria’s subsidy costs have grown sharply. They soared 210% over a chances of re-election. But a growing number of voices are calling for change. two-month period, from a daily average “If the forecast of FDC proves accost of N774m in March 2018 to N2.4bn per day in May, as the country grapples curate,” says Ekpen Omonbude, chief with fiscal deficits and rising debt levels. executive of UK-based energy and minAhead of elections planned for ing consultancy firm Bargate Advisory February 2019, People’s Democratic Limited, “you would be talking SOURCE: FINANCIAL DERIVATIVES CO.
R
ising oil prices float all boats in Nigeria – or so one might think. But while government revenue from oil production rises, so too does Nigeria’s subsidies on petrol prices for consumers. The Nigerian government subsidises things like electricity and petrol – paying the difference between the cost to produce and the cost charged to customers – in order to make them more affordable. If the rise in the cost of petrol subsidies was not enough, subsidies to the power sector are rising fast too. Can the national budget take the strain – and how will things play out in upcoming elections? Africa’s second-biggest economy could spend as much as $5bn in subsidy payments by the end of the year, according to Lagos-based economic research and analysis firm Financial Derivatives Company (FDC). That is far beyond an earlier projection of $3.5bn by the minister of state for petroleum resources, Emmanuel Ibe Kachikwu. The cost overrun comes as other spending priorities attract attention on the campaign trail, such as the 11 million Nigerians who are not in the school system.
$5bn
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SOURCE: NAT. BUREAU OF STATISTICS
SOURCE: IMF
about 70% of government earnCRUDE OIL PRICE INDEX AND REAL GDP GROWTH (Index 2005=100, simple average of three spot prices; and percent, annual) ings for 2017.” Total government revenue 350 for 2017 stood at about $7.2bn. 16 Real GDP growth (%) International financial instit300 Crude oil ($/barrels) utions like the World Bank and the 250 11 International Monetary Fund are urging 200 governments to cut costly national 6 150 subsidies and to provide them in a 100 1 targeted fashion to poor communities. 50 The World Bank says that subsidies -4 0 “impose a heavy fiscal burden and are Jan Aug Mar Oct May Dec Jul Feb Sep Apr Nov Jun Jan Aug Mar Oct May Dec likely not sustainable.” It continues its 91 91 94 95 97 98 2000 02 03 05 06 08 10 11 13 14 16 17 criticism, saying: “Since these subsidies NIGERIA FUEL SUBSIDY(bn naira) disproportionately benefit high-income households, they are a costly way to 633 597 571 557 551 552 protect the poor.” That is borne out on the ground. “Vast 146 parts of Nigeria actually pay a bit more than the fixed pump price of N145 per 2020 2021 2022 2023 2017 2018 2019 litre. This negates the oft-argued concern that Nigerians would struggle to pay for deregulated fuel”, says Bargate’s because of problems with gas supplies, with the government, but that is not the Omonbude. Using July 2018 data from case here because the government is poor infrastructure and late payments. the National Bureau of Statistics, resiThe government has spent a significant now setting the price.” The privatisation amount of money on power sector recontracts said that the tariff would be dents of 26 states paid, on average, nearly forms over the years – amounts that cost reflective, but in the first quarter N3 per litre more than the national pump of 2015 the government changed tack. price. It was up to N10 more in one state, include an estimated $16bn for the and between N5 and N6 more in at least Power Fund between 1999 and 2007 three other states. ‘CENTRALISED MONOPOLY’ to another N155 bn on an intervention “So for instance, if the generating “What is interesting is that the areas fund for the Multi-Year Tariff Order to companies are selling power at $30 subsidise shortfalls in expenditure for with arguably better living standards, the power sector between 2009 and 2013. per kilowatt, the Discos are mandated such as Lagos and Abuja, pay the exact That spending has not price, while the states with by the government to sell to Nigerians arguably lower standards at $15 per kilowatts,” the Disco official done much to break the of living pay higher. The explains. “The government then bears country’s reliance on the shortfalls of the other half. The costly and polluting diesel subsidy system can be generators. price differential shortfall is what is argued in essence to subResidents in 30 states The government comsidise Nigeria’s better off at now known as the Intervention Fund paid on average the expense of the worse because the government is not coming pleted a power sector between N3 and N10 out to say it is subsidising the power off,” Omonbude adds. reform and privatisation more per litre than the national pump price sector. But however you slice it, it is “The petroleum subsidy process in 2013, and due payment is simply unsusstill a subsidy.” to continued problems in tainable,” argues Victor Eromosele, a The power sector reform and privathe sector it paid an estimated N420bn tisation was done so private investors former general manager of finance of in tariff shortfall payments between could deliver sustainable, adequate, Nigeria LNG and now chairman of the February 2015 and December 2016. These are deficits caused by tariffs lower qualitative, reliable and affordable Centre for Petroleum Information. than cost of service delivery – leading power in a deregulated market, but PRESSING PRIORITIES to a payment from the government to post-reforms, the government still holds “Another way to paint the picture is 40% stakes in Discos. It also owns and private sector operators. that the [initial] N1.4trn estimate for operates the transmission network, By 2017, Abuja released another which remains the weakest link in the N701bn through the Power Intervention subsidy payments is nearly five times Fund. Although the government is not the annual capital budget appropriation power supply chain. for agriculture, education, healthcare classifying these payments as subsidies, The government should move away government officials as well as distrifrom “centralised monopoly”, argues and trade and investment combined,” bution company chiefs see it as such. Sunday Oduntan, the executive diEromosele says. “I stress these sectors because they are more important to “The government is subsidising rector for research and advocacy at Nigeria’s development than sustaining the Association of Nigerian Electricity the value chain,” says an official from petrol subsidies. There are other more Distributors. Power minister Babatunde an electricity distribution company Fashola said last year that the governpressing priorities to worry about.” (Disco). “After the privatisation of the sector, electricity prices were supposed ment is considering divesting its shares The Nigerian government also subin the country’s 11 Discos. to be determined by the rules of demand sidises the ailing power sector. The Ruth Olurounbi in Lagos and supply per the agreement we signed country’s electricity supply is erratic
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INTERVIE W
Shingai Mutasa
Majority shareholder, Masawara Holdings
Certain industries need to be protected Through the prism of Sable Chemicals and the Cresta hotel group – assets he acquired in early 2018 – the Zimbabwean magnate talks about his hopes for the country’s economy and the strategies its new government must adopt THE AFRICA REPORT
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MUTASA’S MOVES November 26, 1958 Born in Zimbabwe 1980 Returned to Zimbabwe from Britain after a degree in economics from University College, London 1997 Named executive chairman of Harare-listed TA Holdings 2010 Masawara Holdings listed on London’s Alternative Investment Market (AIM) 2010 Masawara and partners complete the Joina City building in Harare’s central business district
TSVANGIRAYI MUKWAZHI FOR TAR
August 2017 Masawara sells off its interests in Uganda’s Lion Assurance Company
Interview by Tonderayi Mukeredzi in Harare
A
year after the military intervention that forced out president Robert Mugabe, Zimbabwe is at an economic crossroads. With the right policies and commitment to cut THE AFRICA REPORT
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back the cost of government, it could muster the international support to break the logjam of its foreign debts and arrears and reboot the economy. Finance minister Mthuli Ncube has said that the present level of state spending – a fiscal deficit of 11% of gross domestic product that was over twice the 2018 target level – is not sustainable. But he is optimistic that the government can end the foreign-exchange and currency crises with some
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2018 Masawara delisted from AIM after a lack of investor interest
bridging finance as the government pays off its arrears and lays the groundwork for a revival of sectors like mining and tourism. That change of direction is critical for businesses leaders like Shingai Mutasa who have navigated Zimbabwe’s stormy economic waters for decades. Mutasa has interests across property, tourism, finance and telecoms. Mutasa sees Mugabe’s 37-year rule as a necessary corrective to the excesses of colonialism, and he regards his successor, President Emmerson Mnangagwa, as a pragmatist. When Mnangagwa “wakes up every morning, every day he has to ask himself what can he do to make the economy better,” he says. REBOOTING THE ECONOMY
Mutasa says that bridging this perception gap is the urgent task of the new leadership. The world is also going to get better acquainted with Zimbabwe’s entrepreneurial class as sanctions are slowly rolled back, and the government launches plans to access international lending to reboot the economy. D e s p i t e t h e rav a g e s o f hyperinflation and a predatory politico-military elite over the past two decades, Zimbabwe sits on a strong economic base. And Mutasa has big hopes for the country: in health, agriculture, mining and manufacturing, he argues the strong human capital and resource base of Zimbabwe can help it to become an economic hub once again. “If we become deadly serious as a country, we can even go beyond the vision of our president to be an uppermiddle class country by 2030,” Mutasa argues. That will require change from everyone, and the business community is no exception. Mutasa has been forced to re-jig the manner in which Sable Chemicals – which he acquired in January 2018 – operates, ditching its reliance on expensive and patchy electricity to create ammonium nitrate fertiliser. That has come with its own problems, which Mutasa hopes
74 BUSINESS | COMPANIES & MARKETS
TAR: There have been huge political changes in Zimbabwe. How does the business community see things? SHINGAI MUTASA: First and foremost, I think the most critical thing somebody must understand is that the mandate that runs our country has changed, and it’s a big change. […] I believe that our leader is committed to the transformation of this economy, I truly believe so. So those are fundamentals. Once you believe that, the opportunity for any investor – from infrastructure to mining, to agriculture, to health, to services – is mind boggling. […] And I would say to any international investor, you’ve got to come and visit Zimbabwe because when you are here, you begin to realise that the megaphone that talks of doom and gloom of this country is misdirected. What is the future of agribusiness in Zimbabwe, given its history? I think there are several spaces that need to be managed. One is land itself. We have to quickly move past the issue of land and its ownership structure. We now have a very clear position where there are some assets which are still freehold, but a lot are going to be driven by leases. […] So I believe that is the first thing, because once we have that it means people
Fingers in many pies
TECHNOLOGY
JOINA CITY
TELERIX COMMUNICATIONS
Investment property that leases retail and office space at the Joina City building in Harare, Zimbabwe’s capital city.
INSURANCE
MASAWARA HOLDINGS
ZIMNAT LIFE ASSURANCE GRAND REINSURANCE
HOTELS
BOTSWANA INSURANCE COMPANY
CRESTA ZIMBABWE (5 hotels)
LION ASSURANCE COMPANY
AGROCHEMICALS
CRESTA MARAKANELO (12 hotels in Botswana and Zambia)
SABLE CHEMICAL INDUSTRIES
MINERVA RISK ADVISORS
ZIMBABWE FERTILIZER COMPANY
will have title to land, whether lease or freehold, and can now create value which can go into the banks and allow the banks to create loans to support these leases, to support agriculture. Oneofourbusinessesis fertiliser manufacturing. Historically, we used to use a system of electricity [to make ammonium]. We now are importing the ammonium and then converting it and manufacturing ammonium nitrate. We believe our competitiveness will add significantly to the development of agriculture. When our country is able to produce the bulk of its inputs […] our competitiveness and the ability of our farmers to act quickly and produce more efficiently becomes heightened. So one of the first statements that our president gave when he
took over the presidency of our country, he said we must now move forward. Do not look at the farmers as white people or black people, Indian people, Chinese people, but look at farmers as Zimbabweans who want to contribute to the agricultural development of our country. So, if we get the strategy right on, say, fertiliser and inputs, if we get the strategy right on land tenure, and then we get the strategy right on funding, the people who want to farm are there already. This could be an explosion of growth.
ZIMBABWE CURRENT ACCOUNT (US$ million) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 -240.5 -591.3
-762.1 -1224.1
-1557.3 -1878.5 -2289.4
-3042.4 -3385.6 -3432.23 THE AFRICA REPORT
SOURCE: RESERVE BANK OF ZIMBABWE
will be solved by the current regime, in particular, the lack of access to hard currency across the country. In September, Sable Chemicals said it was only able to meet 38% of national demand for ammonium nitrate because the government only granted it $425,000 a month in hard currency when it required $2.8m monthly to import ammonia gas. That will not change until “as a country, we restructure our debts and pay our arrears,” says Mutasa. Until then, his holding company Masawara will use the revenue streams from its property, telecoms and tourism companies – especially hotels in Botswana and Zambia – to keep the manufacturing wing strong.
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How does Sable Chemicals manage to sell fertilisers given farmers’ lack of capital? We are trying to find a way of reducing the cost to the end farmer. […] At the moment, unfortunately, that price is way out of scale with what it should be, and by having a strong Sable producing I think we’ll be able to help with the reduction of cost to farmers. So that’s very important for us. I have a very good leadership at Sable, very focused. They have gone through some incredibly difficult times to reposition Sable. What is the market size relative to your production? The market is very significant. I think when Sable is producing to its current
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76 BUSINESS | COMPANIES & MARKETS
market potential, it’s about 240,000tn. That would just about deal with the market size in the next two years, we think. So already we are thinking of creating new production capacity so that we produce 240,000tn of ammonium nitrate and then start producing some urea as well. But again, we think the more we can produce some of these goods in Zimbabwe the better it would be for our country.
TOBACCO YIELD AND GROWERS 97.066
2 500
100 000
87.383
1 875
What has the currency crisis done to your business? The shortage of currency is something that continues to happen and will continue to happen in our country until we are re-engaged as a member of the global community. So we as a
Sable Chemicals employs 200 permanent workers and has the capacity to produce 240,000tn of ammonium nitrate per year
How are you targeting the region? For us, when we look at this region, we look at a region of plus or minus 140 million people. That’s an interesting market and we want
SOURCE: TOBACCO INDUSTRY AND MARKETING BOARD
What is holding it back? One of the most important things is we have to have sustainable currency in order to produce. Now, people will ask why should government support Sable with currency? The reality is that out of every dollar that you use to import fertiliser, if you use Sable you save 40% of that dollar. That’s a big economic saving to our country, and we have proven it to our leadership and to our country. With that kind of savings, we believe it will be extremely important for us to put more energy into the development of Sable Chemicals.
country have to do certain things. We have to pay our arrears. We have to restructure our debts both local and foreign, and for the first time our political leadership have agreed that the minister of finance must go to the Paris Club to negotiate a restructuring of the debt. The reality is Zimbabwe does not currently have a currency, and unfortunately, because there is lack of confidence, it is going to be very difficult for us to build a currency unless we settle on a real time frame, three years from now, four years from now […]. We have to do a lot of work to build that new currency.
1.893
1.842
1.688
1 250
54.069
57.563
78.906
1.972 2.108 1.900 1.879 75.392 73.437
75 000 1.705
60.156 50 000
Annual average yield -kg/ha- left scale Number of active growers since 2010 - right scale 625
2010 2011 2012 2013 2014 2015 2016 2017
25 000
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to be able to touch the lives of all of those 140 million people. I think in hotels, the way we are structuring ourselves, we now see ourselves as a primary player in the region. We are in Zimbabwe; we are in Botswana; we are in Zambia. We want to be in Malawi; we want to be in Mozambique; we want to be in Namibia; we want to be in Tanzania; we want to be in the DRC. So these are where we think we should be, and our brand should be pretty visible in a number of those areas. Do you support the creation of a free trade zone across Africa? I think a free trade zone for our continent is very important. I think our continent is so insignificant in the world trade space at this point in time, we have to begin to think how we would become important as a player in the world industry. And if we can begin to build a stronger relationship among African countries, that for me is first prize, without question. But having said that, there are certain industries in each of these countries that need to be nurtured and protected and grown, and we should make sure that whatever agreement is signed, it does not mitigate the need to nurture specific competitive assets that a country might have. So I think that for me is important. If I look at Zimbabwe today, it is critical for us to develop an iron and steel capacity […], but if South Africa wants to dump its product on Zimbabwe, it can do so easily. So we have to figure out how can we protect the development of iron and steel in Zimbabwe while we are part of a free trade relationship with our brothers and sisters across the continent. If you don’t do that, then you have the possibility of completely destroying sectors that need to be developed. Beyond iron and steel, [there is] fertiliser, […] but it could also be the development of beneficiation of our mining products. Specifically for me, it would be making sure that we nurture the fertiliser industry. It can be a regional business, and we’d like it to be nurtured as such.
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EXPERT ADVICE
Andrew SKIPPER Partner
I s A f r i c a t h e n e w C h i n a ? I s ‘A f r i c a Rising’ again? Although I may not have answers to these questions, there are four key positive themes for the future that I consistently hear at various conferences and when advising clients on legal matters. The Narrative – Africa’s reputation globally as an investment destination needs some work. Risk is seen as high and business difficult to do, but investment cash has global options, so why Africa? A key part of the answer is seen as ‘changing the negative narrative’ through evidence, confidence, and pride. And this requires government, business, media, cultural leaders, institutions and ultimately the people, to live this message. The Continent – A c c o rd i n g to President Akinwumi Adesina of AfDB, the focus should be on Africa as the n ex t C h i n a d u e to its abundant resources in human capital, its natural resources and an increasing consumer base. More recently, there has been a focus on intra-African trade as a critical driver for continental success through the AfCTA and institutions such as AU’s Agenda 2063, ECOWAS, SADEC, the EAC and NEPAD. This plays the continental hand far more clearly, which is not lost on the rest of the world. We’ve seen the recent visits of May, Macron, Melania Trump, and Merkel vying with TICAD and Belt and Road for influence and investment potential;
Even today the trite saying that Africa is 54 different countries comes as surprise to some potential investors!
which a confident and unified Africa is well placed to exploit. The Leaders – There are new leaders on the block and their language is becoming more aligned and focused on delivering results and investment into Africa from within and without. We know there’s a need to bridge the investment gap and work with the private sector to attract investment from outside the continent. But to do that, we need to create good policies, strengthen institutions, eliminate corruption and regulate consistently in a modern way. The Business – Business leaders, from bankers to industrialists, consultants to corporates and DFIs appear now to have a better grasp of what is needed. More encouraging are the African businesses determined to do this for Africa. As Mr Dangote recently said, he sees more opportunities in Africa than any other continent in the next 10 years. So we have a positive message, but as President Adesina says – you cannot eat potential.
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AFRICA I N
How to hang on to your hat
T
he storm clouds are gathering. “It has been such a long expansion in the US,” says Souleymane Ba of African private-equity firm Helios Capital. “If that pops, it will hit everyone.” In the first nine months of 2018, global merger and acquisition activity hit feverish levels last seen on the eve of the 2008 financial crash. Western observers agree on the prospects. “We think the major Western economies are on the cusp of turning down into the worst recession we have seen in our history,” says Murray Gunn, head of research for Elliott Wave International. “Sitting near its highest ratio ever, US total credit market debt to gross domestic product (GDP) assumes a perpetual economic growth engine that quite simply does not exist.” And that is without factoring in how the government will pay for President Donald Trump’s big tax giveaway to corporations. So what happens if the global business cycle turns? Who is prepared? And how might you hang on to your hat – and shirt – in the coming gale? First, there will be a retreat of global investors from emerging and frontier markets. After quantitative easing (QE) – a posh term for printing money – got underway in the US, European Union and elsewhere, investors in these big markets struggled to find a return on their money at home. They created a wall of money that flooded into emerging economies such as Turkey and Brazil, and increasingly into Africa. Many African governments took advantage and floated eurobonds. They have that extra money now, but will pay the price further down the line. Moody’s says that between 2022 and 2030, financing costs in emerging markets will jump from $7bn to $9bn per year, driven in part by repayments in sub-Saharan Africa. As the US economy continued to improve and interest rates rose, those QE yield refugees have started to head home. And as that tide of liquidity has receded, we now know who’s been swimming naked, to paraphrase veteran US investor Warren Buffet. “We are starting to see much more granularity coming into the pricing [of African bonds],” says Aly-Khan Satchu, a Nairobi-based analyst. “This is a big challenge for little countries. A lot
of policymakers need to adjust to the new normal – currently, if you look at debt-to-GDP ratios, everyone is running on empty.” Ghana’s central bank governor, Ernest Addison, has rung the alarm bell about hikes in the interest rate from the US Federal Reserve pushing up Ghana’s re-financing costs – though it hasn’t stopped Ghana’s finance minister talking about launching $50bn in 100-year bonds. Next, China is a big worry. For those countries exposed to China, including some countries with big Chinese debt, things become even more complicated – and not just for raising money. Some are concerned that President Trump will lean into his trade war with China for political gain ahead of his 2020 election run. If China catches a cold, what does Africa catch? Already, Chinese growth has flattened, hitting Asian countries bound up in its myriad supply chains. This will hit African hard-commodity exporters, too. If all that were not bad enough, Africa is embroiled in its toughest challenge yet: finding things to do for its hundreds of millions of young people. Morocco is ahead of the curve, with its successful industrial policy creating factory jobs in automobiles and aeronautics. But even Morocco is feeling the pressure. Some 300,000 young people graduate from university every year, with only an average of 100,000 jobs available. The situation elsewhere is more troubling. The World Bank warns that recent gains made by the continent will be lost. Between 2013 and 2015, the number of people living in extreme poverty in sub-
As the tide of liquidity has receded we now know who’s been swimming naked Saharan Africa rose from 405 million to 413 million, which is against the trend of the rest of the planet. However, there remain opportunities and positive trends to embrace. Control Risks’ Africa Risk/Reward Index is positive, noting that reformers in Africa are attacking big structural problems – and it points to Zimbabwe and Tunisia for proof that changing leaders does eventually lead to progress (see page THE AFRICA REPORT
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COMPANIES & MARKETS | BUSINESS 79
48 for ‘How to Spot a Reformer’.) The key point is that while in developed markets there may be only marginal gains to be made from reforms, in Africa there are step changes ahead. Basic security, paved roads and a new port could turn Nigeria into the breadbasket of the region, for example, and a rival to Brazil. In a world with increasing food demand, agribusiness can be Africa’s strength. Of course, people cannot eat potential. But that potential can be accessed fast in Africa. The tougher end of the business cycle tends to be when the better decisions are made about allocation of resources for key projects. The project preparation step “is often overlooked in the pursuit of quick returns,” said Tshepo Mahloele, chief executive officer of Harith General Partners, as he unveiled a new facility alongside Afreximbank in November to help de-risk big infrastructure projects across the continent.
And if China pushes ahead with its structural reforms of the economy away from manufacturing and towards consumption, reaching the hungry and newly affluent Chinese consumer is another route to success for African players. Watch out for Ethiopia’s Garden of Coffee opening up 100
Reaching the newly affluent Chinese consumer is another route to success for African players
Even for those with debt problems, there is such growing geopolitical interest in Africa that smart politicians may be able to get debt rescheduled – as we are seeing in Ethiopia, and potentially Kenya, with both countries important to both the US and China. It is unlikely that Beijing will let Angola go to the wall, either. African governments can also wring money out of Europeans fretting about demographics and migration, as the Niger government is doing so ably with France (see page 14 for more on how Africa can play the geopolitical landscape). THE AFRICA REPORT
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cafes in China by 2022. “The Chinese market opportunity is huge, with China essentially being where the US coffee market was 40-50 years ago,” Ethiopian entrepreneur Bethlehem Tilahun Alemu told reporters in late October. “So it was logical for us to expand into China.” You should also watch out for global economic interest being piqued by regional blocs that actually deliver on their promises to create sizeable markets. East Africa is ahead here as a bloc that has invested the most in connective infrastructure, from roads to power lines to a new inland port in Rwanda. For Kenyan analyst Satchu, it is no surprise that the East African Community (EAC) has attracted so much interest from port operators, from China and the Gulf. “That sort of cash is not offered up lightly,” he says. He also suggests that Ethiopia is destined to join the EAC, adding 100 million people to the party.
80 BUSINESS | LEADERS
Ben Leo
Chief executive, Fraym
The data revolution is a reality
S
ome years back, the African Development Bank (AfDB) kicked off a brutal debate over Africa’s middle classes – which it worked out were some 300 million strong, a figure later bumped up to 500 million. Ben Leo, the chief executive of Fraym, a data consultancy specialising in Africa, says there were significant issues with methodologies. In particular, the monetary-based approach is vulnerable to seasonal fluctuations so that a farmer may seem poor at one end of the year and rich at the other. He says there were also problems with the way the AfDB tried to compare countries using power purchasing parity – a statistical tool for standardising incomes. A final topic of debate is that the AfDB has a very generous definition of middle class: households earning between $2-$4 a day. “We took a very different approach,” says Leo. “It’s one that has worked in India to segment
FRAYM
Frustrated by the lack of useable data on Africa, Ben Leo took a whole new approach. His company, Fraym, built up a map of microlevel data on consumers to help companies and investors make their next move consumers, and we adapted it to the African context.” Fraym focuses on assets – cars, phones, fridges – purchased by households, alongside education levels, to build up a picture of the consumer class using the ABC approach: “So an A and B consumer is a premium consumer, and a C might use premium products but less frequently,” says Leo. CONSUMER GRID
There has been a great deal of scepticism around data gathering on the continent. Fraym tries to get around the problem of poorly assembled country-level data sets by getting access to “the raw microlevel data that underpins these national statistics”. And, Leo says, “the particularly transformative thing has been that almost all of this data has geo-coordinates attached to it.” That allows Fraym to layer this household data with satellite imagery and machine learning to create a very localised map of the continent, a one-by-one kilometre
DATA POINTS ON LEO November 2005 Named deputy director of the US Treasury’s Office of International Development June 2013 Appointed as a fellow at the Center for global Development September 2013 Became a senior advisor to Kupanda Capital June 2015 Became chief executive officer of Fraym
THE AFRICA REPORT
grid showing precisely how many and what sort of consumers are located in each square. “I think some people haven’t caught up with how much the data revolution is already a reality,” says Leo. Fraym was born from frustration, says Leo, a former Africa adviser to the George W. Bush administration. In his 20 years working on the continent, he found it was impossible to locate local data sets to match any intuitive leaps you might want to make, “be it for a public policy decision, investment decisions or something else”. He was working at Kupanda Capital at the time. Fraym was built as an internal solution for Kupanda Capital, which became a co-founder in the business. The data itself throws up some interesting nuggets. Kumasi in Ghana, for example, has a shade more consumers than the capital, Accra – the heritage of an old trading network, say old hands. And 10 of Africa’s top 50 consuming cities are in Nigeria.
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82 BUSINESS | LEADERS
NUMBER OF ABC1 CONSUMERS (in millions)
But it also has structuring facts about the continent’s consumers: “95% of African consumers, or at least the ABC1 category that we are following, are in about 20 countries,” says Leo, estimating that this covers some 330 million people. And 219 million of those are in just five countries – Egypt, Nigeria, South Africa, Morocco and Algeria.
<0.25
Lunda
0.2 - 0.5
0.5 - 0.75
>1
Angola
Kitwe Huambo
Ndola
Malawi
Zambia
Mozambique
Lilongwe
Lumbago Lusaka
Nampula
Blantyre
STORES NEED SHOPPERS
Harare Namibia
Bulawayo
Zimbabwe
Beira
Windhoek
Matola
Maputo
SIZE OF AFRICA’S CONSUMER CLASS (in millions)
SOURCE: FRAYM
The data is used, for example, by soft drink and beverage companies who are looking to optimise their distribution networks, and by companies that want to expand with precision. “We want to avoid the mistakes made in the past,” says Leo, pointing to the now infamous comment by a Nestlé executive in 2015 who said that the Switzerland-based conglomerate had “overestimated” Africa’s middle class, causing it to cut 15% of its workforce on the continent. One Fraym analysis of consumers in Nairobi suggests that the current woes of the retailer Nakumatt were not only due to the mismanagement of finances but also an expansion strategy that placed stores in areas where there weren’t enough shoppers to support them. “One concrete example is a school, with roots in Lagos, which does both day school and boarding school in primary and secondary education”, says Leo. “They know their business, but they don’t know what the demand is like a few hours up the road in Ibadan. There is tremendous demand for these services in places outside of Lagos, be it in Kaduna or Maiduguri or Port Harcourt. And that is a common trend we encounteracrossconsumer-facing
0.75 - 1
Egypt Nigeria South Africa Morocco Algeria
78 52 36 29 25
companies,whethertheyarepackaged goods, beverages, education, health and media.” Using a city by city approach, rather than staying at a national level, allows companies to tailor their approach, says Leo. “So you could have a Lagos-Ibadan strategy, or some of the urban areas in the smaller cities as a distinct entity to track and execute against.” While there are many multinationals that currently use the company’s data tools, Fraym is trying to create products that are accessible to African companies. “So while we may not do a supercomprehensive custom body of
work for a mid-sized Ghanaian firm, for example, we will still give them access to the data and some of the insights that a multinational would be able to buy,” adds Leo. At the company level in Africa, there is still far too little data and reporting. Not enough companies publish accounts, making it hard for potential market entrants. Fraym hopes to help private-equity companies – who are among its clients – to size up potential markets correctly and to stress-test business ideas. “It’s a contribution to the de-risking of the continent,” says Leo. Interview by Nicholas Norbrook
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84
DOSSIER MINING
A big, green
HOC/OCP
OCP is beautifying its old sites while digging new ones
85
mining machine In a decade Morocco’s OCP Group, the formerly state-owned phosphate-mining firm, has become the kingdom’s behemoth. It is spending big on research, and expanding production and processing capacity, in order to grab more of the international market
Julien Wagner in Khouribga for Jeune Afrique
J
ust as the gold rush built Johannesburg, Morocco’s town of Khouribga was built to service the monumental phosphate deposit discovered in Boujniba in 1917 – some 31% of global reserves. Since then its destiny has been inextricably linked to that of the Office Chérifien des Phosphates – now the OCP Group. Leaving Khouribga to the south, looking towards Boujniba, you can’t miss the huge mounds left by the extraction of millions of tonnes of phosphate rock. “There used to be many more,” says Brahim Ramdani, OCP’s director of mines in Khourigba. For several years now, the company has been flattening these mini-mountainsandusingthemto plant millions of trees. It is just one of the thousands of projects in the $8bn investment programme OCP launchedin2008,whichin10years hastransformedthecompanyand, THE AFRICA REPORT
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12m
tonnes of fertiliser produced each year, compared to 3.6m tonnes in 2007
SOURCE: OCP GROUP
with it, Khouribga. OCP is now Morocco’s largest group, with a 2017 turnover of €4.3bn. The plan, financed by sky-high prices for phosphate (see box), was to double phosphate mining activity and triple fertiliser production by 2020. It was a two-pronged strategy, suggests one Middle Eastern importer who requested anonymity: “Partly to become flexible enough to export more of one product – be it phosphate rock, phosphoric acid or fertiliser – to meet market demand at any particular moment. […] But also to dissuade other rival producers from trying to enter the race.” Back in the early years of the century,OCP’smarginsweresmall, and the company was caught up in the machinery of state, run by officials linked to the royal palace. Under Mostafa Terrab, it became a limited company in 2008 and restructured its management and operations: from logistics to sales. Over the next decade, OCP went
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from 28m tonnes of phosphates mined to 45m, and fertiliser output leapt from 3.6m tonnes to nearly 12m tonnes per annum. It now has a gross operating surplus of more than $1bn. There have been other innovations. Where the rock was previouslyhauledbytrain150kmfrom the Khouribga mines to the port of Jorf Lasfar, it is now pumped through a metre-wide, steel and rubber slurry pipe. Sensors at each mine and along the pipeline allow anewdata-managementsystemto track volumes and identify problems as they develop. A plan to replicate the system for the mines of Ben Guerir is taking shape. GREEDY FOR ENERGY
At the other end of the pipe, the port of Jorf Lasfar is transforming intothelargestfertiliserproduction hub in the world, with a capacity to produce 11m tonnes of phosphate fertiliser per year and 6m tonnes of phosphoric acid. The whiff of sulphur wafts over the complex. Some 45 different blends of fertiliser are created there, ready to be shipped out from Jorf Lasfar, which last year overtook the port ofCasablancaintonnageexported. All this requires energy. OCP alone consumes 6%-7% of Morocco’s annual energy supply and 1% of its water. “As soon as we boost production, we have to systematically think of ways to lower
86 DOSSIER | MINING
OPEN INNOVATION
OCP chief economist, Mohamed Soual, adds: “The university allows us access to many research institutions around the world and allows us to participate in ‘open innovation’ […]. We can’t keep chasing academics around the world and offering them consulting contracts.” The group has even created a think tank, the
RISING DEMAND FOR FERTILISERS
CHINA, NUMBER ONE EXPORTER Share of the DAP-MAP export market (main phosphate fertilisers)
2005-2050
Rest of the world
Sub-Saharan Africa
+ 300% Middle East and North Africa
+ 180%
17%
East Asia
2015
+ 88%
US
8%
South Asia
+ 39% Latin America
Russia 15%
+ 164%
+ 69% OCP Policy Center, to tackle the political angles of global business. Step inside OCP’s headquarters in Casablanca, and you might think yourself in Silicon Valley. Even more so on the first floor, dubbed the ‘Digital Factory’. A young woman wearing a hijab plays ping pong during lunch, and there are many whiteboards and Post-it notes. This US-inspired environment is not without business logic. Trade with the United States represents between 25% and 30% of the group’s turnover.
SOURCE: ÉCONOMIE DES PHOSPHATES PIERRE-NOËL GIRAUD, 2015
DIAMMONIUM PHOSPHATE (DAP) AND ROCK PHOSPHATE PRICES Rock phosphate ($/tn left-hand scale) DAP ($/tn right-hand scale) 1 000 900 800
300
700
250
600
200
500 400
150
300
100
200
50 0 1969
100 0 1977 1986
1995 2004
2013
11% Saudi Arabia (Ma’aden)
Industrialised countries
IN 2007, MOROCCAN GIANT OCP controlled 47% of the global phosphate market, but it was not yet active in the fertiliser market. This was due to its limited financial resources, an overly
350
38%
11%
OCP’s ambitions are to take this as the first phase of a much larger journey. “We cannot be satisfied with being 17%-18% of globalphosphateproductionwhen we have 72% of global phosphate reserves,” says Soual, taking aim at competitors like Russia’s PhosAgro and Saudi Arabia’s Ma’aden. “And wealsoneedtodiversify,henceour purchaseofaSpanishbiostimulant company and a new partnership with a Chinese group who are specialists in fertiliser additives.” But all is not plain sailing for OCP, which has faced hard times in the past (see box). There remains, for example, the domestic political context of the group, operating in the sensitive Western Sahara region. The Polisario Front, which does not recognise Morocco’s sovereignty in the region, regularly tries to intercept OCP cargoes aroundtheworld.TheOCP-backed Phosboucraa Foundation is trying to improve relations by investing in the city of Laayoune and elsewhere in the region. And then there is the question of OCP’s debt. To execute its expansionplanscoveringtheperioduntil 2027, OCP will need to invest more than $9bn. In May, it raised Dh5bn ($526m) on the local market, followingfundraisingof$2.6bnonthe international markets in 2014 and 2015. Today, total debt is estimated at Dh45bn – about three times OCP’s earnings before interest, tax, depreciationandamortisation.The company lost Dh1.6bn in the last financial year.
The year that changed everything for OCP: 2008
400
China
Morocco (OCP)
cautious management and a lack of technical skills. OCP got an opportunity to transform itself. During the late 2000s, the prices of agricultural commodities spiked, causing demand for the main phosphate fertiliser, diammonium phosphate, to skyrocket. OCP cashed in on this surge and the rise in price of a tonne of phosphates from $50 – where it had stagnated for several decades – to $420. In 2008, OCP reported record sales. The firm’s turnover increased by 118% to reach Dh60bn, its net debt dropped from Dh30bn to Dh4.5bn and its net income exploded by 850% to reach Dh23bn. With new cash reserves, OCP basked in its newfound wealth and invested in its future without overextending or wasting the opportunity. Banks were falling over themselves to loan the company money at very low rates, cementing the behemoth’s place as the world leader in the fertiliser industry. J.W. THE AFRICA REPORT
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SOURCE: ÉCONOMIE DES PHOSPHATES PIERRE-NOËL GIRAUD, 2015
costs,” says Amine Kaf, the Jorf Lasfar facility director. “We need both flexibility and sustainable development. We have brought in the best industrial consultants, like Jacobs Engineering and DuPont, to help us square that circle.” Given the immense technical challenges, OCP is investing in research and training engineers. It built Université Mohammed VI Polytechnique at Ben Guerir, with its well-equiped laboratories to do research in agronomy, nanotechnology and soil analysis. Its current few hundred students should number 5,000 at maturity. The school has forged partnerships with the US-based Massachusetts Institute of Technology (MIT), France’s Ecole de Mines de Paris and Canada’s Université Laval.
Battery Minerals is mapping its Montepuez project, which includes graphite and vanadium
MOZAMBIQUE
Glittering graphite The growing market for electric cars has turned lowly graphite into a hot commodity and promises to put lead in the pencil of the cash-starved government in Maputo
A
s graphite takes the commodities world by storm, Mozambique hopes to capitalise on its vast, high-quality deposits and use them to help to turn its economy around. The government is counting on mining to help get the economy running again after it borrowed $2bn for dubious purposes (see TAR101, June 2018). It is seeking to profit both mining a polutant (coal) and the race to develop sustainable and renewable energy sources. The mineral graphite – a form of coal – is used in lithium-ion batteries, which power mobile phones, portable electronics and, increasingly, green vehicles. Electric cars are cheaper to run than hydrocarbon-powered vehicles and have been proven to reduce carbon emissions.
The likes of Tesla, BMW and Toyota are already producing low-emission cars, and demand is due to soar: according to the International Energy Agency, demand for greener cars will rise to around 125m in 2030 from 3.1m in 2017. CARBON CONCENTRATION
China is the largest exporter of graphite in the world, supplying up to 80% of the 900,000tn demand for the commodity in 2017. But there is one East African country making its way onto the scene: Mozambique. It has one of the largest deposits of high-quality graphite in the world – somewhere between 20% and 40% of total global reserves. Most of the country’s graphite is found in Cabo Delgado, one of the country’s northern-most
provinces. Mining companies have flocked to the region to take advantage of Mozambique’s rich deposits. Australian companies dominate the sector. Triton Minerals, Mustang Resources, Battery Minerals and Syrah Resources are four of the main companies and all are listed on the Australian Stock Exchange. Syrah officially opened its Balama mine, which is about 200km west of the city of Pemba, in April of 2018. But a fire in its processing equipment in October set production back by five weeks, reducing fourth-quarter estimates to 3035 kilotonnes. Graphite mining companies in Mozambique are quick to dismiss any concerns about investor confidence in emerging markets. “The [equity] markets
313 ktn/year: expected average production of Syrah’s Balama mine over its 42-year lifetime SOURCE: SYRAH RESOURCES
THE AFRICA REPORT
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HUGH BROWN/BATTERY MINERALS
88 DOSSIER | MINING
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90 DOSSIER | MINING
ARREARS ACCUMULATE
After the revelation, investors reeled, donor aid froze and Mozambique defaulted on its external debt. The government has amassed $710m of arrears so far, and the International Monetary Fund predicts that Mozambique will continue to default until 2023. According to data compiled by Mozambique’s central bank, foreign direct investment in the extractive industries fell from $2.2bn in 2015 to $1.3bn in 2017. “But we do expect a pick-up in the short term,” says Victor Lopes, senior economist for sub-Saharan Africa at Standard Chartered.
ANNUAL GLOBAL ELECTRIC VEHICLE SALES (millions)
15 10 5
3,000
Rest of the world Rest of Europe France United Kingdom Germany Japan China United States
20
Growth with batteries (9%) 2,500 2,000 1,500 1,000
one million
Growth without batteries (3%)
500
0 2017
ANNUAL GRAPHITE DEMAND (m/tonnes)
2020
2025
2030
Meanwhile, real GDP growth decelerated to 3.8% in 2016 and 3.7% in 2017 from 6.6% in 2015, marking the country’s worst economic growth performance in over two decades. “Slow growth came despite a sharp rise in aluminium and coal exports, which account for 55% of total exports in the first half of 2018,” says Tiago Dionisio, assistant director at Eaglestone, a financial advisory company with an interest in emerging markets. “These exports couldn’t counter the impact of softer demand from both the private and public sectors, softer investment levels and high cost of credit,” he says. But investors have short-term memories. While development finance institutions may have withdrawn from Mozambique in a bid to teach the indebted country a lesson, portfolio investors by and large have flocked back to take advantage of opportunities that still exist in the country – including those in graphite and the wider mining sector. “Investors look at the sector or commodity that they are interested in, not just sovereign risk, and then they will take the necessary steps to mitigate against these risks,” says Christopher McKee, chief executive officer at PRS Group, a country risk rating company. “The graphite sector in Mozambique may well succeed.” He adds: “Moreover, it’s like the age-old adage: the safest place to be after a terrorist attack happens is where it occurred, so investors will go back.” Increased interest comes with softer political policies towards
2010 11 12 13 14 15 16 17 18 19 20
the mining sector. “Graphite mining in Mozambique is a much more appealing prospect compared with some others in the region,” says Triton Minerals’ managing director Peter Canterbury. “For instance, we have full ownership over the mines and we are able to repatriate all profits from them. In Tanzania, on the other hand, the government requires a 16% share of all mines. Despite the problems we find in Mozambique, it’s a much more attractive prospect.”
3.7
Percent of real GDP growth in 2017, the country’s worst economic growth performance in more than two decades despite a rise in coal and aluminium exports SOURCE: WORLD BANK
THE AFRICA REPORT
LESS AGGRESSIVE
Triton is working on its Ancuabe mine, which will cost an estimated $99.4m to construct. Once fully operational, it should produce 60,000tn of graphite per year. The government imposes a 32% corporate tax and takes 3% in royalties. “There’s a fiveyear exception from import duty and a positive capital allowance scheme for 10 years, which takes corporate tax levels closer to 25%,” says Canterbury. “Governments tend to be less aggressive in terms of economic rent when the commodity cycle is at a low point or after some disruptive event, such as a default,” says McKee. “It’s the natural cycle employed by governments to attract much-needed capital in times of stress. It has to be business as usual for them to survive and the graphite sector – as well as mining in general – has the potential to plug some of the government’s debt.” Kanika Saigal
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SOURCE: MASON GRAPHITE
25
SOURCE: BLOOMBERG NEW ENERGY FINANCE
have suffered the world over, but we look at this as a long-term infrastructure investment in any case,” says David Flanagan, managing director at Battery Minerals. “The graphite industry will be a bright spot for Mozambique,” he says. Battery Minerals owns licences for deposits at Montepuez and Balama, but does not yet have the funds to develop them. Graphite is not the only attraction, and the firm estimates that it also has $10bn worth of vanadium, a metal used in making steel alloys, on its acreage. The timing of the mining boom could not be better for the Maputo government, not just because demand for graphite it set to triple over the next 10 years, but because it could be a major boon for the economy, which has lost the confidence of international investors and donors alike. In 2015, while the Mozambican authorities began restructuring a loan from Credit Suisse and Russian bank VTB to fund the development of the fishing industry and other opaque projects two years earlier, officials discovered $2bn – 17.5% of GDP – in undisclosed debt. Mozambique’s attorney general appointed international investigator Kroll to probe government officials and companies embroiled in the mess. Today, some of the debt is still unaccounted for.
92 DOSSIER | MINING
Richard Young Chief executive officer, Teranga Gold Corporation
Exploration in West Africa just got started
T
eranga is part of a growing number of mining companies, many of them from Canada, exploring for gold in West Africa. “West Africa has more potential than probably any other region in the world today. The geology is similar to the geology in northern Ontario and Quebec, as well as Western Australia. Both belts have been so prolific for a century and continue to be,” says Teranga Gold Corporation chief executive, Richard Young. “It’s early days in West Africa – exploration just got started.” Gold output in West Africa is around 8m-9m ounces a year, compared to 12m ounces annually for North America. “Annual production is now approaching that of North America, which, when I first started in the industry, I never thoughtwaspossible,” addsYoung. Ghana is the region’s biggest producer, and output is growing fast in francophone West Africa. With nine active mines, Mali expects its gold production to increase by 21% to 60tn (2.1m ounces) this year, while output in Burkina Faso may reach 55tn. Even in Côte d’Ivoire, gold production has doubled in the past five years to 25tn. Senegal mined 7tn of gold last year and opened a second mine in May. Young says: “Ideally we want to gotocountrieswheregovernments welcome foreign investment, and
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The Canadian mining executive talks to The Africa Report about the region’s potential and the synergies underpinning Teranga’s long-term bets on rising demand for gold we find French West Africa to be mining-friendly.” Getting permits for a project can be done in about a year, while it can take five years or more in North America. There are challenges, too. The region is facing growing security concerns, particularly in Mali and Burkina Faso. There is a lack of infrastructure and training, and electricity costs are high. FRANCOPHONE FRIENDS
That said, Canadian mining companies see the long-term attractiveness in the region. In addition to Teranga Gold, other Canadian miners include B2Gold (Mali), Iamgold (Burkina Faso, Mali),
“Annual gold production in West Africa is approaching that of North America” Endeavour Mining (Burkina Faso, Mali, Côte d’Ivoire) and Semafo (Côte d’Ivoire). “In French West Africa, there’s an affinity towards Canada. A lot of politicians, bureaucrats and business leaders have gone to school here. And the Canadian government has made French West Africa a priority,” says Young. Canadian mining companies’ assets in Africa amounted to C$28.6bn ($21.7bn) in 2016, and the Toronto Stock Exchange – the world’s largest mining bourse – is THE AFRICA REPORT
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a leading hub to raise money for mining projects in Africa. TerangaGoldtargetsproduction of 240,000oz at its mine in Senegal this year and hopes to pour its first gold at its Wahgnion mine in Burkina Faso by the end of next year. With both mines, the company’s annual production would reach 350,000oz. Teranga also expects to complete a feasibility study at its Golden Hill project in Burkina Faso by 2020 and join the ranks of mid-tier gold producers in the next five years. Teranga is investing “for the future”, Young says, despite low gold prices. An ounce sold for around $1,220 in early November, down from about $1,500 about six months ago. The Sabodala mine in Senegal, in operation since 2009, now generates free cash flow that Teranga is using to move its project pipeline forward. “At current gold prices [...] the industryisn’tsustainable.There’snot enough free cash flow to be able to explore, make new discoveries and grow the business,” Young concludes. “[But] mine supply is declining and we expect demand to continue to rise as more and more Asians move into the middle class. So we think increasing demand coupled with falling supply will have a positive effect on gold prices in the longer term.” Interview by Olivier Monnier in Toronto N ° 10 6
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ADVERTORIAL
Discovering Djibouti
Discreet, strik ing and surp rising , Djibouti is a destination th at th e g ov ernment intends to p rotect from mass tourism. Dev elop ing its ow n strateg y , Djibouti draw s an increasing number of tourists annually - from business trav ellers to g eolog ical and eth ical tourists.
The advantage of Djibouti is that it has stayed off the beaten track, thereby preserving its natural wonders. Magical sights like the sun rising over a lake where colonies of pink flamingoes are gathered on its shores, a black lava field from which mysterious chimneys of natural origin sprout, spitting steam, and sun-scorched plains stretching as far as the eye can see, giving one the feeling of travelling through time. This tiny state makes up for its size through the sheer, striking beauty of its landscapes.
"The traveller who sets foot in Djibouti doesnâ&#x20AC;&#x2122;t know where to start. The old country of Pount is full of geological, cultural and ecological curiosities. Some sites, of a stunning beauty, are certainly worth the detour"
Discovering Djibouti
An untapped de ination
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enowned travel guide Lonely Planet raves about the Republic of Djibouti’s hidden beauty. Not surprising, since this tiny 21,000 km² country’s sights of breathtaking beauty have enamoured many before it. French poet Arthur Rimbaud wrote of Lake Assal’s “lunar landscapes”, while 20th Century adventurer H aroun Tazieff called it “an open air geological book” and Jacques-Y ves Cousteau, famous deep-sea explorer, dived with whale sharks into the crevices of the Great Rift. Djibouti’s unimaginable vistas leave no-one untouched. W hich is why Lonely Planet ranks it fourth as a travel destination for 2018, noting it as stable, safe, beautiful sites and good value for money.
Whale sharks:
Swimming with whale sharks is a rare and unforgettable experience, something that few people get to do. Djibouti gives visitors the opportunity from October to February of eachh year, yea , when this gentle giant stops over at Arta Beach in the Gulf of Tadjo djourah. Growing to a length of up to 15 metres, the whale sharkk is harmless to man and can be approached and photographhed. Y ou can swim alongside them, getting a close-up view of their wide-open mouths as they swallow the plankton inn their path. Simply magical!
ADVERTORIAL Discovering Djibouti
The four pillars of tourism development
1
Support development of sustainable tourism
2
Highlight the main tourist attractions
3
Structure the o er
4
Develop human resources
«Djibouti calls out to hikers and divers. You will discover breathtakingly beautiful landscapes.»
Exceptional sites Two must-see places for travellers
L ak e A ssal Thhis is one of the lunar landscapes mentioned by Frrench poet Arthur Rimbaud. At 155 metres below sea level, it is the lowest point of Africa. Together, thhe elements of nature - salt, water, lava - make foor a stark and surreal landscape. W hen tourists encounter a caravan crossing the shores of this laake, it is a magnificent and moving experience.
L aak e A bh e A known as Lake Abhe Bad, this alien landsAlso cape would have served perfectly as the location of the first ‘ Planet of the Apes’ film. The lake is frringed by crowds of pink fl amingoes, surrounded inn turn by a forest of stone chimneys belching stteam. Located at the junction of three of the Earth’s tectonic plates, which are pulling slowly aw way from one another, Lake Abbe’s geological m mystery will capitave any traveller.
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he Djibouti National Tourism Office ( ONTD) has done an excellent job of promoting Djibouti’s touristic assets at international tourism trade fairs in Paris, Dubai and London, bringing to the fore its wonderfully dramatic landscapes and eco-tourism activities. There is much interest from large international hospitality groups such as Morocco’s La Palmeraie, who wish to invest in a Radisson H otel, as well as France’s Onomo Group. Ethiopia is not to be outdone and soon, its K uriftu Resorts will be opening a large hotel on Moucha Island. Private investors, encouraged by the attractive and advantageous investment code, are increasingly investigating the opportunities of this destination, further bolstered by the fact that Djibouti has climbed from 153rd to 99th position in the latest edition of the W orld Bank’s “Doing Business” rankings.
ADVERTORIAL Discovering Djibouti
An interview with Osman Abdi Mohamed, the Director General of the Djibouti National Tourism Office (ONTD).
How does tourism contribute to the dynamism of the economy ?
What is the impact of the tourism sector on poverty reduction?
C
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ourism, hotels and restaurants are a value chain and appear as very labour-intensive service industries, and have numerous assets to reduce poverty by developing the concept of sustainable tourism. For example: • Infrastructure. Its development can fully benefit the poor living in the tourist sites by giving them access to job markets, allowing to improve the supply of goods and services to the economyin general.
"Our strategy preserves the environment and
• Training and qualification. The sector and its components informally provide a large number of jobs for workers having little or no formal education: they can offer opportunities for people who suffer a serious social disadvantage or shortage of skills.
contributes to the reduction of poverty."
• Access to financing. The aim here is to promote local adoption of the initiatives by facilitating access to finance through loans to the poorest project owners.
What made you decide to favour niche tourism?
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t the National Tourism Forum held in Djibouti in March 2018, the strategic pillars for Djibouti’s tourism devleopment were identified. These are part of the cultural and environmental tourism model and form the basis of the Master Plan for the Development of Sustainable Tourism.
The implementation of this tourism model is accompanied by the creation of “Corridors of Sustainable Tourism”: • A cultural tourism corridor connecting Djibouti City to archaeological sites and rock paintings.
How do you see the future?
T
he outlook for this sector is very encouraging. IIn fact, we have not yet explored all the potential. If expected investments do materialize, tourism will certainly be the sector that will be able to be the largest provider of jobs across the country. Djibouti National Tourism Office plans to deploy actions along the lines of:
• An ecological tourism corridor linking the Goubet coastline to Lake Assal and the Assamo region.
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The promotion of Djibouti as a destination by participating in international tourism fairs planned for 2019.
• A corridor of green green and mangrove tourism connecting Tadjourah to Obock via the coast.
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Support for capacity building of tourism industry professionals.
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Raising awareness amongst tourism professionals so that they engage in a quality-and diversity-oriented approach to tourism products and services.
