Tar58 nigeria by The Africa Report

soutH AfRIcA Three divorces and an election

EAst AfRIcA Oil, gas & the new Great Game

HoW to GEt RIcH The new industrialists do it the hard way

w w w.t hea f r ic a r ep or t .c om

N ° 5 8 • M A R C H 2 014

Nigeria

The Sanusi legacy What comes next ?

groupe jeune afrique NIGERIA EdItIoN

Algeria 550 DA • Angola 600 Kwanza • Austria 4.90 € • Belgium 4.90 € • Canada 6.95 CAN$ • Denmark 60 DK • Ethiopia 75 Birr • France 4.90 € • Germany 4.90 € • Ghana 7 GH¢ • Italy 4.90 € • Kenya 410 shillings • Liberia $LD 300 • Morocco 50 DH • Netherlands 4.90 € • Nigeria 600 naira Norway 60 NK • Portugal 4.90 € • Sierra Leone LE 9,000 • South Africa 30 rand (tax incl.) • Spain 4.90 € • Switzerland 9.90 FS • Tanzania 6,500 shillings • Tunisia 8 DT • Uganda 9,000 shillings • UK £ 4.50 • United States US$ 6.95 • Zimbabwe US$ 4 • CFA Countries 3,500 F CFA

SOUTH AFRICA Three divorces and an election

NIGERIA The Sanusi Legacy

EAST AFRICA Oil, gas & the new Great Game

w w w.t heafr icarep or t.com

N ° 5 8 • M A R C H 2 0 14

SOUTH AFRICA Three divorces and an election

EAST AFRICA Oil, gas & the new Great Game

THE AFRICA REPORT

THE HARD WAY

Nigeria

The Sanusi legacy

q Daphne Mashile-Nkosi

The new leaders behind Africa’s industrial renaissance

contents

N ° 5 8 • M A R C H 2 0 14

GETTING

RICH

HOW TO GET RICH The new industrialists do it the hard way

w w w.t heafr icarep or t.com

What comes next ?

Bassem Loukil

u Aliko Dangote

MONTHLY • N° 58 • MARCH 2014

The AfricA reporT # 58 - mArch 2014

t Innocent Chukwuma

GROUPE JEUNE AFRIQUE INTERNATIONAL EDITION

M 08980 - 58 - F: 4,90 E - RD

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GROUPE JEUNE AFRIQUE NIGERIA EDITION

M 08980 - 58 - F: 4,90 E - RD

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country focus

4 Editorial Where are the blessed peacemakers?

45 nigEria Divide or conquer President Jonathan fields demands for restructuring, division of states and autonomous control.

6 lEttErs cover crediTs - inTernATionAl: simon dAwson/BloomBerg viA geTTy imAges; cArl courT/Ap/sipA - nigeriA: pius uTomi ekpe; ivm; hichem; cAmille millerAnd for JA; Jerome fAvre/BloomBerg viA geTTy imAges

8 thE QuEstion

Briefing 10 signposts 12 intErnational

Business

16 pEoplE

64 FrancE-aFrica Romance back on track Faced with limp economic growth French President François Hollande is seeking to boost trade with Africa.

18 opinion 20 calEndar

frontLine

72 rEnEWablEs The sparks of a clean energy revolution

22 industrY Getting rich the hard way A new generation of business leaders are investing in