At this time, we cannot afford to favour a mass tourism that could harm our ecosystem if prerequisites are not implemented both in infrastructure investments and in strengthening of policies to protect the environment of our country’s fragile tourist attraction sites.
Office National du Tourisme de Djibouti Place du 27 Juin, BP 1938 Djibouti Ville, République de Djibouti Tel: +253 21 35 37 90 Email: infotourisme@visitdjibouti.dj or infotourisme@intnet.dj
www.visitdjibouti.dj
©JAMG/DIFCOM - photos : D.R. ONTD
urrently, the tourism sector share of the Djiboutian economy is between 3% and 5% of GDP. This is set to increase significantly in the coming years due to the implementation of our tourism development strategy. The potential of the sector is a promising source of wealth and job creation.
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A guide to
2019 By Dami Ajayi in Lagos, Henry Brefo, Billie A. McTernan in Kumasi, EssĂŠ Dabla-Attikpo in Accra, Jacqueline Nsiah, Oluwashina Okeleji in Lagos, Phiona Okumu, Ayodeji A d ji Rotinwa R ti in i Lagos L and d Wana W U Udobang in Lagos
INTERVIE W
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“Every time I try to leave, something keeps pulling me back” She has given wings to African art and made it fly. After Venice and the FNB Art Prize the Nigerian wunderkind has returned to Lagos to open her own foundation – it was more than she bargained for but, as always, Alatise’s determination saw her through
O ADEOLA OLAGUNJU
By Wana Udobang in Lagos
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ver the past couple of years Peju Alatise’s career has been on a roll. From winning a Smithsonian Artist Research Fellowship in 2016 to representing Nigeria at the VeniceBiennalein2017andscoopingthe coveted FNB Art Prize in Johannesburg the same year, the Lagos-based artist’s feet have hardly touched the ground. Back home, however, she received some surprising reactions to her Flying Girls – the sculptures in her installation at the Biennale. “I was shocked when people said they were witches,” Alatise recounts. “Ogbanje, Abiku, demons. In fact someone described them as howling demons. They said it was because I gave them wings, so anybody that is flying, that has wings, is demonic.”
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Even before Venice, her work was entering the big league. In 2015 her piece High Horses, a triptych of three young women sat on high pedestals, their faces covered in brightly painted fabric, sold at auction at Bonhams in London for £31,250 ($40,000). In January 2018 Alatise started a new adventure, opening the Alter’NATIVE Artist Initiative (ANAI) Foundation. The beachfront property in Lagos combines exhibition spaces with artists’ residencies and ceramics training. With its cement wall, high ceilings, mezzanine library, open-plan kitchen and lights that hang from high beams, it feels industrial and modern.Largewindowsopenonaswimming pool and garden. The building is accented by mustard-painted bars and most of its furniture is welded or carved. Alatise, who herself studied architecture at Ladoke Akintola University of Technology in Oyo State, worked with architect Ade Shokunbi to put her own ideas into practice. ANAI was designed incorporating solar energy and rain harvesting to make it energy-efficient and ecologically sustainable.
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As though g the administrative hassles hadn’t taken enough of a toll on her, she recalls an incident where a young artist in residence posted nude self-portraits of himself spattered with mud on social media, tagged as an ANAI project; the timing was unfortunate as the foundation was in the middle of fundraising from foreign “The amazing thing about Egungun donors, who were likely is that it is the most total art form […]. to be scared off by such It engages all parts of your humanity” radical art. Not long after that some pipes exploded big opportunities coming and we are and needed replacing. Problems were going to lose them if we don’t have our assailing her from all sides. Alastise’s own artistic production thoughts and ideas together, so I thought a place that generates good ideas – that’s can be sometimes ghoulish, life-like what we really need to do. It sounds like and immersive in its storytelling. This it should be really simple.” world-building has been integral to how the audience experiences her work. WAHALA ON ALL SIDES Taking a little break from the stress of The artist did not anticipate the trouble setting up ANAI, she is excited about that lay ahead: “First of all, the strugthe new work she is creating. It will tell gle to even get started, the struggle to the story of a man who died but was not reincarnated so hovered around as a bring in equipment, the struggle with Nigerian policies. […] When you put all spirit to guide his son, who is an Egungun – a physical manifestation, in the form of this together, you are spending £60,000 for a £24,000 project. That is how it a masquerade, of the ancestors. works here. This is just equipment, we “It has to do with Yoruba philosophy and spirituality. In Yoruba spirituality haven’t talked about the fact that the they have three heavens. So I have to government wants to tax you and they don’t even give you water or electricity.” learn everything I can about Egungun She has spent the past two years years and its origins. It’s a phenomenal practice by Yoruba people. The amazing squeezing through bottlenecks, fighting thing about Egungun is that it is the government red tape and investing more than she bargained for. “I’m in a very most total art form that you can find,” weird sort of space,” she says, with a she says, beaming with excitement. “It’s face showing visible signs of exhaustion. very performative and visually engaging. “For the first time in my life I think that There is a lot of literature because of the poems they have to recite […] and the I am confused. I have always known music with the drumming. It engages where I was going, what I wanted to all parts of your humanity.” do, very self-assured, always asserted Alatise’s work has always been heavily my will, very opinionated. You have influenced by Yoruba mythology, which certain experiences that blow you out has also informed her preference to of the water – it is a bit disorientating.”
1. Orange Scarf goes to Heaven (triptych), sold at Bonhams for £17,500. 2. Sleeping Beauty, an installation. 3. O is the new † installation at the FNB Joburg Art Fair 2017: “It’s about lynching,” says the artist. 4. The ANAI Foundation opens in Lagos. 5. The Unconscious Struggle on show at ANAI. 6. High Horses (tryptich), sold at Bonhams for £31,250. 3
ADEOLA OLAGUNJU
Architecture is still a huge influence on her work, she says, especially when it comes to space and structure: “You can’t go through six years of architecture and not feel structure. Architecture makes you obey all the laws. […] It makes you so aware of physicality.” A self-taught artist, she appreciates the huge role that mentors like Mama Nike Davies-Okundaye of the famed Oshogbo school for art, batik and textile design played in her development. This propelled her to want to give something back, but she also wanted to do something about the dearth of creative infrastructure in Nigeria: “This is Nigeria, there are certain things that are lacking. When you look at how we can improve certain things, there are various steps. I want to be a part of these first steps and provide a platform,” she says. Hosting a residency programme that captures artists and their big ideas, she explains, is that first step: “There are
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experiment with a variety of materials that include fibreglass, cement moulds, resin and fabric. On top of that, the project brings together her artistic practices as a writer, sculptor and painter. Whenitcametoresearchingthesubject, however, local scholars and performers proved reluctant to divulge the secrets of
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SELF-SUSTENANCE
MUYIWA ALATISE
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Egungun as the practice is often forbidden to women. “I engaged some of our scholars and even the local people but when you are not part of it and you are female it’s a big problem, so they didn’t want to help and led me on a wild goose chase. Someone at the Smithsonian asked if I wanted to use their facilities to do research and I applied and got a fellowship at the Smithsonian. They are not like the people here who hide everything. It is very detrimental, I don’t know why we do that.”
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She is also disappointed that she could not work with local fabric weavers. She had to import fabrics from China because the local textile industry in Nigeria is almost extinct. This decline in local industries is one of the themes of this new work. During the course of her more than decade-long artistic career Alatise has also worked with artisans to design furniture and is concernedbyhowthesecommunitiesare losing their means of living, driving them to migrate to the cities to look for work. “There is a loss of skill, loss of opportunity to evolve on the technology of producing such a peculiar product. We have lost all of that so for me I am asking: how do you sustain your existence if all you just do is consume? It is not about tradition. What I believe in is called self-sustenance.” Placing a spotlight on social issues and advocacy has always been integral to her storytelling and creative process. At a time when works of African artists are sometimes criticised for being too self-consciously political she believes that art still has a responsibility. “Sometimes I feel that way, like I am tired of saying things, but it is difficult because what is the point of creating something that means nothing? If art is a form of communication, it’s a little bit unnatural for me that if I am creating something it doesn’t come from somewhere.” Reflecting on a year that has been as momentous as it was trying, she tells a story about her grandmother, Mama Alhaja, who nailed Alatise’s umbilical cord to a tree somewhere in Ijebu Ode when she was born. “She said that this child is not going anywhere. So every time I try to leave, something keeps pulling me back, but I am thinking that it is time for me to go. Not forever – I know I will always come back because that umbilical cord is there, and I think that shit is real.”
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The year ahead in arts & culture Documentary filmmaker Jihan El-Tahri
Jihan El-Tahri Filmmaker
LEA CRESPI / PASCO
film New wave breaking in African cinema
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he festival calendar ended with another superb edition of Film Africa London, showcasing 40 films from 15 different African countries across various cinemas in London. The programme was packed with lots of new talent, telling current stories in imaginative ways. In his debut feature, The Burial of Kojo, Sam Bazawule, aka rapper Blitz the Ambassador, used magic realism to confront the subject of illegal mining. Meanwhile, Wanuri Kahiu shone a brave light on queer romantic relationships in Nairobi in Rafiki. Humanimals, a musical directed by Emmanuel Owusu Bonsu, aka Wanlov the Kubulor,madefor the six-track EP ofthesame title by VILLY & The Xtreme Volumes, discusses the problems around attaining a UK visa. And Akin Omotoso’s A Hotel Called Memory is an ode to avant-garde cinema exploring the failure of a marriage through the eyes of Lola (played by Nse Ikpe-Etim). These directors are paving the way for a new wave of African cinema we can look forward to in the years to come. British Ghanaian director Baff Akoto, known for his documentaries Star Cross and Football
Fables, was tipped Screen International Star of Tomorrow 2018. Akoto is set to shoot his first two feature films at the beginning of next year with producer Joy Gharoro-Akpojotor: one will be a prison drama and the other is a comedy drama set in 1984, following a Jamaican family during the UK miners’ strike. The 2019 film festival calendar will begin with Fespaco celebrating 50 years of its existence from 23 February to 3 March. We can expect lots of specials, including retrospectives on the founding fathers such as Ousmane Sembène and Kwaw Ansah. Other festivals to look out for are Luxor African Film Festival in March, NollywoodWeek Paris in May, Durban International Film Festival in July, Toronto International Film Festival in September, Africa in Motion Edinburgh in October and Film Africa once again in London in November.
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“During this year’s Durban International Film Festival I said something that was widely circulated on social media: ‘African cinema doesn’t have an African industry at all and that’s where our problem arises.’ This is related to funding: on the continent we have four countries that have a film fund – Egypt, Morocco, Nigeria and South Africa –, and even out of those countries as a filmmaker you cannot complete your film based on those funds, you would still need to get a co-production deal [in the West]. To get a foot into those funding bodies you have to pass through various hurdles. People within the industry look at me and think that I have it easy, but they don’t see that I have been knocking on those same doors for years. I believe the way forward is to work collaboratively: different filmmakers should work together on a film and apply for funding together. This is the only way I see an African industry slowly emerging and staying.”
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Screen idols
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WEAREGVDS AND SVETJACQUE.
ith fewer album releases than previous years, 2018 has been a lean year for music. Instead, sizzling music videos to singles on the Nigerian scene, like Davido’s Assurance, featuring his current lover Chioma, and Wizkid’s Fever with Tiwa Savage as the leading lady, set social media alight. Singer Teni the Entertainer had a lofty year, belting hits after hits under the Dr Dolor label, and in 2019 is definitely set to consolidate her soaring status. And if clockwork, or his new signees, are anything to go by, rapper Olamide owed his fans his annual November studio LP record. Meanwhile, Sarkodie dissed fellow Ghanaian singer Shatta Wale on the three-minute-long hip-hop tutorial ‘My Advice’, and the song comes with its own crisp monochrome video that went viral on social media. Hopefully 2019 will bring a new studio project from the Twi wordsmith, whose last slam-dunk was two years back. Kenya’s Just a Band has been on a two-year hiatus that will end in 2019. Although their artistic break as a group has enabled their individual careers to flourish (Blinky Bill’s hugely popular debut album Everyone’s Just Winging It and Other Fly Tales was released in October), it will be nice to see the trio make some acoustic magic again. EvenifCameroon’spolitystandsasone Singer-songwriter of the oldest in Africa, that geriatric streak “My forthcoming EP is called Contagious, and it fuses African 80s Fuji music has eluded the blossoming music scene, where young cats like Zas Ziggi, Wazih and [American] 90s R&B. I wanted to create songs guided by [being] simply human. There are no collaborations on this project except ‘Show You Off’ (with Walshy and Forkeh are doing consistent work to Fire from Major Lazer). Playing live is one of the most exciting things for me – join Daphne, X Maleya and Mink, some it’s all high energy and interaction. Sharing my art with diverse audiences, especially of the hardest hitters, on the music scene. here in the US, I believe my Africanness is the true magic to who I am. Many And Coke Studio Africa will return in people say my sound is unique, but what they’re really hearing is an African-born 2019 after a hiatus in 2018. We can look creative exposed to different genres of music. Asa, Wizkid and Olamide are forward to continental collaborations names that always get me excited, but I’m more than ever excited about the next being back on our screens with the first generation of African artists yet to be discovered by the rest of the world.” episode airing in February.
WurlD
Suspense and the sisterhood
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he book that’s got everyone talking, Oyinkan Braithwaite’s debut crime novel My Sister, the Serial Killer – out in January – is certainly worth all the hype. Dead boyfriends, rubber gloves and bleach, and the love of two sisters… family always comes first. The independent UK publisher Head of Zeus has acquired the rights for Ben Okri’s The Freedom Artist. According to the writer, this is “a novel I have been wanting THE AFRICA REPORT
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to write for a long time, a fist of light against a wall of darkness”. Out in paperback in May 2019. Twenty-five years on from its first incarnation, Margaret Busby has edited The New Daughters of Africa anthology. This is the next generation: 200 bold and vibrant women writers from across the African diaspora including ZadieSmith,ChimamandaNgozi Adichie, Imbolo Mbue and many more. The weighty volume will be out in March 2019.
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books Ndinda Kioko Author “I am currently working on my first novel under the Olive B. O’Connor fellowship at Colgate University [New York State, US]. In the novel, I’m interested in family as a place of small terrors, and the rituals of mourning. I have also been working on a collection of short stories. One of the stories, ‘Little Jamaica’, will be published in the Black Warrior Review Spring issue. The story is an examination of the lives of small towns. Next year I’m looking forward to Kenyan author Okwiri Oduor’s debut novel, and, from Zambia, Namwali Serpell’s novel, The Old Drift.
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football No substitute for African talent
Bean there, done that: LoshesChocolate
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travel
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Tasting the continent
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his year, hone in on flavours when making your travel plans for a richer cultural experience – whether working your way through traditional dishes, trying the freshest, most local produce or meeting young food innovators.
À table à Lomé Togo is an unsuspected paradise for food lovers, with a gastronomy that is both tasty and affordable. In Lomé try out grillades – grilled seafood, pork, soy kebabs, guinea fowl – anywhere along the beach. The local delicacy gboma is a leaf stew eaten with a ball of akoumé (corn dough). For the sweet-toothed, street sellers offer a variety of treats: konkada (caramelised peanuts) peanut nougat, coconut toffees. Oh, and do not forget to get your delicious, locally made fruit jams before leaving the capital!
Chocolate delight in Lagos You’ve probably heard about Ghanaian and Ivorian chocolate – now it’s time to discover Nigerian chocolate! Chocolatier Femi Oyedipe, founder of LoshesChocolate, is on a mission to make that happen. Her factory-showroom is a hidden gem located in Lekki, Lagos. There you can go on a tour, sample chocolate, learn about chocolate making and of course buy some! So will you be tempted by the coconut milk chocolate bar, the mango dark chocolate or the spicy dark chocolate?
The perfect food day in Marrakech Get breakfast in the Medina: pomegranate juice, bread, apricots, dates, pancakes – baghrir and m’semen – with a bit of honey. Have lunch at a traditional spot and order lentils, fried fish or fried vegetables. Later, enjoy mint tea and cookies at La Patisserie des Princes. At 7pm, as the sun goes down, head to the main square, Jemaa el-Fnaa, to try out the famous snail soup, followed by a lamb tajine with dried plums and a mix of special spices. Bon appétit!
uch of 2018 was rocked by scandalinAfricanfootball.Ghanaian investigative journalist Anas Aremeyaw Anas’s documentary on corruption, Number 12, led to the suspension of Ghana Football Association president and erstwhile Confederation of African Football (CAF) vice-president Kwesi Nyantakyi. Referee Marwa Range from Kenya was taken off World Cup duty and Salisu Yusuf, coach of the Nigerian national team, was also implicated. On the pitch, there was an eye-opening cache of performances from Egyptian forward Mohamed Salah. The Liverpool man made a remarkable debut in the Premier League, winning the Golden Boot with 32 goals. He propelled the Reds to an unprecedented UEFA Champions League final, where they would fall just short after Salah was forced off with an injury. But his precarious health would prove too much of a handicap for Egypt at the World Cup, where they finished bottomofGroupAinatournamentwhere no African side got past the group stage. The Women’s World Cup holds greater promise: Nigeria are favourites to lead three African teams to the 2019 tournament in France, and will be in pole position to break the glass ceiling of their lofty 1999 quarter-final achievement. As the stock of African sides in the Mundial decreased, that of its players soared. The transfer record for an African player was broken twice in 2018, first by Gabon’s Pierre-Emerick Aubameyang’s £56m move to Arsenal, and then by Algerian Riyad Mahrez’s £60m transfer to Manchester City. The technical abilities of the continent’s players are coming to the fore in a more cosmopolitan league, and that can only be a good thing. The first 24-nation Africa Cup of Nations gets underway in June after a switch from its traditional January start and promises to be one of the most exciting in recent memory. The suitability of hosts Cameroon remains unclear, due to ethnic tensions and delays, but it appears CAF are willing to wait till the very last moment to make a call. N ° 10 6
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Othman Lazraq
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Lynette Yiadom Boakye, Master of Menaces
Bumper year for biennales
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he continent’s art stars will be shining in the north in February, when Marrakech welcomes back its Biennale. With African artists increasingly present at global fairs, Art Dubai will likely be a desired stop too, in March. In October 2018, British Ghanaian painter Lynette Yiadom-Boakye won the prestigious Carnegie Prize. Her work, and that of 31 others, forms part of the Carnegie International exhibition in Pittsburgh until the end of March. In May, the 58th edition of the biggest exhibition in the world, the Venice Biennale, will open in Italy with stakeholders hoping the continent can build on its 2017 representation, where Nigeria showed a (critically acclaimed) pavilion for the first time, alongside South Africa, Tunisia, Kenya and Côte d’Ivoire. THE AFRICA REPORT
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At the Waza Arts Centre in Lubumbashi, DRC, and Modzi Arts in Lusaka, Zambia, there are year-long ‘alternative’ art programmes worth visiting. The Lubumbashi Biennale will return in October, under the artistic direction of curator Sandrine Colard. By August, it will be time to head to Accra, to dance alongside the live, public art at the Chale Wote Street Art Festival. In late October and early November, the biggest art capitals on the continent will host the world at the Johannesburg Art Fair, Art X Lagos (West Africa’s biggest contemporary art fair) and the Lagos Photo Festival. And in December the final destination for the year will be Mali for the Rencontres de Bamako photography biennale.
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“I am extremely excited about the launch of Marrakech Art Week, which will run at the end of February and will include the launch of our next exhibition at MACAAL (to be announced soon) and the second edition of 1-54 African Art Fair Marrakech. Beyond Marrakech, 2019 looks to be another stimulating year for art. A few artists to watch would be Bronwyn Katz, Phumzile Khanyile, Slimen El Kamel, Ian Mwesiga, Soukaina Aziz El Idrissi, Joy Labinjo and Gresham Tapiwa Nyaude.”
SAAD ALAMI
COURTESY: THE ARTIST, CORVI-MORA, LONDON AND JACK SHAINMAN GALLERY, NEW YORK
President, MACAAL
106 ART & LIFE
Reviews: what we loved in 2018 Kasala! This directorial debut by Ema Edosio (left) is an ode to the hustle and bustle of Lagos life, which she describes as a love story between herself and the city. Kasala! means trouble in Pidgin and this refreshing, hilarious and fast-paced film feels very authentic. Within 24 hours, it follows a group of four boys, one of whom comes up with the plan to steal his uncle Teju’s car. The boys take it for a joyride and when things go wrong they turn to their Lagos street smarts to fix the uncle’s car. Kasala! had its world premiere at the NollywoodWeek Paris Film Festival in May and has since screened at Film Africa London.
film AKasha Dir. Hajooj Kuka, Sudan Adnan is a young, idealistic, AK-47-toting revolutionary. He is also madly in love with his girlfriend, Lina. After he and fellow soldier Absi fail to return to duty, an aKasha is launched by the army commander to round up soldiers that are AWOL. Through a series of comical events in which Adnan and Absi must figure out a way to escape their superiors and for Adnan to get his hands back on his prized gun, the film takes the audience through 24 hours in the rebel-held villages in Sudan. In 2014 director Hajooj Kuka became known with his hit music documentary Beats of The Antonov. aKasha is making the festival rounds in 2019.
Kinshasa Makambo
We Need Prayers
Dir. Dieudo Hamadi, DRC
Dir. The Nest Collective, Kenya
A group of young people are gathered together, protesting peacefully in a public space. Suddenly, a jolt moves through the crowd and they run off. A camera is there the whole time, running, trembling, then comes to a halt. Congolese director Dieudo Hamadi’s documentary follows a group of activists demonstrating against the third re-election of Congolese president Joseph Kabila in 2015, risking their freedom and their lives. The film won best doc at the prestigious documentary film festival É Tudo Verdade in Rio de Janeiro. It is Hamadi’s third film centring on Congo and its failed state. THE AFRICA REPORT
We Need Prayers is a mini-series directed by the uber-talented, multidisciplinary art squad The Nest Collective. For the past six years the Kenyan collective has made numerous avant garde films including the fashion short To Catch a Dream and Stories of our Lives, a feature film made up of five shorts on real life LGBT stories from Kenya. This web series consists of 10 episodes, each lasting about 10 minutes, exploring the dichotomies of contemporary living in Nairobi: hustling artists, 21st-century dating and romance are among the subjects tackled with a playful and magnified lens. •
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STEFAN HEUNIS/AFP
Dir. Ema Edosio, Nigeria
music
ART & LIFE 107
Silence is My Mother Tongue Addonia offers a unique telling of the tragedy of displacement. Saba, the 17-yearold heroine, wrestles with what it means to be a woman in a damaged world. Jamal, her mute brother, offers his body for his sister’s independence. Silence is My Mother Tongue presents an intimate and gutsy novel of life in a refugee camp, packed with dark humour and sheer human tenderness.
House of Stone Novuyo Rosa Tshuma Tshuma’s debut novel is a searing indictment of Zimbabwe’s history. In this richly embellished retelling of the past, we are left with no heroes or victors. Zamani plies his surrogate father, Abednego, a recovering alcoholic, with whisky, in exchange for personal stories that will enable him to reconstruct the country’s “hi-story”. What unfolds is more than he bargained for.
Children of Blood and Bone Tomi Adeyemi Based on various African mythologies, a magnificent universe forms the background to an epic family drama. The land of Orisha is caught in a bitter conflict as the despotic King Saran sets out to eradicate magic. Can Zelie, our young sorceress, protect her people? With an ingenious twist, the novel takes its inspiration from the Black Lives Matter movement.
books THE AFRICA REPORT
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ALL RIGHTS RESERVED
Sulaiman Addonia
Strings and Bling Nasty C Strings and Bling is the most streamed hip-hop album on the continent – a feat that’s unsurprising for the self-proclaimed “coolest kid in Africa”. By hopping on multiple hit songs by the likes of Runtown, Davido and Kwesi Arthur, Nasty C (above) is one of a few South African rappers making strides towards continental domination, despite an American hip-hop accent that might usually alienate the mainstream.
19 MHD 19, the album by MHD, includes features from Wizkid, Salif Keïta, Yemi Alade, Orelsan and Dadju, in homage, it would appear, to Paris’s 19th arrondissement and his African heritage. Nineteen tracks can feel like a drag in parts. But where it’s not, this is a fun exploration of pan-cultural synergies that colourfully paints the picture of millennial, third-culture living and identity.
Matriarch Wanja Wohoro We first heard of Wanja Wohoro on Dust, a joint project with fellow Kenyan, Jinku. On Matriarch she makes a powerful stand on her own. The groove is soft but the intention is by no means meek. Her message is a takedown of patriarchy as she sees it. Sonically, the marriage of Kikuyu melodies with neo-soul sensibilities warms the soul along this journey of self-affirmation.
Express Vol. 2 Reniss Cameroonian singer Reniss’s production is, as always, in the capable hands of her label boss Jovi Le Monstre. Over time the two have crafted a sound they call Mboko pop, blending traditional Cameroonian rhythms with a pop and R&B appeal. Reniss is as versatile as ever, singing in Nguemba, Pidgin, English and French on a 4-track EP packed with the right balance of grit and finesse.
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Country profiles On average, the economies of the continent are set to grow, if assumptions about global markets and domestic political trajectories hold true. Reform and austerity are the buzzwords in resource-dependent countries, as more diversified ones outpace on growth
169 WEST AFRICA
By Marshall Van Valen 194 ALGERIA
121 ESWATINI
184 NIGER
COUNTRY REPORT EDITOR
118 ANGOLA
142 ETHIOPIA
185 NIGERIA
Marshall Van Valen
172 BENIN
165 GABON
146 RWANDA
COUNTRY REPORT CONTRIBUTORS
120 BOTSWANA
177 GAMBIA
166 REP. OF CONGO
173 BURKINA FASO
178 GHANA
138 BURUNDI
180 GUINEA
167 SÃO TOMÉ E PRINCIPÉ
158 CAMEROON
181 GUINEABISSAU
187 SENEGAL
144 KENYA
188 SIERRA LEONE
122 LESOTHO
148 SOMALIA
182 LIBERIA
128 SOUTH AFRICA
Arteh Abdourahim Abdillahi, Nuno Andrade Ferreira, Joseph Burite, Frank Chikowore, Frida Dahmani, Kissima Diagana, Eromo Egbejule, Emilie Filou, Tom Gardner, Nandi Geloo, Ilya Gridneff, Frank Jomo, Reinnier Kazé, Morris Kiruga, Jon Marks, Jeff Mbanga, Billie Adwoa McTernan, Paul Melly, Marafaele Antonia Mohloboli, Olivier Monnier, Roger Murray, Oheneba Ama Nti Osei, Francis Okech, Crystal Orderson, Bram Posthumus, Louise Redvers, Gerhard Seibert, Patrick Kwabena Stephenson, Kervin Victor, Omar Wally
161 CHAD
197 LIBYA
149 SOUTH SUDAN
139 COMOROS
123 MADAGASCAR
200 SUDAN
175 CÔTE D’IVOIRE
124 MALAWI
150 TANZANIA
140 DJIBOUTI
183 MALI
189 TOGO
162 DRC
198 MAURITANIA
201 TUNISIA
195 EGYPT
125 MAURITIUS
152 UGANDA
164 EQUATORIAL GUINEA
199 MOROCCO
154 WAKANDA
126 MOZAMBIQUE
130 ZAMBIA
141 ERITREA
127 NAMIBIA
132 ZIMBABWE
174 CABO VERDE 160 CENTRAL AFRICAN REPUBLIC
147 SEYCHELLES
DATA SOURCES Population (2018), population growth (2015-2020) – United Nations Population Division. Life expectancy at birth (2017), position on the Human Development Index (2016), adult literacy (2006-2016) – United Nations Development Programme. GDP per capita (2018 estimate), inflation (2018 estimate), current account as % of GDP (2018 estimate), GDP (2016-2019), GDP growth (2016-2019) – IMF World Economic Outlook Database. Foreign direct investment (2017, inflows) – United Nations Conference on Trade and Development. Mobile phone penetration (2017, mobile cellular subscriptions per 100 inhabitants) – International Telecommunications Union. Key export (2016) – UN Comtrade. Last change of leader – The Africa Report research.
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M 191 NORTH AFRICA
135 EAST AFRICA
155 CENTRAL AFRICA
any of the continent’s biggest economies will face stark political and economic choices in the year ahead, as fast-ggrowing g economies like Ethiopia, Rwan n and Senegal go from strength nda to strrrength; continental giants Nigeria and S South Africa muddle through; and the eeconomies of Equatorial Guinea and S South Sudan shrink due to war and mism management of natural resources. m On n the economic front, the Internatio o onal Monetary Fund (IMF) is optimissstic on the whole about the continent’s post-commodity-crash rebound. It preeedicted in October that sub-Saharan Africcca’s gross domestic product growth woullld rise to 3.1% in 2018, and acceleratee to 4% over the medium term on curreeent policies. But it warns that those grow wth levels are not high enough to w creattte jobs for the generations now in scho o ool and to fight poverty effectively. And, like all economic predictions, these num mbers are based on assumptions. m On n of the IMF’s assumptions that ne migh h prove problematic is that things ht will stay s on their current course. More and more voices in the West and Asia are p pointing to the potential for gloom and d doom. Another crisis, be it in African debtt or commodity prices, will test to theirr limits government reforms and decisions about which projects are econ n nomically viable because the tools availlable l to respond – in the West, Asia and A Africa – are less expansive now than in th he 2008 financial crash. h NEW W TAXES
115 SOUTHERN AFRICA
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With hout a very conducive international h backkkdrop – see page 78 for a look at the th hreats on the horizon – the policy choiccces are stark for a number of African goverrrnments.Manyresource-dependent econ nomies are now getting used to n austeerity e and working with the IMF on struccctural reforms, but others will just be gettin ng the ball rolling in 2019. Zambia’s n goveeernment is promising higher taxes and royalties on miners rather than tightttening its belt and passing the pain of paaast spending binges on to the population. And in Kenya, despite years of the K Kenyatta administration saying that it cou uld continue to spend and spend, u the Nairobi government is rolling out new taxes to make ends meet.
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COUNTRY PROFILES President Cyril Ramaphosa heads to elections in South Africa with the leftist Economic Freedom Fighters whipping up populist sentiment and analysts calling for the government to cut its losses with troubled state-owned enterprises. He is looking for a mandate to tackle corrupt networks left by his predecessor. The political choices on offer in Nigeria are less clear than those in South Africa. President Muhammadu Buhari has made meagre progress on most of his campaign pledges (see Country Focus, page 53) but his rival Atiku Abubakar’s record as vice-president from 1999 to 2007 does not inspire confidence from the electorate that he is going to be a paragon of good governance. The country’s fractious politics make it difficult for whoever wins to make much progress fast, as seen in the fate of the long-debated and still unpassed Petroleum Industry Bill. ALARM BELLS
The World Bank and others are sounding alarm bells about the long-term need for the continent’s governments to invest in creating human capital. Improving education from roots to branch takes longer than the average presidential term, but presidents like Ghana’s Nana Akufo-Addo and Sierra Leone’s Julius Maada Bio are at least giving it a try. On a continental and regional level, strategic questions about where and how to build infrastructure will set the tone for cooperation next year. Policymakers need but look at East Africa for some insight into what can go wrong in an atmosphere of free-for-all competition. Kenya won the race to build its standard-gauge railway, but it is now losing money. Tanzania has started work on its own railway and hopes, just like Kenya, that the needs of neighbouring countries will make the project viable. Regional cooperation is more important than ever in East Africa, with Ethiopia’s Prime Minister Abiy Ahmed leading a peace caucus. While Djibouti has built logistics hubs to service the landlocked Ethiopian market, Eritrea, Somaliland and Somalia are all pitching projects to rival them. Will the peace push lend itself to more cooperation on regional infrastructure in 2019? It is not only the policymakers of the East African Community that want to find out but also the big economic blocs of North, West and Southern Africa that are chewing over the same debates.
2018 Ibrahim Index of African Governance 2017 RANK/54
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 16 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 43 45 46 47 48 49 50 51 52 53 54
10-YEAR TREND (2008-2017)
2017 SCORE/100
COUNTRY
Mauritius Seychelles Cabo Verde Namibia Botswana Ghana South Africa Rwanda Tunisia Senegal Kenya São Tomé e Príncipe Benin Tanzania Morocco Burkina Faso Lesotho Zambia Malawi Uganda Gambia Côte d’Ivoire Liberia Niger Mozambique Sierra Leone Algeria Mali Egypt Togo Madagascar eSwatini Nigeria Comoros Ethiopia Cameroon Guinea Djibouti Zimbabwe Mauritania Gabon Guinea-Bissau Burundi Congo Angola Chad DRC Equatorial Guinea Sudan Central African Republic Eritrea Libya South Sudan Somalia
Increasing improvement Bouncing back
79.5 73.2 71.1 68.6 68.5 68.1 68.0 64.3 63.5 63.3 59.8 59.2 58.7 58.5 58.4 57.1 57.1 56.2 55.8 55.0 54.9 54.5 51.6 51.2 51.0 50.9 50.2 50.1 49.9 49.1 49.0 48.7 47.9 47.5 46.5 46.2 45.9 45.1 44.7 43.4 42.4 40.2 39.8 39.8 38.3 35.4 32.1 30.9 30.8 29.5 29.3 28.3 19.3 13.6
-0.08 +0.44 -0.09 +0.37 -0.41 +0.10 -0.07 +0.66 +0.77 +0.66 +0.68 +0.26 -0.01 +0.14 +0.81 +0.53 0.00 +0.20 -0.16 +0.16 +0.33 +1.41 +0.53 +0.62 -0.33 +0.06 -0.14 -0.44 +0.43 +0.58 -0.49 +0.16 +0.31 +0.43 +0.29 -0.03 +0.68 +0.09 +1.20 +0.13 -0.01 +0.10 -0.56 +0.08 +0.08 +0.51 -0.31 -0.01 +0.16 -0.28 -0.32 -1.73 N/A +0.67
Slowing improvement Increasing deterioration
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5-YEAR TREND (2013-2017)
-0.40 +0.60 -0.23 +0.32 -1.08 +0.35 +0.10 +0.60 +0.63 +0.38 +0.90 +0.03 +0.05 +0.73 +0.92 +0.90 -0.48 -0.55 -0.55 +0.20 +1.05 +1.53 +0.60 +0.23 -0.45 -0.40 -0.40 +0.08 +1.88 +0.48 +0.57 +0.15 +0.65 +0.15 -0.88 -0.25 +0.45 +0.03 +0.80 -0.18 -0.85 +0.95 -1.20 -0.35 -0.03 +0.42 -0.75 -0.20 +0.18 +1.13 +0.10 -3.08 -1.55 +1.10
SUB-GROUPS
N/A
Warning signs
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COUNTRY PROFILES
111
Overall governance and rule of law Number of countries improving
21
overall governance
24
25
2008 - 2017
Number of countries deteriorating
rule of law
30
15
2013 - 2017
overall governance
29
15
2008 - 2017
rule of law
24
2013 - 2017
GDP growth forecasts (2015-2019, average forecast)
Doing business 2018-2019 Biggest risers and fallers (global rank)
0%
2%
4%
6%
8%
10%
Ethiopia
Biggest jump
Mozambique Rwanda Côte d’Ivoire
2018 2019
DRC Nigeria Tanzania Zambia Uganda
154
156
99
80
137
41
61
Djibouti
Togo
Kenya
Rwanda
Tanzania
Comores
Uganda
eSwatini
137
158
144
164
122
112
127
Kenya
29
Angola Ghana Malawi
117
Cameroon Morocco Senegal Sudan Madagascar Tunisia Botswana Zimbabwe Algeria Egypt
Biggest drop
South Africa
Education average score and youth population
Health average score
Youth population (ages 0-24, millions, right scale) Education score (left scale)
46 45
850 800 750 700 650 600 550 500
44 43 42 41 0
2008
2009
2010
2011
2012
2013
2014
2015
2016
60.2
2008
2017
SOURCES: IIAG, UNDESA, WORLD BANK, IMF
Participation and human rights average scores 54
participation
rights
61.4
2009
62.3
2010
63.4
2011
64.5
65
2012
2013
67.7
67.8
2016
2017
41.5 41.5 41.4
41.1
2014
2017
65.8
2014
66.8
2015
Business environment average score
genders
46
52
45.9 45.7
44.9
50
43.8
48
42.7
Participation and human rights
46 44 42 0
2008
2009
2010
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2012
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2013
2014
2015
2016
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2017
2008
2009
2010
2011
2012
2013
2015
2016
112
COUNTRY PROFILES
AFRICA I N
How to make a continental deal
Y
ou won’t have missed the nationalist mood engulfing big economies around the world: the US, Britain, Brazil, France and Germany are all stained by proto-fascists in and around power. Politicians in these countries talk of taking back control of borders; they are keen to identify those who should and should not receive state support. But the politicians of Africa are headed in a different direction. Far from erecting walls, they want to build “the world’s largest free trade area since the formation of the World Trade Organisation”, according to Sierra Leone’s trade minister Peter Bayuku Konte. The African Continental Free Trade Area, sporting the catchy acronym AfCFTA is an African market that is 1.2 billion people strong and has a gross domestic product of $2.5trn. Sierra Leone signed up to become a member on 7 November. It is a bold step by the continent’s leaders. A “new chapter in African unity”, according to Rwanda’s President Paul Kagame, the energetic chair of the African Union (AU). He has been remarkably successful in whipping into line so many peers. Experts agree. “This level of diplomatic and political support for regional integration and trade has not been seen in Africa for a long time,” says Trudi Hartzenberg, executive director of the Trade Law Centre, which is based in South Africa. The economics certainly appear to stack up. Tiny fragmented African markets cannot hope to compete for global capital. And Africa’s most successful regional economic bloc, the East African Community, has been attracting great interest from foreign investors precisely because it is easy to trade across borders in the area. But the process is stalling. Though 44 leaders signed AfCFTA’s original treaty, ratification has been slow. Sierra Leone was just the 12th to date. This has partly been because the big economies have been tepid, at best, in their support. President Muhammadu Buhari of Nigeria, commenting on Twitter, said: “We will not agree to anything that will undermine local manufacturers and entrepreneurs, or that may lead to Nigeria becoming a dumping ground for finished goods.” South Africa’s President
Cyril Ramaphosa said he definitely was up for it – but just had to check with his parliament first. There are also roadblocks below. “There might well be agreement at the top level, but as soon as you get a few rungs down, there are people who say, ‘Yes, well those Tanzanians, don’t you remember what they did to us?’, or ‘Those Kenyans, can they be trusted?’,” says a Kenyan diplomat based in a Nordic country who requests anonymity. “And that’s a problem because that is the level that implementation actually happens.” He is not pessimistic, however. He points to the small things like the East African passport, which is a sign that integration is finally starting to happen. There has also been resistance from big manufacturers who benefit from monopoly conditions at home to build their fabulous wealth. Despite public protestations to the contrary, Nigeria’s most successful building materials manufacturers have domestic margins far greater than even the African average. Why surrender that to lower-cost South African counterparts? And in these pages, Zimbabwean tycoon Shingai Mutasa says he believes certain sectors such as steel and chemicals require states to offer some protection to emergent industrialists while they establish themselves (see page 72). The Trade Law Centre’s Hartzenberg agrees that lobbying and educating Africa’s private sector should be far higher up the priority list: “In many countries, it is still not common practice that the private sector is actively engaged by government on the negotiations or kept up to date on the progress
AfCFTA is an African market that is 1.2 billion people strong and has a GDP of $2.5trn or challenges in the negotiations.” Bringing big business into the big tent might be a start. But beyond the private sector, there are still those in government who are not entirely sold on the concept. They point to those successful countries that have used industrial policy to develop. Japan, South Korea and China were all accused of being protectionist during their high-growth period. THE AFRICA REPORT
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ADRIA FRUITOS FOR TAR
COUNTRY PROFILES
Japan did everything in its power to prevent American cars being sold to Tokyo residents while Toyota and Nissan were in their infancy. When they became world-beaters, the Japanese suddenly started to discover an interest in free markets. Seeing China’s Premier Xi Jinping suddenly defending globalisation at his first Davos speech in 2017, after decades of deliberate under-valuation of the currency, had irony klaxons blaring once again. When he compared protectionism to “locking oneself in a dark room”, it was probably not a reference to the Uighurs. Nevertheless, those nostalgic for industrial policy’s past should probably check their statist ambitions. With value chains in industry crossing borders, it is harder now to target an individual sector without the inevitable piling up of white elephants. It’s not impossible, as Morocco’s flourishing auto sector can testify. But protection remains no substitute for skills development and decent infrastructure.
Africa has some power pools, but they face similar integration challenges. “I call them the big brother utility club,” says Linda Mabhena-Olagunju, who founded independent power producer DLO Energy Resources Group in South Africa. She says there is strong demand for power in surrounding countries.
Those who are nostalgic for industrial policy’s past should probably check their statist ambitions
Perhaps the best approach is incremental and not ‘big bang’. To get over the tepid private sector response and bind in those sluggard administrations, one approach could be the historical precursor to the European Union (EU): the European Coal and Steel Community. Once the trust was built with a few basic goods, ever-greater levels of sophistication and requirements were added. The EU is now worth $18.8trn. THE AFRICA REPORT
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But it is demand that she and her company are unable to meet because the international interconnections are owned by poorly-managed state power utility Eskom, which currently makes a great deal of money from exporting power abroad. “If we are serious about moving the economies of our continent forward, collaboration is the only way to do it,” says Mabhena-Olagunju. “It is only the beginning. These are innovations,” says Abdoulie Janneh, a former diplomat now executive director of the Mo Ibrahim Foundation, who remains positive. “These are areas that we are only just venturing into. Do not think they will just happen overnight.” They need to happen soon, ideally by 31 January 2019, when the next chair of the AU accedes to the position. Up next is Egypt’s President Abdel Fattah al-Sisi – who has not been full-throated in his support for AfCFTA.
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CONTENTS 116 PEOPLE TO WATCH 118 ANGOLA 120 BOTSWANA 121 ESWATINI 122 LESOTHO 123 MADAGASCAR 124 MALAWI
CABINDA
TANZANIA
DEMOCRATIC REPUBLIC OF CONGO
LUANDA Huambo
MALAWI
LILONGWE
ZAMBIA
ANGOLA
Nampula
LUSAKA Blantyre HARARE
Antananarivo Beira
ZIMBABWE
NAMIBIA
GABORONE
Atlantic Ocean
MOZAMBIQUE
Johannesburg
Indian Ocean
MBABANE
ESWATINI
Kimberley
SOUTH AFRICA
MAPUTO
PRETORIA
MASERU
LESOTHO
300 km
Durban
Port Elizabeth
CAPE TOWN
$300
SOUTHERN AFRICA POPULATION (millions) 2 213.4
2019
million
2 271.8
2030
379
2050
Airlines across the SADC sub-region are expected to make a collective $300m loss in 2018, with growth predicted at only 2-3%
SOUTHERN AFRICA 2018 GDP (% of regional total) Zimbabwe 4.1% Zambia 3.1%
18.3% Angola
TOTAL
$625.4bn South Africa
60.2%
3.1% Botswana 0.8% eSwatini 0.5% Lesotho 2.0% Madagascar 1.1% Malawi 2.2% Mauritius 2.3% Mozambique 2.3% Namibia
125 MAURITIUS 126 MOZAMBIQUE 127 NAMIBIA 128 SOUTH AFRICA 130 ZAMBIA 132 ZIMBABWE
MAY
MAY
OCTOBER
OCTOBER
MALAWI Presidential election
SOUTH AFRICA General election
BOTSWANA Presidential election
MOZAMBIQUE Presidential election
SOURCE: UN WORLD POPULATION DIVISION (THE 2018 REVISION)
WINDHOEK
MADAGASCAR
Bulawayo
BOTSWANA
SOURCE: GDP CURRENT PRICES â&#x20AC;&#x201C; IMF WORLD ECONOMIC OUTLOOK DATABASE, OCTOBER 2018
Southern Africa
115
SOUTHERN AFRICA
ANGOLA
SOUTH AFRICA
Manuel Vicente
Sisi Ntombela
After the fall
Free State firefighter Free State premier Sisi Ntombela has a tough time ahead – not only to clean up years of maladministration and corruption in the province but also to turn around bankrupt municipalities, deal with service delivery problems and then mend relations between different African National Congress (ANC) factions ahead of the 2019 election. As a former ANC Women’s League deputy president, Ntombela, 61, has been close to controversial ANC leaders like the disgraced former social development minister Bathabile Dlamini and former Free State premier Ace Magashule, who now runs the ANC party headquarters.
THAPELO MOREBUDI/SUNDAY TIMES/GALLO IMAGES/GETTY IMAGES
SOUTH AFRICA
/SIPA
Job Mokgoro Head of the clean-up crew
SUSAN WALSH/AP
The former vice-president and one-time Sonangol boss appeared to have been sidelined after being charged with corruption in Portugal in 2017. But insiders say that Manuel Vicente is actually running the oil sector and may get a new position in government. Widely regarded as a loyal soldier for ex-president José Eduardo dos Santos, it has emerged Vicente was playing a longer game, discreetly putting his weight behind João Lourenço, who succeeded Dos Santos in 2017. The oilman’s fall from grace is understood to have been engineered by Dos Santos. The rehabilitation of Vicente may affect the credibility of Lourenço’s anti-corruption campaign.
F. DLANGAMANDLA/FOTO24/GALLO/GETTY
116 COUNTRY PROFILES
Job Mokgoro, 70, has been involved in government administration since 1994 and was the first director-general of the North West. He had the huge task of integrating three former homeland government administrations into one. More than 20 years later, as the province's premier, he has got the tough job of cleaning up years of corruption. In May, the North West became the first province in the country to be placed under administration, with the national government running the province. The governing African National Congress believes that the government veteran will be able to clean up the mess left behind by former premier Supra Mahumapelo. THE AFRICA REPORT
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117
MOZAMBIQUE
Ossufo Momade
ADRIEN BARBIER/AFP
Peace or pushback?
MALAWI
Saulos Chilima Young gun turns on the old guard Promising to “save the country from destruction and corruption”, it was surprising how long this young businessman-turned-politician lasted in the government of President Peter Mutharika, 76. Fearing the popularity of his deputy and his intentions to run in presidential elections planned for 2019, Mutharika sacked the vicepresident Saulos Chilima in October. The 46-year-old former Airtel Malawi managing director has formed the United Transformation Movement, which is organising hugely popular rallies criticising Mutharika’s administration.
Opposition party Renamo’s new leader will assume a pivotal peace-building role in 2019 over whether an accord to end civil conflict can be implemented, despite government cheating in the last municipal elections that are a forerunner for national polls in October. Ossufo Momade is trying to balance Renamo’s interest in securing gains promised by the peace agreement – elected opposition control of provincial governorships, integration of personnel into the security services – versus pushback against pro-regime irregularities and provocation from government hardliners.
ZAMBIA
SALIM DAWOOD/AFP
Laura Miti Waste not, want not
THE AFRICA REPORT
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Laura Miti is a fearless activist on the subject of accountability in the spending of public resources, which has earned her the ire of the government. She told Amnesty International in October that “dictatorial regimes only give as much as is demanded by citizens.” The leader of the Alliance for Community Action, a non-governmental organisation for public resource accountability, helped to oversee two recent demonstrations against President Edgar Lungu’s government. She is now in court after being arrested for having questioned and protested against expenditures of $42m on ambulances.
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118 COUNTRY PROFILES
SOUTHERN AFRICA
200 Km DEMOCRATIC REPUBLIC OF CONGO
CABINDA
Angola
LUANDA
Atlantic Ocean
The new broom
Lobito Huambo ZAMBIA
Lourenço is sweeping away many of the corrupt networks left by Dos Santos Debt is soaring, and the government continues to borrow to fund infrastructure
NAMIBIA
A
*Estimation October 2018
in excess of $2bn, announced it was seeking $11bn in new ngola is undergoing radical political and economic change thanks largely to its new president, João loans from China to pay for much-needed infrastructure and Lourenço. The former defence minister – who many entered into negotiations for a $4.5bn extended facility from had initially written off as a puppet for the long-servthe International Monetary Fund. Debt servicing is already ing President José Eduardo dos Santos – has surprised even Angola’s largest single outgoing, and going forward it will have to balance its need for investment with sensible borrowing if his own supporters with his zeal for reform and his apparently genuine commitment to curbing corruption. it wishes to avoid a default. Since taking office in September 2017, Lourenço (known by DEVALUATION BLUES the nickname JLo) has launched a number of economic reform initiatives, replaced the management at nearly all state-owned Meanwhile,commercialbankslike Banco de Poupançae Crédito enterprises and appointed new security and police chiefs. He are straining under the weight of non-performing loans, and has also spearheaded a major reorganisation of the country’s several financial institutions, including two majority-owned by the government, are being restructured oil, diamond and aviation sectors, and due to excessive liabilities. The central revokedseveralopaquegovernmentcontracts previously awarded to Dos Santos bank is trying to bolster the financial Population: 30.8 million allies andfamilymembers,openingthem sector and raise confidence levels. Population growth: 3.3% out to public tender. The abandoning of the dollar/kwanza GDP per capita: $3,924 peg saw the currency drop more than Moreover, a number of formerly Life expectancy: 61.8 50% against the dollar during 2018. The high-ranking officials face a catalogue Adult literacy: 66% devaluation – and resulting shortage of of graft-related charges. Among them is Inflation: 20.5% José Filomeno dos Santos, the eldest son foreign exchange – has been a headache Human development index for overseas companies seeking to reof the former president, and former head (out of 188 countries): 145 of the country’s sovereign wealth fund. patriate funds. Moreover, it has caused Foreign direct investment: -$2.3bn The high reach of these unprecedented importers and private sector operators Current account as % of GDP: -2.1% judicial probes and the speed with which to mothball many projects, leading to job Lourenço has purged his predecessor’s losses and slowed infrastructure delivery. Mobile phone subscription: 45% cronies from government has earned These monetary policy issues are likely to Key export: Petroleum and crude oil him popularity among some opposition continue into 2019, despite other policy Last change of leader: 2017 groups and civil society. moves around exchange controls. GDP growth (%) Under the umbrella of a programme 3.1 THE PARTY’S FINALLY OVER to promote exports and the substitu-0.1 InSeptember2018,Lourençowaselected tion of imports, there is a new law to -2.5 -2.6 the president of the ruling Movimento counter anti-competitive practices. Popular de Libertação de Angola (MPLA), The politically connected elite has long GDP ($bn) a job Dos Santos had held onto after enjoyed a stranglehold on the private 126.5 114.5 110.2 101.1 leaving national office in an apparent sector, inhibiting its growth. A new law bid to retain some control. This shake-up to encourage more private investment 2016 2017 2018* 2019* within the MPLA – the most significant has axed the long-standing rule that in decades – cements Lourenço’s grip requires a local partner in all companies, which should help speed up company on power and significantly weakens the formation and ease compliance concerns. ability of Dos Santos to exert influence or protect his inner circle. While Angola is in what seems like its best political place for In the oil sector, a major overhaul to the state-owned oil some years, its macroeconomic outlook remains weak due to company, Sonangol, is under way. A new regulator, Agência the comparitively low price of oil, its main export and revenue Nacional de Petróleos e Gás (ANPG), will take over the role of source. Angola’s current account balance remains negative and concessionaire, and the parastatal is to divest and rationalise debt is soaring – it reached 70% of gross domestic product in its non-core subsidiaries, allowing it to focus instead on hy2018 – as the government has borrowed aggressively to plug drocarbons exploration, production, refining and distribution. This separation of powers within the sector should help to revenue gaps. In 2018, the country issued eurobonds worth THE AFRICA REPORT
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SOUTHERN AFRICA
COUNTRY 119 PROFILES
SOURCE: IMF
end conflicts of interest and promote poor; education is still limited, especially OIL AND GAS PRODUCTION (millions of barrels per day) more transparency. in rural and densely-populated poorer 1.800 urban areas; and many millions still do Oil remains the engine of Angola’s 1.780 1.798 1.758 not have access to sanitation, clean water economy – accounting for more than 1.730 1.716 or mains electricity. 95% of exports and 80% of government 1.757 1.744 Lourenço’s anti-corruption crusade revenues – but the sector has been sluggish for some years. New exploration is has won him many plaudits, but there 1.672 1.660 needed if the country is to avoid further are doubts that the Angolan judiciary declines in output. There are high hopes will adhere to the highest standards in for a new block-licensing round during all its investigations into high-ranking *projected 2019 and for legislation to allow the officials and see cases through. A failure 2010 11 12 13 14 15 16 17 18* 19* to achieve convictions or to follow correct commercialisation of natural gas. procedures will damage the credibility Big changes are proposed for the diamof the campaign . ond sector too. The Agência Nacional de Recursos Minerais will, like the ANPG, Angola’s two main opposition parties, União Nacional para a Independência become a concessionaire and regulator. Total de Ang ola (UNITA) and And the state-owned diamond and iron Estimated six-year loss by ore companies, Endiama and Ferrangol, Convergência Ampla de Salvação de Catoca diamond mine due Angola–Coligação Eleitoral (CASA–CE), will focus purely on exploration and to state-controlled sales who made moderate gains in the 2017 production. Moreover, there are plans to allow diamond companies to directly general election, have struggled to make their voice heard amid the fanfare surrounding Lourenço’s negotiate sales for as much as 60% of their production, ending the monopoly long enjoyed by Endiama’s selling subsidiary, anti-corruption and reform campaigns. There has also been Sociedade de Comercialização de Diamantes de Angola. general consensus around the government’s reform agenda and few instances where opposition – or ruling party members – COMPLIANCE CRACKDOWN have been moved to vote against motions and legislation. However, mixed in with these reforms are some measures that The next key political battleground will be the country’s may not be so popular. In an effort to raise tax revenue, the first local elections, which Lourenço has said will take government wants to crack down on informal economic activity place in 2022. But before then both parties must resolve and ensure more compliance among registered companies. their leadership issues. UNITA’s longstanding leader, Isaías This will push up operating costs at a time of squeezed revenue Samakuva, has said he will move aside to allow a new face and when bank credit is in short supply. to lead the party in the election, but has given no indication Balancing the need for reform with maintaining popular of a time frame for his departure. Meanwhile, CASA–CE’s backing will be a key challenge for Lourenço during 2019. He leader, Abel Chivukuvuku, is facing significant backlash from several of the parties that make up the coalition, whose will have to manage public expectations about the economy, long-term viability is now in question. jobs and improved living conditions. The quality of healthcare is
$464m
JLo’s diplomatic diary DRIVEN BY A DUAL DESIRE TO RAISE HIS PROFILE and attract investment into Angola’s ailing economy, President João Lourenço spent much of his first year in office shaking hands and collecting air miles. In stark contrast to his predecessor, who rarely travelled overseas, Lourenço made state visits to South Africa, Zambia, China, Germany, France, Belgium THE AFRICA REPORT
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and Portugal in the space of 14 months. During these trips he signed new bilateral credit deals in return for promises to curb corruption, improve the poor business environment and settle longstanding government debts to private operators. Although reluctant to travel or speak publicly, former President José Eduardo Dos Santos modelled himself
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as an African wiseman and Angola took an active role in regional affairs. Lourenço appears to want to continue in this vein and used his time in the chair of the Southern African Development Community’s politics, defence and security body to lead negotiations with DRC’s President Joseph Kabila, who has overstayed the end of his mandate. Lourenço’s
government has also sanctioned free movement for nationals from South Africa, Mozambique, Botswana, Mauritius, the Seychelles and Zimbabwe. This should help deepen economic integration between and Angola and its neighbours, which has historically been overshadowed by longerdistance relationships with Portugal, Brazil and China.
120 COUNTRY PROFILES
SOUTHERN AFRICA ANGOLA
ZAMBIA ZIMBABWE
NAMIBIA
Botswana
Francistown
BOTSWANA
Transition troubles
GABORONE
SOUTH AFRICA
Conflict between President Masisi and his predecessor may spill over into 2019 The diamond sector is booming and new coal mining projects lie ahead
200 km
A
*Estimation October 2018
struggle for influence over the governing Botswana the UDC’s appeal. Boko has also fallen out with Botswana Democratic Party (BDP) between President Movement for Democracy (BMD) president Sidney Pilane. Mokgweetsi Masisi and former head of state BokodeclaredtheBMDsuspendedfromtheUDCinSeptember, which the party has not accepted. The other UDC components, Ian Khama looks likely to come to a head. The the left-wing Botswana National Front, which Boko also leads, Umbrella for Democracy (UDC) opposition alliance is and the centrist Botswana Congress Party, are uneasy partners, considering whether to join forces with Khama partisans undermining the UDC’s hopes of winning the 2019 election. in the BDP to try to force Botswana’s new president out of The 2018/2019 fiscal year will see a slightly higher budget office before the national assembly election in September. Disunity could tip the scales in the UDC’s favour at the polls. deficit due to higher spending in the run-up to the next election. Masisi and Khama have been at loggerheads since the Structural reforms aimed at diversifying away from mining will latter stepped down in April 2018, some continue under a new, six-year strategy to 18 months before the end of his second boostlong-termgrowth.Improvingpublic infrastructure, especially transport and five-year term. This is a political custom Population: 2.3 million intended to provide a new BDP leader water supply, is also a priority. Population growth: 1.8% with time to build support before facGDP per capita: $8,168 DRIVEN BY DIAMONDS ing the electorate. But Masisi’s efforts Life expectancy: 67.6 Mineral revenue – mainly from diato establish a new political direction Adult literacy: ND monds – is forecast at P25bn ($2.3bn), by breaking with Khama’s legacy and Inflation: 3.8% up 51% on 2017/2018 and 38% of total reducing his influence in the BDP has Human development index expected revenue of more than P64bn. caused an intensifying feud. Khama (out of 188 countries): 102 The diamond sector remains crucial to retains considerable influence in the Foreign direct investment: $401m overall growth prospects and – unless BDP, security sector and the foreign Current account as % of GDP: 8.7% the global economy falters – should conbusiness networks he cultivated. Mobile phone subscription: 141% tinue its recent recovery. Production by SPY CHIEF OUT IN THE COLD Debswana (a 50:50 joint venture between Key export: Diamonds Masisi will continue to pursue a reform the government and De Beers) reached a Last change of leader: 2018 agenda to restore civilian control of the two-year high of 22.7m carats in 2017, up GDP growth (%) 11% on 2016. First half 2018 output rose government; before becoming president, 4.6 4.3 by 9% to 12.1m carats. Khama was the Botswana Defence Force 3.6 (BDF) commander. An anti-corruption An accommodative monetary policy 2.4 drive is targeting some current and forand higher government spending will GDP ($bn) support non-mining-sector growth, parmer cabinet members, as well as senior 19.8 ticularly in construction, manufacturing, officials, which may ultimately extend to 19.1 17.4 15.7 finance and business services. Power Khama. Masisi has prohibited Khama outages remain a short-term risk to the from using government aircraft, while 2016 2017 2018* 2019* economy as the Chinese-built Morupule some government-paid staff have been withdrawn from his office and residence. Bcoal-firedpowerplanthasyettoachieve The Directorate of Intelligence and full operational capacity. Security Services (DISS) is at the centre of the dispute; under Developing the huge bituminous coal reserves – an estiKhama it often intervened in politics. Soon after taking office, mated 212bn tonnes – along the eastern border remains a key Masisi dismissed DISS director-general Isaac Kgosi, one of government policy. Botswana-based Minergy has obtained Khama’s closest allies. His replacement, Brigadier Peter Magosi, a mining licence for its 100%-owned Masama project on the isdoinghousecleaningandreviewingthedirectorate’sfunctions. Mmamabula coal field. The firm aims to commission a mine Revelations about mismanagement at the DISS could boost in early 2019, with a 2.4m tonne per year production capacity. the opposition’s election prospects. However, UDC unity is Elsewhere the government has approved two, larger, 225MW power generation units and coal mining/processing operations crumbling. If UDC president Duma Boko works with Khama for the Sese project, a joint venture between Australia’s First to bring down Masisi, the move could backfire. Khama was Quantum Minerals and African Energy Resources. unpopular in urban areas, and any association could weaken THE AFRICA REPORT
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SOUTHERN AFRICA
COUNTRY 121 PROFILES
eSwatini
SOUTH AFRICA MBABANE
The King in control
E S W AT I N I
MOZAMBIQUE
30 km
Banned civil society and political groups have little power to bring change Regaining access to the US market will be a big boost for the textile sector
K
*Estimation October 2018
ing Mswati III celebrated his 50th birthday and end of 2017/18. To reduce its heavy dependence on the the 50 years of Swaziland’s independence in April volatile receipts, the government announced a 1% increase with an announcement that he was renaming the in value-added tax and the introduction of a levy on bank country the Kingdom of eSwatini. Pro-democracy revenue in the 2018/2019 fiscal year. activists called out the monarch for his misplaced priorities At 112th place, eSwatini ranked low on the World Bank’s in the face of extreme poverty and an ailing economy. Thulani 2018 Doing Business index for sub-Saharan Africa, but the Maseko, a prominent human rights lawyer who was jailed in implementation of a web-based customs data management 2015 on sedition charges, has filed a case at the Constitutional platform has improved import and export transactions. The Court arguing that the name change is liberalisation of the mobile telephony illegal because it did not go through a market, with the launch of a second legislative process. phone provider, Swazi Mobile, in July Population: 1.4 million 2017, was widely welcomed, but the 33% The opposition does not believe Population growth: 1.8% that free and fair elections will be held stake the service provider had planned GDP per capita: $4,093 to sell via an initial public offering last anytime soon, and leading opposition Life expectancy: 58.3 year is yet to see the light of day. group the People’s United Democratic Adult literacy: 83.1% Movement (PUDEMO) announced its Inflation: 5% boycott of the 21 September parliaAGOA SUSPENSION LIFTED Human development index eSwatini regained access to the US’s mentary elections – dubbed a “royal (out of 188 countries): 141 African Growth and Opportunity Act sham”. The vote was marked by protests Foreign direct investment: -$137m and spates of violent confrontation. (AGOA)inDecember2017afterconcerns Current account as % of GDP: 10.3% Political parties and pro-democracy over labour violations and workers’ rights led to the country’s suspension in January groups such as PUDEMO are banned Mobile phone subscription: ND 2015. Heavily dependent on AGOA’s from taking part in polls under the 2008 Key export: Odoriferous substances Suppression of Terrorism Act. That is duty-free access provisions, the country’s Last change of leader: 1986 just one of the strong-arm tactics the textile industry was hard hit, resulting in GDP growth (%) factory closures and massive lay-offs. As government employs to entrench the 1.6 the economic pinch of the suspension power of Mswati III. The new prime 1.4 1.3 eases in 2019, prospects look brighter minister, Vincent Mhlanga, and the 0.4 for this key export sector. 30 members of the powerful Senate GDP ($bn) After nearly three years of crippling who were appointed by the King in drought and severe food-production September will undoubtedly help 4.9 4.8 4.4 3.7 maintain the monarchy’s political and shortages, the possibility of another financial interests moving forward. season of drought could spell trouble 2016 2017 2018* 2019* for eSwatini, where more than 70% of the WIDESPREAD POVERTY population relies on agriculture for their eSwatini is classified as a lower-middlelivelihoods. In September, the Southern Africa Regional Climate Outlook Forum warned that most income country, but the country was ranked 144th out of 189 countries in the Human Development Index (HDI) in 2018 countriesin theSouthernAfricanDevelopmentCommunity will based on life expectancy, education and per capita income most likely experience the El Niño weather phenomenon again in 2018/2019 and called for the government to take proactive indicators. The landlocked Southern African country has measures to help offset the drought impacts as 2019 begins. the world’s highest HIV/AIDS prevalence rate and more than 60% of its 1.3 million people live below the poverty line. On a brighter note, the sugar market is expected to witness The country is recovering from a protracted drought, so the a bullish trend in the coming months, with a 35% surge in economy is predicted to produce meagre growth. exports in the 2018/19 season, based on a hike in production. Swaziland remains Taiwan’s last African ally, and Beijing In the 2018 budget, finance minister Martin Dlamini said has been courting Mswati III. The Chinese government could Southern African Customs Union (SACU) receipts are dedeliver a big package of aid and investment should the monarch clining, having dropped from nearly 60% of the national change his mind about Taiwan. budget in 2012/2013 to 49% in 2016/2017 and 43% at the THE AFRICA REPORT
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122 COUNTRY PROFILES
SOUTHERN AFRICA 30 km
SOUTH AFRICA
Lesotho
MASERU
LESOTHO
Mediation and malaise SOUTH AFRICA
Mediators are running out of patience over the slow pace of reforms Agriculture and mining are two key sectors for growth in the economy
T
*Estimation October 2018
he government of the prime minister Thomas claims that the government is exerting political influence over Thabane has used up its international goodwill and the courts and says that Lieutenant General Tlali Kamoli – who has until May 2019 to end its political stalemate or was a central figure in recent instability – should be released risk losing the support of international mediators. from custody. Other things on the opposition’s agenda include a truth and reconciliation commission and a government of Lesotho’s government has not yet found a way out of its malaise national unity. The deputy leader of the Democratic Congress fuelled by instability and the politicisation of the police, security services and the judiciary. The Southern African Development (DC), Mathibeli Mokhothu, had been in exile before returning in Community (SADC) has been mediating the conflict since March 2018, and is now leader of the opposition in parliament. The economy is growing slowly, as Lesotho’s performance 2014, and the coalition government is due to implement is often influenced by neighbouring South Africa, due to the reforms recommended by SADC after the assassination of fact that migrant remittances typically army commander Lieutenant General account for about 15% of gross domestic Maaparankoe Mahao in 2015. product. The textile sector is also largely But Lesotho’s third recent coalition Population: 2.3 million dependent on the South African market, government – comprising the All Population growth: 1.3% and Lesotho remains a relatively exBasotho Convention (ABC), Alliance GDP per capita: $1,466 pensive place for companies to operate. of Democrats (AD), Basotho National Life expectancy: 54.6 Party (BNP) and the Reformed Congress Adult literacy: 76.6% of Lesotho (RCL) – is yet again faced ECONOMIC DIVERSIFICATION Inflation: 6.3% The government has been spending with uncertainty, as all these parties Human development index more than it receives in revenue, and are marred by infighting. Most of the (out of 188 countries): 159 is due to begin slashing expenditure, disputes relate to corruption in the Foreign direct investment: $135m as revenue from the Southern African awarding of contracts. Thabane’s Current account as % of GDP: -6% Customs Union is predicted to decline control of the ABC will be tested at a over the next two years. party conference, with an influential Mobile phone subscription: 107% The government wants to diversify the group criticising the role of his wife Key export: Clothing economy and is backing commercial agin government. Last change of leader: 2017 The reforms on the table for Thabane riculture projects. The Lesotho National GDP growth (%) mostly focus on the constitution, judiDevelopment Corporation is investing 3.1 ciary, security agencies and the public M100m($6.9m)intoapiggeryprojectthat 1.2 0.8 should create 1,000. Similar investments sector. But there also seems to be little -1.6 are expected to be announced during will on the part of the government or GDP ($bn) the course of 2019. the opposition to move quickly. Leadership also plans to build on the 3 3 2.7 2.4 NEW DEMANDS successes of a fruit production project for The SADC Preventive Mission in the Private Sector Competitiveness and 2016 2017 2018* 2019* Lesotho peacekeeping force is due to Economic Diversification Project, which is helped by the World Bank, by going leave the country in November 2018, into partnership with a private regional despite Thabane’s request for it to stay on. There have not been any high-profile killings since firm to expand and build value chains around it. Lesotho is the September 2017 assassination of Lieutenant General also developing its nascent medical marijuana industry, and Khoantle Motšomotšothe. exports could begin in 2019. Diamond mining remains an economic mainstay. A fourth With the leader of the Lesotho Congress for Democracy diamond mine – Lucapa Diamond Company’s Mothae (LCD) Mothetjoa Metsing still in exile, opposition continues deposit – is expected to start commercial production in 2019. to hold the government to ransom over the reforms process. Preliminary results of the ongoing coal explorations Each time the government has tried to take a move forward, the opposition has come up with new demands. The LCD in Qhalasi in the district of Mohale’s Hoek suggest that succeeded in getting the government to drop its insistence Lesotho could soon have its first coal mine, developed by on trying Metsing on corruption charges. The opposition Masemanzi Mining Holdings. THE AFRICA REPORT
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SOUTHERN AFRICA
COUNTRY 123 PROFILES
COMOROS
Madagascar
ANTANANARIVO
Handover time for Rajao
Toamasina Indian Ocean
MADAGASCAR
Former presidents Ravalomanana and Rajoelina headed to a 19 December run-off Outsourcing and export processing are contributing to economic growth of 5% p.a.
300 km
A
MAURITIUS REUNION (France)
*Estimation October 2018
s The Africa Report went to press, the economy was in nickel production and financial losses for 2018. Meanwhile humming and the country headed for a change tourism remains an important source of foreign-exchange in leadership. The first round of the presidential earnings, although the sector underperformed in 2018 because of political unrest and ongoing security issues. elections took place on 7 November. Provisional Agriculture is one sector holding the economy back: it results had been announced, and former president Marc Ravalomanana (35.3%), who was in power from 2002 to 2009, employs 80% of the population and is plagued by low proand Andry Rajoelina (39.2%), who overthrew Ravalomanana ductivity and high vulnerability to climate events such as in a coup and remained president until 2013, will face each drought and cyclones. Good rains in 2018 should see the other in a run-off on 19 December. return to growth after a difficult year in 2017, when the sector contracted 6.6%. The lack of access to markets and arcane Hery Rajaonarimampianina (8.8%), the incumbent, trailed in third place after failing to convince the electorate that he farming practices remain major constraints. They also help could do better a second time round. Rajao, as he is widely to explain why poverty remains very high, with 75% of people living on less than $1.90 per day. This figure is forecast to known, faced protests in April about new electoral laws that decrease only slightly to 73% by 2020. seemed aimed at preventing the two Both farmers and environmentalists are former presidents from standing. He sounding alarm bells about the rate of is expected to throw his weight behind Population: 26.3 million deforestation due to largely unchecked Ravalomanana in the second round, Population growth: 2.7% logging and slash-and-burn agriculture. which may give the latter an edge. GDP per capita: $475 Rajoelina will put up a fight, however: he Life expectancy: 66.3 BETTER MANAGEMENT is said to have spent between $30m and Adult literacy: 71.6% $50m on his campaign. Such financial Structural reforms undertaken as part Inflation: 7.8% stakes, combined with the bitter history of a 2016 International Monetary Fund Human development index programme are bearing fruit. Tax collecbetween the two men, means the risk of (out of 188 countries): 158 post-electoral violence is high. A drawntion – forecast at 12% of gross domestic Foreign direct investment: $389m out political crisis would significantly product in 2018 – is increasing steadily Current account as % of GDP: -2.2% impact the economic outlook. at 0.5% per year. The revised taxation of petroleum products introduced Mobile phone subscription: 34% SERVICES PUSH UP GROWTH in January 2018 will also boost fiscal Key export: Vanilla Two more elections are scheduled for revenue. Government expenditure is Last change of leader: 2018 2019: legislatives in April and the munichanging too: recurrent costs are deGDP growth (%) cipal vote in August. Although neither is creasing thanks to the phasing out of 5.4 5 likely to generate unrest, the legislative subsidies to Air Madagascar and Jirama, 4.2 4.2 the public water and electricity utility, elections will determine how much the new president is able to achieve. whereas capital spending is increasing. Whoever emerges the victor in It took five years, but growth should GDP ($bn) December’s second round, new forchit 5% in 2018 and stay above that until 13.6 12.5 11.5 10 2021. This ‘magic number’, so coveted es are clearly at play in Madagascar. since the return of democracy in 2013, Chinese investors have significantly 2016 2017 2018* 2019* increased their presence in the country is driven by a strong services sector, notably commerce, transport and bankunder Rajaonarimampianina’s mandate. The controversial $2.7bn fishing deal ing, and textile- and seafood-orientated export processing zones. Business processing outsourcing giving some 330 Chinese trawlers access to Madagascar’s for the francophone market has experienced strong growth. territorial waters is one of the largest and also most opaque projects. Russian interests have also come to light, with Moscow There are now more than 200 operators employing close to financing the campaign of a handful of candidates, investing 10,000 people in call centres and other offices. in mining projects and signing a security agreement. Next in Exports continue to be concentrated in vanilla, garments its sightline is oil exploration in the Mozambique Channel, and nickel. Japanese firm Sumitomo, which owns a large stake in the Ambatovy mine, announced a projected 8,000tn drop for which bidding opened in early November 2018. THE AFRICA REPORT
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124 COUNTRY PROFILES
SOUTHERN AFRICA
TANZANIA
150 km ZAMBIA
Malawi
Lake Malawi
MALAWI LILONGWE
Mutharika muddles through
MOZAMBIQUE
MOZAMBIQUE
Blantyre
The race for the presidency will dominate the year Agricultural weakness and food aid drag down the economy
T
*Estimation October 2018
banks of the Shire River. The World Bank will help fund the he year 2019 will be dominated by elections for first phase of the project, which will cost $350m. president, members of parliament and ward councillors. Four main candidates will compete for the Mining – the Kayelekera uranium mine has been closed presidency: the incumbent, Peter Mutharika; his for two years but may resume production soon – and manformer deputy, Saulos Chilima, who resigned from the ruling ufacturing are other areas for development. But the latter is Democratic Progressive Party (DPP) and formed his own constrained by a crippling power shortage caused by weak United Transformation Movement; former president Joyce rains. Load shedding has become the norm, extending to Banda; and opposition leader Lazarus Chakwera. over 10 hours a day. The problem is set to persist until 2019. With the opposition fragmented and a first-past-the-post Construction is expected to start in 2019 on the 300MW election system that awards the presidency to the candidate Kam’mwamba coal-fired facility. Malawi, which currently who gets a plurality of votes, Mutharika is projected by produces 350MW, is seeking to raise its generation capacmany to be the frontrunner to win the vote, which will take ity to 720MW by 2020 and 1,000MW by 2023. In late 2018, place on 23 May. However, he will not the government signed three powerhave it easy. The main campaign issues purchasing agreements, which will that will work against him include high add an additional 86MW to the grid Population: 19.2 million corruption levels in government and by December 2019. It is also in talks with Population growth: 2.9% Mozambique and Zambia on power the energy crisis. GDP per capita: $349 interconnection projects. Chilima, who Mutharika sacked Life expectancy: 63.7 in November, is still hammering the Adult literacy: 62.1% POVERTY STILL RIFE government hard on corruption. In Inflation: 9.2% August, it was forced to refund K145m The government projects that the econHuman development index ($202,000) received from a businessomy will continue to grow, but it has to (out of 188 countries): 170 man who won a tender to supply work on energy challenges, continue Foreign direct investment: $277m foodstuff to the police. Chilima has a to tame inflation, address public debt Current account as % of GDP: -9.3% and ensure enhanced food production. support base among the youths who After years of economic malaise, Malawi feel left out in the running of governMobile phone subscription: 42% looks to have turned the corner, but the ment – he is 45, while Mutharika is 78. Key export: Tobacco recovery process is yet to be fully enjoyed Last change of leader: 2014 BEYOND TOBACCO by the masses: poverty remains rampant. GDP growth (%) The Malawi Congress Party remains the A report by the Reserve Bank of Malawi 4.7 strongest opposition party and might published in September 2018 said a dry 4 3.3 spell and the spread of fall armyworms turn the tables if it manages to get votes 2.3 from the southern region, where the had caused slow growth in the agriculture sector. The bank said the sector is progoverning DPP is the strongest. The GDP ($bn) jected to grow by just 0.1% in 2018 from party elected veteran politician Sidik 7.3 6.9 6.2 5.5 6.3% recorded in 2017. At least 3.3 million Mia, who comes from the south, to Malawians will require food aid going consolidate votes for Chakwera, who 2016 2017 2018* 2019* into 2019, and agriculture is the largest is from the centre. The government’s top priority for 2019 contributor to gross domestic product, and beyond, according to Mutharika, is at 28%. In order to reduce the deficit, the diversification of the agriculture-reliant economy. Tobacco government has been rolling back its subsidy programmes, remains the country’s chief export earner but government reducing the number of beneficiaries to 1.5 million. is now looking to groundnuts, legumes and soybeans as Maize production was due to drop 22.1% to 2.7m tonnes in alternatives since tobacco is seen as an endangered crop 2018, compared with 3.5m in 2017. A rebound is projected in following global anti-smoking campaigns. 2019. In terms of tobacco, farmers produced 200m kilograms Irrigation is also high on the national agenda. The governin 2018 for a demand of 171m kilograms. The government ment is developing an irrigation project called the Green Belt wants to curb overproduction in 2019 in order to help spur Initiative, the first phase of which will cover 4,000ha on the prices for the commodity. THE AFRICA REPORT
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SOUTHERN AFRICA
Mauritius
COUNTRY 125 PROFILES
Indian Ocean PORT-LOUIS
Still waiting for that miracle
10 km
MAURITIUS Indian Ocean
The economy is not growing fast enough to meet Alliance Lepep’s targets The government is coming up with new strategies to boost the finance sector
N
*Estimation October 2018
to be 350,000tn in 2018, compared to 355,000tn in 2017. The ext year is the final one of Alliance Lepep’s five-year government is offering subsidies to producers and planters term. The alliance, which has been running the to face the decline in the price of sugar on the world market. Mauritius government since December 2014, is led by Militant Socialist Movement (MSM) boss and Alliance Lepep’s popularity has also been eroded by scandals. Several ministers and the first woman president of Mauritius prime minister Pravind Jugnauth and his allies in Muvman resigned from their positions for reasons ranging from racist Liberater. They pitch themselves as a government for the remarks to allegations of bribes or being named in the 2018 people, but many of their promises remain unrealised, like report of the independent commission the famous second economic miracle. That would require growth rates of more of inquiry on drugs. Despite the oppothan 5% per year, and Mauritius has sition’s demands for a general election, Population: 1.3 million not exceeded the 4% growth rate since the government has stood firm. Population growth: 0.2% 2010. The promise of full employment However, things could take a new GDP per capita: $11,015 also remains unfulfilled, with the unturn in 2019 with the MedPoint case, Life expectancy: 74.9 employment rate hovering around 7%. involving Prime Minister Jugnauth. He Adult literacy: 92.7% Ahead of elections, the government was criticised for having approved, in his Inflation: 5.1% intends to make up for delays on pubcapacity as finance minister in 2010, the Human development index transfer of Rs144.7m for the purchase of lic projects. Phase 1 of the Rs18.8bn (out of 188 countries): 64 the MedPoint clinic, which included his ($547.8m) light rail system should be Foreign direct investment: $293m sister among its shareholders. Director operational in September 2019. It has Current account as % of GDP: -8.2% of public prosecutions Satyajit Boolell is also earmarked Rs12bn over the next challenging Jugnauth’s 2017 acquittal. three years for the construction and Mobile phone subscription: 145% The case will be heard in January 2019. upgrading of roads and Rs3bn for the Key export: Textiles expansion of port facilities. Last change of leader: 2015 OPPOSITION IN DISARRAY Private investment, on the other GDP growth (%) Despite the government’s hiccups, the hand, decreased, in a trend that may 4 3.9 opposition is not doing well. The leader continue. It dropped 9% to Rs6bn in 3.8 3.8 of the Labour Party, Navin Ramgoolam, the first quarter of 2018, compared has not made a rebound after the muchto the same period last year. A lack GDP ($bn) publicised seizure of his safe-deposit of projects is seen in the persistent box full of bank notes in the 2014. The excess liquidity of the banking sector 14.9 14 13.3 12.2 Mauritian Militant Movement (MMM) – exceeding $1bn in 2018. should have been set to do better in the 2016 2017 2018* 2019* FINANCE TO THE FRONT next elections, but it is in the grip of internal wars. Several members have Other economic indicators are expected to remain in the red. The public debt is quit the party because of disagreement with leader Paul Bérenger. Meanwhile, the leader of the expected to be at 63.1% of gross domestic product (GDP) in opposition, Xavier Luc Duval, leader of the Parti Mauricien 2019 – much higher than the 50% safe level – while the budget deficit will remain above 3% of GDP. Social Democrate (PMSD) and former ally of the MSM, Finance is set to replace manufacturing as the country’s continues to hold the government to account in parliament. most important economic sector soon. The government held Politics in Mauritius has always been about alliances, and a big conference in September on the offshore financial sector. anticipation is building on the potential coalitions for the Treaty changes with India make Mauritius less attractive as a next general election. Some predict the lines will be drawn conduit for investment there, so the country is targeting Africa between an MMM-MSM alliance on the one hand and a and diversifying its offerings. The government is also making Labour Party-PMSD alliance on the other. regulatory changes as Western countries and campaigners At the diplomatic level, the fate of the Chagos Archipelago will remain high on the agenda. For the government, the focus more attention on tax justice. Tourism is growing, with 1.4 million arrivals predicted in 2019, decolonisation of Mauritius will only end when the archipelago up from 1.3 million in 2018. Sugar production was expected is returned to it by Britain. THE AFRICA REPORT
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126 COUNTRY PROFILES
SOUTHERN AFRICA TANZANIA MALAWI
MOZAMBIQUE
ZAMBIA
Mozambique
Nampula
300 km ZIMBABWE
Nyusi’s nightmares
Beira Indian Ocean
SOUTH AFRICA
The unpopular ruling party is still likely to win elections in October 2019 Gas and coal developments are progressing in an overall weak economy
MADAGASCAR
MAPUTO
eSWAT.
P
*Estimate October 2018
resident Filipe Nyusi will enter his second and final Coal – now Mozambique’s largest export – will be a strong term in office at the end of 2019 still managing the contributor to growth, driven by recovery in prices and higher output from Vale of Brazil, and two previously shuttered fallout from the economic and political crises of the domestic mines owned by Indian coal and steel interests. A previous government, and without the political clout to implement an independent agenda. Hardliners who have ‘wild west’-style ruby mining boom – Mozambique is now the crimped Nyusi’s room for manoeuvre will continue to influence largest producer, globally – will continue in the troubled Cabo party policy on peace, political pluralism, economic transparDelgado Province, amidstfurther controversy over rights abuses. ency and security, ensuring they are not exposed for abuses DIRTY ELECTION CAMPAIGN that have plunged the country into economic and political An agreement with international creditors on defaulted crisis. Despite consolidating some power and ensuring that he is the party’s presidential candidate in 2019, Nyusi is a weak sovereign debt will remain out of reach. The authorities have president and a proxy for the relative little inclination or means to come to an agreement, and bond and debt holders power between Frente de Libertação de are reluctant to accept deep discounts Moçambique (Frelimo) party’s moderate Population: 30.5 million faction around ex-president Joaquim and extended maturities. Population growth: 2.9% ChissanoandformerpresidentArmando Mozambique’s capacity for volatility GDP per capita: $481.2 Guebuza’s hardliners. is underlined by a mostly homegrown Life expectancy: 58.9 A government narrative claiming Islamist insurgency that is taking root Adult literacy: 50.6% recovery and stabilisation is belied in Cabo Delgado, close to the LNG enInflation: 6% ergy investment, despite heavy-handed by an extremely weak economy. It is Human development index government security. hobbled by an ongoing rupture in most (out of 188 countries): 179 sources of international assistance The lead up to national elections Foreign direct investment: $2,293m due to the lack of financial disclosure on 15 October 2019 will dominate Current account as % of GDP: -18.2% over the hidden uses of a $2bn illicit the year and be closely fought as an loan portfolio that caused the 2017 unpopular Frelimo party resorts Mobile phone subscription: 40% sovereign default. to irregular measures to guarantee Key export: Aluminium electoral victory. A dirty campaign Last change of leader: 2015 A WAITING GAME will follow the pattern of the October GDP growth (%) The government will continue waiting 2018 municipal elections, in which star 4 out the aid freeze from Western donors opposition candidates were disqualified 3.8 3.7 by a politicised electoral body, and in advance of large-scale revenue from 3.5 gas developments, although production international scrutiny was reduced by GDP ($bn) is not due to start until 2022. The limits draconian new licensing requirements for journalists. of this strategy will be tested in 2019 as 10.9 15.6 14.6 12.6 the authorities find it difficult to raise The government’s priority will be to finance from domestic markets to cover get through elections while implement2016 2017 2018* 2019* the budget deficit. Heavy state arrears ing a peace agreement with the armed opposition, the Resistência Nacional to domestic suppliers, struggles to pay the public-sector wage bill, desperate de Moçambicana (Renamo). Renamo revenue-raising measures and drag from loss-making parastands to gain control of provincial governorships in the statals will mark fiscal policy throughout 2019 and beyond. north and centre for the first time – a major gain under long The economy has some support from the capital-intensive anticipated decentralisation reforms – as well as integration mega-projects. Investment in gas development will kick-start a of personnel into the police and armed forces. major, multi-billion dollar inflow of foreign direct investment. The realignment of the political opposition will continue Construction of the first floating liquefied natural gas (LNG) in 2019 as the country reverts to a mostly two-party system. Renamo could do well in the national elections, gaining platform, for the Rovuma Basin Area 4, will get underway votes from the Movimento Democrático de Moçambique, in 2019, led by a consortium of ExxonMobil, Eni and China which is imploding. National Petroleum Corporation, among others. THE AFRICA REPORT
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SOUTHERN AFRICA
COUNTRY 127 PROFILES
ANGOLA
Namibia
NAMIBIA
ZAMBIA
BOTSWANA
WINDHOEK
The empowerment agenda
Atlantic Ocean
Land and company ownership are the targets for an empowerment drive Chinese demand for uranium is helping the mining sector to grow
Walvis Bay
300 km
P
SOUTH AFRICA
*Estimation October 2018
resident Hage Geingob and his governing South seized by German and South African white settlers to their West African People’s Organisation (SWAPO) are original occupants instead of to all PDNs. A revised black economic empowerment (BEE) law is due to set to win presidential and national assembly be enacted in 2019, and it is very likely to omit a contentious elections decisively in late November 2019, giving proposal for mandatory 25% minimum equity shareholdings Geingob a second five-year term and SWAPO a two-thirds for BEE entities or individuals in all companies. majority in the 92-member lower house. This is despite Restoring Namibia’s investment-grade sovereign credit most Namibians having suffered reduced living standards rating, lost at the end of 2017, may prove difficult. The govcaused by a two-year recession, coupled with job losses due to government spending cuts. The ernment aims to reduce its large budget overall unemployment rate is 34%, and deficits and rein in growth in public debt, the youth unemployment rate is 46%. while pursuing a growth-enhancing Population: 2.6 million public investment programme. Geingob greatly strengthened his hold Population growth: 2.1% on the party following its November 2017 GDP per capita: $5,923 INFRASTRUCTURE UPGRADES elective congress, at which he was chosen Life expectancy: 64.9 as SWAPO president. The vice-president, To offset gradually decreasing Southern Adult literacy: 88.3% Netumbo Nandi-Ndaitwah, was elected African Customs Union revenue, which Inflation: 3.5% in 2017/2018 amounted to 35% of total party vice-president with Geingob’s backHuman development index forecast revenue of N$57bn ($4.4bn), ing and a post-congress cabinet reshuffle (out of 188 countries): 128 sawtheappointmentofGeingobloyalists, several new tax proposals are being evalForeign direct investment: $416m uated and may be levied in 2019/2020. economic pragmatistsand some younger Current account as % of GDP: -6% first-time ministers, along with the sackThefirstdisbursementsofsome$740m Mobile phone subscription: 105% ing of the failed leadership challengers. in new Chinese concessional loans could start in 2019. These will fund priority Geingobhasacknowledgedthatpower Key export: Diamonds infrastructure upgrades, including to must be transferred to a new generation Last change of leader: 2015 of leaders soon, but few of stature among Windhoek’s international airport. GDP growth (%) the ‘born frees’ have yet emerged. The The economy has been reeling from 3.1 latter are increasingly impatient with weak commodity prices, low consumer 1.1 0.7 activity and a sharp fall in construction the compromises SWAPO has made to -0.8 ensure political and economic stability, projects.Primary-sectoroutputisforecast GDP ($bn) and facilitate foreign investment. to rise by 6%, mainly due to increased agricultural output and the Husab ura14.8 14.1 13.2 11.3 LAND RESETTLEMENT nium mine completing its ramp-up to its The generational divide may well full capacity of 6,800tn of U3O8 per year. 2016 2017 2018* 2019* But the secondary and tertiary sectors prove more troubling to SWAPO than are due to stay in recession due to weak the opposition parties, which remain manufacturing output and other factors. weak and divided. Most effective is the Most Husab product is sold to China, where installed right-of-centre Popular Democratic Movement. With five members of parliament, it is the official opposition and is civil nuclear power capacity is due to skyrocket until at led by 41-year-old McHenry Venaani. least 2035. China would virtually monopolise Namibia’s Geingob’s first term will be largely defined by how efuranium industry from 2019 if a projected sale by Rio Tinto of its majority interest in the Rössing mine to China General fectively land redistribution to previously disadvantaged Namibians (PDNs) is implemented. The second national land Nuclear Power goes ahead. conference of early October 2018 resolved that land reform Despite Husab, rough diamonds will stay Namibia’s foremost had been too slow and there would have to be expropriation foreign-exchange earner in the near term, with offshore recovof some white Namibian-owned commercial farmland, but eries by the 50:50 government/De Beers-owned Namdeb deep only in accordance with the constitution, which provides sea mining vessels accounting for two-thirds of production. for ‘just compensation’. However, it deferred any decision But overall output will be flat as onshore mining in south-west Namibia will cease in the early 2020s. on the potentially divisive issue of returning ‘ancestral land’ THE AFRICA REPORT
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SOUTHERN AFRICA ZIMBABWE
300 km BOTSWANA
South Africa
NAMIBIA
PRETORIA
MOZ.
128 COUNTRY PROFILES
Johannesburg eSWAT.
To the polls
Atl. Ocean
SOUTH AFRICA Cape Town
Ramaphosa’s reform drive will be put to the test in the 2019 presidential vote SOEs are underperforming and cuts to the civil service are likely
LESOTHO Durban Indian Ocean
T
*Estimation October 2018
stuffed with people placed there to drive his and the Gupta hecomingyearwillbepivotalasthecountrycelebrates 25 years of democracy and holds its fifth – and perhaps family’s ‘state capture’ agenda. This approach will shift to its most competitive – elections since 1994. Though ensuring that SOEs deliver demonstrably better results to the governing African National Congress (ANC) is help convince Ramaphosa’s critics, not least within the ANC itself, that all this upheaval has been worthwhile. all but assured of victory, President Cyril Ramaphosa wants to demonstratetohispartythatitmadetherightchoiceindumping Jacob Zuma and Nkosazana Dlamini-Zuma, Zuma’s choice of REPAIRING THE COUNTRY’S REPUTATION successor. In 2014, the ANC received 62% of the vote but this At the country’s universities, students were mollified by Zuma’s promise, just before he vacated the presidency, of free higher slumped to 54.5% in the 2016 municipal elections, when the education. This could all change in 2019, however, as the governing party lost Pretoria, Port Elizabeth and Johannesburg. If the ANC vote falls – or even if it remains the same – this National Student Financial Aid Scheme battles to implement will badly weaken Ramaphosa and embolden his enemies the policy for which there is still, as yet, no adequate budget. Ramaphosa will continue his drive to restore South Africa’s within the party. The ANC’s Zuma faction remains a potent reputation as a country capable of responsible and serious threat and would be likely to call for a national general council meeting to try to remove Ramaphosa as party president if foreign policy. South Africa’s return to the UN Security there is no significant improvement in Council in 2019 will provide an early the ANC’s share of the vote. A probable opportunity to repair at least some of successor would be deputy president Zuma’s damage. A significant test of Population: 57.4 million David Mabuza, though the Zuma faction the government’s commitment will Population growth: 1.2% has not forgiven him for abandoning be how it responds to elections in the GDP per capita: $6,560 them in favour of Ramaphosa at the DRC, scheduled for December 2018, Life expectancy: 63.4 ANC’s national conference in December and their aftermath. Adult literacy: 94.4% 2017 – a move that was decisive in seBack home, opposition parties Inflation: 4.8% curing Ramaphosa’s victory. also have challenges of their own. Human development index In September 2018, the Democratic (out of 188 countries): 111 DIFFICULT REFORMS Alliance (DA) lost control of Port Foreign direct investment: $1.3bn If,however,theANCrecordsanimproved Elizabeth after its coalition partners Current account as % of GDP: -3.2% share of the vote, this will strengthen abandoned it, and lost credibility with Ramaphosa’s reform mandate, which is voters in Cape Town for the way it hanMobile phone subscription: 162% dled the removal of mayor Patricia de settoincludedifficultmeasuresincluding Key export: Coal a substantial reduction in the size of the Lille. Many in the DA blame this on the Last change of leader: 2018 leadership of party president Mmusi civil service. Already, rumours of a plan GDP growth (%) to retrench 30,000 civil servants over the Maimane, and if the DA performs poorly 1.4 1.3 next three years has prompted outrage in the 2019 polls, slipping below the 0.8 and threats of strike action. It would also 22% of the vote it picked up in 2014, the 0.6 bolster his land reform plans, which knives could be out for him. many consider too moderate (see box). The Economic Freedom Fighters GDP ($bn) Ramaphosa has set up several com(EFF) also has its credibility at stake in 385.5 376.7 349.3 295.7 the elections. EFF ‘commander in chief’ misions including the Commission of Julius Malema is calling for all land Inquiry into State Capture, led by the 2016 2017 2018* 2019* to be nationalised and has launched deputy chief justice, Raymond Zondo, increasingly strident attacks on white tasked with unravelling the full extent of the corruption at state-owned enterand Indian South Africans. If all this fails prises (SOEs) and other state organs. In the meantime, reform to push the EFF much beyond the 6% of the vote it picked up of the SOEs will be high on the agenda, driven by Pravin in 2014, it will call Malema’s strategy into serious question, Gordhan, the former finance minister and now minister for though a menacing party militia called the Defenders of the SOEs. So far, Gordhan’s focus has been mainly on replacing Revolution will probably ensure that his critics within the SOE boards constituted during the Zuma era, which were party are intimidated into silence. THE AFRICA REPORT
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SOUTHERN AFRICA
COUNTRY 129 PROFILES
SOURCE: ESKOM
South Africa’s gross domestic resulting from the ANC’s commitment to PLANNED ESKOM STAFF REDUCTIONS product (GDP) contracted during the change the constitution to allow for land 48,678 second and third quarters of 2018, expropriation without compensation. Ramaphosa announced a new ecoand overall GDP growth for the year is 41,613 forecast at under 1%. Part of the reason nomic stimulus plan in September 2018, for these figures was a devastating which, the president hopes, will boost the drought in the Western Cape, which country’s growth prospects in 2019. The slashed agricultural production. Good measures include a relaxation of onerous winter rains have ended the drought visa rules to encourage tourism, reforms designed to reduce the high cost of inand boosted agricultural output, which will lift GDP figures in 2019. ternet data, so-far-unspecified initiatives 2018 2023 to reduce electricity costs, port and rail Mining production was also weak in 2018 but the government hopes that the tariffs, and a new R400bn ($27.4bn) infranew Mining Charter, agreed by the cabistructurefund.Ramaphosawascarefulto net in September 2018, will bring greater stress, however, that the fund would not involve new money but would instead regulatory certainty and encourage new be a reallocation of existing spending, investment. That depends, however, on New infrastructure fund what the mining sector makes of the intended to leverage further expenditure announced in the 2018 charter. New legislative changes aimed from the private sector. Markets reacted economic stimulus plan at bettering the lives of workers, junior cautiously but positively. miners, small suppliers and mining There has also been a generally posicommunities. The new black economic empowerment (BEE) tive reaction from markets to the government’s long-awaited shareholding structure will require mining companies to publication in late 2018 of its integrated resource plan (IRP), which lays out the administration’s medium- to long-term set a minimum of 5% non-transferable carried interest to plans for the country’s power supply. The IRP envisages a qualifying employees, the same amount to host communities and a minimum of 20% share ownership to a BEE partner. growing role for renewables, and no increase in the country’s use of nuclear power, reassuring the country that the previous NO QUICK FIX administration’s plans to buy nine expensive nuclear reactors Investor interest in emerging markets is due to be restrained from Russia are firmly off the agenda. because of rising US interest rates and other factors. Economic Industry minister Rob Davies has promised to release a plan for the automotive sector, intended to run until 2035. It will growth is still nowherenear high enough to dent unemployment and to give ordinary South Africans the sense that things may outline incentives for manufacturers to keep making vehicles be starting to improve. Consumers will have to contend with in South Africa, though industry is nervous that it will require the inflationary impacts of a weakened currency. The fall in the tough new empowerment quotas. Activity in the banking rand has been driven both by global emerging market woes and sector is due to heat up in 2019. South Africa is expected to see the launch of at least six new banks and banking services. SouthAfricanfactors,includinguncertaintyaboutpropertyrights
$27.4bn
The land question THE CONSTITUTION ALLOWS the state to expropriate land, requiring it to provide ‘just and equitable’ compensation when doing so. Legal experts say this could in some cases mean zero compensation, though this has never been tested in the courts. Now, however, egged on by the EFF, the ANC has announced its intention to revise the THE AFRICA REPORT
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constitution to provide greater ‘clarity’ on the issue. The EFF has said it will support a bill to change the constitution, thus giving the ANC the two-thirds majority it would need to push the amendment through. The two parties’ visions on the topic remain widely different though, with the EFF wanting all land nationalised and Ramaphosa insisting
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that this will never happen on his watch, arguing that because banks have lent so much money to private property owners to acquire land, this would effectively destroy the country’s banking system. Land expropriation is set to be a major issue on the electoral campaign trail in 2019. If the EFF does well, that may push the ANC to take a more radical
position, but if the party performs poorly, that will encourage Ramaphosa to stick to a more moderate line. Either way, the world will be watching closely. Despite repeated assurances from the ANC that South Africa will never be “another Zimbabwe”, others, not least US president Donald Trump, have already indicated they are not so sure.
SOUTHERN AFRICA
TANZANIA
DEMOCRATIC REPUBLIC OF CONGO
Zambia
ANGOLA
Ndola
Lungu’s many labours
ZAMBIA MOZAMBIQUE
LUSAKA NAM.
The government has begun austerity measures to plug its spiralling debt Lungu wants to run again in 2020 but courts have yet to rule on his eligibility
MALAWI
130 COUNTRY PROFILES
ZIMBABWE
BOTSWANA
200 km
T
*Estimation October 2018
he next presidential and legislative elections are the Luapula Province, is gearing up to try to oust him at the still three years away, and Zambia’s President party convention slated for August 2020. The PF has also begun neutralising the opposition, and Edgar Lungu has many reasons to feel vulnerable. He and his allies in the Patriotic Front (PF) have this will accelerate in 2019. The United Party for National begun their election campaigns early. There is increased Development(UPND)hasbeenrelativelydirectionlesssincethe contested 2016 elections and the arrest of its leader, Hakainde resentment over widespread corruption, growing unemHichilema, in 2017. The party is failing to attract aggrieved ployment, especially among the youth, fragile public-sector finances and, more recently, a rising sense that Zambia is members from the PF or new politicians and is haemorrhaging members even in areas it considers its stronghold. descending into authoritarianism. Lungu’s biggest threat, however, comes from within the party. NEW OPPOSITION PARTIES He has been unable to win over the sceptics, the conservative founders of the party. The presidential nomination will be The halo that Hichilema acquired after his four-month up for grabs at a party congress to be held in August 2020. incarceration on treason charges has faded and he has lost one of his most vibrant and potential Lungu’s eligibility to stand for another term in 2021 is in question as he took successors, Hyvie Hamududu, who has formed his own political party called office in 2015 through a by-election after Population: 17.6 million National Unity. PF-UPND relations the death of then president Michael Sata. Population growth: 3% The constitutional court has postponed remain acrimonious even though there GDP per capita: $1,450 its ruling after an initial hearing in May is a dialogue of reconciliation in place. Life expectancy: 62.3 2018. Even though it is unlikely that The process, which was initiated by the Adult literacy: 83 Commonwealth after the incarcerathe courts will declare him ineligible Inflation: 8.5% tion of Hichilema, has been dogged since he handpicked the judges, he is Human development index still uneasy and has resorted to publicly by squabbles over who should lead the (out of 188 countries): 141 warning the court that there will be process. Neither party is interested in Foreign direct investment: $1.1bn chaos if he cannot run for another term. the dialogue, preferring the status quo. Current account as % of GDP: -4% TheUPNDalsofacescompetitionfrom BANDA MOVES AWAY a new generation of opposition parties, Mobile phone subscription: 79% like the National Democratic Congress Lungu is looking for friends from outside Key export: Copper the party to keep his hold on power. He headed by Lungu’s former information Last change of leader: 2015 initially had the moral and financial minister Chishimba Kambwili. Kambwili GDP growth (%) and former foreign affairs minister Harry support of former president Rupiah 4.5 Kalaba, who resigned in January 2018 Banda. Lungu returned the favour and 3.8 3.8 3.4 citing “swelling” levels of corruption managed to stave off the prosecution of Banda and members of his family on corin government and who has set up his GDP ($bn) ruption and abuse of office charges. But own party, are campaigning on good as public concern over corruption rises governance platforms. Both men com26.1 25.8 25.7 20.9 Banda has gravitated towards his former mand significant influence in Northern party, the Movement for Multi-Party and Copperbelt provinces. 2016 2017 2018* 2019* Democracy (MMD), and declared that Civil society groups have been he would like to see an MMD member in stepping in to hold the government the presidency. A revitalised MMD under to account. Initially, the government works and supply minister Felix Mutati could soon emerge. targeted individuals to harass, but this has become increasingly difficult as more members of the public join protests and The PF itself is fractured and the chasm is growing. demonstrations and use social media to express their anger. There is rising disaffection with Lungu’s style of leadership, especially his failure to indulge PF supporters from the The PF has tried to mute dissent by setting up fake accounts powerful northern bloc. A shadowy group calling itself and infiltrating chat groups and communication channels. The economy has taken a hit since the PF came into power Luapula United, consisting of high-ranking members of in 2011 and began a spree of spending and borrowing that parliament, cabinet ministers and party functionaries from THE AFRICA REPORT
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SOUTHERN AFRICA
has done little for growth and poverty reduction. That has left the country with a serious debt problem (see box). The government is rolling out measures to raise revenue in 2019, which have already angered players in the mining sector. Mining royalties will increase by 1.5% across the board. The government will also introduce a 10% charge if the metal price climbs above $7,500 a tonne. There is expected to be an immediate push back from the miners, who are facing the tenth tax change in 16 years. They claim such a volatile tax regime is not conducive for long-term investment. The government has also proposed to abolish the value-added tax system to replace it with a sales tax. This would move the country away from global norms, as tax evasion is more likely with this system.
ZAMBIA’S DEBT CRISIS
COUNTRY 131 PROFILES
Thanks to improving prices and electricity supply, Zambia’s copper produc11.25 tion rose by 10.6% in the first half of 2018 11 to 402,222tn. Production is on course to 10.75 surpass 2017’s production of 755,000tn 10.50 and reach 815,000tn. China Nonferrous 10.25 Metals launched production at its new 10 $832m Chambishi South-East mine in 9.75 August, which should add 60,000tn per 9.50 annum to national production by 2020. Power is critical to the mining indusSep. Dec. Mar. Jun. Sep. 2017 2018 try, and Zambia is reliant on hydropower for the majority of its electricity production. State electricity company Zesco assured Zambians that the load-shedding that began in 2015 would come to an end in 2018. The government is now Increase in copper working on a plan to implement tariffs production in the first that reflect the cost of production, which half of 2018, to 402,222tn will mean higher costs for mining firms. The country has the capacity to produce 2,878MW, with a goal of reaching 3,746MW by 2021. STUDENT LOANS RECALLED At least 100MW of that should come from a series of solar The government has instituted other austerity measures projects currently under discussion. But coal and hydro will to shore up its finances. In August it announced plans to be the major focus, with the 300MW Maamba coal plant and the 340MW Emco plant in the works. Zimbabwe and Zambia implement an internet tax of K0.30 ($0.03) on over-the-top want to develop the $4bn, 2,400MW Batoka Gorge Dam project services like WhatsApp, Facebook Messenger and Viber. next year. However, the financing has not yet been secured and Then, in late September, the government announced that both countries are struggling with their debts and austerity. all student loans to graduates from the University of Zambia Poor rains hit maize production in 2018, with analysts and Copperbelt University would be recalled starting October 2018. Some loans have been outstanding since 2004. predicting a 34% drop to 2.4m tonnes. The country has In 2019, the government will focus domestic resources sufficient reserves to deal with it, and harvests of beans, on infrastructure projects that are at least 80% completed, groundnuts and rice are set to be higher. After rolling out abandoning those in early stages of development. This a subsidy programme for farming inputs, the government should reduce domestic borrowing from 4% to 1.4% of is trying to get beneficiaries to reinvest their surpluses so gross domestic product. that it can reduce its spending on the measures. 11.5
Zambian kwacha (%, left scale) Yield on Zambia’s 2024 eurobonds (kwachas per dollar, right scale)
SOURCE: BLOOMBERG
18 17 16 15 14 13 12 11 10 9 8 7 6
10.6%
Debt and deception WARNING BELLS ABOUT Zambia’s swelling debt – which is now estimated at around $18.6bn in a country with a gross domestic product of $25.5bn – began back in 2015. Only when the International Monetary Fund (IMF) described Zambia’s debt as “unsustainable” and refused to discuss an aid package did President Edgar Lungu begin to pay THE AFRICA REPORT
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heed to the caution. He still claimed, as he does now, that Zambia’s economy is stable and growing. As finance minister Margaret Mwanakatwe showed in the 2019 budget, Zambia is not addressing the debt situation. Crunch time is looming. Of the 75 countries whose bonds make up the Bloomberg Barclays Emerging Markets
D E C E M B E R 2 018 - J A N UA R Y 2 019
Index, none performed as badly in 2018 as Zambia. As accusations of hidden borrowing – especially from China – and corruption draw concern from investors and Western donors, the finance ministry continues to obfuscate about the debt details, refusing to provide a breakdown of debt performance, creditors, interest rates, the size
of loans and repayment strategies. Mwanakatwe has also not announced how government will reduce the cost and improve the efficiency of the country’s bloated civil service, an issue the IMF has consistently raised concerns over. Lungu now says he has put an end to further borrowing and will engage China about debt restructuring.
MALAWI
SOUTHERN AFRICA ZAMBIA
Zimbabwe
HARARE
ZIMBABWE
Multitasking for Mnangagwa
BOTSWANA
SOUTH AFRICA
200 km
Mnangagwa is struggling to maintain unity within the ruling ZANU-PF Tobacco production is booming, and the mining sector is set to grow
Bulawayo MOZAMB.
Indian Ocean
132 COUNTRY PROFILES
T
*Estimation October 2018
is weak due to a lack of national and international support he government heads into 2019 struggling to deal with after the courts threw out his complaints about electoral expectations that the overthrow of former president Robert Mugabe in 2017 would help to revive the fraud in the presidential vote. He is unlikely to find much country’s moribund economy, improve the respect help from the African Union since Zimbabwe’s neighbours and international partners have accepted the vote results. He for human rights and allow the government to provide basic is also talking about launching a national protest movement. services for all. Improving the sluggish economy, which is starved of hard currency, will be one of the Harare government’s main challenges for the year ahead. SOLDIERS WANT CASH Both Mnangagwa and Chamisa are facing pressure from Elected in a contested mid-2018 vote, President Emmerson within their parties as ZANU-PF and the MDC prepare Mnangagwa’sgovernmentcontinuestoapplythelawselectively, banning opposition public gatherings but not those of the for forthcoming congresses. Mnangagwa is struggling to rulingZimbabweAfricanNationalUnionmaintain unity in the groups supporting him. Criticism is growing about the Patriotic Front (ZANU-PF). Mnangagwa nonetheless wants to show the world close relationship between him and Population: 16.9 million that he can do things differently from his businessman Kudakwashe Tagwirei of Population growth: 2.3% predecessor. He promised at his inauSakunda Holdings (see box). GDP per capita: $1,269 guration to promote the rule of law and Vice-presidentConstantino Chiwenga, Life expectancy: 61.7 moved swiftly to appoint a commission who was the army chief when the military Adult literacy: 88.7% toppled Mugabe, is angling to succeed of inquiry, led by former South African Inflation: 3.9% Mnangagwa and the army remains a president Kgalema Motlanthe, into the Human development index serious power broker. As The Africa army shooting of civilians that claimed (out of 188 countries): 155 at least six lives in post-election violence. Report went to press, soldiers were deForeign direct investment: $289m However, critics have pointed out that manding to be paid in hard currency. If Current account as % of GDP: -5.8% some members of the commission are the government gives in, it will further Mobile phone subscription: 85% known ruling-party sympathisers. strain the budget. In the MDC camp, secretary general Key export: Tobacco ANTI-CORRUPTION’S LIMITS Douglas Mwonzora is said to be plotting Last change of leader: 2017 In 2018, Mnangagwa scored points to wrestle power from Chamisa at the GDP growth (%) by introducing a trimmed cabinet opposition party’s elective congress due 4.2 3.6 3.7 this February. Chamisa has, however, including technocrats like finance 0.7 minister Mthuli Ncube. The team also found new allies in two former secretary includes experienced ruling-party generals of the MDC – Tendai Biti and stalwarts like Oppah Muchinguri Welshman Ncube – who broke away GDP ($bn) and July Moyo. Some of the dropped from the late MDC-founding president 21.6 19.4 17.6 16.1 ZANU-PF politicians, like former Morgan Tsvangirai. health minister David Parirenyatwa, With investors worried about politi2016 2017 2018* 2019* have been charged with corruption cal uncertainty, exports not bringing in but critics argue that Mnangagwa is enough hard currency and the governskirting around the party’s corrupt ment spending well beyond its means, heavyweights. the Zimbabwean economy is struggling. The government is preparing a round of painful spending cuts in order to reduce His ‘Zimbabwe is open for business’ mantra seems to be the deficit and to help pay back its arrears to creditors in the bearing fruit, with some Western countries embracing the new administration. The United States remains sceptical and hopes of unlocking new international borrowing. has told Harare to walk the talk on key democratic reforms. Cash shortages are causing price increases for basic comNelson Chamisa of the Movement for Democratic Change modities and shortages of other goods, such as cement. The (MDC), who lost the July 2018 presidential vote, maintains government is sending mixed messages about some of its that Mnangagwa is an illegitimate leader and criticises the strategy. Finance minister Ncube says the country’s surrogate currency known as bond notes will be taken off the market soon. government’s economic policy. Chamisa’s political position THE AFRICA REPORT
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SOUTHERN AFRICA
The country will then be allowed to use the US dollar and join South Africa’s Rand Monetary Authority in order to improve the circulation of cash. Mnangagwa, meanwhile, is less supportive of ending bond notes, blaming the economy’s woes in part on sabotage. Investors seem to be taking their time to study Mnangagwa’s administration to see if its policies are investor-friendly and whether it is implementing key democratic reforms that the new president promised before and after elections were held. Billions of dollars in deals for investments in mining and other projects were signed before the July elections, so the year ahead will show which of the investors intend to follow through.
COUNTRY 133 PROFILES
Perence Shiri says the country is putting in place measures to protect food security. Already, efforts are under way 2.3 to install irrigation equipment in many parts of the country in order to improve water supplies and boost productivity. 1.5 Mnangagwa says his government 1.1 plans to compensate more than 4,000 white commercial farmers who lost land in the country’s controversial land reform programme that started in 2000. 2020 2018 2019 The new finance minister, Mthuli Ncube, also says the Harare administration was planning to expedite the issuance of bankable 99-year leases to new farm settlers to allow them to access loans from financial institutions. white farmers to be Under the two-year Transitional compensated for loss Stabilisation Programme aimed at of land under Mugabe RICHES IN THE GROUND reviving the economy, which runs up Despite low levels of foreign direct into December 2020, the government is vestment, the government argues that Zimbabwe’s mining also planning to target aggressive marketing and rebranding of Zimbabwe. It plans to facilitate tourist arrivals through sector is on an exponential growth trajectory. Mines minister Winston Chitando projects that the sector will generate relaxation of restrictive visa requirements. $3.5bn in 2018. The Chamber of Mines figures show that this To deal with the fiscal deficit, estimated at more than $2bn, the government is implementing some measures to start target would be achieved through strong production in gold, nickel, diamonds, coal, chrome and lithium. New ventures winning back control and management of budget expenditure. at Mhondoro-Ngezi and Great Dyke are expected to boost At the same time, to improve infrastructure, the government is recapitalising the defunct National Railways of Zimbabwe platinum production in the year ahead. parastatal by injecting $400m under a joint venture to enable Tobacco is the star of the agricultural economy, and the the rail company to refurbish rolling stock and tracks. country produced a record bumper harvest of 238m kiloTo get more finance at concessional rates, the government grammes in 2018 due to the success of contract farming has to repay debts to development finance institutions. An programmes. Much of Zimbabwe’s tobacco is grown by International Monetary Fund team visited Zimbabwe at the smallholder farmers and exported to China. With the country expecting low harvests in the 2018/2019 agricultural season end of the year to assess economic progress in the country and its prospects for paying down its arrears in the year ahead. due to an expected El Niño phenomenon, agriculture minister
GOVERNMENT DEFICITS ICITS
SOURCE: GOVERNMENT OF ZIMBABWE
($bn)
4,000
Growing pains ZIMBABWE COULD FACE ACUTE food shortages despite an accelerated agriculture programme sponsored by the government and funded by a local petroleum company, Sakunda Holdings. Organisations like the Commercial Farmers Union and the Zimbabwe Farmers’ Union have hinted that yields could be very low because of recent price THE AFRICA REPORT
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hikes of most inputs, due to the liquidity crisis. The Food and Agricultural Organization predicted a 21% drop in the maize harvest in 2018. The shortage of foreign currency has resulted in most agricultural suppliers increasing prices by more than 100%. Some suppliers are also demanding payment in foreign currency, which is not readily available.
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Despite the 2016 launch of Command Agriculture – a programme assisting farmers with inputs through loans – most Zimbabwean farmers are complaining that inputs supplied by the programme are insufficient for their needs. Meanwhile, the El Niño weather phenomenon is expected to affect Zimbabwe’s rainfall in 2019, and the authorities have
indicated that they will accelerate irrigation facilities. The Transitional Stabilisation Programme is meant to bring greater involvement by the domestic financial system in underpinning agriculture financing. The government also launched Command Livestock with a view to increasing the national cattle herd to satisfy local and export beef markets.
East Africa
135 Red Sea
ERITREA
SUDAN
CHAD
SAUDI ARABIA
Massawa
ASMARA Gondar
YEMEN Gulf of Aden
DJIBOUTI
DJIBOUTI Berbera Hargeisa Harar
Dire Dawa ADDIS ABABA CENTRAL AFRICAN REPUBLIC
SOUTH SUDAN
Jima
ETHIOPIA
Juba
UGANDA
MOGADISHU
KENYA
KAMPALA Kisumu
DEMOCRATIC REPUBLIC OF CONGO
Obbia
SOMALIA
Lake RWANDA Victoria KIGALI
Kismayo NAIROBI
BUJUMBURA
Indian Ocean Mombasa
BURUNDI
DODOMA
TANZANIA
Zanzibar
Dar es Salaam
Mbeya ZAMBIA 300 km
136 PEOPLE TO WATCH 138 BURUNDI 139 COMOROS 140 DJIBOUTI 141 ERITREA 142 ETHIOPIA 144 KENYA 146 RWANDA 147 SEYCHELLES
$29.4
3 329.5
2019
4 433.7
2030
billion
651.5
2050
Amount owed to China by countries in East Africa, according to data from the China Africa Research Initiative
EAST AFRICA 2018 GDP (% of regional total) Burundi 1.2% Uganda 9.5%
0.2% Comores 0.8% Djibouti 2.3% Eritrea
Tanzania 19%
South Sudan 1.4% Somalia 2.5% Seychelles 0.5% Rwanda 3.3%
28.6% Ethiopia TOTAL
$292.6bn
30.6% Kenya
SOURCE: GDP CURRENT PRICES â&#x20AC;&#x201C; IMF WORLD ECONOMIC OUTLOOK DATABASE, OCTOBER 2018
CONTENTS
EAST AFRICA POPULATION (millions)
SOURCE: UN WORLD POPULATION DIVISION (THE 2018 REVISION)
MOZAMBIQUE
148 SOMALIA 149 SOUTH SUDAN 150 TANZANIA 152 UGANDA 154 WAKANDA
JANUARY
MARCH
MAY
JULY
ETHIOPIA African Union Summit
RWANDA Africa CEO Forum
ETHIOPIA Local elections
KENYA Power & Energy Africa
EAST AFRICA
ETHIOPIA
BURUNDI
Lelise Neme
Antoine Kaburahe
Empowering industry
Stand up and be counted
Lelise Neme is among a handful of women appointed by Prime Minister Abiy Ahmed to high-profile positions. At just 26, the new chief executive of Ethiopia’s Industrial Parks Development Corporation (IPDC) is also the youngest. Hailing from Abiy’s region of Oromia and with a background in engineering, Lelise made lightning-quick progress up the regional bureaucracy, starting at the newly established Oromia Industrial Parks Development Corporation and becoming director general of the regional agency for industrial development. Next year will be critical for the IPDC, with two new parks to open and another expanding.
The exiled Burundian-Belgian journalist and publisher has been a key critical voice highlighting the governance problems in Burundi. The 58-year-old founded the weekly paper and monthly magazine Iwacu. He has been in exile since November 2015, when the government accused him of participating in a failed coup against President Pierre Nkurunziza, who pursued a controversial third term that deepened the country’s political crisis. In 2017, Kaburahe and human rights activist Pierre Claver Mbonimpa published the book Rester Debout to get the word out about Burundi’s worsening human rights situation.
JOSEPH RUBAMBE
LAURENT BENHAMOU/SIPA
136 COUNTRY PROFILES
TANZANIA
ALL RIG
HTS RE
SERVE
D
Fatma Karume Critical scion A scion of the Karume political dynasty – her father, Abeid, was the first president of Zanzibar – Fatma Karume shot into the limelight after being elected president of the Tanganyika Law Society in April 2018. Since then, she has emerged as one of the sharpest critics of Tanzanian president John Magufuli’s leadership style and the ruling party. While Karume maintains she has no interest in politics, but only in the rule of law, her criticism of the establishment has confounded observers. Speculation is rife as to what signal the Karume family might be sending. What will be next for Fatma when she steps down from the law society’s presidency in 2019? THE AFRICA REPORT
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137
UGANDA
Robert Kyagulanyi
BRIAN INGANGA/AP/SIPA
People power
KENYA
TONY KARUMBA/AFP
Isaac Awuondo Big-time banker As managing director of the Commercial Bank of Africa (CBA), Isaac Awuondo is in charge of making Kenya’s largest privately owned bank into a rival of the banks owned by big multinational financial institutions. He is helped by two big factors: one is that the family of President Uhuru Kenyatta is a big shareholder in the bank; and the other is that CBA is the partner of part-government-owned telecom Safaricom’s mobile-money lending app M-Shwari, which is recording huge revenue growth. Awuondo is also chairman of the board of the state-run Kenya Airports Authority.
In Kyagulanyi, a member of parliament and popular singer going by the name of Bobi Wine, the Ugandan regime faces a new type of opposition figure. He does not belong to any political party; has no historical links with the ruling regime; belongs to the Catholic faith, the largest faith-based institution in the country; and professes his love for the King of Buganda, the largest kingdom in the country. President Yoweri Museveni is worried about Kyagulanyi and his ‘People Power’ slogan, with many eyes in Kampala focused on how the upstart will play his hand in 2019.
RWANDA
JEAN BIZIMANA/REUTERS
Victoire Ingabire Political fighter
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To some Ingabire is a fearless politician who returned to Rwanda in 2010 to run for the presidency, while others see her as an extremist Hutu trying to distort Rwanda’s unity and reconciliation. She has a tense relationship with President Paul Kagame, whose government released her in September 2018 from a 15-year jail term. She was arrested in 2010 for forming an armed group and criticising the government’s narrative on the 1994 genocide, which prevented her from contesting the election. She said that she hopes her freedom is a sign of a political opening in Rwanda and immediately called for the release of more political prisoners.
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138 COUNTRY PROFILES
EAST AFRICA
Lake Kivu
RWANDA TANZANIA
Burundi
BURUNDI
R.D.CONGO
BUJUMBURA
Unstable stalemate President Nkurunziza is not interested in national reconciliation The lack of donor funding is hurting government finance and the economy
Lake Tanganyika
100 km
T
*Estimate October 2018
he government of President Pierre Nkurunziza newlyformedFrontNationalpourlaLiberté–Amizeroy’Abarundi has no interest in ending its conflict with its most has the strongest opposition following. As vice-president of the national assembly, Rwasa is the most visible challenger to virulent critics. Nkurunziza won a third term in the ruling party’s strong-arm tactics. The smaller opposition 2015, in elections boycotted by the opposition parties remain weak and divided. on the grounds that it was unconstitutional. Since then, the country’s conflict has killed an estimated 1,200 people The East African Community (EAC)’s attempts to organand displaced more than 400,000. Some generals and police ise a dialogue between the government and the opposition officials fled the country. There have been regular attacks have been unsuccessful, as the government has denounced on the security forces by unidentified groups. some groups as terrorists and refused to engage with them. The government says it will go ahead The EAC – whose member states have with preparations for a new round of different positions on Burundi – has not shown an effective strategy in response elections in 2020. Several opposition Population: 11.2 million to Bujumbura’s manoeuvres. The UN leaders remain in exile and the political Population growth: 3.2% climate in Burundi remains tense. In Security Council is now calling for a GDP per capita: $307 2018, Nkurunziza appointed Ezechiel national dialogue ahead of the 2020 polls. Life expectancy: 57.9 Nibigira, a former leader of the ruling Adult literacy: 61.6% STAGNANT ECONOMY party’s Imbonerakure youth militia, as Inflation: 1.2% foreign affairs minister. The opposition Without any major boosts on the horizon, Human development index the economy is set to stagnate. Poverty claims it is a sign that state repression of (out of 188 countries): 183 the media, civil society and the opporemains a severe problem, with 73% of Foreign direct investment: $0.3m sition will continue. A new penal code the population living below the poverCurrent account as % of GDP: -13.4% adopted in early 2018 gives the police ty line. Poverty is high amongst rural Mobile phone subscription: 54% more tools of intimidation. small-scale farmers, who make up the majority of the 80% of the population Key export: Coffee WORDS AND DEEDS engaged in agriculture – the mainstay Last change of leader: 2005 Nkurunziza says that he will not run of the economy. GDP growth (%) again, which has led the ruling party, The government regularly points to the 0.4 0.1 0 potential of the mining sector, but it is the Conseil National de Défense de la held back by Burundi’s weak electricity Démocratie–Force de Défense de la -1 supplies. It says there are commercial Démocratie, into conflict as he wants to GDP ($bn) chose his preferred successor. But there quantities of minerals including nickel, are some who doubt that Nkurunziza vanadium, gold, phosphates, cassiterite 3.6 3.4 3.4 3.1 will respect his word, as he organised a and rare earths, among others – but there have been no full national geological constitutional referendum in May 2018 2016 2017 2018* 2019* studies. Mining generated a meagre that allowed him to now run for the BF4bn ($2.3m) in 2017. presidency until 2034. If he is not going to run, it is likely that he will not reveal his Burundi has the capacity to produce preference for a replacement until the eve of the 2020 elections. just 40MW of electricity, and tariffs were doubled in late 2017. Nkurunziza launched a 10-year national development plan in In late 2017, the World Bank and European Union signed a 2018, focused on reforming government, boosting agriculture financing deal for the construction ofdamsatJiji andMulembwe to add 49.5MW to the grid. and livestock and building new energy infrastructure. If he does Road projects and the construction of a presidential not run, he will want someone who will protect his legacy and ensure that he does not face national or international justice. A palace are due to continue in 2019. Prior to the 2015 criUnited Nations report issued on 8 September 2018 suggested sis, donor aid accounted for about 50% of the national that Nkurunziza may have committed crimes against humanity budget. Western countries have cut off aid, and the govbetween 2017 and 2018. ernment has been asking for donations from the public in In the meantime, Nkurunziza will try to play divide and rule order to finance preparations for elections and other with the opposition. Former rebel leader Agathon Rwasa of the government activities. THE AFRICA REPORT
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EAST AFRICA
COUNTRY 139 PROFILES
NGAZIDJA (GRANDE COMORE)
Comoros
MORONI
Indian Ocean
COMOROS
Assoumani’s ambitions
Mutsamudu MWALI (MOHELI)
Constitutional reforms change the rotation of power between islands Infrastructure is needed for the economy to make a dent in poverty levels
30 km
A
NDZUANI (ANJOUAN) Dzaoudzi
MAORE (MAYOTTE) (France)
*Estimate October 2018
– the country’s biggest scandal in recent years. Civil society fter organising a 30 July 2018 referendum to shake groups are calling for former president Ikililou Dhoinine to up the country’s constitution, president and former putschist Azali Assoumani is planning to take the face similar charges. If re-elected, Assoumani will face tough negotiations with country to the polls again for an early presidential vote. But his power grab is destablising the country. Under the the government in Paris over the disputed archipelago of new constitution power now passes between the three main Mayotte, which became an overseas French department in islands of Comoros every 10 rather than every five years, and 2011. President Emmanuel Macron’s administration stopped presidents have the possibility of two consecutive rather than issuing visas to Comorian citizens in the middle of 2018 after just one term. The previous constitution had been praised for the Comorian government refused to work with them on the putting an end to a series of coups and instability fomented return of undocumented migrants to Mayotte. Relations with by rivalries between the islands. the Gulf States are better than those with France, and Saudi Arabia promised a Assoumani’s moves angered some new $22m aid package in July 2018 for allies and his opponents, provoking Population: 0.8 million infrastructure projects. protests. On Anjouan island, where Population growth: 2.2% residents are angry they will have to GDP per capita: $877 RISING REMITTANCES wait another term to get the rotating Life expectancy: 63.9 The economy is set to continue growing presidency, there was a rebel-soldier Adult literacy: 49.2% slowly because of the poor business clistandoff in October. Inflation: 2% mate, weak transportation infrastructure Assoumani’s term is due to expire in Human development index and unreliable supplies of electricity. 2021 but he wants to hold elections in (out of 188 countries): 163 Electricity utility Ma-Mwe installed a 2019 to strengthen his hand. He has said Foreign direct investment: $9m that he will make the country a devel2MW addition to the Itsambuni plant Current account as % of GDP: -9.2% oping economy if he ends up serving an in mid-2018 to help reduce load shedMobile phone subscription: 55% additional two terms, which would keep ding in Moroni. There are also plans for him in power until 2029. Assoumani solar power projects at Ndzuani and Key export: Cloves defends his agenda, saying that it was Mwali. The International Monetary Fund Last change of leader: 2016 warns that the economy will not grow the result of national consultations that GDP growth (%) wrapped up in early 2018. fast enough to fight poverty until the 2.8 2.8 2.7 government implements thoroughgoing 2.2 OPPONENTS ARRESTED reforms, raises more revenue and spends The opposition boycotted the July refmore on priority infrastructure. GDP ($bn) Activity in the telecoms sector is erendum. Youssouf Boina, secretary general of the Union pour le Développement heating up after Madagascar’s Telma 0.7 0.7 0.7 0.6 des Comores, and other oppositionists launched mobile operations in the say that Assoumani is creating a dictaComoros in late 2016. However, Telma 2016 2017 2018* 2019* does not yet benefit from a level playing torship, as the amendments abolished the constitutional court, a level of island field when competing with former mogovernmentandthepositionofvice-presnopoly firm Comores Telecom. ident. Assoumani had banned protests in the lead-up to the The economy is powered by remittances and the export of referendum and he isolated politicians who opposed his plans. soft commodities like vanilla, cloves and ylang-ylang. Vanilla After the referendum, the government launched a series prices and migrant remittances were high in 2018 and set to of arrests, saying that people were seeking to destabilise the stay that way into 2019. The government predicts that net country. Army deputy chief of staff Colonel Ibrahim Salim was remittances will rise from 18.6% of gross domestic product in arrested in September on charges of conspiracy. The African 2018 to 19.2% in 2023. And if trends persist, the country could Union has sought to mediate but has not been able to get the take in more than 10bn Comorian francs ($23.5m) from exports of cloves, up from 8.3bn in 2018. Tourism could also soon pick sides to reach an agreement on a way forward. Former president Ahmed Sambi, awaits trial for corruption up. In June 2018, Turkish Airlines added a three-times-a-week and fraud related to an opaque programme to sell passports route to Moroni, the country’s capital. THE AFRICA REPORT
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140 COUNTRY PROFILES
EAST AFRICA
30 km
YEMEN ERITREA
Djibouti
ETHIOPIA
DJIBOUTI Gulf of Aden
A complicated neighbourhood
DJIBOUTI
Ethiopia’s push for peace in the region could threaten Djibouti’s role as a partner A resolution of the DP World dispute is caught up in a question of numbers
SOMALIA
O
*Estimate October 2018
the Guelleh government in recent years. But like in many ver the next few years, Djibouti’s political direction other African countries borrowing heavily from China, will become clearer, as long-serving President there are concerns about the viability of projects and the Ismail Omar Guelleh, 71, will be too old to run for the presidency in 2022. He remains coy about his sustainability of debt. Djibouti has borrowed heavily to plans, having said that he will choose a successor when the time build new ports and a railway link to Addis Ababa. The is right. As 2022 approaches, he could also attempt to change Tadjourah and Goubet ports are operational, and Doraleh the constitution, which limits a presidential candidate’s age to Multipurpose Port opened for business in early 2018. It is 75. In the meantime, his government remains unconcerned near a Chinese-backed free zone, said to be the largest in about the threats to its position as Ethiopia’s sole access route Africa at 48km2. The International Monetary Fund warns to the sea, arguing that the country has that Djibouti’s debt is unsustainable made decades of progress on trade and and will remain so for many years, but transport that neighbours will struggle for now the economy is growing rapidly. Population: 1 million to catch up with. Population growth: 1.5% FOCUS ON LOGISTICS Other than the long-running questions GDP per capita: $2,085 about the succession, Djibouti’s political Djibouti’s dispute with the port operator Life expectancy: 62.6 DP World is set to drag on into 2019. landscape remains fairly stable. Guelleh’s Adult literacy: ND After long complaining about the terms position is strengthened by the economic Inflation: 1% and strategic rents the government earns of its deal, the government nationalised Human development index from the French, US and Chinese bases the Doraleh port in 2018. The case is in (out of 188 countries): 170 that Djibouti hosts due to its location at arbitration, and the government says Foreign direct investment: $165m it is willing to pay compensation – but a key chokepoint for international trade. Current account as % of GDP: -14.3% agreeing on a number is the difficult part. Mobile phone subscription: 39% IRON HAND This could continue to cloud relations with the United Arab Emirates. The ruling party trounced the opposition Key export: Transmission belts Union pour le Salut National (USN) in The government maintains that the Last change of leader: 1999 February 2018’s legislative elections. port is performing much better under GDP growth (%) government ownership. Traffic may Since then, the USN has not provided 6.7 6.7 6.7 6.5 not surpass the 865,000 twenty-foot much of a challenge to Guelleh. The equivalent units (TEUs) recorded in Union pour la Majorité Présidentielle 2017, but the port authorities say that rules with an iron hand, fearing most GDP ($bn) transshipment rates have risen from Islamists and political Islam. The government has banned extremist versions 20% to 30% of total cargo and container 2.4 2.2 2 1.9 of Islam, and radical leaders are either movements have risen from 65 to 75 in exile or in prison. per hour. The government signed a 2016 2017 2018* 2019* The Addis Ababa government has deal in March 2018 with Singaporemade peace with neighbouring Eritrea, based Pacific International Lines to and Eritrea and Somaliland could soon boost port capacity by 300,000 TEUs be viable options for Ethiopia to diversify its trade routes. per annum, and is looking for investors for the Doraleh Guelleh’s plans to make Djibouti the region’s main logistics project and a planned $600m new terminal. hub depend on its privileged relationship with Addis Ababa, The focus on logistics is not creating many new jobs or so other viable export routes pose a threat to Djibouti’s fighting poverty, so it hopes that a new decentralisation development model. But the peace drive of Ethiopia’s prime programme will help to spread economic activity more evenly. The post of deputy minister for decentralisation was created minister Abiy Ahmed is also delivering benefits for Djibouti. in 2016, but progress has been slow. Addis Ababa and Mogadishu are now mediating the conflict between Eritrea and Djibouti over the territory of Doumeira With the support of the World Bank and the African that the Asmara government seized about 10 years ago. Development Bank, the government is backing projects that Many other projects in the logistics fields rely on financing produce clean geothermal electricity. Estimates suggest that an from China, which has emerged as a very important ally of initial project at the Assal Rift could add 100MW to the grid. THE AFRICA REPORT
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EAST AFRICA Red Sea
SUDAN
Eritrea
COUNTRY 141 PROFILES
SAUDI ARABIA
ERITREA ASMARA YEMEN
A new era begins
Assab ETHIOPIA
The Asmara regime is looking to capitalise on regional developments Improved relations with Ethiopia should spur foreign investment
DJIBOUTI 200 km
T
*Estimation October 2018
he year ahead promises more uncertainty after there are rumblings in the upper ranks of the army too. Isaias Eritrea’s most momentous year since the end of the has revealed few details of the agreements signed with Abiy bloody 1998-2000 war with Ethiopia. For almost two and negotiated them before Ethiopia handed over the disputed territories, including the flashpoint town of Badme. It may decades, following Ethiopia’s refusal to implement a United Nations (UN) border ruling, the two sides were be that only a small handful of senior officials are privy to the at loggerheads, supporting each others’ rebel groups and terms of the deals, such as Isaias’s advisers Yemane Gebreab occasionally clashing over the disputed territories. and Hagos Ghebrehiwet. But in July 2018 the two sides made peace, with Eritrea’s GULF STATES STAKE THEIR CLAIM only president since independence in 1993, Isaias Afwerki, Isaias may be betting on economic developments to steady the embracing his Ethiopian counterpart, Abiy Ahmed, in the ship. The peace process was mediated by Saudi Arabia and the Eritrean capital. It was the first visit by an Ethiopian leader United Arab Emirates (UAE), Eritrea’s closest regional allies. in more than two decades. Flights between the two countries were soon restored, along with phone The two countries have been promislines and diplomatic relations. On 11 ing economic assistance in exchange September, the two leaders opened for increased influence in the region. Population: 5.2 million land border crossings, promising to In September, Isaias traveled to Abu Population growth: 2.3% demobilise the tens of thousands of Dhabi to hold talks about investment GDP per capita: $1,112 troops stationed along the frontier. In and economic cooperation with the Life expectancy: 65.5 November, the UN removed sanctions Emirati crown prince. The UAE is using Adult literacy: 64.7% an Eritrean port as a support base for its and an arms embargo that had been Inflation: 9% war in Yemen and also plans to invest in in place, thanks to Ethiopia’s promptHuman development index an oil pipeline between Ethiopia and ing about Eritrea arming jihadists in (out of 188 countries): 178 Eritrea’s Assab port. Somalia, since 2009. Foreign direct investment: $55m Ethiopian ships have already started This marks the start of a new era for Current account as % of GDP: -1.6% docking at the port of Massawa, and Eritrea, which since 1998 has been on a permanent war footing. The secretive Asmara hopes improved relations with Mobile phone subscription: ND government is said to want to return Ethiopia will spur foreign investment, Key export: Fish national service to its original 18-month which until now has been negligible and Last change of leader: 1993 mostly restricted to the mining sector. limit; some of the most recent conscripts GDP growth (%) There are currently two operational have reportedly already been sent home. 5 4.2 Asmara also plans to raise government mines, employing 15,330 – about 1.1% 3.8 salaries and downsize the military. of Eritrea’s labour force. Bisha, which is 1.9 60% owned by Nevsun Resources, had MASS EXODUS a solid year in 2018 and was on track to GDP ($bn) After the opening of the land border with meet its annual production targets of 7.7 6.7 5.8 Ethiopia, the government ended draco210m-240mpoundsofzincand20m-30m 5 pounds of copper. A unit of the Chinese nian controls on its citizens’ movements. 2016 2017 2018* 2019* For the first time in decades, Eritreans state-owned Sichuan Road & Bridge Co. will start producing copper, zinc, gold enrolled in the national service were and silver by early next year. allowedtoleavethecountrylegallyviathe Ethiopian border. As many as 15,000 Eritreans entered Ethiopia The Australian-based fertiliser miner Danakali, which has in the first three weeks alone, many of whom intended to stay worked in Eritrea since 2009, also said it expected the diplomatic thaw would help it raise capital. It aims to raise $322m in the for good, according to UN High Commissioner for Refugees. coming year to develop substantial potash reserves. The mass exodus poses major political as well as economic Investors have been put off by Eritrea’s human rights record challenges. There is some discontent inside the ruling party, but also, the government argues, by the UN arms embargo. the People’s Front for Democracy and Justice (PFDJ), and It hopes this will soon be lifted, citing its improved relations former finance minister Berhane Abrehe was arrested in with other neighbours, including Djibouti and Somalia. September for publicly criticising Isaias. Diplomats reckon THE AFRICA REPORT
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142 COUNTRY PROFILES
EAST AFRICA
Red Sea
300 km
YEMEN
SUDAN
Gulf of Aden
DJIBOUTI
Ethiopia
ADDIS ABABA Dire Dawa
SOUTH SUDAN
Can reforms outpace resistance? Sweeping political changes have sparked insecurity in some areas Change to the state-driven economic model will be much slower
SOMALIA
ETHIOPIA
KENYA
SOMALIA
E
*Estimation October 2018
A particularly nasty outbreak of ethnic violence in Addis thiopia entered a period of potentially revolutionary transition under new prime minister Abiy Ahmed, Ababa in September 2018 was followed by thousands of arrests in the capital and Oromia. who took office in April 2018 following the resignation of Hailemariam Desalegn. Abiy has moved much After a brief window of unbridled liberalisation, in which faster than observers expected in upending the status quo, hundredsofformerenemiesofthestatewerewelcomedhomeand allowed to freely stage political rallies, the pendulum may swing in particular by ending Tigrayan dominance of the ruling back further in the opposite direction. Some opposition figures coalition, the Ethiopian People’s Revolutionary Democratic may be expelled or find their activities more closely monitored. Front (EPRDF), and putting to bed two decades of conflict with neighbouring Eritrea. RESTORING ORDER ForthefirsttimeinEthiopianhistory,theOromos,thecountry’s largest ethnic group, hold the key levers of power. Members of In the troubled Somali region, preserving stability will be theOromoPeople’sDemocraticOrganisation,recentlyrenamed particularly challenging. It was rocked by violence in August, as the Oromo Democratic Party (ODP), octhelong-standingregionalpresidentAbdi cupy the prime minister’s office and the Mohamed Omar was arrested by federal military. The former strongman, with presidency, as well as the defence and Population: 107.5 million close links to several TPLF hardliners, foreign ministries. Population growth: 2.4% But while the liberal-sounding prime was then put on trial for inciting violence GDP per capita: $891 minister has been met with euphoric and escaped from custody in October. Life expectancy: 65.9 enthusiasm across much of Ethiopia, In 2017 around 1 million people fled Adult literacy: 39% especially in Oromia, Abiy has not their homes following deadly fighting Inflation: 12.7% delivered on stability. Ethnic violence along the border with Oromia, which Human development index and displacement has continued and Abdi is said to have orchestrated. His (out of 188 countries): 173 in places intensified, especially in the successor, Mustafa Omer, a formerly Foreign direct investment: $3.6bn south. Ethiopia had the largest numexiled activist, will struggle to keep the Current account as % of GDP: -6.2% ber of internally displaced persons of peace while dismantling the remnants of Abdi’s rule, including removing ancien any country in the world in 2018, with Mobile phone subscription: 60% régime officials. A scramble for natural around 1.4 million fleeing violence, Key export: Coffee gas reserves the government estimates suggesting that the state and security Last change of leader: 2018 will eventually earn it $7bn a year may apparatus has weakened significantly. GDP growth (%) aggravate tensions further, with many in 10.9 LONG-SUPPRESSED GRIEVANCES the region demanding a greater share of 8.5 8 7.5 Optimists say the instability is only potential revenues. temporary. In his first months in office, Restoring order will also require GDP ($bn) Abiy removed many of the old guard, healing some of the EPRDF’s divisions. Many of Abiy’s early decisions, including including key members of the security 88.2 83.8 80.9 73.2 the Eritrea peace deal, were taken with establishment such as former spy chief limited consultation. The TPLF has been Getachew Assefa, leaving a power vac2016 2017 2018* 2019* particularly frustrated by Abiy’s approach uum. It is possible networks associated with him and other disgruntled members and even discussed leaving the coalition. of the Tigray People’s Liberation Front The November arrest of Kinfe Dagnew, a Tigrayan major general, angered the TPLF leadership. (TPLF) have been behind some of the insecurity, though an Preparations for national elections, scheduled for 2020, attempt on the prime minister’s life in June 2018 was found by a court to have been carried out by members of the Oromo continue apace. Abiy has made it clear he wants free and fair Liberation Front, a formerly exiled opposition group. elections, and does not want to govern much beyond that It is also likely that the rapid dismantling of the security date without a clear democratic mandate. Local elections, apparatus allowed long-suppressed conflicts and grievances postponed due to the political crisis, may be held in May 2019. to flare into the open, and for vigilantism to go unchecked. Of all the coalition parties, the ODP stands to lose the most. In any case, Abiy is attempting to reassert his authority. It faces challenges from various Oromo opposition parties and THE AFRICA REPORT
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EAST AFRICA
COUNTRY 143 PROFILES
SOURCE: UNCTAD
many in Oromia still dislike it intensely. debt. Repayment of the railway loan has FDI INFLOWS ($bn) 4 It is also unpopular in the capital. The been extended by 20 years. Other loan 3.6 new name, new logo and early retirebooks, including that of the Ethiopian ment of prominent party veterans are an Sugar Corporation, another serious 2.6 attempt to rebrand. Efforts to clean out underperformer, may be restructured, local government in Oromia – including somewhateasingtheoveralldebtburden. 1.9 the removal of thousands of officials – Meanwhile, the World Bank has restored 1.3 continue at the district level. budgetary support for the first time since Ethiopia was suspended after a disputed Ethiopia’s economy will continue to and violent election in 2005. grow, albeit at a slightly slower pace than 0.3 the 10% or more witnessed for much of Abiy’s administration continues to 2012 2013 2014 2015 2016 2017 the past decade. A weak export outlook revise the state-led development model behind the debt balloon. There will be means the country continues to be no new public projects in 2019, with plagued by an acute shortage of hard the focus on completing existing ones. currency. The mineral sector, a noted Partial privatisation of key state-owned underperformer, fetched a record low enterprises, such as Ethiopian Airlines of $130m in the fiscal year ended June Agricultural exports for and Ethio Telecom, will dominate the 2018, far from the government’s targeted the 2017/2018 season, $2bn by 2020. Ethiopia earned $478m government’s economic agenda for the short of the $538m target coming year. It is looking for foreign inin agricultural exports of its 2017/2018 season, also short of its $538m target. The vestors to help plug the foreign-exchange currency was devalued in 2017 in an effort to boost exports gap, but it will take at least a year until the first stakes are sold. and another devaluation may follow soon. Studies are underway to determine whether, for instance, Ethio Telecom will retain its monopoly. The government is GROWING DOUBTS also looking for buyers for some of its state-built industrial Public debt continued to mount in 2018, reaching almost 60% parks. A further softening of the tough financial regulations of gross domestic product. Earlier in the year the International affecting private banks – as occurred in August – is possible. Monetary Fund raised Ethiopia’s risk of debt distress to “high”. The flagship infrastructure project, the 6,450MW Grand Defaults on some Chinese debts followed. Ethiopian Renaissance Dam, continues to be a headache for Chinese creditors have extended at least $12.1bn to Ethiopia the government. In August 2018 it stripped the state-owned since 2000, though it is now slowing financing as doubts grow Metals and Engineering Corporation, a military-industrial over the profitability of majorinfrastructure projects. Funding for conglomerate run by generals, of key responsibilities because it had failed to carry out the electro-mechanical installation a northern extension to Ethiopia’s new railway, which opened to much fanfare in 2016 but has since been operating under work. The government is looking for a reputable international firm to take over, but it may be several years until the dam is capacity, has suffered multiple delays. In early September, Abiy announced China had agreed to restructure part of Ethiopia’s operating at full capacity.
$478m
Countdown to 2020 THE LONG RUN-UP to the much-anticipated 2020 elections will gather steam in 2019. In November, Birtukan Mideksa, a former exiled dissident, became Ethiopia’s election chief. The 2015 result – in which the EPRDF won all parliamentary seats – was derided by observers and laid the groundwork for the protest movement that brought Abiy THE AFRICA REPORT
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to power. Now Abiy plans to shake up the election board with new personnel to restore some faith in the institution. The government could also introduce a biometric voters’ roll to replace the existing manual system. The code of conduct for political parties is expected to be revised. This may mean reviewing a rule which bars foreign passport holders from running for
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office. As it stands, many leading opposition politicians who have returned from exile are not allowed to compete. Some draconian laws will also be revisited. A new anti-terror proclamation, along with civil society and media laws, are expected to ensuring political parties can campaign freely. Rights groups have long said the 2009 anti-terror
law in particular has been used indiscriminately against anyone who opposes government policy. But it may not be enough to win over sceptics who believe the playing field will remain far too tilted in the EPRDF’s favour. Indeed many among the opposition, as well as ordinary citizens, advocate postponing elections for a year or more.
144 COUNTRY PROFILES
EAST AFRICA
SOUTH SUDAN
ETHIOPIA
SOMALIA
UGANDA
Kenya
200 km
K E N YA Kisumu Lake Victoria
Austerity begins to bite
NAIROBI
The government is trying to raise revenue to pay back infrastructure loans Deputy president Ruto may fall out with Kenyatta on the road to 2022
TANZANIA
Mombasa
Indian Ocean
P
*Estimation October 2018
resident Uhuru Kenyatta is going through a difficult Kenya’s oil sector has been slow to reach lift-off after UKpatch in his last term, with elections scheduled listed Tullow and the local community in northern Kenya for 2022. After spending and borrowing to build fought over revenue sharing. Tullow is now moving ahead infrastructure, the government is slashing expendwith plans to exploit the estimated 750m barrels from its blocks. A pipeline needs to be built from Lokichar to the port iture and raising taxes in order to reduce the budget deficit of Lamu, and construction should be completed in time for and the national debt, which reached a hefty 60% of gross commercial production to begin in 2021 or 2022. domestic product in 2018. An anti-corruption drive has not yielded any big wins, and Kenyatta’s political rivals – deputy ‘BIG FOUR’ NO SMALL TASK president William Ruto and oppositionist-turned-ally Raila Keeping public finances afloat without hurting the overall Odinga – are positioning themselves for 2022. economy and the government’s popularity is Kenyatta’s For William Ruto, 2019 is a scary year. He is now the big dog primary goal for 2019, and it is unlikely he will get to achieve everyone is fighting. A falling out with Kenyatta could give him his ‘Big Four’ agenda – food security, leeway to redefine himself outside of the affordable housing, manufacturing ruling Jubilee party and his relationship and affordable healthcare – in a time with Kenyatta. How he handles this will Population: 51 million determinehispoliticalfuture,ashisoppoof austerity. Kenya’s short-term debt Population growth: 2.5% nents are already painting him as the face obligations ballooned over the past six GDP per capita: $1,865 ofwhat’swrongwiththeKenyanstatedue years, hitting KSh4.6trn in December Life expectancy: 67.3 to his role in past electoral violence and 2017. In the financial year that began Adult literacy: 78.7% theinvolvementofhisalliesincorruption. in July 2018, Kenya needs to pay back Inflation: 5% Ruto also has to deal with the fact KSh870.5bn, which is half of what the Human development index that more than 30 governors cannot run government predicts it will collect in (out of 188 countries): 143 again for the same seat in 2022 because ordinary revenue over that period. Foreign direct investment: $672m of term limits. While some might retire The government has a standby Current account as % of GDP: -5.6% from politics or to the Senate, a good arrangement with the International Mobile phone subscription: 86% Monetary Fund (IMF), which is advising number have already declared their Kenyatta’s team on how to improve manintentions to run for the presidency. Key export: Tea agement of the government’s finances. Most of the latter are from opposition Last change of leader: 2013 It recommended an increase in tax on zones, but in 2019 it is likely others will GDP growth (%) petroleum products, and there was a join the bandwagon, as Kenyatta’s grip 6.1 6 5.9 public outcry when the government tried on his political strongholds wanes. 4.9 to implement it. Kenyatta ultimately ECONOMY TICKS ALONG cut the increase in half in an attempt to GDP ($bn) balance the needs of the economy and The main drivers of the Kenyan economy – construction, agriculture and tourthe realities of Kenya’s citizens. 98.3 89.6 79.2 70.9 ism – are performing reasonably well. Increased taxation on household While international visitor numbers hit items, fuel, mobile money and even 2016 2017 2018* 2019* 1.5 million in 2017, that is well below data bundles and airtime will hurt the record of 1.83 million in 2011. The household spending. The government tea sector has been growing, with 2018 worries that the economic pain could production set to reach 452m kilogrammes, up from 439m in lead to an increase in crime. When higher taxes began to 2017. The government plans to respond to the rise in demand bite in mid-to-late 2018, it increased the police presence in for electricity – about 8% per year – with a new drive to build urban areas significantly. geothermal power plants. The country currently has the The political class as a whole will most likely continue to seek fast solutions over efficient long-term ones. One of Kenyatta’s capacity to produce 2,370MW, and those new plants could campaign promises in 2017 was that he would deal ruthlessly add 1,745MW to the grid by 2025. The government is also with corruption and reduce government waste. He appointed working on plans to form the Kenya Mortgage Refinance a new director of public prosecutions, Noordin Haji, a former Company in order to support more house construction. THE AFRICA REPORT
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EAST AFRICA
COUNTRY 145 PROFILES
SOURCE: EAST AFRICAN TEA TRADE ASSOCIATION
19 81 19 84 19 87 19 90 19 93 19 96 19 99 20 02 20 05 20 08 20 11 20 14
spy, to lead the war on corruption. In access. With the support of Kenya’s KENYA TEA PRODUCTION (1980-2015) banks and the IMF, the government 2018 this resulted in frequent night raids 500 to the palatial homes of the men and 450 could remove or adjust the rate cap. But this would be a politically unpopular women in senior government positions, 400 decision. Banks remain profitable and as well as a marked escalation in the war 350 on counterfeits. The initial optimism 300 well-capitalised, but non-performing 250 loans remained high, at 12%, in 2018. that this would reduce government theft 200 and waste is waning. One likely outcome is that, for the 150 The economic downturn of 2019 will 100 first time in years, more members of the 50 Kenya elite will actually be convicted for alter Kenya’s socioeconomic scene and could give birth to a new generation crimes. In 2017, after losing an election of agitators. While this may not affect petition, President Kenyatta threatened to deal with the judiciary. In 2018, the Jubilee’s position or even William Ruto’s 2022 prospects, the peace and quiet reduction of the judiciary’s budget and that the ruling party has enjoyed in the case against its second-highest-ranking judge were seen as the executive’s parliament is most likely going to fade way of forcing the judiciary to bend to as new and younger politicians give Additional electricity its will. What this means for Kenya’s elite voice to the suffering on the ground. capacity by 2025 from class is that they are not safe anymore. Austerity might mean scaling down planned geothermal plants For President Kenyatta, the reality Kenya’s involvement in the war in of 2019 may alter how he manages his Somalia, where the country has been dual roles as a president and a member of the rich Kenyatta engaged since 2011. Kenya has not achieved much, as Alclan. For many Kenyans, the thriving clan represents the Shabaab has adapted to shifting circumstances. Its attacks increasingly wealthy political class. The politics of the now are small-scale, precise and barely appear in the national headlines. But Kenyatta has also said that he will keep Kenya’s KSh500bn Northlands project, for example, bring to the troops in Somalia until peace is won and stability returns. fore the fact that the president’s clan is thriving while the nation is struggling economically. CAP CONUNDRUM For opposition leader and failed 2017 presidential candidate It is possible that the government may seek to organise a Raila Odinga, his March 2018 handshake with President referendum on Kenya’s decentralisation policies. There are Kenyatta was less about peace within Kenya and more about accepting the logical end of the Luo’s symbolism as the oppogrowing complaints that decentralisation is expensive and sition identity. The rapprochement presents an opportunity is not delivering the expected boom in local development. for a younger, more vibrant identity to take over. There are Another issue that will be the subject of lively debate in 2019 thousands of young politicians jostling for space and also older is the country’s cap on the interest rates that banks can charge on loans. The cap has not hurt the banking sector as much politicians such as Makueni governor Kivutha Kibwana, whose positive work and politics are changing the opposition. as predicted, but neither has it significantly enhanced credit
1,745MW
A troublesome train line BUILT AT A COST OF $3.6bn, Kenya’s new standard-gauge railway is the flagship project of President Uhuru Kenyatta’s government. China Export-Import Bank came up with 90%, with the Kenyan taxpayer covering the balance. It is the most significant national investment in Kenya’s history, as well as the most expensive. THE AFRICA REPORT
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After the Mombasa-Nairobi section of the line was officially launched in July 2017, it was expected that the passenger and freight traffic would increase Kenya’s revenue and ability to meet its short- and medium-term obligations. But the economic model is unsustainable because the government is currently subsidising ticket prices.
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And instead of looking for ways to lure freight carriers from traditional routes, the government forcefully demanded they use the line. The railway line reported a $100m loss in its first year of operations. Socially and politically, the railway line has also become a symbol of China’s place in Africa. The management is fighting the bad press
of stories of blatant racism, and the railway line was already struggling even before the continued role of the Chinese in the project became national news. The construction of the route westwards from Nairobi towards Uganda is already in progress, and the fate of the entire line will depend on more than just passengers and cargo.
146 COUNTRY PROFILES
EAST AFRICA UGANDA
Rwanda
Lake Kivu
KIGALI
DEM. REP. OF CONGO
Kagame keeps at it
TANZANIA
R WANDA
BURUNDI
The economic focus is on tourism, infrastructure and manufacturing The release of a key oppositionist from prison shows a softer approach
50 km
P
*Estimation October 2018
resident Paul Kagame, now serving a third term Tourism is another important economic engine. It is in office after constitutional changes to remove projected to nearly double its revenue to $800m by 2024, up from $404m in 2016. Visitor numbers were dropping the two-term limit, does not seem likely to deviate from his developmental-authoritarian approach in 2018 due in part to a rise in fees for visiting national to governing in 2019. He has wide support for delivering on parks. But the Kigali Convention Centre, the centrepiece development but stifles civil liberties and does not tolerate of the business tourism segment, continues to pull in big political competition. He showed some softening of his Africa-focused conferences. approach to the opposition in 2018, but not enough to change With institutions such as the Rwanda Development the nature of the political game in Rwanda. Board – which countries like Zimbabwe are seeking to Kagame, as per the new constitution amended in 2015, replicate – Rwanda is backing a programme to develop can run for presidency up to 2034. Defence minister James industries that will help it reduce the country’s imports. The Made in Rwanda policy, however, Kabarebe and former foreign minister has run into some difficulties because Louise Mushikiwabo, who was elected the US administration kicked Rwanda secretary general of the Organisation Population: 12.5 million out of a trade deal when the Kigali Internationale de la Francophonie in Population growth: 2.4% government banned the import of 2018, remain key presidential allies. GDP per capita: $800 second-hand clothes and shoes as Kagame’s government launched the Life expectancy: 67.5 part of a bid to cultivate the local beginnings of a rapprochement with Adult literacy: 68.3% garment industry. the opposition in 2018 that looks set Inflation: 3.3% to continue into 2019. Victoire Ingabire Human development index was released after serving part of a 15POVERTY REDUCTION (out of 188 countries): 157 year jail sentence. Ingabire, who was The government is addressing poverty Foreign direct investment: $366m through programmes like One Cow living in Netherlands, went to Rwanda Current account as % of GDP: -8.9% per Poor Family (Girinka). It started in in 2010 to run against Kagame but was 2006 and by December 2017 more than arrested before she could do so. Some Mobile phone subscription: 72% of her supporters have fled and a group 300,000 dairy cows had been donated, Key export: Petroleum and crude oil of them are being tried over charges of out of a target of 350,000. Improving Last change of leader: 2000 forming a militia. access to clean water (currently at GDP growth (%) 80% of the population) and electricity 7.8 7.2 WATCHING THE NEIGHBOURS (currently at 41%) are high on the govOn the diplomatic and security front, ernment’s agenda, with 100% access 6.1 6 Rwanda will be watching its neighthe goal for each sector by the end of bours closely in 2019. Relations remain Kagame’s term in 2024. In 2018, Prime GDP ($bn) strained with Burundi’s President Pierre Minister Edouard Ngirente promised 10.5 9.7 9.1 8.5 that the economy would create 1.5m Nkurunziza, and there is a risk of heightnew jobs as the government rolls out ened instability in Democratic Republic 2016 2017 2018* 2019* of Congo, due to elections planned a programme to support the developthere for late 2018. ment of an income-generating project in every Rwandan village. The economy depends on tourism, In terms of infrastructure, a key project is the first phase agricultural exports like coffee and tea, and mining. The of the new Bugesera airport located in about 40km south of government is trying to raise more domestic revenue to finance its budget and reduce the influence of donors. Donor Kigali. Discussions are still underway for the construction money, mainly from the European Union, Britain and the of a standard-gauge railway to link Rwanda to the Pacific Ocean via Tanzania. It is taking longer than predicted to US, accounts for 16% of the $2bn 2018/2019 national budget. get a project off the ground to generate electricity from The economy is growing strongly, led by mining. Companies plan to install two smelters to help add value to minerals such the methane in Lake Kivu, but Symbion announced the as tin and coltan. Rwanda says the sector should generate signing of contracts to develop 81MW of capacity from export revenue of $600m in 2019 and $1.5bn by 2024. the Kivu56 and KP1 sites in August 2018. THE AFRICA REPORT
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EAST AFRICA SILHOUETTE
SEYCHELLES 10 km
150 km
VICTORIA
Seychelles
COUNTRY 147 PROFILES
MAHÉ
MAHÉ Indian Ocean
Mostly happy cohabitation PRASLIN
The two main parties working together are at odds over an Indian naval base The government hopes to diversify away from tourism and fishery
LA DIGUE
10 km
T
*Estimation October 2018
he political focus in Seychelles in the coming Bank of Seychelles, the island welcomed 235,640 international year will be on the upcoming presidential elecvisitors between January and September 2018, with tourism earnings in the first half of the year having increased by 27% tion in 2020. Long-time opposition leader Wavel Ramkalawan – he heads the four-party opposition compared to the same period in 2017. Overall, there was a alliance Linyon Demokratik Seselwa (LDS) that won the 7% hike in the number of European visitors. parliamentary elections for the first time in September Economic prospects look less bright in 2019 for the is2016 – wants to represent LDS as its sole candidate. If the land country’s national carrier, Air Seychelles, which has Seychelles National Party leader runs, it will be his third faced several challenges on the back of rising competition attempt in securing the country’s highest office. He last took from international carriers such as British Airways and Air 49.9% of the vote in December 2015. France subsidiary Joon. In April, Air Cohabitation between President Seychelles dropped all flights to Paris, Danny Faure, who is the leader of conceding defeat on that route, which Population: 0.1 million had represented roughly 30% of its total Parti Lepep, and the LDS has mostly Population growth: 0.5% revenue from passengers. A ban on the been smooth. However, one point of GDP per capita: $16,377 construction of large hotels, which is disagreement is about a planned Indian Life expectancy: 73.7 military base. During a visit to India by in place until 2020, has constrained Adult literacy: 94% President Faure in July, he inked a deal international investment in the sector. Inflation: 4.4% to collaborate on a controversial base The government is now focusing its Human development index efforts on making sure tourism delivers on Assumption Island. The LDS says it (out of 188 countries): 62 more benefits to local actors. will not approve the agreement. Foreign direct investment: $192m With elections on the horizon, Current account as % of GDP: -18.4% EXPLORATION, CONSERVATION President Faure’s government has Mobile phone subscription: 177% Great hopes for economic growth and increased the minimum monthly saldiversification have been pinned on the ary and social benefits for the elderly. Key export: Fish oil and gas sector. The Australian comFaure also announced plans to build Last change of leader: 2016 pany Sub-Sahara Resources, which also two tunnels on the main island of GDP growth (%) operates in Eritrea and Tanzania, has Mahé to reduce transportation costs 5.3 applied for acreage and is in the process and improve electricity distribution. 4.5 3.6 of negotiating a petroleum agreement However, the International Monetary 3.3 that should be finalised within the next Fund (IMF) warned in June 2018 that GDP ($bn) the state must be careful to not increase two years. Mauritius and Seychelles have the country’s debt burden. also hired Spectrum Geo to do seismic 1.6 1.6 1.5 1.4 mapping of the Joint Management Area INFLATION WORRIES that the countries share. 2016 2017 2018* 2019* The government is also working on plans In February, the government signed to boost the share of renewables in the an agreement with conservation group energy mix – currently at 2% and with The Nature Conservancy to swap about $22m of its outstanding $406m sovereign debt in exchange a target of 15% for 2030 – with several solar power projects. for the conservation of a rich tropical marine ecosystem. Seychelles has the highest gross domestic product per capita The deal, touted to be the first in the world for marine on the continent and overall it has enjoyed robust economic growth in recent years, albeit with a few setbacks. Inflation protection, entails the creation of two marine parks around remains low, but higher fuel prices and strong domestic the Aldabra archipelago and the Amirante Islands in order to limit activities such as fishing and oil exploration. demand could trigger inflationary pressures. With the goal of making the offshore financial sector The tourism and fisheries sectors are the main growth drivers. Growth in fishing revenue is expected to be somewhat a third pillar of the economy and following recommenlower due to an agreement on maximum catches of certain dations made by the IMF, the government is finalising a kinds of tuna. The government is raising funds to invest in new sector strategy that will increase tax transparency fisheries value chains. Meanwhile, according to the Central and fight money laundering activities. THE AFRICA REPORT
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148 COUNTRY PROFILES
EAST AFRICA DJIBOUTI 200 km
Somalia
Hargeysa ETHIOPIA
Struggling for stability
SOMALIA
Indian Ocean
MOGADISHU KENYA
The power struggle over regional states will impact the year ahead Al-Shabaab remains able to deliver damaging attacks on Mogadishu
S
*Estimation October 2018
omalia continues to lurch from crisis to crisis. The an alliance of the United Arab Emirates (UAE) and Saudi Arabia. Despite Mogadishu claiming a “neutral position” on the GCC Horn of Africa country, which remains at the bottom of most United Nations (UN) rankings for health, feud, a perception remains that it sided with Qatar and the economy and development, is muddling through Muslim Brotherhood. Meanwhile, FMS leaders announced an alignment with the UAE and graciously accepted subsequent with limited progress. lucre. The government of the secessionist region of Somaliland In 2018, Mogadishu repeatedly suffered setbacks, with signed a deal with Ethiopia and the UAE’s DP World to build internal security forces clashes, terror attacks, cabinet and a new port in Berbera in 2018. senior government official reshuffles and opposition figures and MPs arrested or killed. A slew of business and community leaders were also assassinated. SYSTEMIC CORRUPTION The African Union Mission in Somalia did not draw down But the power struggle between the Federal Government troops from its 22,000 peacekeeping force, considering Somalia’s of Somalia (FGS) and the regions, the Federal Member inability to organise to counter Al-Shabaab’s frequent attacks. States (FMS) leadership, defined 2018 and will shape 2019. But while Al-Shabaab freely operates Politicians spent most of the year fighting about who should represent each across Somalia, systemic corruption regional state, yet another obstacle to continued to be a pervasive force inside Population: 15.2 million the country, a dominant one that scares the decade-long process of forming a Population growth: 3% away serious foreign investment. There cohesive federal state. GDP per capita: ND are no signs that the government will be President Mohamed Abdullahi Life expectancy: ND able to neutralise Al-Shabaab in 2019, ‘Farmaajo’ Mohamed continues to Adult literacy: ND with it said to rely on a strong base of lose popularity with the public as the Inflation: ND government fails to deliver basic services between 5,000 and 10,000 troops. Human development index and its stance on centralisation alienates Despite limited international invest(out of 188 countries): ND a population preferring a multi-polar ment and a prosperous commercial Foreign direct investment: $384m approach to governance. The prime scene in Mogadishu, broader economic Current account as % of GDP: -6.3% minister, Hassan Khaire, while seen as a drivers failed to gather pace in 2018. The Mobile phone subscription: ND counterbalance to the presidency and at World Bank promoted perceived gains in times a threat, has been loyal while the ongoing financial reforms and limited tax Key export: Animal hides collection, but overall growth remains focus of much public distrust and anger. Last change of leader: 2017 low.Thegovernment’sgeneratedrevenue GDP growth (%) GULF FEUD FALLOUT continued to increase steadily. Domestic 4.4 revenue was up to $141m in 2017 from Throughout the year, President Farmaajo 3.5 3.1 2.3 $110m in 2016. But that is still a fraction and his political supporters were accused of trying to usurp FMS leaders who had of what Somalia receives in remittances GDP ($bn) rallied against the government for a numfrom the diaspora, which is estimated at ber of issues including a lack of resource around $1bn per year. 7.8 7.4 7.1 6.8 sharing. During this power struggle, One of the biggest economic inhibitors for Somalia is its $5.1bn of external debt. leaders neglected broader state-building 2016 2017 2018* 2019* efforts, in particular the National Security Thelureofdebtreliefsawconcertedefforts in Somalia gather momentum, but the Architecturethatwasdesignedtofightthe World Bank and International Monetary insurgent Al-Shabaab terrorist network. The centre/periphery struggle boiled over in September. The Fundarestillalongwayoffbeforeallowinglarge-scaleborrowing. Somalia faces numerous challenges. But the coming year emboldened grouping of FMS presidents – called the Council of Interstate Cooperation – met in Kismayo, then issued a will see its leaders preoccupied with regional elections and statement that “suspended its collaboration with the central then horse trading for the 2020 federal election. The UN government” as a response to its perceived political interference. hoped for a ‘one-man-one vote’ style election in 2020, but The FMS spat with the FGS was exacerbated by the Gulf the lack of progress on numerous benchmarks, including Cooperation Council (GCC) fallout that saw Qatar pitted against security, makes this highly unlikely. THE AFRICA REPORT
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EAST AFRICA
COUNTRY 149 PROFILES
SUDAN CHAD
South Sudan
ETHIOPIA
SOUTH SUDAN
CAR
History repeats itself
JUBA KEN.
DRC
Riek and Salva are trying to make a unity government work once again Oil production is restarting in some areas damaged by the war
200 km
A
UG.
*Estimation October 2018
five-year politico-military conflict could be soon Sudan and Uganda played big roles in getting the warring parties to talk. This agreement attempts to make Sudan a coming to an end, but South Sudan will continue to remain in deep crisis in the short term even if part of the solution to instability, whereas Khartoum had a September 2018 peace deal is respected by all previously been seen a fomenter of conflict in Juba. The the belligerents. The war between President Salva Kiir and Khartoum government is keen on the economy boost that main rival Riek Machar sucked in several armed groups restarted oil production in South Sudan will bring. across the country, bringing with it disastrous economic Currently there are about 4 million displaced South and humanitarian impacts. Huge tasks await the unity Sudanese, with 2.5 million of them in neighbouring coungovernment in 2019, like the integration of the armed forces tries. A steady trickle of people has started to return to the and the disarming and demobilisation of nearly a dozen country from refugee settlements in neighbouring countries but many are ending up in internally displaced people’s rebel groups. Doubts remain about the leaders’ abilities camps. Many returnees have found their to control their troops, which have at homes and land – and in some cases times disobeyed direct orders. whole villages – occupied by other ethnic An accord signed between the warPopulation: 12.9 million groups, particularly the Dinka, to which ring parties agreed to a power-sharing Population growth: 2.7% President Salva belongs. arrangement, with Riek returning to the GDP per capita: $307 country as Salva’s deputy, alongside four Life expectancy: 57.3 THE COST OF GOVERNMENT other vice-presidents. Donor countries Adult literacy: 26.8 worry that this is a repeat of past misSouth Sudan will not see an immeInflation: 106.4% diate improvement in its very poor takes, as the war broke out with Salva as Human development index president and Riek his vice-president. economic situation due to the damage (out of 188 countries): 186 In 2016, a similar arrangement ended to the country’s infrastructure and the Foreign direct investment: $80m up with fierce fighting within only three large number of displaced people. The Current account as % of GDP: -8.8% months, leading Riek to flee the country. economy is dependent on oil, and proMobile phone subscription: 12% Currently, mistrust is still deep-rooted duction is slowly ramping up. In early among these leaders, as demonstrated 2018, oil production was 135,000 barrels Key export: Petroleum and crude oil per day (bpd). The peace accord also in the manner in which they dragged Last change of leader: 2011 provided for an agreement between their feet while negotiating the deal. GDP growth (%) South Sudan and Sudan to resume DETERMINING BOUNDARIES production in the former Unity State, -3.2 -4.6 -13.9 -5.1 There are still many problems that could which began in September and inflare up in 2019. After signing the pact, creased production by 45,000 bpd. The GDP ($bn) government believes it will gradually there is an eight-month period in which the parties expect to solve some of the open other oil fields which were closed 4 3.1 3.1 3 issues raised, such as determining the in 2013 to increase production to about 210,000 bpd by next year. number of states in the country and their 2016 2017 2018* 2019* The huge cost of running the tranboundaries. Some analysts see the new paradigm as strengthening divisions sitional government may eat into through a focus on demarcating ethnic revenue earned from that rise. Five vice-presidents, 35 ministries – up from 30 – and 550 memhomelands, which could be a source of future conflict. bers of parliament –up from 400 – require huge resources. The September deal does not weaken the presidency’s iron grip on power or address concerns about marginalisation at Lack of law enforcement will exacerbate the humanitarian the centre. As The Africa Report went to press, the Juba govsituation. This will limit agricultural production, since many ernment was delaying the release of political prisoners and the people are afraid to resettle in their original homes and could end up lingering in towns or displacement camps. In 2017, formation of a hybrid court to administer transitional justice, two important elements of the peace deal. The power-sharing the country produced 760,000tn of cereals, compared to 1.1m government is due to last for three years, after which a new tonnes in 2013. This means that food insecurity may continue round of elections should be held. to affect more than half of South Sudan’s 12 million people. THE AFRICA REPORT
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150 COUNTRY PROFILES
EAST AFRICA UGANDA
DRC
Tanzania
RWANDA
Lake KENYA Victoria
BURUNDI
Arusha DODOMA
Keeping up with the bulldozer
TANZANIA ZAMB.
Magufuli’s delivery of a raft of infrastructure projects has taken the spotlight Uncertainty over policy is slowing investments in the gas and mining sectors
400 km
Dar es Salaam
Indian Ocean
MAL. MOZAMBIQUE
T
*Estimation October 2018
he year before general elections in 2020 will likely electoralreforms,oratleastchangesattheelectoralcommission, serve up a flurry of activity, from the reactivation in a bid to level the playing field. So far, the government has not shown signs of being receptive to those calls for reform. of grassroots structures by political parties and expansionary budget policies to publicly staged Alliance for Change and Transparency leader Zitto Kabwe defections. The opposition will deliberately be testing the remains a critical voice who seeks to keep the government in check. He was arrested in October for questioning government limits of government. President John Magufuli remains accounts about violence in Kigoma. Along with civil society, popular and controversial, using many of the tools available the opposition will seek to push progressive reforms through as the leader of the ruling Chama Cha Mapinduzi (CCM) to the judiciary, which has recently assumed an activist posture. crush dissent and weaken the opposition. Having consolidated his grip on the day-to-day running of BIG LOANBOOKS CCM by becoming its chairman in December 2017, Magufuli The government’s own reform agenda, such as the December will likely spend the year mending fences and reaching out to 2017 regulatory blueprint aimed at improving conditions the party’s historical leaders and ideologues, who were more for doing business in the country, will continue to stall as or less isolated by the factionalism that accompanied his rise to power. They include the family of it needs amendments to the constituAbeid Karume, the independence-era tion in order to proceed. However, the sustained public investment in capitalpresident of Zanzibar, and those close Population: 59.1 million intensive projects, now backed by bilto former prime minister John Malecela. Population growth: 3.1% lions of dollars in external financing Independent-minded as Magufuli may GDP per capita: $1,090 be, presenting a united front remains infrom lenders including Credit Suisse, Life expectancy: 66.3 tegral to electoral success. Familiar faces Standard Chartered, the World Bank Adult literacy: 77.9% or their scions are expected to bounce and China, will continue to support Inflation: 3.8% back with appointments for board growth of at least 6% over the short and Human development index medium term. This will help Magafuli to roles and positions in state agencies (out of 188 countries): 154 as the president extends olive branches. evade scrutiny over underperformance Foreign direct investment: $1.2bn Magafuli relies on the help of key allies in other sectors. Current account as % of GDP: -4.3% Growth will also likely be spurred by like former president Benjamin Mkapa Mobile phone subscription: 70% and defence minister Hussein Mwinyi. accommodative monetary policy at the Bank of Tanzania, highlighted by easing Key export: Gold PLANES, TRAINS, ROADS of repo rates and statutory minimum reLast change of leader: 2015 The man known as the ‘Bulldozer’ had serve ratios, all of which could help revive GDP growth (%) focused on concretising his domestic commercial lending to the private sector. 7 Credit growth slowed due to rising levels agenda. Even some of Magufuli’s most 6.6 6 5.8 of non-performing loans, but it is now ardent detractors have praised his ability to deliver signature projects, which recovering. Many bad loans are linked to GDP ($bn) include relaunching the national airdomestic fiscal arrears, which have been pending review by the treasury. Credit line, building a standard-gauge railway 60.3 55.6 51.8 47.7 that is now snaking from the region of to the private sector grew at an annual Morogoro to the newly revived political rate of 3.7% in July 2018, up from 1.1% 2016 2017 2018* 2019* capital of Dodoma, adding thousands of in July 2017. Accommodative monetary policies adopted by the central bank kilometres of paved roads in all corners of the country, commencing works on should help to sustain this momentum the controversial Stiegler’s Gorge hydroelectric dam and Although investors continue to fret over policy uncertainty under Magufuli, many of them – especially those with improving transit in the commercial capital of Dar es Salaam. a long-term view – remain keen on opportunities in the The opposition parties, led by former prime minister Edward LowassaandchairmanofChamachaDemokrasianaMaendeleo gas-rich East African country, the third-largest economy in the region after Ethiopia and Kenya. Uganda and Tanzania (CHADEMA) Freeman Mbowe, will maintain their Umoja wa are working on a pipeline to allow for Ugandan oil exports. Katiba ya Wananchi umbrella coalition and are looking to force THE AFRICA REPORT
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EAST AFRICA
Negotiations in Shell and its partners’ huge liquefied natural gas project have stalled over the government’s recent fighting with the mining industry. First gas is still many years down the road. The semi-autonomous region of Zanzibar, on the other hand, will look to gain momentum by signing more exploration deals to add on that recently reached with RAK Gas. The government is yet to resolve its conflict with the Barrick Gold-owned Acacia Mining, which received a $190bn tax bill in 2017. Negotiations have stalled, and production at Acacia’s mines recently dropped. Much will depend on how Mark Bristow, the CEO of Randgold, who will take over when his company merges with Barrick, handles the dispute.
COUNTRY 151 PROFILES
Even after attaining B1 on its inaugural credit rating from Moody’s, in March 2018, Tanzania remains hesitant about issuing a highly anticipated debut eurobond, largely because it still enjoys 45,518 access to less costly concessional and multilateral alternatives. Should the 36,568 eurobond issue go forward this year, a cloud of uncertainty still hangs over 958 1,017 how it will be received by the markets. Worsening debt profiles and elevated chances of default in Africa are increas2013 2014 2015 2016 ingly a source of concern for many emerging and frontier market investors. For Tanzania, of key concern will be the downturn in South Africa, its fourth-largest export market. A drop Planned investment in in exports could hurt the balance of irrigation infrastructure trade and widen the current-account over the next decade deficit. Neighbouring Zambia, facing LOCAL SOURCING fiscal stress and yet a key source of Agriculture is a key growth sector for the economy – accounting transit cargo revenue for Tanzania, will also be on the radar of nervous policymakers in Dodoma. for about a third of the country’s exports – and the government In East Africa risks in the neighbourhood often go beyond wants to spend nearly $5bn over the next decade to repair and improve disused irrigation infrastructure. The government has economic variables, stretching into matters of security. been struggling to attract big private investment, and the sector Tanzania’s recent admission that its citizens are involved in has recently grown at a rate of about 3.3% while the extractives the unrest taking place in neighbouring Mozambique’s Cabo sector has grown much faster. The government’s agriculture Delgado Province has geopolitical connotations that could strategy now targets the development of agricultural corridors affect the region. There is likely to be a joint engagement to imand improving access to finance. It is also encouraging more prove security in both countries’ troubled but gas-rich regions local sourcing: AB InBev’s Tanzania Breweries is increasing of Cabo Delgado and Lindi. President Magufuli is dedicating some time to foreign policy, as shown in his late-September its use of Tanzanian barley. To protect local producers from trip to the United Nations, a first since rising to power. The smuggling, the government banned Ugandan imports in October kidnapping of businessman Mohammed Dewji in 2018. Kilombero Sugar, owned by South Africa’s Illovo, now plans to nearly double its production to 250,000tn per annum Dar es Salaam raised the prospects that domestic security and add processing capacity in order to meet local demand. and crime will be higher on Magufuli’s agenda in 2019.
NATURAL GAS PRODUCTION
SOURCE: BRITISH GEOLOGICAL SURVEY
(million cubic metres)
$5bn
Dashing for debt AMBITIOUS INFRASTRUCTURE PLANS come at a cost, and the East African country’s debt appetite is starting to have a scary ring to it as mediumterm commercial debt is used to finance projects whose returns will accrue over the long term. Take Magufuli’s signature infrastructure project, the standard-gauge railway line, for example. THE AFRICA REPORT
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Credit Suisse offered $200m for the section from Dar es Salaam to Morogoro; Standard Chartered then offered $1.5bn for the line from there to Dodoma – a combined total of about 663km. A similar distance is planned north-west to Isaka, eventually extending to Kigali, Rwanda. Even as government remains tight-lipped on financing conditions, the
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ministry of finance estimates spending as much as $14.2bn on standard gauge railway networks to connect the Indian Ocean port of Dar es Salaam to eastern and southern markets. Moody’s forecasts Tanzanian debt could grow nearly 3% to 43% of GDP by 2020. That leaves the country just 7% away from breaching an East African Community
benchmark of 50% debt-toGDP ratio. And this is before accounting for expansionary policy anticipated ahead of elections in 2020. Commercial loans already account for 34% of all Tanzanian debt, just behind multilateral funding at 47%, according to central bank data. With ambitious plans afoot, this will keep rising and so will the risk of a debt trap.
152 COUNTRY PROFILES
EAST AFRICA
100 km SOUTH SUDAN Gulu
UGANDA
Uganda
DEMOCRATIC REPUBLIC OF CONGO
KAMPALA
Old versus young
Mbarara
Jinja
Lake Victoria
KENYA
RWANDA
Bobi Wine and his youth following are a serious challenge for Museveni The government must sign a series of oil deals for production to start in 2021
TANZANIA
P
*Estimation October 2018
resident Yoweri Museveni heads into the year One advantage the ruling National Resistance Movement 2019 facing a toxic political environment. Many of has is that it has access to more money than the opposition. But Uganda’s frustrated youths form a critical electoral spending is not likely to be the government’s only response to base going into the 2021 general elections. An uptick youth activism. It has been banning rallies, and is increasingly in political assassinations – both of government supporters deploying the Special Forces Command (SFC), an elite unit of the army that protects the president and some crucial and critics – has added to the political tension in the country, with Museveni promising to use old guerilla war tactics to deal assets. It is the unit that quelled demonstrations during the with the murderers. Muhammad Kirumira, a police officer debate over the lifting of the presidential age limit from the who was critical of his bosses at the force, constitution in late 2017 and arrested was shot dead in September, adding Kyagulanyi. Museveni relies upon key to a long list of similar assassinations. allies from his native western Uganda, Population: 44.3 million Many people say Museveni should with close confidants in charge of the Population growth: 3.2% step down for a new leadership with state security apparatus. GDP per capita: $717 fresh ideas. He and his allies removed Life expectancy: 60.2 OPPOSITION PARTY WEAKENED constitutional age limits, postponing the Adult literacy: 70.2% The Forum for Democratic Change, urgency of debating the President’s sucInflation: 3.8% the most popular opposition party, has cession. Leading the calls for Museveni Human development index to retire is Robert Kyagulanyi Ssentamu, beenhurtby factionalism, especially after (out of 188 countries): 162 Mugisha Muntu, the immediate former alias Bobi Wine, a member of parliament Foreign direct investment: $700m and an Afro pop artist. presidentoftheparty,felloutwiththecurCurrent account as % of GDP: -6.9% rent leadership and left the party. Muntu Mobile phone subscription: 58% BOBI’S BRAND has some key members of parliament, The emergence of Kyagulanyi as the such as Winnie Kiiza, the former leader Key export: Coffee latest face of the firebrand opposition of the opposition, in his camp. Last change of leader: 1986 has already disrupted the political The political deadlock between the GDP growth (%) opposition and government is expected playing field. His brand has attracted 6.1 5.9 4.8 to hurt sensitive business sectors such international attention like no other as tourism, especially in the wake of Ugandan politician. It is unlikely that he 2.3 will join any of the country’s prominent countries like the US, Denmark and political parties, though he is known the United Kingdom issuing security GDP ($bn) 30 to retain a close relationship with the alerts for its citizens. Uganda expects 27.9 26.6 24.5 popular opposition figure Kizza Besigye. to record 1.7 million tourist arrivals Arrested, tortured and charged with between July 2018 and June 2019, up 2016 2017 2018* 2019* illegal possession of ammunition in from 1.1 million five years ago. By June 2018, tourism had brought in $1.4bn, August, the 36-year-old Kyagulanyi, who grew up in a shanty town, has rallied about 5% of the country’s gross domestic product, compared to $498m 10 years ago. youths to demand a better life. Attention will now be paid to The tourism industry is expected to receive support when how Kyagulanyi exploits his clout and how far the government will push back. With many youths taking to social media to the renewed national carrier, Uganda Airlines, launches its vent their anger, the government slapped a new daily tax of maiden flight nearly 20 years after it folded. The country has already procured a couple of Bombardier CRJ900 aircraft, and USh200 ($0.05) on its use in July. the first flights are expected in the second quarter of 2019. Uganda’s general-election fever usually kicks in two years The government’s plan to meet its part of the financing for before the vote, and many of the country’s politicians are expected to draw up campaign plans in 2019, most likely both a refinery and crude oil pipeline (see box) will raise the focusing on building alliances with young people looking for country’s debt levels. As of March 2018, the government said alternatives to the status quo. In response, the government its public debt stood at $15.1bn, which was more than 50% of is likely to focus more spending on programmes offering the gross domestic product. The central bank has warned that debt levels are too high and that the government should be soft loans for small businesses run by young people in 2019. THE AFRICA REPORT
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EAST AFRICA
COUNTRY 153 PROFILES
SOURCE: ILO
more careful with its spending. Recent in the economy and the growth of the LEVEL OF EDUCATION mobile-money industry, the annual projects completed include a new $580m AMONG THE YOUNG (2013 and 2015,%) link between Kampala and the airport volume of which outstrips the money 9.2 4.2 9.4 6.1 at Entebbe. The Kampala government is that goes within the banking system. lookingforaninvestorforapublic-private In September 2018, the government partnership to build a $1bn toll road from renewed the licence of MTN Uganda, 33.3 51.2 39.5 47.1 Kampala to Jinja in the east. one of the biggest taxpayers in the There will be some relief for the country, for 10 years. However, the government when some of the power government says that any renewal of 2013 2015 Never attented school plants it is financing, such as Karuma an operator’s licence should be on the Dropped-out before graduation or completing school and Isimba hydropower dams, with a condition that it lists on the Uganda Currently attending school combined capacity of 783MW, are parSecurities Exchange. Education completed The construction of a standard-gauge tially commissioned in the first quarter of 2019. Maximum demand for power railway link to Kenya’s new line is due to start in 2019. Progress had been reached 600MW in June 2018, up from 583MW in December 2017. The new slowed by the compensation process power from the dams will present some for landowners, but that was more than Value of the Ugandan headaches in distribution. Umeme, 90% complete in late 2019. tourism industry in 2018, the main power utility company, Uganda’s undeveloped minerals secup from $498m in 2008 tor is now attracting greater interest. says the country needs to invest at In July, Rio Tinto and Sipa Resources least $120m every year to match the announced plans for a joint venture for the Kitgum-Pader generation of new power. Umeme will spend some time in 2019 lobbying government base metals mine, which is currently at the exploration phase. to extend its 20-year concession beyond the expiry date in Until oil production takes off, the economy is set to continue growing meagrely. Agricultural production has not been March 2025. It is also looking to raise $1.2bn to invest in increasing enough to drive growth. However, the Uganda growing and improving the national grid. Coffee Development Authority predicts that production from BANKS GO DIGITAL the 2018/2019 season could rise by 11% to reach 51m bags, In 2018, Standard Chartered Bank Uganda became the first thanks to improved weather. local bank to launch a digital branch, pushing ahead a trend On the regional front, relations between Rwanda and that is expected to attract more banks into the digital space Uganda are getting worse. In June 2018, former police chief in 2019. Stanbic Bank, the biggest bank in Uganda in terms Kale Kayihura was arrested in Uganda and charged with of assets, has also launched a digital platform in the wake illegally repatriating Rwandan refugees. And, while the rail of banks closing more branches, while also laying off some link with Kenya is progressing, Museveni gets along better staff. The shrinking of space and staff comes amid tight with John Magufuli, his Tanzanian counterpart, than with margins within the banking sector. This is due to a slowdown Kenya’s Uhuru Kenyatta.
$1.4bn
Oil on the horizon SEVERAL AGREEMENTS for Uganda’s oil and gas industry are to be signed off in 2019 as the country races towards hitting its target of producing oil in 2021. The government is expected to approve Tullow’s transfer of 21.6% of its 33.3% interest in oil acreage to its partners, France’s Total and China’s CNOOC, in the first quarter of 2019, nearly two years after THE AFRICA REPORT
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the deal was announced. Those three oil companies have spent more than a year negotiating the final investment decision (FID) for the $3.5bn crude pipeline between Hoima in western Uganda to the Chongoleani peninsula in Tanzania. The signing of the deal is expected in early 2019. With the Albertine Graben Refinery Consortium posting
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a $17m performance bond in August, discussions have shifted the construction of the $4bn refinery. An FID agreement is expected in the second half of 2019. At a policy level, the government is negotiating with oil companies over the sharing of oil between the refinery and the pipeline. The pipeline is expected to move 216,000 barrels per day,
while the refinery will start with 30,000 barrels per day before doubling its capacity. Also, government is looking to issue a policy for the midstream industry that will offer it more control on the costs spent on putting up infrastructure such as the crude pipeline. The instrument will determine how capital investments will be recouped.
154 COUNTRY PROFILES
EAST AFRICA
50 km
UJANKA SUDAN
GHUDAZA RUDYARDIA NIGANDA
Wakanda
MOHANNADA
WAKANDA
ETHIOPIA
BIRNIN ZANA CANAAN
Long live the Black Panther!
KENYA
Wakanda is engaging with the world to mount a common response to a major threat The country will turbo-charge the African continent’s voice in global affairs
ZWARTHEID Nyanza
AZANIA
W
*Estimation October 2018
technology for renewable energy, with a ‘Light Up Africa’ hiplash-inducing change over the past year means that 2019 will be a year of recovery for campaign that pledges 100MW per person per African country. Wakanda. The presence of Wakanda on the With Beijing now interested in Wakanda’s magnetic levitation rail technology, a potential partnership is emerging continent – the nation only becoming visible to outsiders in early 2018 – represents a sea change in the with the Shuri-founded Wakanda Design Group. This would affairs of East Africa, the continent and the world. If that extend China’s One Belt, One Road initiative from its current East African landing points to a more ambitious plan to link was not enough, Wakanda’s king T’Challa disintegrated Dakar and Dar es Salaam by ultra-high speed rail, with stops at the snap of Thanos’s gauntlet-clad hand during the including Kinshasa and Lagos, and a Infinity War of 2018. second leg to link with South Africa. But Wakanda has a history of the peaceful transfer of power, and in rePopulation: 6 million SUPERPOWERED DOLLAR placing a fallen king the violence has Population growth: 2% Negotiations over entry into the East limited itself to those seeking the throne. GDP per capita: $300,000 Leading engineer and sister to T’Challa, African Community will take up much of Life expectancy: 85 Shuri surprised many by outwitting the coming year. Nairobi and Dodoma Adult literacy: 94% the stronger and bigger M’Baku of the have been forced into an unlikely alInflation: 1% Jabari tribe to become queen and the liance over concerns that Wakandan Human development index new Black Panther, as the country’s goods will flood their markets. Given (out of 188 countries): 2 traditional ruler is called. the strength of the Wakandan dollar, a Foreign direct investment: $10m Under Shuri’s leadership, Wakanda monetary union in East Africa is likely Current account as % of GDP: 2% is a new and powerful voice in global to be pushed down the road. The IMF Mobile phone subscription: 200% affairs, and it will work to articulate issued warnings in November, which a continental position on a range of Wakanda’s economic councillors have Key export: Uranium issues. These include: how to disarm politely disagreed with, over the inLast change of leader: 2018 Thanos; who should pay for the effects of flationary pressure generated by fast GDP growth (%) climate change adaptation; African port increasing vibranium-fuelled exports. 75 and coastal infrastructure; establishing Diplomatic pushback is also expect50 security in the Sahel; and managing ed from certain quarters in Abuja and 33 25 the predatory debt strategies of certain Johannesburg, which have been jolted foreign investors. from their usual squabbling over conGDP ($qdn) tinental leadership. A conference to be 1.31 0.60 1.05 0.40 SHURI LEADS RE-ENGAGEMENT held in Addis Ababa at the end of January With a strong external enemy, internal should formalise the entry of Wakanda 2016 2017 2018* 2019* opposition to Queen Shuri’s rule looks into the African Union (AU). Here again, slender. Since her family’s reconciliation an economic and diplomatic approach with M’Baku, a unified consensus has should help smooth ruffled feathers. Given Wakandan strength in aeronautical engineering and emerged over re-engagement with the rest of the world. Shuri will be looking to work with the countries of the world and Shuri’s desire to see African companies enter the very highest echelons of global manufacturing supply chains, there are also forces from beyond in order to disarm Thanos of the rumours that a new unified Africa-wide aeroplane company power, soul, time, space, reality and mind Infinity Stones. But political tensions still remain over the speed of opening will be launched at the AU summit. Akin to the Airbus model up, especially in the economic and security spheres. Hawks of decentralised manufacturing in Europe, production sites would be located in all five regions of the continent. in the regime, including security boss Okoye, are pushing for a limited or at least slower pace to change. Others, includShuri is also expected to announce new funding and ing former intelligence chief Nakia, are partisan of a more support for the AU’s Peace and Security Department, inaggressive push to engage with continental challenges such cluding a special detachment of soldiers to work for the as finding jobs for the fast-emerging youth population. Shuri AU’s African Standby Force, having already worked to tamp has already announced Wakanda will be sharing advanced down insurgent groups in northern Nigeria. THE AFRICA REPORT
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LIBYA
155
156 PEOPLE TO WATCH 158 CAMEROON 160 CENTRAL AFRICAN REPUBLIC 161 CHAD 162 DEMOCRATIC REPUBLIC OF CONGO 164 EQUATORIAL GUINEA 165 GABON 166 REPUBLIC OF CONGO 167 SÃO TOMÉ E PRÍNCIPE
CHAD Lake Chad
300 km
Abeche
SUDAN
N’Djamena BENIN NIGERIA
ETHIOPIA
CENTRAL AFRICAN REPUBLIC
CAMEROON Douala Atlantic Ocean
Malabo
Yaoundé
Bangui UGANDA
EQUAT. GUINEA São Tomé SÃO TOMÉ E PRÍNCIPE
Libreville Port-Gentil
GABON
Kisangani
Mbandaka
CONGO
Goma
DEMOCRATIC REPUBLIC OF CONGO
Brazzaville
Pointe-Noire
SOUTH SUDAN
Bukavu
KENYA RWANDA BURUNDI
Kinshasa
TANZANIA
Matadi
ANGOLA
Lubumbashi
MALAWI
ZAMBIA
54%
CENTRAL AFRICA POPULATION (millions) 141.9
2019
193.1
2030
CEMAC countries raised 1.3trn CFA francs on the sub-regional securities market at the end of August 2018, a 54% increase on 2017
308
2050
SOURCE: UN WORLD POPULATION DIVISION (THE 2018 REVISION)
CONTENTS
NIGER
MALI
CENTRAL AFRICA 2018 GDP (% of regional total) Equatorial Guinea 2.7% Republic of Congo 2.4%
3.6% Gabon 0.1% São Tomé e Príncipe
DRC 8.8% Chad 2.3% CAR 0.5% TOTAL
$482.5bn
Cameroon
79.6%
SOURCE: GDP CURRENT PRICES – IMF WORLD ECONOMIC OUTLOOK DATABASE, OCTOBER 2018
Central Africa
ALGERIA
JUNE
JUNE-JULY
OCTOBER
N/A
DRC DRC Mining Week
CAMEROON Total Africa Cup of Nations (AFCON)
CHAD Chad International Oil, Mining & Energy Conference
DRC DRC presidential election
CENTRAL AFRICA
CAMEROON
DEMOCRATIC REPUBLIC OF CONGO
Maurice Kamto
Deplick Pomba Nuance Talent, energy and ambition
The opposition’s most popular candidate in the October 2018 presidential election intends to keep the pressure up on President Paul Biya in 2019. Maurice Kamto’s young Mouvement pour la Renaissance du Cameroun (MRC) claimed that Kamto won and that the election was fraudulent, but the Conseil Constitutionnel rejected all challenges to the outcome. The MRC launched protests in the hopes of maintaining its grassroots mobilisation for legislative and municipal elections in 2019. Having negotiated the handover of the Bakassi Peninsula from Nigeria, Kamto is a talented lawyer laying the groundwork for the opposition to be a force in the succession battle.
One of the best singers from the formidable Koffi Olomide stable, which is saying something, Deplick Pomba Nuance went on to perform with Werrason’s immensely popular Wenge Musica Maison Mère. Deplick went solo in 2014, releasing his first album, Ouverture, in 2016. This year Deplick released Bundesliga, underlining his love of the beautiful game. Lovers of older style Congolese rumba may lament the absence of poetry, blistering guitar solos or any hint of political consciousness, but Deplick’s singing is beautiful, the arrangements are strong and Deplick has the energy and ambition to keep honing and improving his sound.
FRANCOIS GRIVELET FOR JA
Self-proclaimed president
156 COUNTRY PROFILES
CHAD
Succès Masra From the bank to the ballot box ES
QU
C JA EG RR
TO AN O R
FO
JA
The former senior economist has left behind the stodgy offices of the African Development Bank in Abidjan for the cut-throat world of Chadian politics. Succès Masra quit his job at the bank in early 2018 to launch his Les Transformateurs party. As a sign that he is being taken seriously as an opposition mobiliser, he was received for a visit by the French foreign ministry in October to talk about President Idriss Déby’s efforts to weaken the opposition. Masra tells sister magazine Jeune Afrique that most of Chad’s problems could be fixed with “political will and good governance”. THE AFRICA REPORT
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157
CENTRAL AFRICAN REPUBLIC
Abdou Karim Meckassoua CHARLES BOUESSEL/AFP
Thorn in Touadéra’s side
REPUBLIC OF CONGO
Denis-Christel Sassou Nguesso DENIS CHRISTEL SASSOU NGUESSO/FACEBOOK
Heir in waiting The son of President Denis Sassou Nguesso, who is a member of parliament and senior official of the state oil company, is crafting a narrative that he would be the most natural successor for his father. Denis-Christel is charting a middle path between radical reforms and maintaining the political status quo. The opposition might not be the biggest worry in terms of blocking a familial succession, as members of the ruling party are likely to be some of his fiercest opponents.
Troubled President Faustin-Archange Touadéra and his allies rallied to sack the national assembly president in October, but it may not be Abdou Karim Meckassoua’s last act in politics. Amidst sectarian violence that has divided the country for years, Meckassoua was the first Muslim in CAR to lead the national assembly before falling out with Touadéra amid claims that he was preparing a coup. He is often now seen travelling with Nimery Matar Djamous, the wanted head of a Muslim vigilante group in the capital.
GABON
Brice Laccruche Alihanga
DAVID IGNASZEWSKI FOR JA
Bongo Ondimba’s trusted ally
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With President Ali Bongo Ondimba’s recent health crisis and potentially long recovery period, cabinet director Brice Laccruche Alihanga is in part responsible for keeping the Gabonese ship of state afloat. Alihanga replaced Maixent Accrombessi – a popular target of opposition ire - in 2017 and has since helped to push through the tough reforms that the oil-based economy needs, and the International Monetary Fund demands. Alihanga, a 37-yearold former banker, is also now the ruling party’s chief auditor.
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158 COUNTRY PROFILES
CENTRAL AFRICA
CHAD
200 km Garoua NIGERIA
Cameroon
Biya doesn’t budge
CAMEROON
Douala
YAOUNDÉ
Gulf of Guinea
In power since 1982, Biya won a new seven-year term in the presidency in 2018 Boko Haram and the Anglophone separatist crises are the biggest threats to stability
CENTRAL AFRICAN REPUBLIC
EQUATORIAL GUINEA
GABON
CONGO
P
*Estimation October 2018
to keep its troops in the Far North Region, which borders residentPaulBiya,85,begins2019havingwonanother seven years in office in October 2018 and facing a Nigeria, until Boko Haram is no longer a threat. series of security, political, social and economic The year 2019 is unlikely to bring major changes to the problems. For about a year, the government has universe around Biya, which includes scores of small parties supporting his political project. A ministerial reshuffle was on been fighting an unprecedented secessionist push in the the cards before the end of 2018 due to Biya’s re-election, but Anglophone regions of North-West and South-West Cameroon. Biya easily won re-election thanks to a weakened historic most of the changes were expected to be superficial. With each opposition party, the Social Democratic year that passes, voices grow louder that Front (SDF), and the huge benefits of Biya should prepare the country and his incumbency, which include the control party for his departure, but so far he has Population: 24.7 million not talked about the subject publicly. of powerful state institutions (see box). Population growth: 2.6% Turnout was low in the Anglophone GDP per capita: $1,545 MEDIA MEDDLING regions, and analysts are warning about Life expectancy: 58.6 a rise of ethnically divisive rhetoric. Key Biya allies include interior minister Adult literacy: 71.3% Paul Atanga Nji, who had Biya’s ear The security crisis in the Anglophone Inflation: 1% regions started in 2016 with strikes by throughout the election period, but he Human development index students and lawyers. Peaceful protests is unpopular in his native North-West (out of 188 countries): 150 later gave way to armed conflict. Many Region because of his denial that there Foreign direct investment: $672m young people have chosen the radical are problems there. National assembly Current account as % of GDP: -3.2% president Cavayé Yeguié Djibril rallied route after Yaoundé cracked down on the base in the Far North Region during the protest movement. Armed groups Mobile phone subscription: 82% the election, despite the government’s began gaining strength about a year ago, Key export: Petroleum and crude oil and there are now regular skirmishes inability to neutralise Boko Haram. Last change of leader: 1982 between groups pushing for independSocial media and TV channel Vision GDP growth (%) ence and government troops. 4, whose owner, Jean-Pierre Amougou 4.6 4.4 Belinga is close to power, whipped up 3.8 DECENTRALISATION ethnic hatred during the campaign. This 3.5 The International Crisis Group think is something Biya will now be keener GDP ($bn) tank estimates that 420 civilians, 175 to dampen down. Tensions have been soldiers and police and more than 100 highest between the Bamileke, Beti 40.1 38.4 35 32.6 separatist fighters have so far been killed. and Bulu ethnic groups. Members of Despite international and local criticism, the Bamileke are big in business, while 2016 2017 2018* 2019* the government seems set on a military high-profile Beti and Bulu are well represented in Biya’s inner circle. response. The army has launched massive operations to crush secessionist The opposition is transforming, and strongholds. The goal is to reestablish state authority, as adoptingayoungerleadership.TheSDF’spresidentialcandidate Joshua Osih, 49, unseated former presidential candidate John many local officials and populations have fled. As of August Fru Ndi, 77, but did not win over all corners of the party. The 2018, there were an estimated 300,000 displaced people in the regions and 25,000 refugees in Nigeria, according to UN bodies. SDF is now a much reduced force, having taken just 3.4% of the Anglophones make up an estimated 20% of the population. October vote. It does, however, remain the opposition party with A small radical minority is calling for independence, while the biggest number of legislators and municipal officers. The a much larger group wants a federal system of government conflict in the North-West and South-West regions explains in part the low support for the SDF, which has its bedrock there. where regions have much more control. In response, the Voter turnout was just 5.4% in the North-West. government is rolling out a decentralisation programme and created a minister of decentralisation in 2018. The big shift in the political playing field is the growth in supRegional cooperation in fighting Nigeria’s Boko Haram port for opposition leader Maurice Kamto of the Mouvement pour la Renaissance du Cameroun (MRC), who came in second Islamist militia is reducing the number of attacks that take with 14.2% in the young party’s first ever presidential race. place in Cameroon, and the Yaoundé government intends THE AFRICA REPORT
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COUNTRY 159 PROFILES
SOURCES:NATIONAL HOUSEHOLD SURVEY, 2014
Kamto, a former justice minister, is one The IMF is sounding warnings about POVERTY IN CAMEROON (%) of the few former Biya allies who has 75 government borrowing and debt levels. Urban Rural Total While it predicts that the debt-to-gross been able to make a name for himself domestic product (GDP) ratio will drop and not end up on the wrong side of slightly to 38.6% in 2019, the government an anti-corruption investigation. But 50 has signed many loan deals that it has social media campaigns painted Kamto, yet to implement. It has agreed to loans a member of the Bamileke ethnic group, as a threat to the status quo. that have yet to be disbursed totalling an 25 additional 21.5% of GDP, which would Delayed legislative and municipal take Cameroon well over the sustainable elections in 2019 will test the MRC’s threshold of 50% of GDP. newfound popularity, but are unlikely 0 2001 2007 2014 Due to low oil prices and ageing fields, to alter the governing Rassemblement oil production is dropping. The state oil Démocratique du Peuple Camerounais’s dominance. The presidential vote company reported a 15.6% decrease in showed the MRC has its strongest supproduction in the first quarter of 2018 to 8.2m barrels. However, developments in port in Douala, Yaoundé and the West. The big challenge for the opposition is the gas sector are due to boost the econof liquefied natural gas omy in 2019. Perenco and its partners getting the human and financial resourcfrom Perenco’s Kribi plant launched a floating liquefied natural es to pick candidates and run effective will be exported to Russia campaigns in the country’s 360 cities gas (LNG) plant at Kribi, in southern and 58 departments. The opposition was Cameroon, in April 2018. Built at a cost unable to agree on a common candidate for 2018, and now of 700bn CFA francs, it will produce 1.2m tonnes of LNG, which some parties are talking about pooling funds and issuing mixed will be exported to Russia during its first eight years of operation. candidate lists to give the widest geographical spread. Some of A building boom linked to Cameroon’s hosting of the Africa the issues the opposition are campaigning on are reforms to the Cup of Nations football tournament could die down after the matches in June 2019, but energy and other infrastructure electoral law and the reintroduction of presidential term limits. projects could pick up some slack. Work on the World BankBORROWING CAUSES CONCERN financed 420MW Natchigal dam is due to start in late 2018 Security concerns and the drop in oil prices have somewhat or early 2019. The 718bn-CFA-franc project is set to increase slowed growth. The government has been working on reforms Cameroon’s electricity generation capacity by 30%. The dam is due to be operational in 2022. with the International Monetary Fund (IMF) since June 2017. Cameroon’s insecurity is hurting the agriculture sector, as The main targets of the IMF programmes are the management of public spending, reducing the national debt and increasing South-West Region typically produces about half of the country’s non-oil revenue. The finance ministry is working on a series cocoa crop. After cocoa production rose 9.5% in the 2017/18 of measures to increase the government’s tax take. They are season to hit 253,510tn, the authorities reported a 10% drop expected to be approved by parliament before the end of 2018. in arrivals for export at the port of Douala as of 31 May 2018.
1.2m tn
Biya’s power bases PRESIDENT PAUL BIYA relies on the blurring of lines between state and party to maintain his grip on power. Those with their eyes on the succession will be looking at any changes in important institutions for signs of a shift in the balance of power. The contested presidential election of October 2018 highlighted the role of the newly operational Conseil THE AFRICA REPORT
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Constitutionnel. It was created by the 1996 constitution, but Biya only appointed its officials in February 2018. Oppositionist Maurice Kamto pointed out that many of the Conseil’s 11 members openly support Biya and the ruling RDPC party. The opposition has long campaigned for an independent electoral commission. It believes
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the electoral directorate Elecam is not impartial and its president, Enow Abrams Egbe, is close to the RDPC. The national assembly and Senate are led by Biya allies Cavayé Yéguié Djibril and Marcel Niat Njifenji, respectively. Almost all government ministers are from the RDPC, and Biya often reshuffles officials to stop them from building
up strength in a department. He also has the power to appoint governors and prefects, who typically ban protests with the support of the police and gendarmerie. Control of the army is another key tool for Biya. For example, the elite Bataillon d’Intervention Rapide intervened during 2008 protests against removing term limits from the constitution.
160 COUNTRY PROFILES
CENTRAL AFRICA 300 km
Central African Republic
A capital without a country
CAMEROON
CHAD
SUDAN SOUTH SUDAN
CENTRAL AFRICAN REPUBLIC
Berberati BANGUI DEMOCRATIC REP. OF CONGO
Rebel groups control a majority of the territory, but new talks are on the horizon The economy is growing, but the health of key sectors depends on the level of security
CONGO
P
*Estimation October 2018
eace in the Central African Republic (CAR) will retrained by the European Union military training mission and depend on the government’s ability to disarm rebels Russian instructors. Creating a national army that can provide and hold inclusive peace talks in 2019. Those issues security across all of the country’s territory is a crucial element will play out against the backdrop of infighting in of the peace process. Non-governmental organisations say that the national assembly, and President Faustin-Archange the United Nations (UN) force in the country does not have the staff or the financial resources to achieve its goals. Its mandate Touadéra’s improving relations with Moscow and strained ties with Paris. Touadéra and the Russian was due to be extended in November, as government signed a deal on defence local populations complained that the ties in 2018, with Moscow providing UN force is weak in responding to rebel Population: 4.7 million training and arms to the CAR military. attacks on civilian populations. Population growth: 1.6% French diplomats are sore about their GDP per capita: $454 PARLIAMENTARY TROUBLES loss of influence in Bangui, and critics Life expectancy: 52.9 The Touadéra administration’s reforms suggest that Moscow might be more Adult literacy: 36.8% have been slow to get off the ground. interested in gaining access to mines Inflation: 4% He blames that on the management than it is in helping the peace process. Human development index of national assembly president Abdou Bangui’s allies are pursuing parallel (out of 188 countries): 187 Karim Meckassoua, whom Touadéra’s diplomatic strategies to end the war in Foreign direct investment: $17m the CAR, which has been going on since allies accused of coup plotting and Current account as % of GDP: -8.9% 2013. Russia and the African Union (AU) stymieing reforms. The assembly sacked Mobile phone subscription: ND Meckassoua in October, but the goveach are holding their own talks with the ernment still worries about his role as country’s rebel groups. The government Key export: Trucks is due to hold an inclusive national diaa spoiler, as he is close to the leaders Last change of leader: 2016 logue in 2019 under the auspices of the of some Muslim vigilante groups. The GDP growth (%) AU mediators, and the country’s militias climate in the national assembly has 5 have already been making a series of been worsening, with a series of scandals 4.5 4.3 and death threats that highlight the demands before the dialogue has begun. 4.3 lack of inter-parliamentary dialogue. These range from a general amnesty to GDP ($bn) constitutional reforms and the formation Independents, who control 60 out of 2.5 of a government of national unity. The 140 seats, constitute the largest single 2.3 2 1.8 government has not been receptive to block in the legislature. most of those demands. The economy is on the rebound in 2016 2017 2018* 2019* Touadéra’s second year in office and has REBELS HOLD THEIR GROUND been stabilising, in part due to reforms Rebel forces control an estimated 80% launched with the support of partners of the CAR’s territory, so they are not keen to set down their includingtheInternationalMonetaryFund(IMF).Buteconomic growth – especially in sectors like agriculture – depends on the arms before agreeing to deals with the government. The country’s security situation, and that could worsen if thenational Front Populaire pour la Renaissance de la Centrafrique, led dialogue is unsuccessful. Mining, logging and construction are by Noureddine Adam, controls parts of the north-east. The currently performing well. More transparency on mining and Union pour la Centrafrique, headed by Ali Darassa, controls part of central and south-central CAR. Meanwhile, Mahamat timber deals is a key part of the IMF-backed reform programme. The domestic private sector is weak, so the government Alkatim’s Mouvement Patriotique pour la Centrafrique is active in north and north-central CAR. Bangui was due to launch would like to see foreign investors take the lead in the year a national disarmament, demobilisation, reintegration and ahead. Turkey’s Medcem is due to start building a plant in repatriation programme in September, but the groups refused 2019 with the capacity to produce 350,000tn of cement per to act until after the national dialogue. year. Also in 2019, China Gezhouba Group will begin work Elsewhere on the security front, the government is preparing on the Boali 2 power plant to increase its production capacity to recruit 1,023 new soldiers who will begin their training in to 5MW. Construction of the World Bank-backed Danzi solar power plant has also been launched. January2019.Thecountryhasabout3,000troopswhohavebeen THE AFRICA REPORT
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COUNTRY 161 PROFILES
LIBYA 400 km
Chad
CHAD
Bare coffers
NIGER
Lake Chad
SUDAN
N'DJAMENA NIGERIA
Chad is in the midst of another painful boom-bust cycle due to its oil dependency A rise in rebel attacks point to new risks in the year ahead for the Déby government
CAM.
H
Moundou CENTRAL AFRICAN REPUBLIC
SOUTH SUDAN
*Estimation October 2018
The government is prioritising projects like its new national aving amended the constitution in 2018 to eliminate political threats, President Idriss Déby’s biggest carrier, Tchadia Airlines – a partnership with Ethiopian Airlines obstacles in 2019 are an ailing, oil-dependent econlaunched in October 2018 – over programmes that would help the poor. The World Food Programme estimates that more omy and new security problems. The country’s new than 85% of Chadians live below the poverty line, while other constitution marks the founding of Chad’s fourth republic, and the government is due to create new institutions and organise a United Nations agencies say that about four million people were round of legislative and municipal elections in the year ahead. suffering from food insecurity and malnutrition in 2018 due to Déby now has unchecked powers: he recent seasons of poor rains, which also hit the bread basket of southern Chad. no longer has a prime minister, cannot be called before the legislature and can Population: 15.4 million run for the presidency until 2033. DESPERATE TIMES Population growth: 3% The opposition is isolated, and boyThe rising price of oil in 2018 helped the GDP per capita: $890 economy to grow after shrinking in 2016 cotted the national consultations that Life expectancy: 53.2 and 2017, but that has not been enough led to the constitutional change in May. Adult literacy: 22.3% to get N’Djamena out of the financial Later in 2018, Déby issued a decree on the Inflation: 2.1% management of political parties that will hole it dug in the lead-up to the 2014 oil Human development index price crash. Public schools and hospitals likely keep many parties out of the game. (out of 188 countries): 185 The new law says recognised parties barely functioned in 2018 due to perForeign direct investment: $335m sistent strikes by civil servants who demust be represented in at least half of the Current account as % of GDP: -4.2% country’s provinces, regularly participate manded that the government pay them Mobile phone subscription: ND in elections, have up-to-date accounts the salaries it cut off in order to cope and show the origins of their funding. with the economic downturn. It also Key export: Petroleum and crude oil stopped payments on its $1bn loan from Last change of leader: 1990 NO MONEY, NO POLLS the Swiss commodities trader Glencore GDP growth (%) and renegotiated the terms, but that The government is due to hold elections 3.6 3.5 in 2019, but that requires having the provided very little breathing space. The -3.1 -6.4 government has rolled back spending funds to organise them. The coffers are bare, and donor countries – so far – are so far that an International Monetary GDP ($bn) not stepping in to finance the polls. The Fund official stated in September that opposition, led by Saleh Kebzabo of the more cuts were not feasible. 11.8 11.1 10.1 9.9 Union Nationale pour la Démocratie The country’s oil dependence means et le Renouveau, is calling for a united that economic pain has spread to other 2016 2017 2018* 2019* sectors. A backlog in payments to confront for the legislatives. tractors has led to stoppages on many Rebel groups appear to be a bigger building projects. In the oil sector itself, threat than the political opposition, as companies have not announced any major projects for 2019. evidenced by the government’s vast spending on security. The cotton sector, however, – which is mainly active in The Conseil de Commandement Militaire pour le Salut de la southern Chad – is showing signs of a turnaround in 2019. République (CCMSR) attacked from southern Libya in August 2018, representing the first armed rebellion in the country since Singaporean agribusiness company Olam purchased a 60% 2009, and briefly occupied an area in northern Chad. Since stake in state-owned Cotontchad in 2018. It has a medium-term development plan that includes the payment of debts and then, long-dormant armed groups in southern and eastern Chad have been making noise. And while Nigeria’s Boko Haram new investment in cotton production. Olam also has its eyes Islamist group limited some of its activities in the Lake Chad on opportunities to grow sesame and cashew nuts in Chad. The government has been trying, with little success, to basin after military offensives in 2015 and 2016, some analysts say the risk of new attacks will be higher in 2019 due to Chad’s drum up investor interest in the mining sector. It has been continuing economic troubles. Chad is a key ally of France working with the communities in northern Chad to pave in maintaining stability in the Sahel and hosts French forces the way for gold-mining companies to operate there, which assigned to Operation Barkhane, an anti-insurgent operation. should favour an increase in activity in 2019. THE AFRICA REPORT
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162 COUNTRY PROFILES
CENTRAL AFRICA SOUTH SUDAN
CAR
Democratic Republic of Congo
CAM.
400 km
GABON
Kisangani
CONGO KINSHASA
Atlantic Ocean
Après moi, le déluge
Goma
DEMOCRATIC REPUBLIC OF CONGO
UGANDA RWANDA BURUNDI TANZANIA
Lubumbashi ANGOLA ZAMBIA
Shadary, Kabila’s chosen successor, is set to win polls scheduled for late 2018 Miners are due to decide whether to sue the government over new industry rules
A
*Estimation October 2018
fter years of delays, 2019 should bring about the an electoral commission and constitutional court perceived departure of President Joseph Kabila. That should to favour the regime, and the active involvement of serving turn a page for the Democratic Republic of Congo ministers, provincial governors and heads of state-owned (DRC), but Kabila will probably be replaced as companies in his campaign. head of state by one of his most loyal disciples: Emmanuel Kabila’s expected exit was driven by domestic and foreign pressure. Western governments were vocal in urging him not to Ramazani Shadary. The former interior minister and current tinker with the constitution’s term limits, but it was hard-nosed head of Kabila’s Parti du Peuple pour la Reconstruction et la African diplomacy that appears to have persuaded Kabila Démocratie (PPRD) was selected at the last moment to run as to go. The leaders of countries including Angola and South the candidate of the ruling Front Commun pour le Congo (FCC) coalition in elections scheduled to take Africa, as well as the African Union, made it clear to their Congolese counterpart place on 23 December, more than two that they would strongly disapprove of years after the end of Kabila’s mandate. Population: 84 million The PPRD boss’s elevation to anointed any efforts to renew his mandate. Population growth: 3.2% successor was not widely expected, GDP per capita: $478 KABILA’S CHESSBOARD largely because Kabila’s initial decision Life expectancy: 60 Nonetheless, should Shadary be sworn to stay beyond December 2016 had fed Adult literacy: 77% suspicions that he intended to alter in, Kabila will retain immense power. Not Inflation: 23% the constitution and run again. While only is he likely to remain at the head of Human development index the PPRD and the FCC, but the president Shadary, armed with Kabila’s bless(out of 188 countries): 176 has reshuffled both the constitutional ing and state resources, kicked off his Foreign direct investment: $1.3bn campaign immediately, the opposition court and the military, removing judges Current account as % of GDP: 0% faltered and delayed key decisions. and generals of doubtful fidelity. Shadary Mobile phone subscription: 43% owes his political career to Joseph Kabila AN UNEXPECTED CHOICE and to his father, Laurent-Désiré. It is Key export: Copper highly improbable he would go after Seven prominent politicians who aspired Last change of leader: 2001 to be the DRC’s next president, includhis former chief’s family in the way that GDP growth (%) João Lourenço has done since taking ing the disqualified Jean-Pierre Bemba 4.1 3.8 3.4 over from José Eduardo dos Santos in and the exiled Moïse Katumbi, pledged 2.4 neighbouring Angola. to unite behind a single candidate to A Shadary presidency would also maximise the opposition’s chances in GDP ($bn) prove to be a diplomatic tightrope for the the one-round contest. In November, European Union (EU). He was among just five weeks from the polls, the seven 46.1 42.7 41.4 39.3 the 15 Congolese politicians and seculeaders met in Geneva for tense talks. rocrats hit with targeted sanctions in Unable to decide unanimously on who 2016 2017 2018* 2019* 2016 and 2017 for human rights abuses should take the battle to Shadary, they in the wake of delayed elections. A fresh put it to a vote. This produced a shock start with Europe will be a tough sell. result when Martin Fayulu emerged as Similar challenges lie in store for MONUSCO, the world’s the opposition’s flag-bearer. Fayulu’s national profile falls largest United Nations (UN) peacekeeping mission, which well short of those of Felix Tshisekedi, the leader of the largest opposition party, and Vital Kamerhe, who finished third in the has been in the DRC for two decades. Kabila has been hostile towards the force, viewing it as an enduring humiliation. last election in 2011. Many supporters of Tshisekedi or Kamerhe and party cadres immediately rejected the Swiss resolution. The president has used recent speeches to the UN General In November, Kamerhe backed Tshisekedi, who will split the Assembly to simultaneously deplore MONUSCO’s military opposition’s vote with Fayulu. Meanwhile Shadary’s opponents inefficacity against the DRC’s myriad armed groups and its say his pursuit of the presidency is given extra momentum by over-zealous meddling in sovereign affairs. In the run-up to THE AFRICA REPORT
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CENTRAL AFRICA
COUNTRY 163 PROFILES
SOURCE: BMI AND USGS
the election, the government’s approach terrain. The virus may well reach nearby COBALT PRODUCTION (’000 tonnes) Uganda and will not be contained before to the UN became increasingly obdurate, 150 DRC Australia Russia including blocking arms shipments the planned December elections. Zambia China Canada to peacekeepers and refusing logistiThe economy is set to continue growing moderately, largely driven by the cal electoral support from its fleet of 100 mining sector (see box and graph). There aircraft. Violence committed by more are some problems on the horizon, like than a hundred militias continues to torment eastern Congo and is only likely the fact that in late 2018 the central bank’s 50 to worsen during elections and their foreign exchange reserves would still aftermath, adding to the millions who only cover about a month and a half of have already been displaced by conflict. the country’s imports. There is no coop0 That there will be presidential eration with the International Monetary 2015 2016 2017 2018 2019 2020 2021 and parliamentary elections on 23 Fund. The government’s attempts to set up big agricultural zones are foundering, December is still not set in stone. The and the country’s instability has slowed opposition parties distrust Corneille down the development of some oil and Nangaa, the head of the electoral gas activity. Investors are likely to hold off commission, who they see as deeply on any major commitments until there biased. The main objects of their ire of the DRC’s export is a new government and it unveils its are a touchscreen voting system, which revenues come from the they claim will facilitate fraud, and the policy directions. mining and oil sectors electoral register, which they insist is A lack of electricity continues to blight tainted by millions of fake voters. the population and hamper the country’s crucial mining sector. The government’s long-term solution The FCC and the electoral commission say the path to the to this deficit is the ambitious Inga III hydropower facility polls is irreversible – with Shadary’s coalition saying that the that is forecast to cost up to $18bn and generate 11,000MW opposition is disorganised and clutching at excuses because it wants to delay the elections to stave off certain defeat. Some of power from a stretch of the Congo River west of Kinshasa. in the opposition argue Kabila will sow disorder or deprive In October 2018, nearly a decade after Kabila launched the the commission of resources – which would serve as Nangaa’s project, his administration finally struck an agreement with pretext for a further postponement. two consortiums – one Chinese, the other Spanish – binding the co-developers to submit a joint bid to build and manage EBOLA IN THE MIX the facility. Much still needs to be done before financial close Holding elections across vast, poorly connected Congo is a and the awarding of a contract. The lack of other infrastructure also constrains economic growth. At the government’s colossal challenge. It will be complicated further by the most deadly Ebola outbreak since the 2013-2016 epidemic that request, the African Development Bank is providing $121.4m for upgrading airports at Mbuji-Mayi, Kindu and Kisangani. devastated Guinea, Liberia and Sierra Leone. The outbreak was first reported in August in Mangina, North Kivu province, Most of the DRC’s population is unbanked, so the country’s financial sector still has a long way to grow. Kenya’s Equity and there were attempts to contain it around the town of Beni but local distrust of health workers and insecurity bred by Bank, which owns a share of the DRC’s ProCredit Bank, is armed groups has complicated the response and spread the one of an increasing number of East and Central African disease over hundreds of kilometres of often inaccessible companies expanding their operations in the DRC.
95%
Mining muscle THE DRC’S NEW MINING CODE, which was signed into law in March 2018 after several years of blowing hot and cold, is profoundly unpopular with the industry. Not only does the law hike royalties and introduce taxes, but it also cancelled a measure that would have protected producers against most fiscal changes until 2028. Miners are reluctantly THE AFRICA REPORT
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complying with the law but will be banging on the door of the next president. If the future government refuses to amend the code, the firms say that international arbitration is an option. State-owned mining companies have proven adept at squeezing large payments out of their joint-venture partners. Gécamines has extracted D E C E M B E R 2 018 - J A N UA R Y 2 019
a combined $250m from Freeport-McMoRan and Glencore since 2017 to settle disputes. Now its goldmining sister firm Sokimo is trying to impose itself on a mega-merger between Randgold and Barrick. The future of the electric vehicle revolution depends on the DRC, which in 2017 produced two-thirds of the world’s cobalt. While prices
slumped in the second half of 2018, deficits and therefore price rises are very likely in several years’ time. Other key developments include Glencore’s recently reopened KCC unit, where exports have been suspended until next year due to impermissible uranium levels, and the launch of Eurasian Resources Group’s Metalkol tailings project.
164 COUNTRY PROFILES
CENTRAL AFRICA
MALABO CAMEROON
BIOKO
Equatorial Guinea
Bottom of the barrel
Bata
EQUATORIAL GUINEA
Atlantic Ocean
The president’s son and likely successor is gaining more influence in the military The IMF warns that the economy is likely to continue shrinking until at least 2023
GABON 50 km
T
*Estimation October 2018
Further uncertainty lies ahead because the most virulent he oil-dependent economy of Equatorial Guinea is critics of the Obiang government – Severo Moto Nsá of the set to be one of the continent’s worst performers for years to come, weakening President Teodoro Partido del Progreso and several members of the Coalición de Oposición para la Restauración de un Estado Democrático – Obiang Nguema Mbasogo’s legacy as he prepares have pledged to leave exile and return to Equatorial Guinea to to hand power over to his son and vice-president, Teodoro challenge Obiang at home. The opposition already active in ‘Teodorín’ Nguema Obiang Mangue. Work on many major the country is constrained by the PDGE’s strong-arm tactics infrastructure projects, like the new city of Oyala – which and state institutions biased in the ruling critics have lambasted as wasteful – party’s favour. The Convergencia para has stopped and the government is la Democracia Social no longer has any now working on reform plans with the Population: 1.3 million parliamentary representation and the technical assistance of the International Population growth: 3.6% Monetary Fund (IMF). government dissolved the Ciudadanos GDP per capita: $15,294 por la Innovación party in early 2018. This is taking place against the Life expectancy: 57.9 backdrop of a succession struggle. Oil Adult literacy: N/A OIL COMPANIES MUST STUMP UP companies favour oil minister Gabriel Inflation: 0.9% With another oil-fuelled bust – it started Mbaga Obiang Lima – also a son of the Human development index in 2013 and the IMF predicts the econpresident – but Obiang, 76, has put his (out of 188 countries): 139 omy will keep shrinking until at least trust in Teodorín to take over should Foreign direct investment: $304m he retire or die in office. The next presi2023 – the government is both talking up Current account as % of GDP: -3.1% the possibilities for diversification and dential elections are not due until 2023. pressuring foreign investors to spend As vice-president, Teodorín would be Mobile phone subscription: ND the constitutional successor. However, more on oil and gas projects. The Malabo Key export: Petroleum and crude oil his rise to power threatens some senior government – known for its opacity – has Last change of leader: 1979 a lot of tough work ahead of it to get the officials in the security services and the GDP growth (%) ruling Partido Democratico de Guinea IMF to agree to provide financial support. -2.6 -3.2 Ecuatorial (PDGE). President Obiang Oil minister Obiang Lima announced -7.7 -8.6 he is playing hardball and would not named Teodorín a general in the army renew licences if oil companies do not in October to strengthen his hand. come up with $2bn in new investment. GDP ($bn) A COUP OR A CLEAN-UP? Noble Energy and its partners on Blocks 13 13.2 12.5 11.3 I and O are due to spend to boost gas Several countries are putting pressure on President Obiang to choose a different production that will supply Marathon Oil 2016 2017 2018* 2019* course. Equatorial Guinea is fighting a Corporation’s liquefied natural gas plant three-year suspended sentence handed at Punta Europa. Gas is playing a bigger to Teodorín by a French court for money role in the economy. Oil production has laundering, seeking the intervention of the UN’s International been dropping as fields age, averaging about 188,000 barrels per day in 2017. The government is due to launch a bidding Court of Justice. Meanwhile, in September 2018 the Brazilian round for new licences in early 2019. authorities seized $1.5m in cash and millions more in watches from Teodorín for violating customs procedures. The government regularly holds big economic conferences More worrying for the regime was a supposed coup attempt to discuss its diversification plans. But those are limited by the in December 2017. The government says that the opposition fact that Equatorial Guinea has a small domestic market and and some dissidents from the PDGE hired mercenaries and doing business in Central Africa can be expensive as well as conspired to kill Obiang and overthrow the government. complicated by red tape and other obstacles. The government is due to launch a third national economic conference in There is a lot of uncertainty about many of the details in the November 2019 and roll out a new development strategy. coup plot, and members of the opposition argue that it is just another attempt to crack down on the regime’s opponents. The With the economy struggling, one of the few infrastructure projects going ahead is a new terminal at Malabo’s internatrials of alleged coup organisers are due to take place in 2019. The PDGE kicked out several senior officials in November. tional airport. It is due to be completed in 2019. THE AFRICA REPORT
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CENTRAL AFRICA
COUNTRY 165 PROFILES
CAMEROON 100 km EQUATORIAL GUINEA
Gabon
LIBREVILLE
GABON
Uncertainty looms
Port-Gentil
President Bongo Ondimba is having health issues and his prognosis is unclear Agriculture and mining are helping the oil-addicted economy to continue growing
Atlantic Ocean
A
Franceville
CONGO
*Estimation October 2018
s The Africa Report went to press, President Ali hand. The PDG – which has been sloughing off many of Bongo Ondimba’s hospitalisation in Saudi Arabia its old guard in favour of younger leaders – took 126 out of – which began on 24 October – had thrown the 143 seats in the October legislative polls, with former PDG country into political uncertainty. The presidency members like Rassemblement Héritage et Modernité leader did not provide regular updates, and rumours swirled about Alexandre Barro Chambrier and Guy Nzouba Ndama of Les a stroke and other health problems. It was not clear if he Démocrates losing their races. would make a full recovery. If Bongo is incapacitated, the The government estimates that the worst of the most senate president, Lucie Milebou-Aubusson, is supposed to recent oil-fuelled downturn is in the past. Libreville has had take over and hold a new election. fraught relations with the International Monetary Fund over concerns about transparency and the lack of progress on Bongo is now relying heavily on his wife Sylvia, prime minister EmmanuelIssoze-NgondetandcabinetdirectorBriceLaccruche cutting spending for subsidies and a bloated civil service. The Alihanga. In the year ahead, the governgovernment announced a new series of ment will be looking to make as many cuts in June, including a freeze on public sector hiring and an audit of spending reforms as possible and cause the least Population: 2.1 million on salaries. Local companies in the amountofdisruption,aspublicdiscontent Population growth: 2.2% withausterityandthelackofjobprospects private sector have been shedding jobs. GDP per capita: $8,385 begin to rise. Economic downturns in Life expectancy: 66.5 SELLING OFF STAKES Gabon tend to be accompanied by a rise Adult literacy: 82.3% While activity in the oil sector has been in xenophobic sentiment, which often Inflation: 2.8% targetsWestandCentralAfricansworking laggingduetolowerprices,sectorssuchas Human development index in the services and petty trading sectors. agriculture,miningandtimber havebeen (out of 188 countries): 109 doing well. However, the government The government’s anti-corruption Foreign direct investment: $1.5bn has plans to attract more oil investment, drive, called Mamba, after a lethal snake, Current account as % of GDP: -1.6% has been stalling. The trial of former and oil minister Pascal Ambouroue anMobile phone subscription: 132% public works minister Magloire Ngambia nounced in October that the government is working on tax reforms and a new oil started off in June 2018, and the governKey export: Petroleum and crude oil code in addition to launching a new ment is looking for some big wins to show Last change of leader: 2009 that it is serious about tackling graft. licensing round. The country’s producGDP growth (%) tion has been dropping and reached an 3.4 CONFLICTS TO ONE SIDE average of 199,000 barrels per day in 2 2.1 Jean Ping, who ran in the highly fraught 2017. Oil majors have been selling off 0.5 2016 race, said it is time for Gabon to put their stakes in historical fields as output its political conflicts to the side during declines. For example, France’s Total sold GDP ($bn) its stake in the Rabi-Kounga field in July Bongo’s illness. But Ping insists that he 17.8 17.2 15 14 2018. Those trends are set to continue. is Gabon’s true president after Bongo squeaked through in 2016 under susSingaporean agribusiness Olam is 2016 2017 2018* 2019* developing big oil palm and rubber tree picious circumstances. Ping’s strategy plantations, but it has paused its plans to since 2016 has been to appeal to the cut down forests to grow palm oil until international community and to boycott elections. Ping and his allies had put a lot of hope into the an industry body announces new regulations at the end of prospect that the International Criminal Court would get 2018. Oppositionists and civil society groups are becoming involved through investigations into post-election violence, more critical of the group, which is close to the government but it said in September that the events did not amount to and active in an increasing number of sectors, including crimes against humanity. The opposition continues to fume logistics and timber. about the Cour Constitutionnelle’s 14 November decision Some investors have also been concerned about the safety of to allow Bongo to stay in office despite his hospitalisation. their investments in Gabon after the government nationalised Veolia’s 51% stake in the Société d’énergie et d’eau du Gabon, But the fact that the opposition is not united has been the water and electricity utility, in February 2018. strengthening the ruling Parti Démocratique Gabonais’ THE AFRICA REPORT
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166 COUNTRY PROFILES
CENTRAL AFRICA 200 km
CAR
CAMEROON
Republic of Congo
Like father, like son
GABON
REPUBLIC OF CONGO
Atlantic Ocean
BRAZZAVILLE
Brazzaville wants the IMF’s money but not its demands for transparency Denis-Christel is gearing up to replace his father as president, possibly in 2021
Pointe-Noire CABINDA (Angola)
DEMOCRATIC REP. OF CONGO
A
*Estimate October 2018
lready thoughts across the political class are turning failing to honour promises on transparency, the IMF was not to 2021, when President Denis Sassou Nguesso’s prepared to abandon its demand for much greater accountacurrent term of office expires. And, for the first time bility and a fairer distribution of oil income. The government since Brazzaville’s strongman recaptured power was reluctant to fully comply and talks dragged on, and on. The outlook for 2019 remains one of continued tension in more than two decades ago, talk of the succession is seriously on the agenda. Denis-Christel, a son of the head of state, has this key relationship: the government will continually look made his ambitions clear and begun to prepare the ground. for ways to preserve a degree of latitude and discretion in Last May he published the book Ce Que Je Crois to set out the management of oil income, while the Fund will mainhis vision for the Congo of tomorrow, in warm words that talk tain pressure for greater transparency and the allocation of of values, social inclusion, elites setting more money to grassroots development a good example and the need for the and social programmes.These will be particularly badly needed in the Pool, country to wean itself off its dependence Population: 5.4 million on oil. Over the course of 2019, his goal the region surrounding Brazzaville, Population growth: 2.6% is to get the public accustomed to the following the fragile mid-2018 peace GDP per capita: $2,572 idea that he can maintain stability and agreement between the regime and Life expectancy: 65.1 yet move the country on from its uncomPastor Ntumi, leader of sporadic Ninja Adult literacy: 79.3% promising and often brutally conflictual Nsiloulou guerilla activity. Civilians were Inflation: 1.2% politics. The opposition and segments the main victims as the military sought Human development index to curb any residual hint of rebellion. of the ruling party have criticised the (out of 188 countries): 133 prospect of a dynastic succession. Foreign direct investment: $1.2bn LICENSING ROUND But Denis Sassou Nguesso may not Current account as % of GDP: 9.1% The economic prospects for 2019 are be ready to retire in 2021. He remains Mobile phone subscription: 96% helped by the partial recovery in oil worried about threats to his regime. prices and also by the significant uptick In July 2018, a report from the antiKey export: Petroleum and crude oil in the production of crude since the corruption commission criticised oil Last change of leader: 1997 minister Jean-Marc Thystère-Tchicaya, Moho Nord field was brought on stream GDP growth (%) a political godfather of the oil port city by Total in 2017. The French group has 3.7 2 of Pointe-Noire, who was rumoured to deployed some of its most advanced -2.8 -3.1 technology in the operation of this field, have presidential ambitions. with a production capacity of around DEBT BURDEN 100,000 barrels per day. GDP ($bn) 12 The regime remains unafraid to use Meanwhile, the government is 11.5 8.7 7.8 bluntertacticstodetermoreovertoppositrying to stimulate further interest in tion figures, such as General Jean-Michel hydrocarbons exploration through 2016 2017 2018* 2019* Marie Mokoko and Paulin Makaya, who a new licensing round covering five have spent much of the past few years in shallow offshore blocks, five in deep jail. Congo’s opposition parties remain and ultra-deep water, three onshore hobbled, with a weak position in parliament and lacking a blocks near the coast and five in the Cuvette basin in the clearly articulated common agenda. Many of their leaders rainforest interior. The door was opened for companies to have been tarnished by past compromises with the regime. register for the round in May 2018 but the closing date for The economic situation presents a more awkward challenge. tenders will not be until June 2019. The slump in oil prices over the past few years exerted huge The government also hopes for growth in the mining pressure on state finances. Borrowing against pledged oil sector, following the mid-2018 start of export production shipments provided temporary relief but pushed the overall from the Mayoko iron ore mine. French companies have debt burden to almost 120% of gross domestic product. agreed to merge and expand the Kola and Dougou potash The government was left with no choice but to seek support mines in Kouilou region, while provisional agreements have also been reached with investors for the development of from the International Monetary Fund (IMF) and talks began in early 2017. Given the Sassou-Nguesso regime’s history of other potash and phosphate deposits. THE AFRICA REPORT
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CENTRAL AFRICA
COUNTRY 167 PROFILES
PRINCIPE
São Tomé e Príncipe
Coalitions are back in style
SÃO TOMÉ
5 km
SÃO TOMÉ E PRÍNCIPE SÃO TOMÉ Atlantic Ocean
The MLSTP/PSD’s Jesus is set to take over as prime minister in late November The results of mapping operations could lead to drilling plans for the EEZ
T
*Estimation October 2018
he October parliamentary elections have brought has replaced the container port idea with the construction São Tomé back to the days of brittle governments. of a fishing pier budgeted at €70m ($79.8m). Outgoing prime minister Patrice Trovoada’s was the While Trovoada was unable to turn the impoverished archipelago’s first government since the democratic twin-island republic into the Dubai of the Gulf of Guinea, transition in 1991 to complete a full four-year term. In the his government realised several smaller investments in the legislative vote, Trovoada’s Acção Democrática Independente social and infrastructure sectors, including the extension of (ADI) lost its absolute majority. It remains the single strongest the water supply and electricity network. Several projects party, with 25 seats in the 55-seat national assembly. were inaugurated in the weeks preceding the elections, São Tomé is due to have a new prime minister, with a including the construction of the country’s third secondary government due to be inaugurated on 22 November. Under school in Lobata district. new leader Jorge Bom Jesus, the main opposition party PALM OIL EXPANSION Movimento de Libertação de São Tomé e Príncipe/Partido The economy is set to grow based on new infrastructure Social Democrata (MLSTP/PSD) increased its haul from 16 to projects financed by foreign donors, including an airport 23. The coalition established by the Partido de Convergência Democrática (PCD) and the two-party expansion, road construction and repair, and the rehabilitation of the outdated alliance União Movimento Democrático electricity supply system. Production Força de Mudança - União Democrática Population: 0.2 million para Cidadania e Desenvolvimento of cocoa, by far the country’s most imPopulation growth: 2.2% (UniãoMDFM-UDD)obtainedfiveseats. portant agricultural export product, GDP per capita: $2,069 The Movimento Cidadão Independentes has stagnated at between 3,000tn and Life expectancy: 66.8 de São Tomé e Príncipe, founded recent3,500tn in recent years and is unlikely Adult literacy: 90.1% ly by two wealthy businessmen who to increase much in the near future. Inflation: 6.8% abandoned the MLSTP/PSD in May Palm oil exports are set to grow thanks Human development index to Belgian-owned Agripalma. In August 2018, took two seats. (out of 188 countries): 144 2018, the firm started the construction Foreign direct investment: $41m FAILED PROMISES of a $40m palm oil processing plant in Current account as % of GDP: -7% After the elections Jesus said he would Ribeira Peixe. The plant, with an antake the premiership, counting on an nual production capacity of 12,000tn, Mobile phone subscription: 85% absolute majority of 28 seats, including is expected to export 80% of its output. Key export: Cocoa beans five seats from the PCD-MDFM-UDD Tourism is another of São Tomé’s Last change of leader: 2016 coalition. Trovoada said his party might economic engines. Thanks to improved GDP growth (%) try to form a minority government. His air connections and a visa waiver for 4.5 4.2 European Union and US citizens, the electoral losses were largely attributed to 4 3.9 his autocratic style, but also to Jesus’s imarrival of foreign tourists increased age of credibility and competence. Jesus from 21,161 in 2015 to 28,948 in 2017. GDP ($bn) says his policies will focus on youth and According to the International Monetary 0.5 0.5 fighting poverty and unemployment. Fund, in that year, tourism generated 0.4 0.4 The Trovoada government largely revenue of $73.7m or 19.7% of gross failed to fulfil the promises it made domestic product. 2016 2017 2018* 2019* in 2014, including the construction Due to new investments by foreign oil companies, especially the US-based of an $800m deep-sea transshipment Kosmos Energy, the prospects of the container port in Fernão Dias and the Exclusive Economic Zone (EEZ) have become much better reduction of poverty and unemployment levels. In 2015, than those of the moribund Joint Development Zone with the government switched allegiance from Taipei to Beijing. Nigeria. Eight of 19 EEZ blocks are owned by foreign oil It then signed an agreement for the construction of the port companies, with Kosmos a stakeholder in six blocks. Another with China Harbour Engineering. The project has since two EEZ blocks, for which a restricted licensing round was disappeared from the government agenda because funding launched in May 2018, will be awarded soon. has not materialised. Meanwhile, the Trovoada government THE AFRICA REPORT
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170 PEOPLE TO WATCH 172 BENIN 173 BURKINA FASO 174 CABO VERDE 175 CÔTE D’IVOIRE 177 GAMBIA 178 GHANA 180 GUINEA 181 GUINEABISSAU 182 LIBERIA 183 MALI
ALGERIA
MAURITANIA
MALI NIGER
Timbuktu DAKAR
Gao
SENEGAL
BANJUL
Mopti
GAMBIA
BAMAKO
GUINEABISSAU
BISSAU
CONAKRY FREETOWN
NIAMEY
Zinder
OUAGADOUGOU Maiduguri
BURKINA FASO
GUINEA
BENIN CÔTE D'IVOIRE
SIERRA LEONE
MONROVIA
TOGO
YAMOUSSOUKRO
LIBERIA
NIGERIA
GHANA
ABUJA
PORTOLOMÉ NOVO
ACCRA
Port Harcourt
Abidjan
PRAIA
CAMEROON
300 km
CABO VERDE
Atlantic Ocean
200
WEST AFRICA POPULATION (millions) 387.5
2019
512.4
2030
Number of observers ECOWAS will send to support Nigeria’s independent electoral commission in the 2019 general election
2050
800.7
WEST AFRICA 2018 GDP (% of regional total) Togo 4.0% Sierra Leone 0.6% Senegal 0.9%
TOTAL
$600bn
Nigeria
66.3%
1.8% Benin 2.4% Burkina Faso 0.3% Cabo Verde 7.7% Côte d’Ivoire 0.3% Gambia 8.6% Ghana 1.9% Guinea 0.3% Guinea-Bissau 0.5% Liberia 2.9% Mali 1.6% Niger
SOURCE: UN WORLD POPULATION DIVISION (THE 2018 REVISION)
CONTENTS
LIBYA
SOURCE: GDP CURRENT PRICES – IMF WORLD ECONOMIC OUTLOOK DATABASE, OCTOBER 2018
West Africa
169
184 NIGER 185 NIGERIA
FEBRUARY
FEBRUARY
APRIL
MAY
187 SENEGAL
NIGERIA Presidential election
SENEGAL Presidential election
CÔTE D’IVOIRE Mo Ibrahim Annual Governance Weekend
GUINEA-BISSAU Presidential election
188 SIERRA LEONE 189 TOGO
170 COUNTRY PROFILES
WEST AFRICA
CÔTE D’IVOIRE MALI
Simone Gbagbo
Kamissa Camara
COURTESY OF MR. EAZI/@MREAZI
ISSOUF SANOGO/AFP
“We are going. We are going, and we are not going to stop,” intoned former first lady Simone Gbagbo when she was freed from prison based on a presidential amnesty in August. Many say that she could be the candidate of the opposition Front Populaire Ivoirien (FPI) in the next elections in 2020. A stronger FPI will complicate calculations about who will replace President Alassane Ouattara when his second term ends. Simone’s husband, former president Laurent Gbagbo, is still detained in The Hague. However, his popularity in Côte d’Ivoire is rising now that there is talk that he could be freed.
NIGERIA
Mr Eazi aka Mr Popular
/JA
In a few years, Mr Eazi (born Oluwatosin Oluwole Ajibade) has carved out a space for himself in the crowded Nigerian pop scene. Known for his catchy hits like ‘Leg Over’ and ‘Pour Me Water’, Mr Eazi is as interested in the music as he is the music business, having signed with Universal Africa, a subsidiary of the US-based Universal Music, in July 2018. As a student in Ghana he set up several businesses before making it big. Now guest spots on songs such as Major Lazer's ‘Let Me Live’ are giving him more exposure in markets outside of the continent, and he is touring Europe and North America to build up his fan base.
FOURNIER
The 35-year-old MalianFrench-American became Mali’s foreign affairs minister under the new government of President Ibrahim Boubacar Keïta. Kamissa Camara is the youngest and first female foreign minister in Mali’s history, the star of the government’s new focus on promoting a new generation of leaders. She is known for speaking up when she thinks something is wrong, and has been critical of the government’s policies. A political analyst previously based in the US, Camara is now crisscrossing the globe to get support for the G5 Sahel peacekeeping force. She is pushing for a multidisciplinary approach to the crisis in northern Mali that uses political, military and development tools.
Fiery former first lady
VINCENT
Rising star of Malian diplomacy
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171
SENEGAL
Moustapha Cisse
AANDSTORY
Robot dreams
GHANA
ALL RIGHTS RESERVED
Ernest Addison Front and central Ghana’s central bank governor will continue to be in the headlines in 2019 for shaking up the banking industry in the footsteps of former Nigerian central banker Sanusi Lamido Sanusi. With Ernest Addison’s institution raising minimal capital requirements in 2018 to push banks to raise funds, or merge to form bigger banks that can lend more, he has been a calm hand as several banks collapsed due to mismanagement. The central bank has withdrawn the licences of seven local banks and merged five of them into the Consolidated Bank Ghana.
The sort of brainy star that generations of African nerds look up to, Senegal’s Moustapha Cisse is now managing Google’s Artificial Intelligence (AI) Research Lab in Ghana. He has his fingers in many cuttingedge pies, having launched a master’s programme in machine intelligence at the African Institute for Mathematical Sciences in July, arguing recently in an op-ed that “fewer African AI researchers and engineers means fewer opportunities to use AI to improve the lives of Africans”. He hopes countries on the continent can leapfrog a stage of development, like they did with mobile phones.
NIGERIA
Peter Obi Reformist running mate
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The vice-presidential candidate on the opposition People’s Democratic Party ticket for February 2019’s elections, former Anambra State governor Peter Obi has boosted presidential candidate Atiku Abubakar’s hopes of victory. While many of Nigeria’s governors leave their states poorer after pilfering their coffers, Obi left office in 2014 with the state’s finances in better shape than when he found them. Obi will bring Atiku votes from the south-east and strengthens the team’s reformist credentials. On the campaign trail, Obi is championing issues like education, where the current government has performed poorly.
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172 COUNTRY PROFILES
WEST AFRICA BURKINA FASO
BENIN
Benin
Parakou TOGO
The big clean-up
NIGERIA
GHANA PORTO NOVO
Legislative elections in 2019 will determine if Talon can change the constitution Cotton and the transshipment trade for Nigeria are boosting the economy
150 km
Cotonou Gulf of Guinea
T
*Estimation October 2018
he economy is humming along thanks to the end minister in the presidency Pascal Irenée Koupaki. Other of the recession in neighbouring Nigeria. President important Talon supporters include former national assembly Patrice Talon is pushing through more reforms presidents Bruno Amoussou and Antoine Kolawolé Idji. to raise revenue in the hopes of winning enough Former Deloitte official and current finance minister Romuald Wadagni is Talon’s point man on the economy. legislative seats in 2019 to begin streamlining the government’s institutions. Fending off charges that his anti-corruption drive Talon is facing continued opposition from civil society groups is biased, and keeping the business community on his side, andsomebusinessleaders.Hisgovernmenthasbeenincreasing the levels of a variety of taxes. In the face of protests about are two big challenges for the year ahead. announced new levies on communications, the government Legislative elections in March will be a crucial test of Talon’s popularity. The lack of a sufficient majority scuppered his relented and two telecoms operators scrapped announced constitutional reforms in April 2017 and tariff rises in September 2018. July 2018, so he is looking to increase the Strong agricultural growth and the number of his allies – who are in a loose bouncing back of Nigeria’s economy Population: 11.5 million coalition – from the current 60 parlia– trade with the West African giant acPopulation growth: 2.7% counts for about 20% of gross domestic mentarians out of the body’s 83 seats. GDP per capita: $923 product – are driving Benin’s strong Talon is also looking to build a strong Life expectancy: 61.2 growth. For the 2018/2019 cotton seamandate for this presidential term, which Adult literacy: 32.9% comes to an end in April 2021. He will son, the government raised its target Inflation: 2.3% be facing an opposition led by former to 750,000-800,000tn, up from a record Human development index of 597,986tn in 2017/2018. The strong president Thomas Boni Yayi and his (out of 188 countries): 161 results are due to reforms of the sector, Forces Cauris pour un Bénin Emergent, Foreign direct investment: $184m an increase in the territory where cotton and employers’ union boss Sébastien Current account as % of GDP: -10.6% is planted and a 4.6% rise in yields per Ajavon, who was found guilty in absenhectare on the previous season. tia of drug trafficking in October and is Mobile phone subscription: 79% currently based in France. The 2019 vote Key export: Cotton INFRASTRUCTURE PUSH will be the first under a new electoral law Last change of leader: 2016 passed in September 2018 that vastly The government is spending most of GDP growth (%) raises the financial deposit required to its investment budget on infrastruc6.3 6 5.6 run for office. The law also means that ture, agriculture, electricity, health, 4 parties must receive at least 15% of the education and tourism. On the infranational vote in order to win seats in structure front, major projects include parliament, which is forcing more parties a new road around northern Cotonou, GDP ($bn) to work together rather than go it alone. a new airport at Glo-Djigbé, expansion 11.4 10.5 9.2 8.6 of the Cotonou port, and rehabilitation EXPECT MORE ARRESTS works on major urban roads across the 2016 2017 2018* 2019* country. One problematic project is The president is making anti-corruption drives and the fight against impunity a the planned Benin-Niger railway. After disputes with local company Petrolin centrepiece of his policies, and 2019 and France’s Bolloré, Talon’s government now wants to hand is likely to bring more announcements. In September, the the project over to China, arguing that it is only feasible with national assembly voted to lift the immunity of half a dozen concessional rather than commercial finance. opposition parliamentarians, all of whom were high-ranking government officials under former president Boni Yayi. The The electricity sector is getting a couple of big boosts. A opposition says that the government is selectively choosing thermal power plant at Maria Gléta, backed by the West its cases with the goal of scoring political points. Officials African Development Bank and other financiers, is due to begin producing 120MW in early 2019. Money from the United targeted include former justice minister Valentin Djènontin States’ Millennium Challenge Corporation is going to the Agossou and former interior minister Simplice Codjo. construction of 45MW of solar power plants. The government’s Talon’s political allies include some of Boni Yayi’s former goal is to raise national production to 500MW by 2021. officials, like planning minister Abdoulaye Bio Tchané and THE AFRICA REPORT
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WEST AFRICA
COUNTRY 173 PROFILES
MALI NIGER
Burkina Faso
OUAGADOUGOU
Roch’s mountain to climb
B U R K I N A FA S O Bobo-Dioulasso GHANA
The government is scrambling for a response to worsening insecurity in the Sahel Trading Taiwan for China should reel in big projects to benefit the economy
CÔTE D'IVOIRE
W
BENIN TOGO 100 km
*Estimation October 2018
ith just two years of his term left, President members of the Kaboré regime argue that others have been Roch Christian Kaboré still has a mountain of launched by Compaoré sympathisers. The government signed military cooperation deals with Russia and China in 2018 to electoral promises to climb before presidential elections in 2020. The pace of change since help it address the terrorist threat in the Sahel. There have been the overthrow of Blaise Compaoré in 2014 continues to be many attacks in northern Burkina Faso, and the government is continuing with its 455bn CFA francs investment programme slow – the transitional justice programme, for example, has in the north to deal with the underlying socio-economic stalled because of the lack of resources – and insecurity has problems that contribute to the recent criminality. worsened. The government has made progress on issues The Ouagadougou government relies like free healthcare, education, access on other allies in the fight against terto water and building social housing, rorism. French forces responded to an but not enough to satisfy unions, civil Population: 19.8 million attack on a gold mine in October with society and the opposition. The year Population growth: 2.9% a drone strike. The French embassy ahead will start off with the launch of GDP per capita: $734 in Ouagadougou was the target of a a reform of civil service salaries. The Life expectancy: 60.8 terrorist attack in March 2018. government says that the majority of Adult literacy: 34.6% pay packets will increase. Inflation: 2% GOODBYE, TAIPEI! There are three opposition groups Human development index Meanwhile, the economy is growing squaring off against the Kaboré team. (out of 188 countries): 182 strongly and debt levels remain relatively Zéphirin Diabré is the leader of the Foreign direct investment: $486m low. The government, which switched opposition and the Union pour le Current account as % of GDP: -8.6% its allegiance from Taiwan to China in Progrès et le Changement (UPC). The Mobile phone subscription: 94% May 2018, hopes that Chinese investwo other major parties are the former tors will set up projects in sectors such ruling Congrès pour la Démocratie Key export: Gold cotton, roads and electricity to help to et le Progrès (CDP) and the Alliance Last change of leader: 2015 transform the economy. China Harbour pour la Démocratie et la Fédération/ GDP growth (%) Engineering won the contract to build Rassemblement Démocratique Africain. 6.4 5.9 6 5.9 the Ouagadougou-Bobo-Dioulasso But the UPC has been weakened since 13 parliamentarians split off to work with highway. Chinese investors are also said the governing Mouvement du Peuple to be interested in the manganese mine GDP ($bn) at Tambao in northern Burkina Faso, pour le Progrès (MPP). but it is currently the subject of an arbi15.4 14.3 CONSTITUTIONAL TEST tration proceeding at the International 12.6 11.3 Chamber of Commerce in Paris. The CDPis gaining strength, andanalysts 2016 2017 2018* 2019* are predicting a two-horse race between The mining sector is abuzz with acthe MPP and CDP in the upcoming tivity. Three new gold mines are due election. The opposition is organising to begin operations soon: SEMAFO’s regular protests against the government’s economic strategy, Boungou mine, Teranga Gold’s Niankorodougou deposit rising levels of crime, the high cost of living, corruption and and the Endeavour Mining’s Bouéré deposit. They are due unemployment. The level of opposition support will be tested to help national gold production jump from a predicted 45tn in 2018 to 50tn in 2019. Cotton is the country’s second most in early 2019 when the country will vote on a new constitution that the MPP is backing. The proposed changes, which are important export, and the government has set a target for the 2018/2019 season of 836,000tn. There are worries that some likely to pass, include creating a semi-presidential system farmers have switched crops, and the risk that rains may not of government and setting up term limits for presidents and fall when needed, so the goal will be difficult to achieve. members of parliament. The government’s budget is expanding due to the demands ThecountryisduetohostthefiftiethanniversaryoftheFespaco of social spending, investment and addressing insecurity. film festival in 2019, but that is unlikely to improve the country’s Terrorist groups – some linked to Al Qaeda and others to Islamic tourismprospects.Westerngovernmentshavebeenissuingnew State – have claimed responsibility for some attacks, but certain warningsabouttraveltothecountryinthelightofrecentattacks. THE AFRICA REPORT
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174 COUNTRY PROFILES
WEST AFRICA CABO VERDE WI
Cabo Verde
ND
WA
ISLES
Atlantic Ocean
Slow going on the reform agenda LE
Delays in the privatisation of the state airline are symptomatic of wider difficulties Tourism is back to booming, with new investments in Praia and São Vicente
RD
A EW
RD
ISLES PRAÏA
50 km
T
*Estimation October 2018
he governing Movimento para a Democracia (MpD) late 2018 when two members of parliament broke ranks to – which took power in 2016 – is looking to put its vote for an MpD bill on decentralisation, allowing it to pass, recent difficulties behind it in 2019 so that it can and for the MpD to make good on one of its main campaign promises. Candidates to lead the PAICV are expected to begin address the country’s economic challenges. Prime announcing their intentions to run for the party leadership Minister Ulisses Correia e Silva spent much of 2018 on the ahead of local elections in 2020 and legislative polls in 2021. back foot fighting crises ranging from a ministerial scandal The government’s decentralisation programme is based to criticism from the US government about press freedom. Policies to address long-standing problems have been strugon the creation of 10 regions: one for each inhabited isgling to get off the ground. Inter-island transport is an obstacle land, but two for Santiago, the most populated one. This to development, and the government tender for an inter-iswill create an additional level of government between the land shipping network was postponed central government and the country’s several times before Portugal-based municipalities. The MpD argues that Transinsular – Transportes Marítimos this will help to address the country’s Population: 0.6 million Insulares won the contract in October. uneven development, but detractors Population growth: 1.3% As for the long-suffering flag carrier say that without the redistribution of GDP per capita: $3,622 TACV – now called Cabo Verde Airlines – resources, the new governments will Life expectancy: 73 it is still being prepared for privatisanot be able to change much. Adult literacy: 86.8% tion. Its troubles reached new heights Inflation: 1% CHINESE VISITORS WELCOME in July when it stranded thousands of Human development index Another issue that the MpD and PAICV passengers for weeks because it was (out of 188 countries): 124 will continue arguing about in 2019 temporarily without any viable planes. Foreign direct investment: $109m is the status of forces agreement with In September, the government finally Current account as % of GDP: -9.1% announced that Icelandair will come in the US, signed by President Fonseca in as its strategic partner, which will take September 2018. The MpD says the deal Mobile phone subscription: 112% will help to improve security and fight 51% of the recently renamed airline. Key export: Fish drug trafficking, but the PAICV insists Last change of leader: 2011 UTILITY STAKES SELL-OFF that it is unconstitutional. GDP growth (%) The MpD government has a little more Tourism is a primary driver of the 4.7 than a year to make a big impact on economy, and the sector continues 4.3 issues like reforming public finances, to grow. An estimated 716,000 people 4 4 visited the country in 2017, 11.2% more improving transportation, launching GDP ($bn) than in 2016. The IMF predicts douprivatisations and boosting the economy before a new cycle of elections starts. It ble-digit growth for the tourism industry 2.1 2 1.8 is also due to sell off stakes in electricity in 2018. The biggest ongoing investment 1.7 utility Electra and the country’s airports. in this sector is in Praia, where Chinese 2016 2017 2018* 2019* The government has been reducing businessman David Chow is building a hotel and casino. Great Britain sends the budget deficit, and, for the first time the most tourists to Cabo Verde, and in 10 years, public debt declined in 2017 to 126.5% of gross domestic product – compared with 130.1% an uptick in arrivals from China could be a boon. A cruise in 2016. The International Monetary Fund (IMF) insists that terminal on the island of São Vicente is another planned debt remains one of the country’s biggest challenges. investment of which there is likely to be more news in 2019. The opposition – including the largely ceremonial presiThe agriculture and fisheries sectors require more investment if they are going to help the country to diversify its dent, Jorge Carlos Fonseca, an MpD politician – has plenty productive base. The government’s five-year development of criticism for the government, but so far has not been able to profit from it. Janira Hopffer Almada, the youthful plans call for the agriculture sector to supply more of the tourism industry so as to reduce the country’s imports. Cabo leader of the Partido Africano da Independência de Cabo Verde imports more than three-quarters of its food, and much Verde (PAICV), announced in October 2018 that she would of the country’s agriculture is rain-fed and for subsistence. not run to continue leading the party. She faced a crisis in THE AFRICA REPORT
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WEST AFRICA
COUNTRY 175 PROFILES
200 km MALI
GUINEA
Last years for legacy building
CÔTE D'IVOIRE Bouaké YAMOUSSOUKRO
LIBERIA
All eyes are now on the 2020 presidential election to replace Ouattara The economy is growing, but reforms are needed to raise government revenue
GHANA
Côte d’Ivoire
BURKINA FASO
Abidjan Gulf of Guinea
P
*Estimation October 2018
resident Alassane Ouattara will continue to oversee A second container terminal at the port of Abidjan, which one of Africa’s fastest-growing economies in 2019, is being built by Bolloré and Maersk’s APM Terminals for driven by investment in infrastructure and the growth $470m, is due to be completed by mid-2020. A new terminal of urban middle classes. But as the 2020 presidential and an extension are also planned at San-Pédro’s harbour. election approaches, divisions between the former allies of In the power sector, works on a 112MW dam in the west the governing coalition will exacerbate amid a reshuffling of of the country, near the newly built dam of Soubré, started the political landscape. in 2018. China’s Sinohydro oversees construction, and two Despite a positive medium-term outlook, growth is slowing other dams might soon follow. Plans are also underway to down compared to the near double-digit figures seen in the expand two thermal plants in Abidjan. aftermath of a decade-long political crisis that ended in 2011. The government wants to bring its installed power capacity to 4,000MW by 2020, up from 2,200MW currently. It plans to Still, the economy has proven its resilience, managing to keep growth at a high level despite a sharp invest $20bn in the energy sector in the next 10 years to meet a rising domesdrop in cocoa prices in the 2016/2017 tic demand for power, electrify more season and unexpected expenditures Population: 24.9 million after the government conceded to paylocalities and consolidate its position Population growth: 2.5% ment demands from soldiers, who led as a regional exporter. GDP per capita: $1,791 a wave of mutinies, and civil servants Life expectancy: 54.1 MINING, CROP BOOMS who staged a general strike. Adult literacy: 43.9% Côte d’Ivoire also wants to increase its The shocks did not deter the conInflation: 1.7% power production to sustain its longfidence of investors, who subscribed Human development index term mining ambitions, targeting gold, massively to two eurobond sales – in (out of 188 countries): 169 nickel, bauxite and iron ore. Agriculture dollars and euros – in 2017 and 2018. Foreign direct investment: $675m traditionally dominates the economy, The issuances, which some critics say Current account as % of GDP: -4.6% and mining is growing rapidly: gold are dangerously increasing the public Mobile phone subscription: 131% production rose 2% in 2017 to 25.4tn; debt, have funded the government’s manganeseoutputmorethandoubledto budget which is also benefiting from Key export: Cocoa beans 510,000tn; and nickel production, which increased tax collection following a Last change of leader: 2010 started in 2017, reached 379,766tn. rise in duties in the cocoa and oil and GDP growth (%) While the government is granting a gas sectors. 8.3 7.8 7.4 large number of offshore exploration 7 EASING CONGESTION licences, crude oil output is declining, The government collected 1.1trn averaging 34,000 barrels per day in 2017 GDP ($bn) compared to 42,000 in 2016. Gas proCFA francs ($1.9bn) in taxes in the duction more than doubled, however, first half of 2018, up 4% from a year 49.4 45.9 40.5 36.4 earlier, and wants to bring tax revenue reaching 216m cubic feet per day in to 20% of gross domestic product, up 2017, up from 100m in 2016. 2016 2017 2018* 2019* from 15.9% currently. Raising domestic The production of cash crops is rising revenue is necessary if the country as well. Output of cashews is expected to wants to maintain a growth of 7% in reach 770,000tn in 2018, from 673,236tn in 2017; exports of rubber rose 20% in the first seven months the medium-term, the International Monetary Fund says. of 2018 to 388,244tn; cotton production jumped 29% in the The continued focus on infrastructure projects will sustain growth in 2019. Construction started in 2018 on a new bridge 2017/2018 harvest to 421,646tn; and the tonnage of coffee spanning Abidjan’s lagoon. It will cost $191m and is being sent to ports from January to July 2018 doubled. built by China State Construction Engineering Corporation In the highly strategic cocoa sector, the price slump has been to ease the rising traffic congestion in the city of 6 million compensated by a record harvest of about 2m tonnes in the inhabitants. Two other bridges and four interchanges are 2016/2017 season, reinforcing Côte d’Ivoire’s position as the world’s largest grower. Production will probably reach a similar planned, while Alstom and Bouygues are set to build a level in the 2017/2018 and 2018/2019 harvests. Still, after the $1.6bn commuter train network. THE AFRICA REPORT
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176 COUNTRY PROFILES
WEST AFRICA
Côte d’Ivoire Last years for legacy building
SOURCE:WORLD BANK
GDP per price crisis forced the government to Poverty Houphouëtistes pour la Démocratie et la POVERTY capita cut the farmers’ minimum price, Côte rate (%) Paix(RHDP),collapsedin2018overplans HEADCOUNT RATE (thousand) (2002-2015) d’Ivoire is making plans with neighbour- 90 to turn the alliance intoa single party. The 4 coalition’s two main parties, Ouattara’s ing Ghana, the second-largest producer, 80 3.5 GDP per capita (US$2011 PPP) Rassemblement des Républicains (RDR) to coordinate production and marketing 70 3 strategies – a sort of OPEC of cocoa – to 60 and ex-president Henri Konan Bédié’s 2.5 exert more influence on market prices 50 Parti Démocratique de Côte d’Ivoire 2 40 (PDCI),felloutoverOuattara’ssuccession. set in London and New York. 1.5 Ouattara was vague about whether he The economic outlook is relatively 30 1 would run again but confirmed he will bright, but President Ouattara faces a 20 International Poverty Line 0.5 number of challenges. His popularity has 10 step down in 2020. The prime minister, 0 0 been undermined in the last few years Amadou Gon Coulibaly, appears to be 2002 2004 2006 2008 2010 2012 2014 by corruption scandals and the increasOuattara’s preferred successor. ingly obvious grip of his allies from the The PDCI, after backing Ouattara northern regions on the administration in the 2010 election runoff and again and some lucrative businesses. in 2015, argues the next candidate People are saying that growth is not should come from its ranks. In August, Planned investment in the trickling down. The eviction of thousands the PDCI withdrew from the RHDP, energy sector in the next of people from makeshift settlements but internal divisions undermine the decade to meet demand in central Abidjan, whose homes are party as some of its members, who still sometimes replaced by luxury real estate, support the unification project, remain in the government. To increase confusion, Bédié initiated a has fuelled an impression that the government is more focused on the rich. However, Côte d’Ivoire is the only country to rapprochement with the opposition Front Populaire Ivoirien improve in all 14 subcategories of the Ibrahim Index of African (FPI) of ex-president Laurent Gbagbo. Bédié, 84, is said to be Governance over the past five years. considering a run for the presidency. The party of the former leader, detained in The Hague since BROKEN ALLIANCES 2012 for crimes against humanity, is still profoundly divided Recently, there has only been a modest decline in poverty, between the Gbagbo-or-no-one line and the more moderate while other human development indicators have been slow to strategy of Pascal Affi N’Guessan. Gbagbo’s wife Simone, who improve. In response to that, the government is now piloting used to run the party, was released from detention in August. a universal healthcare scheme. Some observers see Ouattara’s granting of amnesty – she was convictedto20yearsofprisonin2015forherroleduringthe2011 In this context, and less than two years before the next violence – as a way to appease political tensions,but others argue presidential election, the political landscape is going through it was calculated to destabilise the FPI. Meanwhile, former rebel a major transition, making many worried about renewed leader Guillaume Soro, now speaker of the national assembly, tensions and violence during the next polls. The coalition announced in July he might consider running in 2020. that ruled the country since 2011, the Rassemblement des
$20bn
Coming down from a chocolate high PRICE STABILITY REMAINS a critical challenge for the country’s cocoa sector, from its farmers to its exporters. Once Côte d’Ivoire’s second-largest exporter, local group Saf Cacao was placed under liquidation in July 2018 by an Ivorian court. The company, founded by three Ivorian-Lebanese businessmen and based in the western port city
of San-Pédro, owed several Ivorian banks – including subsidiaries of Société Générale, BNP Paribas and Ecobank – as much as 150bn CFA francs ($269m). Saf Cacao’s demise occurred after the group defaulted on cocoa contracts following the slump in prices in the 2016/2017 season. Like many other local exporters, Saf Cacao speculated on
rising prices and found itself unable to fulfil contracts – for some 22,400tn – when prices dropped by 40% in 2016 due to bumper West African crops. The group was also severely hurt by the bankruptcy of one of its main clients, the American company Transmar. Saf Cacao’s liquidation, as well as additional outstanding loans from other defaulting THE AFRICA REPORT
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exporters, may destabilise Côte d’Ivoire’s banking system and discourage lenders from getting involved in the funding of the cocoa sector. It is also a major blow to the government’s efforts, over the past few years, to empower local cocoa companies in a highly strategic sector, which is dominated by multinational companies. •
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WEST AFRICA
Gambia
After the honeymoon
COUNTRY 177 PROFILES
SENEGAL
Atlantic Ocean
GAMBIA BANJUL SENEGAL
The united front that brought President Barrow into power is now crumbling China is financing new infrastructure ahead of the OIC’s Islamic Summit in 2019
50 km
P
*Estimation October 2018
resident Adama Barrow will celebrate two years in Security remains a crucial challenge because many soldiers remain loyal to former president Jammeh. The Economic office on 18 February but under growing clouds. They includeafracturinggoverningalliance,aslow-growing Community of West African States maintains a peacekeeping force known as ECOMIG. It is expected to remain in the economy and the heavy expectations that the country would change rapidly after the downfall of dictator Yahya country for a long time so that reforms of the security services Jammeh. He will be focusing much of 2019 on transitional can be implemented. The government plans to downsize the military and transition former soldiers into new jobs. justice and rolling out the initiatives in his ambitious 2018On the diplomatic front, relations been Gambia and Senegal 2021 National Development Plan (NDP), which includes continue to be excellent. Cooperation between Dakar and decentralisation, revolutionising agriculture and boosting the tourism sector. A big summit on the Banjul can be seen in the tamping down NDP in Brussels in May resulted in aid of tensions in the Senegalese secessionist area of Casamance and in joint and loan commitments totalling $1.5bn Population: 2.2 million of its $2.3bn estimated costs. electricity projects. Gambia rejoined Population growth: 3% Gone are the days of a bureaucracy both the Commonwealth and the GDP per capita: $740 and army bending to Jammeh’s will, but International Criminal Court in 2018. Life expectancy: 61.4 people are expressing anger at the slow Adult literacy: 42% TOURISM AND TRADE pace of change. Barrow’s government Inflation: 6.2% The International Monetary Fund preblames its predecessor for many of its Human development index current difficulties, as the departing addicts that the economy will continue to (out of 188 countries): 173 grow at about 5% per year for the next ministration left empty coffers and gross Foreign direct investment: $87m human rights abuses in its wake. The few years. Aid is flowing in, but poor Current account as % of GDP: -12.5% government has now launched a conrains in 2018 have cast doubts about Mobile phone subscription: ND harvests in the crucial agriculture sector. stitutional review and appointed comInvestment is starting to grow in the missioners to the Truth, Reconciliation Key export: Fabric and Reparations Commission. Criminal agribusiness sector and local firm GACH Last change of leader: 2017 justice and media law reforms, and the Group launched Gambia’s first tomato GDP growth (%) processing plant in August. setting up of a human rights commission, 5.4 5.4 4.6 are all on the agenda for 2019. With additional money to host the Organisation of Islamic Cooperation 0.4 BARROW DIGS IN (OIC) summit in 2019, the government But Barrow’s room for manoeuvre is is overseeing the building of new inGDP ($bn) frastructure. Barrow ended Gambia’s shrinking because he is falling out with 1.7 1.6 1.5 1.4 the coalition partners who helped to recognition of the government of Taiwan get him elected. One conflict relates to in 2018, and Beijing is financing the con2016 2017 2018* 2019* struction of a $50m conference centre an agreement before the election that that will host the OIC meeting. Banjul whoever won would only serve three and its surroundings will get 100km of years as a transitional period and then step down. Barrow now says that he will serve a full five years new roads, and the construction of a bridge to link Banjul and plans to run again in 2021. He sacked several former allies, with northern Gambia is due to start in the year ahead. including People’s Progressive Party leader Omar Jallow, in Tourism is a key sector that generates a lot of foreign a major June 2018 cabinet reshuffle. exchange. Plans have been announced for the construction Barrow is working on consolidating power, and now counts of at least ten new hotels over the next three years and the former regime cadres like Jammeh’s information minister expansion of Banjul’s international airport. In 2019, the Seedy Njie among his allies. Barrow’s relationship with his government will be rolling out a new security tax of $20 per own party is souring over his attempts to set up a base outside passenger each international flight to and from Gambia in the United Democratic Party (UDP), including his own youth order to raise more money for defence. The World Travel and support group. Some UDP supporters are worried that he Tourism Council predicts that tourist arrivals could be close will soon break off and form his own party. to 200,000 in 2019 and double to nearly 400,000 by 2028. THE AFRICA REPORT
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178 COUNTRY PROFILES
WEST AFRICA BURKINA FASO
Tamale
Ghana
TOGO 150 km
Factories and flagship projects
GHANA Kumasi
CÔTE D'IVOIRE
ACCRA Takoradi
The government is making slow progress on its programmes The NDC will decide whether to pick Mahama to lead the 2020 vote
Gulf of Guinea
I
*Estimation October 2018
an additional 50 projects are expected to be accredited n the year ahead, President Nana Akufo-Addo is seeking to keep his political allies onside in order to help his flagship by the end of the year. programmes on industrialisation and education. The next Industrialisation relies on cheap and plentiful electricity. elections are not until 2020 and both parties could set up The government says that its predecessor signed too many a rematch of the 2016 election. Akufo-Addo campaigned expensive power purchasing agreements that the energy on a platform of turning the ailing economy around, which ministry is now trying to renegotiate. Blue Power Energy’s was suffering from weak electricity supplies, a depreciating 100MW solar power plant in northern Ghana is due to be currency and mounting debts. operational next year, and deals for Akufo-Addo, 76, is firmly in control several other power plants have been Population: 29.5 million of the government New Patriotic Party signed over the past year. (NPP) and is unlikely to face much of Population growth: 2.2% DOUBLE-TRACK EDUCATION a challenge in running to be the party’s GDP per capita: $1,787 Another flagship government propresidential candidate again in 2020. In Life expectancy: 63 raising funds, reforming taxation and gramme is free senior high school Adult literacy: 71.5% paying off debts, Akufo-Addo relies on education. The system is struggling to Inflation: 9.5% finance minister and former banker cope with the intake of new students. Human development index Ken Ofori-Atta. Industry minister Alan The government has introduced a (out of 188 countries): 140 Kyerematen – who ran against Akufodual-track system that splits a year of Foreign direct investment: $3.3bn Addo in the NPP primary and who is students into two groups that learn at Current account as % of GDP: -4.1% rumoured to have a tense relationship different parts of the year, and plans to Mobile phone subscription: 127% with him – is taking a leading role on hire many more teachers. Critics warn Key export: Gold industrialisation, while Matthew Opoku that the government has not budgeted Prempeh is responsible for education. enough resources and that spreading Last change of leader: 2017 money thinly is likely to lower the quality GDP growth (%) AN INDUSTRIAL REVOLUTION of the education system. 8.4 7.6 6.3 In the opposition, the National Chinese state-owned firm Sinohydro 3.7 Democratic Congress (NDC) is gearhas signed an agreement to provide $2bn for key infrastructure projects in the ing up for its national congress on GDP ($bn) country, with the first $500m expected 7 December, where it will vote on a flagbearer ahead of the 2020 elections. to be provided before the end of 2018. 57.2 51.8 47 42.8 After his loss in the 2016 election, forGhana is leveraging its bauxite reserves to unlock this support. The opposition mer president John Dramani Mahama 2016 2017 2018* 2019* announced in August that he will vie NDC criticised the Chinese financing for the party leadership. His most likely facility and its implications on the pubchallenger is deputy parliamentary lic debt stock. But the International speaker Alban Bagbin. With a solid group of supporters Monetary Fund, whose support programme is due to come calling for a new NDC leadership, the party has not been to an end in April 2019, indicated that the agreement did scoring many big hits on the government. not qualify as a loan. When Akufo-Addo came into power in 2016, he promised Akufo-Addo is touting the idea of ‘Ghana Beyond Aid’. an economic transformation spurred by an industrial revoluEarlier this year he announced plans to no longer rely tion that would cut across all 10 regions of the country. This on donor aid. But in the absence of a coherent strategy, industrial revolution is to be based on the One District, One there remains some uncertainty as to the implications on Factory policy. The economy is growing rapidly thanks to oil programmes and government financing. and gas projects, but almost two years on, the industrialisation Finance minister Ofori-Atta is working on a plan to issue policy has been slow out of the starting blocks. up to $50bn in century bonds to raise needed finance to As The Africa Report went to press, only 18 factories support investment in infrastructure, and to, in the short had obtained the go-ahead to commence operations term, provide some cushion for the cedi, which lost about 7.3% of its value in US dollar terms over the first nine months across Ghana’s 216 districts. The government says that THE AFRICA REPORT
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WEST AFRICA
COUNTRY 179 PROFILES
24.6%
SOURCE: GHANA DEMOGRAPHIC AND HEALTH SURVEY 2014
of 2018. But interest rates are rising in months, the central bank withdrew the CHILDREN AGED 6-14 the US, which tends to lower investor licences of seven local banks and merged WHO HAVE GONE TO SCHOOL (%) five of them into the Consolidated Bank interest in emerging markets. Ghana Without preschool With preschool Western Ghana. The shareholders of uniBank, the has never raised so much money on Central largest of the five consolidated banks, international markets, and analysts are Accra pessimistic about the idea. are fighting the central bank’s decisions Volta in court, and its case is likely to spill Reliable electricity supplies and oil Eastern and gas projects are driving the country’s over into 2019. Meanwhile, central bank Ashanti strong economic growth. The govern- Brong Ahafo governor Ernest Addison says that his Northern ment rebased its economic statistics institution also intends to clean up the Upper East in 2018, revealing that gross domestic microfinance sector, which typically Upper West product was 24.6% larger than previously serves the informal sector. 50 60 70 80 90 100 estimated. The new numbers mean that The weakening of the cedi and the the country’s tax take is much lower on a banking crisis have put pressure on per-capitabasis,andsothegovernmentis local businesses. The limited growth in expected to review taxes upward in 2019. the non-oil and labour intensive sectors One of the government’s long-term of the economy has been reflected in GDP was this much larger goals is more influence over the globconsistent job cuts by key industries: than expected after 2018 al cocoa market, and that will require media, finance, mining, transport and statistics were rebased telecommunications. In October 2018, cooperation with a neighbouring mathe government launched the Nation jor producer. Akufo-Addo and Côte Builders Corp to provide temporary employment to some hund’Ivoire’s President Alassane Ouattara signed the Abidjan dred thousand graduates and address youth unemployment. Declaration so that the two countries – which control about After the resolution in Ghana’s favour of the dispute with 60% of the world’s cocoa supply – can work together to deliver more value to farmers and protect against big price swings, Côte d’Ivoire over maritime boundaries, oil and gas activity is like the 20% drop in 2017. Ghana’s state-run Cocobod has picking up again, and the government hopes that exploration in the Volta Basin will reveal commercial quantities of oil. set a 2023 production target of 1m tonnes per annum and The government launched a bidding round for eight blocks in aimed to close the 2018 season with 850,000tn. October, and its results should be known in 2019. The country MERGERS AND ACQUISITIONS currently produces about 200,000 barrels of oil per day. Thecentralbankhasbeenencouragingmergersandacquisitions Thegovernmentcouldsoonliftitsbanonsmall-scalemining,as in the financial sector. The country’s banks have until December theinter-ministerialcommitteeonillegalminingaimstoconclude 2018 to meet new minimum capital requirements, rising in its work of reviewing and validating nearly 650 concessions to part so that banks have more to lend to the private sector. small-scale miners. With improved security, the removal of However, it will take some time for the banking sector to artisanal miners from it is Obuasi mine and a $230m tax break, recover from the recent round of bank failures. Over the past 18 Anglogold Ashanti is also working on restarting production.
Looking for big wins with anti-corruption PRESIDENT NANA AKUFO-ADDO said he would fight corruption with a new independent prosecutor, but so far there have been no big wins. Special prosecutor Martin Amidu has yet to cut his teeth on anti-corruption cases, despite there being plenty to get stuck into and having been appointed in February. Amidu complained that a lack of cooperation THE AFRICA REPORT
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from the executive arm of government was making his preliminary work difficult, and his position was finally confirmed in September as funds were allocated to his office. Analysts suspect it might take a year for him to hire and develop his own team of investigators. The deputy commissioner of the Commission on Human Rights and Administrative
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Justice, Richard Quayson, said in October that the country loses ¢13.5bn ($2.8bn) to corruption each year, so Amidu, a former attorney general under former president John Atta Mills, will have his work cut out for him. Akufo-Addo picked Amidu in part because he worked for a National Democratic Congress government. A key test of Amidu’s new
role is if he will equally pursue investigations into members of the governing New Patriotic Party. One case Amidu might investigate is the August 2018 sacking of energy minister Boakye Agyarko, said to have re-negotiated a power deal with Greek company Mytilineous that would have been unfavourable for Ghanaians.
180 COUNTRY PROFILES
WEST AFRICA SENEGAL
GUINEABISSAU
Guinea
At daggers drawn
MALI
GUINEA Kankan
CONAKRY Atlantic Ocean
SIERRA LEONE
LIBERIA
More conflict between the ruling party and opposition is likely ahead of elections Mining is booming as China activates its big infrastructure-for-mines deal
CÔTE D'IVOIRE 200 km
T
*Estimation October 2018
he year ahead is shaping up to be a tough one due and goods. The World Bank gave the government $60m in to tensions around legislative polls in 2019 and the budget support in 2018 to focus on agriculture, amongst presidentialelectionin 2020. Thegovernment and the other things, which is the economy’s other big growth centre. Some investors are holding off on making decisions until the opposition have been at daggers drawn for years, with country’s post-2020 direction becomes clearer. more than 90 people killed during protests over the past several years,accordingtostatisticsfromtheoppositionandcivilsociety groups. President Alpha Condé’s Rassemblement du Peuple de BAUXITE AND BEIJING Guinée/Arc-en-Cielcoalition(RPGArc-en-Ciel)andCellouDalein In the meantime, the mining areas in the Boké region remain the Diallo of the Union des Forces Démocratiques de Guinée (UFDG) country’s main economic engine. The Société Minière de Boké spent much of 2018 fighting over the disputed local elections, so (SMB) is ramping up production having set an export target of morethan40mtonnesofbauxitefor2019. it is unlikely that the two sides will find a SMB and its partner Winning Shipping waytomovebeyondtheirdifferenceswith high-stakes votes on the horizon. Dalein signed a $3bn deal with the government Population: 13.1 million in November for the construction of a Diallo and his allies have been organising Population growth: 2.6% new refinery and a 135km rail link. regular stay-at-home protests that shut GDP per capita: $865 downConakry.Thepotentialforviolence Protests in bauxite-producing areas Life expectancy: 60.6 is high because the country’s two parties are a regular occurrence, with comAdult literacy: 32% havestrongethnicbases–Malinkéforthe munities angry about the lack of jobs Inflation: 8.2% RPG Arc-en-Ciel and Peul for the UFDG. and environmental degradation. The Human development index The delayed legislative election, origgovernment says it is losing patience (out of 188 countries): 177 withAnglo-AustraliancompanyRioTinto inally due to take place in October 2018, Foreign direct investment: $577m and may cancel its claims to half of the could take place in early 2019. If the vote Current account as % of GDP: -21.2% is delayed any further, it could be a pretext huge Simandou iron ore deposit because to push back the 2020 presidential vote. of the lack of investment and progress. Mobile phone subscription: ND Although the constitution bars Condé The government signed a $20bn Key export: Aluminium from running again, he has not stated that frameworkdealwithChinainSeptember Last change of leader: 2010 he will step down. Potential successors 2017, so Beijing is set to be the main supGDP growth (%) are maintaining a low profile. Key Condé plier of Guinea’s infrastructure finance. 10.5 allies like defence minister Mohamed Conakry and the China Export-Import 8.2 Bank signed a deal in September for Diané, prime minister Ibrahima Kassory 5.9 5.8 Fofana and industry minister Tibou the construction of the $1.2bn 450MW GDP ($bn) Kamara are said to be amongst those Souapiti dam. The government hopes who might seek to take Condé’s place at it can end regular power cuts by 2020 12.5 11.5 10.3 the head of the RPG Arc-en-Ciel. through this and other projects. 8.7 Other infrastructure that is part of 2016 2017 2018* 2019* DEADLOCK LIKELY the Chinese deal includes the CoyahIn 2018, Condé and Diallo reached an Mamou-Dabola highway and road projects in Conakry. Guinea is supposed to agreement – without the full backing pay China back through allowing China Power Investment of their parties – about the management of the electoral commission, but it may create more problems than it solves. Corporation to build an alumina refinery and Chinalco and Their parties have sidelined Guinea’s smaller parties to each China Henan International to set up bauxite mines. take seven seats at the 17-member electoral commission, Companies from other countries are still keen on Guinea’s which makes a deadlock more likely. opportunities. In 2018, the government signed a controversial ad hoc deal with Turkish group Albayrak to manage the port The economy is growing fast, but this is almost solely based of Conakry for a 25-year period. on mining production, which does not cause wealth to trickle down to the population. The government has a programme Since October 2017, there have not been any big oil develwith the International Monetary Fund and has been raising opments. That was when France’s Total signed a deal for the petrol prices, which ordinary people feel in the cost of transport exploration of a vast deep offshore area. THE AFRICA REPORT
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WEST AFRICA
COUNTRY 181 PROFILES
SENEGAL
Guinea-Bissau
GUINEA-BISSAU BISSAU
Political stalemate
Atlantic Ocean
Rivalries within the ruling party have caused an ongoing political crisis Corruption and poor access to electricity scare off private investment
GUINEA
50 km
T
*Estimation October 2018
he solution to Guinea-Bissau’s grinding political the vote of the PRS. Losing parliamentary control is in all crisis has once again be delayed. As The Africa probability a larger worry for Vaz and his partisans than an incomplete voter registration exercise. Report went to press, there was no new date for Meanwhile, the government has not been making as much the delayed 18 November legislative elections. progress as it had planned on reforming the security sector, Parliament has been gridlocked in a dispute within the in light of the historical role of military officials in political ruling party of President José Mário Vaz for the better part instability and drug trafficking that put the country on the of the past three years. The current parliament’s mandate radar as a ‘narco-state’ several years ago. expired on 18 April 2018. In August, consensus prime minister Aristides Gomes hinted that there may be a delay and on 7 September, the electoral STEADY GROWTH Agriculture accounts for almost half of Guinea-Bissau’s gross commission announced that the November date would be domestic productand continues togrow.Cashews,thecountry’s impossible to keep, since it did not have the funds to finish principal export, brought in an estimated 195bn CFA francs the voter registration on time. In spite of there being only ($337.5m)in2017,accordingtotheAfrican 900,000 eligible voters, the poor road Development Bank (AfDB), as a result of network in most of the country makes higher prices. Cashews had produced registration a daunting logistical task. Population: 1.9 million 162bn CFA francs in revenue in 2016. The Economic Community of West Population growth: 2.4% African States (ECOWAS), the chief meThe growth in income is good news for a GDP per capita: $852 diator in the country’s political stand-off, cash-strapped government that relies on Life expectancy: 57.8 is increasingly exasperated with the slow customs receipts for an important part of Adult literacy: 45.6% pace of carrying out the political accord its revenue. A series of infrastructure proInflation: 2% jects, including Chinese-built roads and signed in Conakry in 2015, of which the Human development index holding of legislative elections is a key a long overdue rehabilitation of Bissau’s (out of 188 countries): 175 part. In February, the regional body port, are also sustaining growth. Foreign direct investment: $17m slapped sanctions on 19 politicians and These positive performances notwithCurrent account as % of GDP: -3.6% businessmen for blocking progress, a standing, the ongoing political uncerMobile phone subscription: 77% move that led to Gomes’ appointment tainty is an impediment to executing as prime minister. ECOWAS insists that structural reforms of government instiKey export: Cashew nuts tutions, the judiciary and the military, the 18 November date is non-negotiable. Last change of leader: 2014 necessary to reduce corruption and GDP growth (%) ANTI-VAZ FACTION improve the business climate. 6.3 The reason behind the delay lies With an ineffective banking system 5.9 5 within the political stand-off. Ever and a small domestic market, investment 4.5 will continue to be backed by money since the ruling Partido Africano para GDP ($bn) from the major international financial a Independência de Guiné e Cabo institutions and governments. The Verde (PAIGC) expelled 15 of its own 1.6 1.5 1.4 InternationalMonetaryFund,withwhich parliamentarians for disagreeing with 1.2 relations were restored in 2017, has expresident Vaz, Guinea-Bissau’s par2016 2017 2018* 2019* pressed broad satisfaction with progress liament has been paralysed, with the pro-Vaz section of the party holding on made under the Extended Credit Facility to 42 seats, the opposition Partido da arrangement and will make available Renovação Social (PRS) having 41 and the balance held by about $12.5m for further macroeconomic reform. The AfDB the rest of the PAIGC and a few smaller parties. Domingos and World Bank are investing in infrastructure projects. An estimated 83% of the country’s population have no access Simões Pereira is the leader of the PAIGC and its anti-Vaz toelectricity.Improvingaccesswillbeessential in ordertoattract faction. He wants to modernise the party and isolate the supporters of the late João Bernardo ‘Nino’ Vieira around Vaz. privateinvestors.Since2017aWorldBank-supportedprogramme A fresh election could upset this delicate balance, either has been in place to reform management at the grossly underby diminishing the pro-Vaz contingent or by increasing performing national electricity and water company. THE AFRICA REPORT
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182 COUNTRY PROFILES
WEST AFRICA GUINEA
SIERRA LEONE
Liberia
CÔTE D'IVOIRE
MONROVIA
Weah’s woes
Buchanan
LIBERIA
Concerns about opaque deals and Weah’s entourage have weighed him down New regulations could halt plans by agricultural firms to grow oil palm in Liberia
Atlantic Ocean 100 km
W
*Estimation October 2018
the Weah government to borrow $536m from a Singaporean ith the economy hurt by the drop in commodity prices and environmental concerns about big company to build a coastal highway in south-eastern Liberia. It agricultural projects, President George Weah will was later revealed that Weah flew on the plane of a businessman not have the resources he would like to spend who was bidding on the same road project. on the promises that swept him into power in January 2018. Lively media outlets and non-governmental organisations demanded a quick resolution to an October 2018 scandal Weah says that his focus over the next five years will be on linked to the central bank. Weah’s team claimed that some agriculture, youth and infrastructure. He launched his five-year Pro-Poor Agenda for Prosperity and Development in October $100m in freshly printed cash went missing and suggested with the goal of lifting 1 million Liberians out of poverty. Other that members of the Johnson Sirleaf administration could be to blame, but the central bank replied targets include raising electricity generation from 134MW to 270MW. But the that no such sum was missing. 2016/2017 national budget was $600.2m, Population: 4.9 million and Weah’s inaugural national budget REVISITING CONCESSION DEALS Population growth: 2.5% Growth is projected to rise modestly in is $562m, leaving him little to devote to GDP per capita: $663 2018 and 2019, but this depends on an those policies. The percentage allocated Life expectancy: 63 expansion of gold and palm oil producto education remained largely the same, Adult literacy: 42.9% tion. Output of iron ore, which fuelled while spending on defence and security Inflation: 21.3% rose significantly. Weah is making the growthbeforetheEbolaoutbreakof2014, Human development index government live more within its means, is low due in part to the fall in commodity (out of 188 countries): 180 prices. Another problem to address in having cut some agency allocations and Foreign direct investment: $248m reduced his own salary. 2019 is that the Extractive Industries Current account as % of GDP: -18.3% WeahwonthepresidencywiththesupTransparency Initiative suspended Mobile phone subscription: ND port of his vice-president, Jewel Howard Liberia in July for its failure to publish Taylor – a former wife of former president an annual report. Weah announced in Key export: Iron ore Charles Taylor, who is serving a 50-year 2018 that his government will examine all Last change of leader: 2018 jail term in The Hague for crimes against concession deals in the resources sector GDP growth (%) humanity committed in the civil war. signed by its predecessors to make sure 4.5 3 2.5 they are legal and a good deal for Liberia. -1.6 EARLY MISSTEPS Mining is set to remain a big earner of Many Taylor associates are in governforeign exchange. The IMF predicts that GDP ($bn) iron ore exports will generate $130m in ment, including Charles R.G. Bright, a export revenue in 2018 and reach $157m finance minister under Taylor who is 3.3 3.3 3.2 3.2 Weah’s top economic adviser. But Jewel’s in 2023. Meanwhile, gold is set to produce $166m in 2018 and $303m in 2023. role is a strain on Monrovia’s relationship 2016 2017 2018* 2019* with Washington – traditionally one of International support is dwindling. its most important – due to her ties to Donors have been cutting back on aid her ex-husband. since Ebola is no longer considered a Weah is benefitting from the fact that the opposition has threat. Also, the final withdrawal of United Nations peacekeepers in early 2018 has been a blow to the economy because largely been weak and divided since the late 2017 elections. the mission dealt in hard currency. After the vote, the former governing party, the Unity Party (UP), expelled former president Ellen Johnson Sirleaf – who fought Malaysia’s Sime Darby was awaiting new regulations from the palm oil industry in late 2018 before determining how to deal the expulsion in the courts – over claims that she was meddling in the elections. The UP has 20 seats in the 73-seat House of with its investment plans. It is leasing some 200,000ha but has stopped planting until an industry body determines whether Representatives, making it the biggest opposition party. Weah’s team is looking to move on from early missteps, and to implement rules about cutting down forests for plantations. local media and civil society groups are holding the government The Firestone rubber plantation will not boost the economy to account. There was a lot of criticism, including from the in the year ahead. The US tire manufacturer sacked workers International Monetary Fund (IMF), over an opaque deal for in late 2018 due to low prices for the commodity. THE AFRICA REPORT
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WEST AFRICA
COUNTRY 183 PROFILES 300 km ALGERIA
Mali
Muddling through
MALI
Atlantic Ocean
MAURITANIA SENEGAL
IBK won re-election in August, but has made little progress on security Gold and cotton are the main economic games, with production for both on the rise
Gao
BAMAKO Ségou
GUINEA
NIGER BURKINA FASO GHANA
P
BENIN
*Estimation October 2018
The opposition is going to continue to pile pressure on resident Ibrahim Boubacar Keïta (IBK) won re-election in contested 2018 polls, leaving him with the the IBK government to fight corruption. This was one of the challenges of fighting rebel groups and re-estabissues underpinning the presidential campaign of candilishing the state’s authority throughout the country, date Soumaïla Cissé of the Union pour la République et la especially in the restive north. IBK has just one presidential Démocratie, who took 32.8% in the August second round. term left to make his mark on the politico-security crisis that Despite the government creating new institutions to fight has shaken the country since 2012, as there was not much graft, there have been no high-level prosecutions. progress in his first five-year term. RECORD COTTON HARVEST Mali’ssecuritycrisishasbeenenduringbecauseitisasymptom of weak governments in the Sahel region. The government Two of Mali’s top economic performers are the cotton and gold sectors, which have been supporting strong gross domestic has the help of the G5 Sahel regional force – which includes product growth. Higher international prices and government Burkina Faso, Niger, Chad and Mauritania –, France and the United Nations (UN) MINUSMA force, but they have so far not subsidiestofarmersareboostingcottonproduction.Thecountry became the continent’s top producer beendecisiveingettingtheMalianarmed forces into shape. The government warns when it harvested about 725,000tn in the that the G5 does not have the mandate or 2017/2018 season, which was a record for Population: 19.1 million the country. The government is predictthe finances to respond to all the threats; Population growth: 3% ing that national production will reach critics of the foreign intervention say that GDP per capita: $892 ithashelpedtoradicaliseterroristgroups; 750,000tn in the 2018/2019 season. Other Life expectancy: 58.5 and MINUSMA holds the record for the agriculture has alsobeen performingwell Adult literacy: 33.1% UN peacekeeping mission that has lost due to good rains. In 2018, rice and maize Inflation: 2.5% productionroserapidly,withoverallgrain the highest number of members. Human development index productiononcoursetohit10.7mtonnes, (out of 188 countries): 181 THE COST OF INSTABILITY up 12% from the previous season. Foreign direct investment: $266m The government is privileging a largely On the mining front, the government Current account as % of GDP: -7.2% said it expects a more than 20% jump military response to the crisis – because Mobile phone subscription: ND a government investment programme in annual production to 60tn in 2018, cannot go ahead amidst the insecurity – due especially to increased output from Key export: Gold and IBK announced that his government Randgold’s Loulo-Gounkoto mine, the Last change of leader: 2013 will devote 22% of the national budget to launch of the Fekola mine by B2Gold and GDP growth (%) spending on the security services. The of the Komana mine by Hummingbird 5.8 Resources. Randgold is also in talks government has a lot of hopes pinned on 5.4 5.1 4.8 aidcommitmentsfromtheFebruary2018 with the government about mapping summit in Brussels on the crisis in Mali. that could unveil other commercially GDP ($bn) A peace deal for the north has been viable mining projects. stalled for the past three years, in part due Mali’s infrastructure deficit is a major 18.5 17.4 15.4 14 to the fragmentation of fighting forces constraint on economic growth. The representing jihadist groups – some government estimates that the country 2016 2017 2018* 2019* meets just 250MW of its 700MW demand allied to Al Qaeda and others Islamic State –, the Tuareg community and other for electricity. In October, Mali launched its first independent power producer, a groups. A recent UN report said that over a three-month period in 2018 there were 58 terrorist attacks $130mthermalpowerplantwiththecapacitytoproduce90MW. that killed 287 people and displaced 5,000. Climate change Some projects in the works will help the economy to perform better. The costs of trading in landlocked Mali are high, and is contributing to communal violence. Islamist groups have ports company DP World announced plans in July to create pushed into central Mali from the north, worsening relations between Peul, Dogon and Bambara communities. The nomadic a $50m and 1,000ha hub outside of Bamako to improve the Peul, who are looking for grazing areas, have been fighting country’s logistics. It is also part of a plan to improve the with the sedentary Dogon and Bambara farming communities. performance of the Dakar-Bamako railway line. THE AFRICA REPORT
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184 COUNTRY PROFILES
WEST AFRICA
300 km
LIBYA
ALGERIA
Niger
NIGER MALI
Building a bulwark
NIAMEY BURKINA FASO
Agadez Zinder
CHAD
NIGERIA
BENIN
Issoufou has been cracking down on critical independent voices Uranium is the only major dark spot on a bright economic horizon
T
*Estimation October 2018
here is one issue the government of Niger will not of this will sway Niamey or its Brussels partners because have sleepless nights over in 2019: the economy. the objective, a dramatic reduction in migration across the A resurgent agricultural sector fed by a good rainy Sahara, has been attained: the International Organisation season in 2018 is set to propel growth, backed by for Migration estimates that in 2017 the flow of migrants energy, a gold rush and services. Meanwhile, China is driving along this route in Libya, and to a lesser extent Algeria, a minor construction boom, especially in Niamey. The odd was reduced by 75%. one out is uranium, which remains in the doldrums following President Mahamadou Issoufou has made the fight against the 2011 Fukushima disaster and French nuclear giant terrorism the centrepiece of his second term, and the presence of foreign troops falls squarely within that remit. There are Areva’s decision to not upgrade mining operations in Niger. Oil, however, is starting to pick up some of the slack left now four Western countries with troops stationed in Niger: by uranium. Niger may be sitting on France, Italy, Germany and the US. The latter is reported to have 800 military reserves of up to 1bn barrels, and UKand civilian personnel, making it one of based Savannah Oil announced its Population: 22.3 million Africa’s largest operations, second only fourth discovery in August 2018. After Population growth: 3.8% to Djibouti. France has 500, and Italy a period of disruptions the 20,000bpd GDP per capita: $489 and Germany a couple of dozen each. capacity Soraz refinery in Zinder, majorLife expectancy: 60.4 ity-owned by China National Petroleum Adult literacy: 15.5% REFUGEES, PROTESTS Corporation, is back to being fully operInflation: 3.9% ational, making Niger one of those rare The presence of French and US troops Human development index developing countries that can satisfy is closely connected to anti-terrorist (out of 188 countries): 188 operations, such as Barkhane and domestic demand for oil products. The Foreign direct investment: $334m Nigerien government also signed a deal support for the G5 Sahel force. Critics Current account as % of GDP: -16.2% with Nigeria in July 2018, with the aim contend that the presence of foreign Mobile phone subscription: 41% of constructing a pipeline to take oil troops tends to act as a magnet for from Niger to a refinery in Katsina State. terrorists and that stability is better Key export: Uranium served with their departure. Last change of leader: 2011 HARDLINE STANCE Self-proclaimed jihadist groups, miliGDP growth (%) The government still relies on donors tias and other armed gangs do not appear 5.4 5.3 to have been deterred. Boko Haram for about half of its revenue. Their lar4.9 4.9 actions stretch well into Nigerien terrigesse has increased substantially in past years, linked to twin obsessions of the tory and have resulted in up to 250,000 GDP ($bn) international community: migration and refugees and internally displaced people, terrorism. Both issues put the Niamey putting enormous strain on an already 10 9.5 8.2 7.5 severely deprived part of the country. governmentunderconsiderablepressure. The European Union in particular will The Mali crisis has sent an estimated 2016 2017 2018* 2019* continue to use the funds it provides as 65,000 refugees into a rough and poor leverage to reinforce the government’s region north of the capital. increasingly hardline stance on migraIn early 2017, civil society groups betion, in spite of the serious disturbances this has caused in gan staging demonstrations in Niamey against tax increases – particularly in light of tax exemptions routinely given to the Agadez region. Evidence is emerging that those who were formerly employed in the migrant business, many drivers large international investors – and the increasing presence among them, are turning to crime instead. of foreign troops. One of these marches attracted an unprecedented 35,000 people, but repression was swift and seven Analysts warn that continuing the anti-migration policy civil society activists were arrested. This only increased public is likely to aggravate corruption among the security forces anger. At the time of writing, fresh protests were being held. and the civil administration that used to get their cut from The year 2019 looks set to see further confrontations between the migration business. It may also lead to more youth the government and increasingly persistent protesters, not turning to radical Islam, more political instability and only in the capital but in other major population centres. security problems in the border region with Libya. None THE AFRICA REPORT
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WEST AFRICA NIGER 300 km
Nigeria
CHAD
Kano BENIN
ABUJA
NIGERIA
Atiku vs. Buhari
COUNTRY 185 PROFILES
CAMEROON
Lagos Gulf Port Harcourt of Guinea
The February 2019 presidential election looks like it will be a close race The lack of reforms in the oil industry is slowing investment in key sectors
F
*Estimation October 2018
ebruary 2019 will bring to an end a bruising presiA serial defector from political parties, he has patched up dential campaign that pits the incumbent, President his poor relationship with the president he served under, Muhammadu Buhari of the governing All Progressives Olusegun Obasanjo, and is working on maintaining unity in Congress (APC), against former vice-president Atiku the PDP, which is home to many politicians who wanted to Abubakar of the People’s Democratic Party (PDP). As The run for the presidency in 2019. The Buhari administration’s Africa Report went to press, the race was neck-and-neck. line of attack on Atiku is that his opaque business dealings Whoever wins the vote will have to deal with a weak econwould mean the return to bad old days of corruption. omy, the Boko Haram Islamist militia in the north-east and FARMER-HERDER CLASHES the farmer-herder clashes in the Middle Belt. In the year Security remains a major challenge for the government going ahead, the president will also have to deal with big national into 2019. Buhari had promised to defeat Boko Haram, and debates about revenue sharing between the state and federal governments, whether states should have their own police while the group has a very limited ability to control territory forces and other topics related to the restructuring of the in Nigeria, it still launches regular bombings and suicide attacks. With climate change making it Nigerian government. In 2015, Buhari campaigned on a platharder to get water in certain areas and people encroaching on grazing lands, formofdiversifyingtheeconomy,fighting Population: 195.9 million insecurity and ending corruption. While the farmer-herder clashes became more Population growth: 2.6% the single treasury account makes it hardviolent than the war against Boko Haram GDP per capita: $2,050 er to misappropriate funds, the Buhari in 2018. The federal government has Life expectancy: 53.9 government has not had high-profile discussed ideas like setting up cattle Adult literacy: 51.1% victories in the priority areas he has tarranches to reduce the competition for Inflation: 12.4% geted. Agriculture is a bright spot, with land, but a long-term solution to the Human development index the Buhari team having followed up on crisis is unlikely to be implemented (out of 188 countries): 156 the previous government’s programmes during campaigning season, when Foreign direct investment: $3.5bn to improve access to finance. politicians’ priorities are elsewhere. Current account as % of GDP: 2% Some politicians in the Middle Belt BUHARI COURTS THE SOUTH have accused Buhari of being biased in Mobile phone subscription: 76% Buhari is counting on a strong turnout favour of the herdsmen. The governor Key export: Petroleum and crude oil from his northern base and is also of Benue turned against Buhari and Last change of leader: 2015 courting a number of the opposition defected from the governing party. The GDP growth (%) APC’sresponse to this could prove crucial governors, especially in the south. Ben 2.3 1.9 0.8 Ayade, governor of Cross River State, has because north-central Nigeria has been a -1.6 been cozy with the presidency. Enugu’s key swing region in elections since 1999. Ifeanyi Ugwuanyi is reportedly planning Ahead of the elections, militants in the Niger Delta have been woken up from to defect to the APC. Nearby, Ebonyi State GDP ($bn) their slumber by an early September governor Dave Umahi has recently been 447 405.4 397.5 376.4 forced to offer an explanation about his police raid on the Abuja home of Edwin cordial relationship with Buhari. Clark, an Ijaw leader and former senator, 2016 2017 2018* 2019* Having spent months abroad to take for illegal possession of ammunition – a care of his ill health, Buhari often left claim found to be false. Still, a fragile vice-president Yemi Osinbajo in charge. ceasefire is coming undone and a return Neither Osinbajo nor Buhari are passionate about the of militants to the creeks could spell trouble for the economy. Whoever wins the 2019 presidential election will have to horse-trading side of politics. There were a series of defections deal with an economy dependent on oil revenue, which has from the APC as the elections approached. Atiku argues that the government has been ineffective at responding to the not been used to fight the country’s high poverty levels. An recession created by the low oil price over the past few years. estimated 87 million Nigerians live below the poverty line. The PDP has struggled to find its feet since losing power in The economy came out of a recession in 2017 and has since 2015, and Atiku is campaigning as the pro-business candidate. been growing meagrely. THE AFRICA REPORT
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186 COUNTRY PROFILES
WEST AFRICA
NIGERIA Atiku vs. Buhari
SOURCE: INEC
Petroleum Corporation. For his part, The government has been rolling out REGISTERED VOTERS morepoliciesthroughtheNational Social Buhari is not keen on the long-discussed 84,271,832 Intervention Programme ahead of the Petroleum Industry Bill because it would 73,528,040 reduce his discretionary powers. 2019 vote, offering microloans to traders 69,720,350 and market sellers through the Trader One bright spot in the oil sector has Moni and Market Moni platforms. been France’s Total, which has chosen Transport minister Rotimi Amaechi to soldier on with investments despite is hurrying contractors along to deliver the uncertainty in the industry. Local on big infrastructure projects before the company LADOL and South Korea’s election. He says that the Itakpe-Warri Samsung Heavy Industries built the line, a 276km standard gauge rail line floating production, storage and offload2011 election 2015 election 2019 election ing vessel for Total’s Egina field, which connecting a steel plant in central Nigeria to the Niger Delta, is 80% completed and is due to add 200,000 barrels of production per day (bpd) to Nigeria’s nearly will be operational later this year or early 2m bpd total. Construction of cement next. It comes on the heels of the launch of the first phase of the $824m 290km magnate Aliko Dangote’s 650,000 bpd Abuja city metro in July 2018, eight years oil refinery is underway, and it is likely Amount in supposedly after it was initiated. Funded partly with to be operational in 2020. Meanwhile, illegal remittances that loans from the Export-Import Bank of Nigeria’s richest man has plans to list his MTN was asked to refund China, it has six phases in all. Another company on the London Stock Exchange in 2019 and to restart operations at a project set for completion in early 2019 is the Lagos-Ibadan railway which will link the seaports in the vehicle assembly plant with European carmarker Groupe PSA. Sectors such as agriculture, technology and the arts commercial capital to other parts of the country. Overall, oneare contributing to long-term economic diversification. third of the 2018 budget is focused on improving infrastructure. Cereals production grew by 2% in 2017 to hit 26m tonnes, BILLION-DOLLAR CONFLICTS and another good harvest was expected in 2018. In fintech, Atiku says the Buhari government is not investor-friendly, payments company Interswitch is working on its African pointing to its billion-dollar conflicts with South African expansion plans and initial public stock offering that telecom giant MTN. In 2018, the government asked MTN could take place in 2019. to refund $8.1bn in supposedly illegal remittances, which All of these prospects depend in part on the health of the banking and electricity sectors. While the recession hurt bank was further compounded by a $2bn fine for tax arrears. Negotiations on a compromise are likely to stretch into 2019. bottom lines and increased the ratio of non-performing loans, Whether and how the country rolls out more reforms to the sector is generally well capitalised. Still, the central bank announced that three banks did not meet its requirements the oil industry will depend on who wins in February. PDP on liquidity ratios in November and withdrew Skye Bank’s presidential candidate Atiku wants to sell off most government stakes in state-run companies, like the Nigerian National licence in August.
$8.1bn
Will it be free and fair? AS NIGERIA’S PARTIES prepare for elections in 2019, the management of the electoral commission is a hot topic of debate. After a huge outcry, the Independent National Electoral Commission (INEC) clarified that its new ban on the use of smartphones was limited just to polling booths and not polling stations. Campaigners were worried
that it was an attempt to stop party cadres from taking photos of the results posted at polling locations. There has been squabbling in the national assembly about INEC’s budget. President Muhammadu Buhari wants the required N189bn ($495.9m) deducted from the Constituency Intervention Funds allocation, while Buhari’s opponents
want it to come from the N500bn in the 2018 national budget for the Special Intervention Programme. In the middle of this lingering dispute is an unprepared and unfunded INEC. INEC’s personnel are crucial in building trust in the institution, as demonstrated by former INEC chairman Attahiru Muhammadu Jega in 2015. Amina Zakari, THE AFRICA REPORT
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kinswoman and distant relative of President Buhari, was head of INEC operations until senate president Bukola Saraki and other leaders of parliament protested the irregularities in the Osun governorship election in September. INEC chair Mahmood Yakubu reshuffled the agency’s commissioners, moving Zakari to a less strategic post. •
D E C E M B E R 2 018 - J A N UA R Y 2 019
WEST AFRICA
COUNTRY 187 PROFILES
MAURITANIA Atlantic Ocean
Senegal
Saint-Louis
DAKAR Thiès
Make our garden grow
SENEGAL
GAMBIA
Macky Sall is unlikely to face stiff competition in the 2019 presidential race Agriculture, construction and tourism are driving the country’s high levels of growth
GUINEA-BISSAU
H
100 km MALI
GUINEA
*Estimation October 2018
of peanuts – one of the main cash crops – and fruit have been aving sidelined his main opponents with legal on the rise, with the peanut harvest hitting 1.4m tonnes in troubles, Macky Sall is aiming to win the 2019 2017. Investors are calling for the government to improve land presidential election in the first round. The opadministration to facilitate the purchase and sale of properties. position is weak and divided, and it blames the Meanwhile, the government has set a target of rice self-suffigovernment’s selective use of the judicial system for that. ciency – which would require a 1.6m tonne harvest – for 2019. With the economy turning out good year-on-year growth, Tourism numbers are rising fast, and the country was it is unlikely that the opposition will provide much of a on pace to welcome more than 1 million visitors for the challenge to Sall if it does not form a united front. The president is running on the econfirst time since it reached that record omy’s strong performance, which has in 2013. The World Travel and Tourism Council predicts the figure will hit 1.4 been driven by investments that support Population: 16.3 million million by 2027. the national development plan, the Plan Population growth: 2.8% Sénégal Emergent, which he launched in GDP per capita: $1,485 2013. He is also counting on the backSHARING THE SPOILS Life expectancy: 67.5 Recent discoveries of oil and gas in ing of Parti Socialiste leader Ousmane Adult literacy: 42.8% Senegal’s offshore areas are attracting Tanor Dieng and Alliance des Forces de Inflation: 0.4% more investment, and more problems. Progrès boss Moustapha Niasse, who Human development index The government is now in arbitration are members of the governing Benno (out of 188 countries): 165 with Norway-based African Petroleum Bokk Yaakaar coalition. Foreign direct investment: $532m at the International Centre for the Sall’sopponentsaccusehimofstacking Current account as % of GDP: -7.7% the deck in his favour and using his posiSettlement of Investment Disputes tion to enrich his friends and family. They because Dakar has refused to renew Mobile phone subscription: 99% say they do not trust interior minister Aly the company’s licence. Meanwhile, Key export: Gold Ngouille Ndiaye to be fair and have been Malaysia’s Petronas purchased a 30% Last change of leader: 2012 criticaloftheelectoralreformsthegovernstake in French oil major Total’s Rufisque GDP growth (%) ment rolled out in 2018, saying that they Offshore Profond in August. 7.2 7 6.7 make life harder for the country’s smaller Senegal and neighbouring Mauritania 6.2 parties. All parties need to get signatures have agreed to share the production of the Tortue complex’s gas because the from at least 1% of the population in each GDP ($bn) of the country’s regions in order to put up deposit is on both sides of the border. a candidate for the presidential election. US-based Kosmos Energy is leading the 26 24.2 21.1 development of Tortue’s estimated 25trn 19 OPPONENTS SIDELINED cubic feet of gas, which should begin 2016 2017 2018* 2019* The Parti Démocratique Sénégalais, a producing in 2021. The International leading opposition group, may tear itself Monetary Fund is pressuring the Dakar apart over its current direction. Former government to figure out how to manage president Abdoulaye Wade, 92, still controls the party and oil and gas revenue before production begins so it can use its resources effectively and avoid the ‘resource curse’. insists that his son Karim, who is legally barred from running The government also has big hopes for the mining because of a conviction for corruption, should be the party’s presidential candidate in 2019. Khalifa Sall, the former mayor sector. It signed a memorandum of understanding with of Dakar, has also been sidelined by legal cases, which he Turkish steelmaker Tosyali in October that could see it says were trumped up by the Sall government. That leaves develop an iron ore deposit at Falémé. Mines and other veteran oppositionist Idrissa Seck, who took 7.9% of the vote big projects require electricity, and Senegal’s national on a Rewmi party ticket in the presidential race of 2012, as electrification rate is low. one of Sall’s strongest challengers. Some key projects in the power sector are now moving The economy continues to grow strongly on the back of ahead. Netherlands-based Lekela Power announced in July sectors like construction, tourism and services, but agriculture that it had finalised a deal to build a 160MW wind farm that has recently underperformed due to poor rains. Production should be operational by 2020. THE AFRICA REPORT
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188 COUNTRY PROFILES
WEST AFRICA GUINEA
Sierra Leone
Makeni
SIERRA LEONE FREETOWN
The gloves are off
Kenema
Corruption investigations into the previous regime will dominate 2019 While iron ore prices are low, the prospects for economic growth are weak
Atlantic Ocean
LIBERIA 100 km
T
*Estimation October 2018
he new government’s anti-corruption probe of its for education, detailed in Bio’s supplementary budget in predecessor will shape the year ahead in Sierra July, also set aside conditional cash payments amounting Leone, as will its free education programme and to L5bn ($588,000) for poor parents to encourage them to its accessing Chinese money to build a long bridge send their children to school. from Freetown to the country’s main international airport. Bio announced an ambitious and controversial project at the Forum on China-Africa Cooperation in early September: Keenly contested presidential elections in March 2018 building a bridge to connect the country’s only international brought to power former military leader Julius Maada Bio. airport at Lungi on Tagrin Bay to Freetown, the capital. It But his Sierra Leone People’s Party (SLPP) won fewer seats could cost more than $1bn. Bio hopes the bridge can be in the parliamentary elections than the former governing funded by the Chinese government through a combination party, All People’s Congress (APC). The SLPP won 49 of of loans and grants, in effect replacing 132 parliamentary seats, the APC 68. Koroma’s plan to build a new internaThis parliamentary outcome, which the SLPP blamed on gerrymandering by tional airport at Mamamah, also with Population: 7.7 million the previous APC government, makes Chinese money and technicians, for Population growth: 2.1% Bio the first Sierra Leonean president $400m. The International Monetary GDP per capita: $496 Fund (IMF) and the World Bank heavily to lack a parliamentary majority. It has Life expectancy: 52.2 criticised Koroma’s airport project and not yet significantly constrained Bio, Adult literacy: 32.4% are extremely unlikely to support Bio’s. however. He got his candidate, Abass Inflation: 15.6% Chernor Bundu, elected speaker, and Human development index LAGGING EXPORTS the smaller parties tend to vote with (out of 188 countries): 184 Sierra Leone’s extractives sector is hurtthe SLPP. Bio is working with allies like Foreign direct investment: $560m ing economic growth. The iron ore mines Bundu, chief minister David Francis Current account as % of GDP: -13.4% of Shandong Iron and Steel Group, a and finance minister Jacob Jusu Saffa. Mobile phone subscription: ND key economic engine, closed down in Bio’s key campaign promise was a November 2017 due to low prices for ore. vow to increase the state’s revenue by Key export: Shrimp This meant that the total value of export stopping ‘leakages’ and combatting Last change of leader: 2018 in the first quarter of 2018 amounted to corruption. He says that will allow GDP growth (%) just $110.5m, 25% lower than for the the government to fund free quality 6.3 5.5 same period in 2017. In late 2018, the education from primary through sec3.7 3.7 Freetown government and the IMF were ondary school, as well as embark on in talks over a new programme to help constructing modern infrastructure GDP ($bn) the government with its reforms and to across the country. boost the economy. 3.8 3.8 3.8 3.6 KOROMA PROBE Agriculture is important to the econActing on a transition team’s report into omy due to the number of people that it 2016 2017 2018* 2019* the parlous state of the government, employs, but activity is mainly focused on subsistence – without much big Bio set up a commission of inquiry investment. The government’s main focusing on former president Ernest Bai Koroma’s administration. Koroma remains the dominant priority in agriculture is to reduce imports of rice. figure in the opposition, and he is rallying his supporters Diamond mininghasbeenanimportantsourceofrevenuefor the country, though official exports dropped to $122.3m in 2017 against the commission of inquiry. from $158.9m recorded in 2016. Reforms of the mining law and Perhaps more important for Bio’s political standing will be how his free education programme, launched in August a review of current concessions are on the government agenda. 2018, works in a country where the basic infrastructure of Bio’s team hopes that Sierra Leone’s offshore oil acreage schools and roads is in a state of disrepair. Bio has increased could deliver a major discovery like the ones found in neighthe budgetary allocation to education from 16% to 21%. His bouring countries. However, the aborted 2018 licensing round shows that the lack of commercial discoveries is dissuading education programme is meant to benefit an estimated 2.1 million pupils in nearly 9,000 schools. The increased funding companies from making new commitments to the country. THE AFRICA REPORT
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WEST AFRICA
COUNTRY 189 PROFILES
BENIN
Togo
Sokodé Lake Volta GHANA
Fighting over Faure
TOGO
NIGERIA
LOMÉ
There are arguments over whether Gnassingbé should be allowed to run again The government’s economic growth plans are based on Togo being a logistics hub
200 km Gulf of Guinea
T
*Estimation October 2018
that the elections will not be held on time and is calling for a he long reign of the Gnassingbé clan will again be in rebalancing of the country’s legislative districts in favour of the spotlight in 2019. The C14 opposition coalition of 14 parties and the ruling Union pour la République the heavily populated cities. Fabre said that he was the victim (UPR) are at loggerheads over whether President of an assassination attempt in 2018, and other oppositionists Faure Gnassingbé should be able to run for another term in say that the government is routinely arresting its opponents. 2020, as he inherited a constitution from his father’s era that To speed up the growth of the economy, the government has no term limits. With the spectre of past political violence launched a new five-year development plan in July 2018 looming, the opposition has been organising street protests that targets key parts of the economy, like infrastructure, since October 2017 to pressure the government to reform the agriculture and mining. The government wants to strengthen constitution and level the political playing field. So far, the Togo’s role as a trade hub for its landlocked neighbours and government has been dragging its feet. Many oppositionists also create finance and manufacturing hubs. To achieve that, had hoped that they would be able to mobilise a big grassroots Gnassingbé is relying on the help of important allies like civil movement to sweep Gnassingbé out of service minister Gilbert Bawara, cabinet director Victoire Tomegah-Dogbé and power, as was done in Burkina Faso a few army chief Félix Abalo Kadanga. years ago, but the movement opposing Population: 8 million the UPR is not that strong. Population growth: 2.5% PRIVATISATION SWEEP The two sides are not budging from GDP per capita: $668 their positions, and mediators from the But with worries about rising debt levels Life expectancy: 60.5 Economic Community of West African and as part of its International Monetary Adult literacy: 63.7 States – led by Ghana’s President Nana Fund programme, the government has Inflation: 0.4% Akufo-Addo and Guinea’s President been cutting back on the public investHuman development index ment budget and looking more to the Alpha Condé – imposed a deadline (out of 188 countries): 164 private sector. The national developfor holding legislative elections by Foreign direct investment: $146m ment plan requires financing of $8.3bn, 20 December 2018. The UPR and the Current account as % of GDP: -9.2% which the government hopes to get from opposition have at least reached a Mobile phone subscription: 80% multilateral institutions and investors, compromise about the composition including Chinese companies. To cut of the national electoral commission, Key export: Phosphates government spending, the government which was a key sticking point for the Last change of leader: 2005 also announced plans in October to upcoming vote. Having gotten this far, it GDP growth (%) is unlikely that the C14 – led by Brigitte privatise two state-run banks, Banque 5.1 5 4.7 Kafui Adjamagbo-Johnson – will boycott Togolaise pour le Commerce et l’Industrie 4.4 the legislative vote, but many think it and Union Togolaise de Banque. It also will not be held in time. plans to open up Togocom, the parent GDP ($bn) company of Togo Telecom and Togo ROUTINE ARRESTS Cellulaire, to private investors. 5.7 5.3 4.8 4.5 The holding of the legislative election The government is working with the does not address the opposition’s African Development Bank to set up 2016 2017 2018* 2019* demands about the presidential vote, a series of agropoles and local value which it wants held in two rounds rather chains. Very little investment goes into than one. The political atmosphere is so the sector, and the government estimates tense that Tikpi Atchadam of the Parti National Panafricain, that agriculture accounts for about 0.3% of bank loans. In July, who helped to start the protests of October 2017, remains in the Gnassingbé administration launched the $100m Mécanisme exile after saying many times that he feared for his safety. Incitatif de Financement Agricole to de-risk lending to farmers. Other obstacles are holding back the economy, like the At this stage, it is not clear if Atchadam and other opposition parties, like the Alliance Nationale pour le Chagement led by 37% electrification rate. In October the company Eranove Jean-Pierre Fabre, will be able to decide on a joint candidate signed a contract for the construction of a 65MW gas-fired for the presidential poll. Fabre is one of the government’s more power plant at the Lomé port and the government is backing some pilot off-grid solar projects. radical critics, and he has been calling for a boycott. He argues THE AFRICA REPORT
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FOCUSING ON AFRICA Lands of plenty Lands of contrasts Lands of opportunities
From the stoneage to the future
AVAILABLE AT LES Ã&#x2030;DITIONS DU JAGUAR Email : jaguar@jeuneafrique.com - www.leseditionsdujaguar.com
400 km
Atlantic Ocean
Algiers Tangier
Casablanca
Fes Rabat
Marrakech
Oran
Constantine
TUNISIA
Béchar
MOROCCO Tindouf
194 ALGERIA 195 EGYPT
Alexandria
Benghazi
Cairo
ALGERIA
L I B YA
EGYPT
Aswan
Nouadhibou Nouakchott
SUDAN
MALI NIGER
CHAD
Khartoum
SENEGAL
ETHIOPIA
NORTH AFRICA POPULATION (millions) 2019
246.5
2030
291.3
2050
Projected MENA region spending on IT in 2018, a 3.4% increase from 2017 that is largely due to consumer spending
368.9
NORTH AFRICA 2018 GDP (% of regional total) Tunisia 6.1%
27.7% Algeria
Sudan 4.9%
Morocco 17.4%
TOTAL
$679.3bn
Mauritania 0.8% Libya 6.4%
36.7% Egypt
199 MOROCCO 200 SUDAN 201 TUNISIA
APRIL
JUNE
MONTH
N/A
ALGERIA Presidential election
MOROCCO Fes Festival of World Sacred Music
TUNISIA Presidential election
MAURITANIA Presidential election
SOURCE: UN WORLD POPULATION DIVISION (THE 2018 REVISION)
CENTRAL AFRICAN REPUBLIC
SOUTH SUDAN
197 LIBYA 198 MAURITANIA
ERITREA
M A U R I TA N I A
billion 192 PEOPLE TO WATCH
Mediterranean Sea
Tripoli
$155 CONTENTS
Tunis
SOURCE: GDP CURRENT PRICES – IMF WORLD ECONOMIC OUTLOOK DATABASE, OCTOBER 2018
North Africa
191
192 COUNTRY PROFILES
NORTH AFRICA
LIBYA
TUNISIA
Fathi Bashagha
Noureddine Taboubi
Misrata man in Tripoli
Upright union leader
ALL RIGHTS RESERVED
MIGUEL AL ASBANI
Since taking over as secretary general of the Union Générale Tunisienne du Travail less than two years ago, Noureddine Taboubi has been a critical voice on the country's economic direction. He has been a key player as the government tries to push through tough reforms, seeking to get the best deals for public and private sector workers. The 57-year-old labour leader is opposed to the government's privatisation plans, which are backed by the International Monetary Fund. With elections planned for 2019, he will be upping the pressure on both the government and company bosses.
If plans to replace the prime minister, Fayez al-Serraj, with a three-person presidency are successful, interior minister Fathi Bashagha is in a good position to take his place. He has a military background, having joined the air force before leaving the armed forces for the business world. His base is in his hometown of Misrata, where he had been spokesman for the Misrata Military Council and later led the city’s largest militia, the Halbous Brigade. As interior minister since October 2018, Bashagha will play a critical role in the Tripoli-based Presidential Council’s attempts to improve security in the capital and beyond.
EGYPT
ZO
UB EIR
SO
UIS S
I/RE
UTE RS
Alaa Al Aswany Talking about a revolution A polarising force in Egypt's literary circles, author Alaa Al Aswany is back in the headlines for his book The Republic, As If, which tackles the 2011 revolution that overthrew Hosni Mubarak through many lives, like his 2002 hit The Yacoubian Building. Several Arab countries have banned it. After taking heat for saying that a military dictatorship would not be as bad as rule by the Islamists of the Muslim Brotherhood, Al Aswany remains critical of the government of Abdel Fattah al-Sisi. He tells sister publication Jeune Afrique: “The political effects of dictatorship are less dangerous than its cultural and social ones.” THE AFRICA REPORT
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193
ALGERIA/FRANCE
Dalila Dalléas Bouzar
ALEXANDRE DUPEYRON
Blooming rose
MAURITANIA
Cheikh Ould Baya Man in the wings The new president of the national assembly is pegged as a potential successor to President Mohamed Ould Abdel Aziz, who is constitutionally barred from running for a third term. Abdel Aziz insists he will retire, but his supporters are calling for him to stay in power. Cheikh Ould Baya, a rich former colonel who was previously mayor of the city of Zouerate, will play a key role in cementing Abdel Aziz’s legacy - but could also scupper any attempts to change laws to allow him another run. The government scrapped the senate, so the national assembly is the country’s only legislative body.
The striking pink tones on the faces of women and children show Dalila Dalléas Bouzar’s focus on the flesh. It is a theme throughout much of the Oran-born and France-based artist’s work. She tells sister publication Jeune Afrique that her childhood frustration at the lack of equality between the sexes in Algeria lives with her today: “I believe in the performative power of art; an image can create a new reality.” She says that she does not like to stay long in Algeria because of that, but she returns frequently to give painting classes at women’s associations.
MOROCCO
YASSINE TOUMI
Aziz Akhannouch Boycotted business baron
THE AFRICA REPORT
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The billionaire investor, agriculture minister and founder of the centrist Rassemblement National des Indépendants sees a future as a potential prime minister should the current Islamist-led government fall. Along with his wife Salwa Idrissi – a powerful businesswoman in her own right – Akhannouch is one of the Moroccan government’s heavyweights. But as the chief executive of the Akwa Group, one of the largest conglomerates in Morocco, Akhannouch is the target of the popular boycott movement aimed at politically connected businesses. Consumers accuse the Afriquia chain of petrol stations of using its position to gouge customers.
D E C E M B E R 2 018 - J A N UA R Y 2 019
194 COUNTRY PROFILES
NORTH AFRICA SPAIN
Oran
Algeria
Mediterranean Sea
ALGIERS Constantine TUN.
MOROCCO
ALGERIA
All eyes on the prize
LIBYA
MAURIT.
An ailing President Bouteflika is holding on to power as long as he can The government hopes rising oil prices will save it from spending cuts
MALI
400 km
NIGER
A
*Estimate October 2018
ll eyes are on the 2019 presidential election in of 30 are unemployed, and many more under-employed. a country with an economy and politics highly Economists see little prospect of improvement. The 2019 budget includes higher-than-ever current excentralised under the control of a small ruling elite. At 81 years old and infirm, President Abdelaziz penditure and social spending, while once again ignoring the Bouteflika has yet to confirm he will stand for a fifth term, government’s commitments to cutting subsidies and other spending. Oil prices in the $70-$80 per barrel band offer a lifeline but the likelihood is that the raïs will again confound those – with the budget prudently based on a who have placed him at death’s door. $50 price – but the government expects The consensus among Algeriatheeconomytogrowonlyby2.6%in2019, watchers is that if Bouteflika can be Population: 42 million while inflation will reach around 4.5%. wheeled in to vote next May he will Population growth: 1.7% At a predicted $33.2bn in 2019, energy beat all opposition. Under the watchful GDP per capita: $4,450 eye of the president’s younger brother revenue will be insufficient to close the Life expectancy: 76.3 Saïd Bouteflika and a powerful circle of trade deficit. Foreign-exchange reserves Adult literacy: 75.1% are expected to fall further, to $62bn loyalists – including the resilient deputy Inflation: 6.5% at end-2019, down from an estimated defence minister and army chief of staff Human development index Lieutenant General Ahmed Gaïd Salah $85.2bn in 2018 and $193bn in mid-2014. (out of 188 countries): 83 and Front de Libération Nationale secForeign direct investment: $1.2bn MURKY BUSINESS retary general Djamel Ould Abbes – the Current account as % of GDP: -9% odds on a fifth term grow ever shorter. Positive signs of revival in state hydrocarMobile phone subscription: 121% bons giant Sonatrach under chairman Although younger politicians, notably prime minister Ahmed Ouyahia, have Abdelmoumen Ould Kaddour should Key export: Petroleum and crude oil considerable ambitions, the received continue, with a flow of major engineerLast change of leader: 1999 ing projects helping to firm up oil and wisdom is that no serious members of the GDP growth (%) natural gas production and sales. This elitewillstandagainst‘Boutef’.Contenders 3.2 2.7 2.5 such as the Islamist Mouvement de la is necessary as Algeria seeks to reassure its European gas customers that it can Société pour la Paix leader Abderrazak 1.4 maintain its decades-old reputation as Makri will be hard-pressed to make a GDP ($bn) a stable supplier during a period when dent in the president’s vote. rising domestic energy consumption 200.2 188.3 167.6 TO DIE IN OFFICE has put pressure on exports. 160.1 That Bouteflika is likely to stand again But much more is needed to persuade 2016 2017 2018* 2019* reflects the inability of the ruling young Algerians that their future resides in North Africa, rather than in often establishment – widely known as ‘le desperate attempts to migrate to Europe. pouvoir’ (the powers-that-be) – to find There is little confidence that a business elite headed by an acceptable alternative candidate. Le pouvoir seems to Forum des Chefs d’Entreprise chief Ali Haddad – a close ally accept that Boutef should stay on as an interim measure of Saïd Bouteflika – will deliver the mass of jobs needed. until agreement is reached on a long-term successor. The Arguably the top news story to emerge from Algeria in 2018 president himself has stayed mute on whether he will stand came with the seizure of 701kg of cocaine in Oran, which again, but in conversation with his contemporaries, the old led to the sacking of police chief Major General Abdelghani revolutionary has consistently said he expects to die in office. Except during periods when he is most infirm, Bouteflika Hamel and other senior officers. The drugs were smuggled by a gang identified with prominent local businessman Kamel may remain a major power-broker. He has a big support base, especially amongst older Algerians. However, persuading Chikhi, who is widely believed to be very well connected younger Algerians that Bouteflika and the elite he represents with the ruling establishment. Algerians are waiting for more offer a better future is a tougher job. heads to roll over the affair – including some who could be very close to the pinnacle of power. But hopes of a major While the macroeconomy looks in somewhat better shape following a significant increase in hydrocarbon revenue clean-up and modernisation of Algerian business practices in 2017/2018, more than 25% of Algerians under the age are likely to remain as elusive as ever. THE AFRICA REPORT
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NORTH AFRICA Mediterranean Sea
Egypt
Alexandria CAIRO
Sisi soldiers on
ISRAEL Port Saïd
EGYPT
SAUDI ARABIA dS
Re
BYA
ea
Questions linger over how long President Sisi will stay in power Egyptians are feeling high interest rates and rising fuel and electricity prices
COUNTRY 195 PROFILES
SUDAN
E
300 km
*Estimate October 2018
gypt’s economy is expected to dominate the spotlight have on smaller businesses and the growing entrepreneurship ecosystem. The military continues to play a big role in the again this coming year, while its political scene will economy and is part of big projects like the new capital city. likely remain muted as the space for opposing voices tightens further. The government has managed to Prices will continue rising due to a number of factors, rein in inflation from the record highs reached after the including global increases in oil prices coupled with govdecision to freely float the currency in late 2016 and to ernment measures to gradually reduce subsidies, as well replenish foreign reserves to above pre-2011 levels, amassing as a devalued Egyptian pound. The prices of gasoline and a total of around $45bn as of late 2018. electricity are rising; the government increased electricity However, starting the last quarter of 2018, trouble in emergtariffs by an average of 26% in the 2018/2019 fiscal year. And ing markets began to impinge on the trickle of economic the era of record high interest rates – the key central bank rate recovery that was starting to be felt. This was 17.8% in June – will likely continue led the government to postpone an iniunabated in 2019, especially as pressure on the pound starts being felt. tial public offering programme for some Population: 99.4 million state-owned companies, which has been Population growth: 1.9% in the works since 2017, attributing the ECONOMIC REPRIEVE GDP per capita: $2,572 Relations with the International delay to volatile global markets. Life expectancy: 71.7 Monetary Fund remain good, and The privatisation programme was due Adult literacy: 75.1% tobeginintheautumnwiththeofferingof the institution’s officials say that the Inflation: 20.9% 4.5% of Eastern Company, a big tobacco government is performing well under Human development index producer, followed by similar share sales the $12bn loan programme signed in (out of 188 countries): 113 of around 20 state-owned companies. late 2016, which stipulated a liberal Foreign direct investment: $7.4bn Foreign direct investment fell in the currency regime, bringing the value Current account as % of GDP: -2.6% second quarter of the year to $600m, a of the pound down by more than half. One area of the economy that the Fund sharp drop from $956m the previous Mobile phone subscription: 106% wants to see improvements on is growth quarter and $1.5bn in the last quarter Key export: Gold of the private sector. of 2017. The finance ministry cancelled Last change of leader: 2014 several auctions of treasury bonds, which On a positive note, if Egypt’s tourism GDP growth (%) has been a main source of replenishing recovery continues in the medium term, 5.5 5.3 it can offer some reprieve from these foreign reserves in the past two years, due 4.3 4.2 to higher yields than anticipated. The external economic pressures. Tourism government plans to limit its foreign and revenue has reversed a downward trend domestic borrowing in the years ahead. that lasted a couple of years, so the sector GDP ($bn) may regain its position as one of the 332.5 298.2 249.5 236.5 INCENTIVES FOR INVESTORS main pillars of the economy. The country A sovereign wealth fund recently aprecorded tourist arrivals of nearly 15 2016 2017 2018* 2019* million people in 2010 and predicts proved by parliament will have start-up capital of E£5bn ($280m) and a total that 2018 will bring at least 8 million. planned capital of E£200bn. The inOne of the brightest stories continues to come from Egypt’s energy sector, where the discovery of vestment minister said that the Egypt Fund will be used to the giant Zohr field and other gas reserves has helped sustain manage some state-run companies once they are listed. steady energy supplies. A deal to import gas from Israel has The fund is one of many measures Egypt has taken to proven controversial, but the critical voices have not been increase the ease of doing business, which has been weighed down by bureaucracy and red tape. The long-awaited investenough to stop the deal from moving forward. ment law passed in 2018 makes it easier to set up businesses, Plentiful and inexpensive electricity are needed for the gives more options for corporate structures and shareholder government’s industrialisation plans. In the year ahead, contracts, and creates more incentives for investors. several new power plants are due to start construction, The coming year will show if the new regulations will be including Global Energy Services’s 263MW wind farm at implemented efficiently and how much of an impact they will Ras Ghareb and a Rosatom-backed nuclear power plant THE AFRICA REPORT
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D E C E M B E R 2 018 - J A N UA R Y 2 019
196 COUNTRY PROFILES
NORTH AFRICA
Egypt
Sisi soldiers on
with a capacity to produce 4,800MW. The government is setting up a free zone called the Suez Canal Economic Zone, and it signed a deal in July for a 500MW wind farm there to be built for $650m by a consortium including Orascom Construction. Local and foreign companies announced a series of logistics projects for the zone in 2018. The government has been pushing the development of mega-projects. It launchedtheexpansionoftheSuezCanal in 2014, and that seems to be paying off even though there are worries about international trade levels. The canal produced a new record for revenue in the 2017/2018 fiscal year, hitting $5.6bn. Another big project gathering steam is the construction of a new city to take someofthepopulationpressureoffCairo.
FDI INFLOWS ($bn)
Maait are shepherding reform efforts through the government. 7,4 7 Sisi paints extremism and terrorism as the greatest threats to Egypt. New laws 6 that have come into effect, including 4,6 4,3 those regulating cyber crime and media – digital media in particular – have created an environment of stifled public opinion that has left little room for critical voices and opposition. Many people are not happy about 2012 2013 2014 2015 2016 2017 the government’s policies, which are resulting in soaring costs of living. There have not been any mass protests, in part because some are convinced that the reforms are needed to address economic imbalances. But the govRevenue from the Suez ernment’s heavy-handed control over Canal for the 2017/2018 media outlets gives it outsized tools fiscal year, a record high to influence debates and the flow of information. The government has been HEAVY-HANDED CONTROL imprisoning people for social media and online activity Egypt’s politics continue to be muted as the crackdown on that is critical of its policies and restricting the activities activists continues and critical voices will continue into the of non-governmental organisation. There is talk that the next year. Oppositionists say that President Abdel Fattah al-Sisi government might revise the constitution in order to give is creating the most intimidating climate in decades. Against it more control over the political sphere. Amendments to that backdrop, he easily won the March 2018 presidential the constitution could also open the door for Sisi to run election, as most opposition leaders – like former general for the presidency again. The biggest opposition to the government has been through Sami Anan and former prime minister Ahmed Shafik – were armed conflict in the Sinai Peninsula. The government insists not able or not willing to run. Sisi’s key allies are in the security forces. He changed some that it is making steady progress against Islamic State-backed rebels of Ansar Bait al-Maqdis, but the cycle of news about people in control in June 2018, choosing former presidential guard head Lieutenant General Mohamed Ahmed Zaki to militants killed and new bombings show that the end of lead defence and former national security chief Mahmoud the fighting is not yet in sight. A scorched-earth policy and Tawfik for the interior dossier. Meanwhile, prime minister blockade of the region that lasted several months in 2018 Mostafa Kemal Madbouly and finance minister Mohamed have added to the grievances in the region. SOURCE: UNCTAD
8,1
$5.6bn
An outward outlook AFTER FOCUSING ON domestic politics, President Abdel Fattah al-Sisi is now more outward looking. He is focusing more of his time on regional issues, namely in Africa – with a big conference planned for December 2018 – as well as the Israel-Palestine conflict. The most significant improvement in foreign relations is with Ethiopia.
The new prime minister there, Abiy Ahmed, has been keen on eliminating any reasons for tension with neighbouring countries. Thanks to the mediation of countries in the Gulf, Abiy clinched a deal to fill the Grand Ethiopian Renaissance Dam more slowly so as not to harm the water supply of the Nile River. As Sudan and Turkey work together, Egypt is
strengthening ties with Eritrea to provide a counterbalance in the Red Sea region. Turkey has plans for a base on Sudan’s Suakin Island, and in response Cairo sent troops to Eritrea in early 2018. The Egyptian military has repeatedly denied reports that it has plans to build a base in Eritrea. Nonetheless, Egypt is also improving its economic diplomacy in Asmara. THE AFRICA REPORT
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N ° 10 6
The conflict in Libya remains a worry for the Cairo government, which has been supporting the Libyan National Army under Khalifa Haftar in its fight against militias and other factions. Elsewhere, diplomats negotiated the relaunch of Moscow-Cairo flights in 2018, after a suspension following the explosion of a Russian passenger plane in 2016. •
D E C E M B E R 2 018 - J A N UA R Y 2 019
NORTH AFRICA
COUNTRY 197 PROFILES
300 km TUNISIA
Libya
Mediterranean Sea
TRIPOLI
No peace, no elections
Benghazi
L I B YA
EGYPT
ALGERIA
International attempts to resolve the political crises in Libya are foundering Armed groups are competing for control of revenue streams
NIGER
F
CHAD
SUDAN
*Estimate October 2018
urther attempts to involve the rival governments and number of UN Security Council resolutions will nevertheless define the framework of international law in which all other factions in a peace process leading towards elections and the reunification of the country under a single solutions to Libya’s problems will have to fit. Emboldened by the lack of sanctions against them, the United Arab democratic and legitimate administration are set to fail in 2019. They are likely to fail for the same reason that the Emirates and Russia will increase their military support United Nations Support Mission in Libya action plan to hold for Haftar and the LNA. elections in December 2018, and the 2015 Libyan Political Within this political vacuum, the overriding objective of Agreement, also failed. The key players in the conflict still each group and faction will be to establish and maintain expect to gain more from conflict than from compromise. control over an economic entity or stream of revenue. For In the eastern province of Cyrenaica, this reason, Haftar’s LNA will pursue its Field Marshal Khalifa Haftar plans to troubled attempts to sell crude oil from reinforce the military governance of his terminals under its control via the rival Population: 6.5 million National Oil Corporation (NOC) manLibyan National Army (LNA). However, Population growth: 1.3% agement based in the Cyrenaican city the lukewarm support from the political GDP per capita: $6,639 and tribal groups nominally aligned of Al-Bayda. UN sanctions prohibiting Life expectancy: 72.1 with him – and his lack of support in this will, however, be strictly enforced. Adult literacy: ND Tripolitania – will undermine his claim Inflation: 28.1% to be capable of uniting the country GETTING NEAR THE MONEY Human development index under a single strong leader. Meanwhile, The Tripoli-based militias will be more (out of 188 countries): 114 in the west, a handful of militia groups successful in extending their control Foreign direct investment: ND will consolidate their control over the over key economic entities such as the Current account as % of GDP: 1.5% capital and the main governing instituCentral Bank of Libya (CBL), the frozen sovereign wealth fund, and key ministions, including the Presidency Council Mobile phone subscription: ND of the Government of National Accord tries from which valuable rents can be Key export: Petroleum and crude oil (GNA), led by Faiez Serraj. siphoned. These militias will look to Last change of leader: 2016 turn themselves into economic players No single group will, however, be GDP growth (%) in their own right, finding increasingly able to dominate the unstable web of 64 sophisticated ways of attaching themalliances and rivalries extending to other 10.9 armed groups based in major suburbs selves to revenue streams. 10.8 -7.4 such as Tajura, and the outlying cities of Competition for the control of sources Misrata, Zintan and Beni Walid. of revenue will intensify in 2019 as the GDP ($bn) economic situation deteriorates. The 51.3 18.5 43.2 POLITICAL VACUUM state’s foreign currency reserves will fall 30.6 During 2019, the last shreds of legitto an alarmingly low level as spending 2016 2017 2018* 2019* imacy could fall away from the GNA continues to outstrip revenue by a large margin. The CBL management may be and the other institutions named in forced to impose budget controls and the Libyan Political Agreement, like the Tobruk-based legislature, the House of Representatives and minimise the extent of depredations, despite itself being the Tripoli-based High Council of State. With no process to subject to the influence of armed groups. This would add to its unpopularity and place it under ever more political pressure. replace them, they will continue to wield a veto on political Although the oil-producing and -exporting facilities run progress but will contribute little more. by the NOC will be periodically fought over by tribal groups, Various international actors are attempting to resolve the situation or to impose their own vision on Libya’s future. the fragile understanding that allows it to operate will persist. Cyrenaican factions, dependent on payouts from the CBL, The US, European Union and Britain remain wedded to a will push for a greater share of revenue but will shy away from discredited UN-led peace process. Having already failed closing down production. So, paradoxically, oil operations in 2018, the UN consensus will fray further in 2019, with may actually increase despite the weakening of every other France increasingly backing Haftar – and Italy on the side remaining element of the Libyan state. of the GNA. The asset-freezes and sanctions imposed by a THE AFRICA REPORT
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N ° 10 6
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D E C E M B E R 2 018 - J A N UA R Y 2 019
198 COUNTRY PROFILES
NORTH AFRICA MOROCCO ALGERIA
Atlantic Ocean
Mauritania
300 km
MALI
Will he stay or will he go?
Nouadhibou
M A U R I TA N I A
NOUAKCHOTT
Abdel Aziz no longer has the majority he needs to change the constitution A big gas development will help the economy, which needs to diversify
SENEGAL
T
*Estimation October 2018
he year ahead could either bring the retirement of The economy is set to grow strongly on the back of big President Mohamed Ould Abdel Aziz – who has ruled projects like the development of the large Grand Tortue/ for 10 years after overthrowing a democratically Ahmeyim gas field. The government is benefiting from a elected government – or plunge the country into three-year programme with the International Monetary Fund (IMF), which it is using to implement reforms and cope with political uncertainty. Abdel Aziz has insisted that he will drops in revenue from key sectors like fishing and mining try to not change the constitution in order to run again, but since the commodity price crash of 2014. Poor rains have his supporters are also calling for him to stay in power. If he respects his promise to retire, it is likely that he will wait until also brought difficulties for the herding and farming sectors. the last moment to announce a preferred successor. The Mauritania has approximately 1.5bn tonnes of iron ore most likely man for the job is another reserves, and exports have fluctuated soldier, General Mohamed Ould Cheikh due to price volatility in the steel sector. Mohamed Ahmed. It exports about 12m tonnes per year, Population: 4.5 million The September 2018 legislative with most of the production destined for Population growth: 2.7% China, and prices are due to be stable dealt a blow to Abdel Aziz’s chances GDP per capita: $1,310 for at least the next year or two. of removing term limits. His Union Life expectancy: 63.4 Pour la République still took a maAdult literacy: 45.5% A HARMONIOUS GAS PROJECT jority of 89 out of 157 seats, but this is Inflation: 3.8% Spanish and Moroccan companies have less than than the two-thirds majority Human development index been investing in the Nouadhibou free needed for a constitutional change. (out of 188 countries): 159 zone, especially in the fisheries sector. The Islamist party Tawassoul became Foreign direct investment: $330m Diversification is also a high priority the biggest opposition group, with 14 Current account as % of GDP: -16% seats. It has been led by parliamentarian for the Nouakchott government, and Mobile phone subscription: 92% Afreximbank signed a $1.5bn financing Mohamed Mahmoud Ould Seyyid since deal to broaden the Mauritanian econDecember 2017. Abdel Aziz has built up Key export: Iron ore his international profile as a bulwark omy in February 2018. The government Last change of leader: 2008 is working with the IMF to reform regagainst Islamist terrorism in North GDP growth (%) and West Africa: Mauritania’s General ulations in the business sector to make 5.2 Hanena Ould Sidi now heads the G5 the economy more competitive. 3.5 2.5 1.8 Sahel anti-terrorism force. Abdel Aziz The Tortue deposit near the border paints Mauritania’s main Islamist party between Mauritania and Senegal is as a dangerous threat and says he does estimated to contain 25trn cubic feet of GDP ($bn) not see a difference between political natural gas. Kosmos Energy is the field’s 5.2 5.2 5 4.7 Islam and terrorism. operator,anditexpectstoproducefirstgas by 2021. Thanks to cooperations between 2016 2017 2018* 2019* OPPOSITION STEPS UP the Nouakchott and Dakar governments, Other opposition parties are taking a Kosmos and its partner BP do not have more active role in Mauritanian politics. to spend on duplicate infrastructure. The They participated in September’s legislative and local elections two countries have agreed to share production from the field. A final investment decision on Tortue is due by the end of 2018. after boycotting previous votes. Oppositionists criticise Abdel Aziz’s autocratic policies, but some of them are trying to Exxon, Shell, Total and BP all have acreage in Mauritania, and convince Abel Aziz that they would not unfairly target him more exploration drilling is on the cards for 2019. if he steps down. Anti-slavery campaigner Biram Dah Abeid, Increasing electricity production is essential to support who ran against Abdel Aziz in the last presidential race and the growth of industry. A consortium led by Spain’s Elecnor is building a 100MW solar power plant at Boulenouar took 10%, won a parliamentary seat despite being arrested on trumped up charges on the eve of the vote. He is preparing in western Mauritania. It is the country’s second solar for a presidential run in 2019. Ahmed Ould Daddah, leader project and should be operational in 2019. In 2018, the of the Rassemblement des Forces Démocratiques, will not be government signed a deal with the Bamako government able to run in 2019 because he is too old. to provide about 50MW to its neighbour. THE AFRICA REPORT
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NORTH AFRICA
COUNTRY 199 PROFILES
PORTUGAL
SPAIN
400 km
Morocco
Casablanca CANARY ISLES (Spain)
Wake-up calls
Shiny new infrastructure boosts image but does not address unemployment The PJD coalition government is underperforming
Atlantic Ocean
Rabat
Marrakesh ALGERIA
MOROCCO
MAURITANIA MALI
M
*Estimate October 2018
oroccans can expect to travel from Tangier to elite, #boycott reflects new realities. Millions have responded Kenitra on Africa’s first long-distance, high-speed to the anonymous call on Moroccans not to buy the products of three major groups: high-flying agriculture minister Aziz rail line and zip around Casablanca on new lines of the city’s tramway, as more mega-projects are Akhannouch’s Afriquia petrol stations, former employers’ delivered in the next year, promoting the kingdom’s image as body chief Miriem Bensalah-Chaqroun’s Oulmès/Sidi Ali one of the continent’s most go-ahead economies. From the mineral-water empire and prominent French brand Danone’s yoghurt. Their profits continue to slump as a significant Tanger-Med container port to advanced aerospace, automotive and renewable energy projects, innovative fintech start-ups percentage of consumers stay away. and new financial instruments emerging from Casablanca CABINET SHIFT Finance City, there will be much of merit to feed the kingdom’s expensive public relations machine in 2019. Constitutional reform in 2011 was the King’s reaction to the Arab Spring uprisings, but recent protests, from Rabat wants to end Morocco’s dependency on Algerian gas. UK explorer Sound Energy’s gas from the onshore Tendrara the Al Hoceima riots to #boycott, suggest the people’s field could start supplying power stations anger has not dissipated. The King from 2020/2021, which would help it has increasingly taken back power meet that goal. There are no signs that from the coalition government led Population: 36.2 million conflict with Algeria over the disputed by the Islamist Parti de la Justice et Population growth: 1.3% Western Sahara will end soon, and major du Développement (PJD)’s Othmani. GDP per capita: $3,355 investment in the kingdom’s ‘southern Many of Othmani’s ministers are under Life expectancy: 76.1 pressure. Several technocratic minisprovinces’ continues. Adult literacy: 69.4% ters have joined the Rassemblement Glitzy trains and urban transit systems Inflation: 2.4% aside, the Makhzen (ruling establishNational des Indépendents, which, unHuman development index ment) and its big business allies can der Akhannouch’s energetic leadership, (out of 188 countries): 122 hardly rest easy. King Mohammed VI has is positioning itself to replace the PJD. Foreign direct investment: $2.7bn punctuated politics in the past year by Boussaïd’s successor at finance, Current account as % of GDP: -4.3% banker Mohamed Benchaâboun, will unleashing ‘colères royales’ (royal rages) Mobile phone subscription: 123% focused on lack of progress in tackling be expected to tackle a host of difficore economic and social problems. cult problems including a build-up of Key export: Automobiles payments arrears, notably from state Last change of leader: 1999 POPULAR DISCONTENT bodies, that are stifling business. HighGDP growth (%) These colères have been expressed in tech projects and Moroccan business’s 4.1 3.2 3.2 sackings – last August the departure drive to become a major player across sub-Saharan Africa will undoubtedly of well-thought-of finance minister 1.1 continue as key elements in building Mohamed Boussaïd shocked many – King Mohammed’s version of a ‘develand in a flow of policies driven by the GDP ($bn) opmental state’. However, for all their Palace, rather than by Prime Minister 122.5 118.2 109.3 103.3 benefits most of these success stories Saad Eddine El Othmani’s coalition government. This has added to the King’s do not create the large-scale sustainable 2016 2017 2018* 2019* popularity among many Moroccans who jobs needed to soak up unemployment. blame the government for underperIn Morocco, polling of 16-24-year forming education and health services. olds shows migration to Europe, rather With the public sector widely perceived to remain in crisis, than a career at home, to be the ambition for a majority. popular discontent is apparent far beyond the kingdom’s most This age group is being targeted by a new one-year national troubled corners, such as the northern town of Al Hoceima. service programme for 19-25-year olds, which was announced as a potential remedy to unemployment and alienation. This discontent is spectacularly shown by the social-media phenomenon that emerged last April under the hashtag Opinion is divided about whether national service will be #boycott, which has given public voice to pervasive concerns a panacea to the more than 2.7 million aged 15-29 who are over the cost of living. Directly attacking the political/business not in employment, education or training. THE AFRICA REPORT
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200 COUNTRY PROFILES
NORTH AFRICA
ea
CHAD
SAUDI ARABIA
dS
Port-Sudan
Re
Sudan
400 km
EGYPT
LIBYA
KHARTOUM
ERITREA
SUDAN
Crisis, conflict and continuity
SOUTH SUDAN
CAR
Bashir is unlikely to stick to his pledge to step down in 2020 South Sudan restarting oil production will boost the economy somewhat
ETHIOPIA
S
*Estimation October 2018
udan’s economic crisis is set to continue into 2019, coalition includes the National Ummah Party led by Sadiq as President Omar al-Bashir prepares to hold onto al-Mahdi and the Sudanese Congress Party led by Omer power for another term despite rising discontent. The al-Digair. Bashir has ruled the country since seizing power wave of optimism that swept over Sudan following in an Islamist-backed coup in 1989. He has been indicted the revocation of US economic sanctions in October 2017 by the International Criminal Court for war crimes, crimes has quickly evaporated. The ailing economy, which has been against humanity and genocide during his government’s struggling to recover from the loss of 75% of its oil revenues abusive counterinsurgency campaign in Darfur since 2003. with the secession of South Sudan in 2011, has taken a turn Bashir has defied the ICC indictment and has recently for the worse since sanctions were lifted. The Sudanese pound managed to reposition himself as a regional peacemaker. depreciated by 50% against the US dollar after November His government took over the peace process in South Sudan. With backing led by Uganda, Bashir’s 2017, and inflation soared to 60% in 2018, leading to huge and rapid increases in government managed to bring South the price of imports. The country will not Sudan’s President Salva Kiir and his Population: 41.5 million be eligible for much-needed debt relief rival Riek Machar to sign a power-sharPopulation growth: 2.4% until Washington removes it from the ing deal in August 2018. GDP per capita: $792 list of countries that sponsor terrorism. Life expectancy: 64.7 One of the main factors for the crisis, REBEL ACTIONS RUMBLE ON Adult literacy: 53.5% For both Khartoum and the isolated besides the government’s vast spending Inflation: 61.8% South Sudan elite, what matters is the on defence and security, is the country’s Human development index dwindling hard-currency reserves. The lifeline that is expected to come with the (out of 188 countries): 165 resumption of oil production in South central bank has printed money in order Foreign direct investment: $1.1bn Sudan. As part of their post-secession to pay for socially sensitive imports such Current account as % of GDP: -14.2% aswheatandfuel.Thegold-miningsector arrangements, South Sudan pays Sudan Mobile phone subscription: 71% for every barrel of oil it processes and is a bright spot, however, and it produced transports through Sudan’s pipeline 78tn in the first nine months of 2018 after Key export: Petroleum and crude oil recording production of 100tn in 2017. and refinery infrastructure. Last change of leader: 1989 Meanwhile, the chronic conflicts in GDP growth (%) AUSTERITY AND PROTESTS Sudan’s peripheral regions continue. 3 1.4 As part of an austerity programme The government has effectively manthe government introduced subsidy aged to weaken Darfur’s rebel groups -1.9 -2.3 GDP ($bn) and spending cuts. When opposition to a point where they no longer pose a serious threat, but security in the region groups protested, the security forces clamped down and detained hundreds remains precarious. Acts of banditry and 55.8 45.8 of people for months without charge clashes between pastoralists and farmers 34.4 33.2 over scarce natural resources abound. or trial. Economic woes deepened in 2016 2017 2018* 2019* The UN Security Council voted on 13 April when the country was plagued by severe shortages of fuel and gas. In July 2018 to renew the mandate of the September, Bashir appointed his close African Union-United Nations hybrid ally Moutaz Moussa as prime minister. Moussa has launched operation in Darfur – UNAMID – for a year but also decided a 15-month plan to address the deep economic woes. to downsize its current deployment from 9,029 military personnel to 4,050. Despite having a robust mandate to Despite declaring his plans to step down, President Bashir is preparing for elections in 2020. In August, the ruling National protect civilians, UNAMID has failed to effectively discharge Congress Party (NCP) amended its by-laws to allow him to it, mainly due to government restrictions on the movement stand as the party’s candidate for the 2020 presidential elecof its troops. More than 15 rounds of two-track negotiations tions. This is expected to be followed by another amendment mediated by the African Union on Darfur, South Kordofan of the 2005 constitution to scrap its two-term limit. and Blue Nile have failed to bring the government and The opposition is weak and its calls to overthrow the rebel groups to agree on terms of a cessation of hostilities and a political settlement. government go unanswered. The opposition Sudan Call THE AFRICA REPORT
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NORTH AFRICA
COUNTRY 201 PROFILES
TUNIS
Tunisia
Sousse Sfax
The Arab Spring’s long shadow ALGERIA
The country has had a number of unstable governments since 2011 The administration wavers on decisions when faced with union anger and protests
TUNISIA
Mediterranean Sea
LIBYA 150 km
T
*Estimation October 2018
hrough the aftermath of the Arab Spring, Tunisia economy around, and it could soon lose the support of the continues to suffer from political instability, with International Monetary Fund (IMF) and donor governments. conflict between the president, the prime minister The European Union says that Tunisia is not doing enough to and the national assembly. Nidaa Tounes, the party fight against money laundering and terrorism finance. Other of President Béji Caïd Essebsi, and the Islamists of Rachid economic threats include the devaluation of the dinar and high levels of inflation. Government revenue has also been Ghannouchi’s Ennahda had worked together in 2018 to deal with urgent problems but not their unhit by recent problems in the mining derlying causes. But that deal fell apart sector, particularly a series of strikes at in September when Essebsi announced the Compagnie des Phosphates de Gafsa. Population: 11.7 million that the cooperation plan was over, makPopulation growth: 1.1% RISK OF DEFAULT ing it more unlikely for the government GDP per capita: $3,573 to be able to pass reforms. Added to All of Tunisian main political actors Life expectancy: 75.9 agree on the causes of the country’s this are the regular battles between the Adult literacy: 79% government and the country’s unions economic problems but not on how Inflation: 8.1% about the ongoing economic difficulties. to solve them. For example, massive Human development index Agriculture and tourism are two of the civil service recruitment from 2011 to (out of 188 countries): 96 sectors still doing well. 2013 drove up the deficit, leaving the Foreign direct investment: $880m Prime minister Youssef Chahed no government to struggle to pay down Current account as % of GDP: -9.6% longer has the support of his own party, a debt estimated at an unsustainable Mobile phone subscription: 124% Nidaa Tounes, due to his rapprochement 73% of gross domestic product. The with Ennahda. Chahed is considergovernment estimates that it will have to Key export: Electric conductors ing a run for the presidency and is in make debt payments of $3.2bn in 2019, Last change of leader: 2014 and local analysts warn that there is a open conflict with Essebsi and his son GDP growth (%) 2.9 risk of default because the government Hafedh Caïd Essebsi, the party leader. 2.4 2 Chahed remains prime minister thanks has been paying debt with new treasury 1.1 to Ennahda, other smaller parties and bills. Meanwhile, foreign direct investment levels have been low and are not some Nidaa Tounes rebels. GDP ($bn) likely to pick up with the uncertainty 42.3 41.8 41.7 POLITICAL SHIFT of election season. 40 The presidential and legislative elections Tunisia has strong unions, and they 2016 2017 2018* 2019* planned for late 2019 will reshuffle the are opposed to the sort of policies backed deck but might again leave the top by the IMF, like the privatisation of stateowned enterprises. Labour groups like political parties without control of all theUnion Générale Tunisienne duTravail the machinery of government, and have also been leading protests about high levels of unemploytherefore unable to implement their agendas. The May ment and the rising cost of living. The government has been 2018 municipal elections showed that Ennahda, which has raising taxes and cutting subsidies on things like electricity been downplaying its Islamist roots over the past few years, and petrol prices in order to avoid massive government layoffs. is the strongest party in the country, but took just 28.6% of The tourism sector is growing and could soon be back to the vote. Together, independent candidates won 32.3%, levels last seen in 2015, when a gunman killed 39 tourists in suggesting that the population is shifting its support from Sousse. The country recorded 7.1 million arrivals in 2014 and Tunisia’s main political parties. hit 7 million in 2018. The tourism minister predicted that There has not been a quorum in the national assembly, so it has not appointed members to the Cour Constitutionnelle the number would reach 8 million in 2018, with high visitor and the electoral commission. That could cause problems for numbers from Algeria, Europe and Russia. the elections planned for late 2019, and some party leaders Thegovernmentisfocusingmuchofitsinvestmentspendingon are calling for them to be delayed. theelectricitysector.Itisduetosigncontractsfortheconstruction of 1,000MW of generating capacity from wind and solar projects The political infighting means that the government is not in addition to an underwater interconnection with Italy. implementing the economic reforms needed to turn the THE AFRICA REPORT
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LAST WORD
A STRANGER’S POSE A BOOK BY EMMANUEL IDUMA Emmanuel Iduma was born and raised in Nigeria. He is the author of The Sound of Things to Come, a novel, and the blog A Sum of Encounters, for which he won a 2017 Creative Capital/Warhol Foundation Arts Writers Grant. A Stranger’s Pose (Cassava Press), his latest work, is a travel memoir of poetry and prose with a curated selection of photographs.
Reorientation, Mauritania, 2014, by Dawit L. Petros, who travelled with the author
© DAWIT L. PETROS
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From A Stranger’s Pose
O
n my second evening in Khartoum, we were served a welcome dinner of falafel, a tray full of bean stew, and a pile of pita bread. I observed the woman who spoke the most. Her eagerness seemed like a sprint ahead of the moment. Each person’s response to a question was one-fifth of hers. And when, in an unforeseen twist of the conversation, she was asked which of the men she thought was the best-looking, she pointed at me. She was gorgeous. I noticed, despite her spiritedness, that at the moments she fell silent, the corner of her mouth would twitch, as if she pondered what to leave unsaid. I gathered hearsay tales about her from her friends. The daughter of rich parents, she had returned from studying in Malaysia a few months before. She was betrothed, they
said, but hesitant about marriage. Although curious about how far I could take my interest in her, I felt damned by time. There weren’t more than two days left. They said she was high on hashish the first night I met her. This seemed plausible. Her carriage the next time I saw her, in contrast with her outrageous chattiness, seemed forlorn. A day to my departure, she bought a new camera, a Nikon for entry-level photographers. She brought this when, in a rare moment when we were unaccompanied by my travel companions, we walked in the Omdurman market. She began to take photographs of me framed by wares and stalls and faces in mid-chatter. These are portraits, she joked, of the moments I imagine you’re Sudanese. If you write me, I will send them to you.
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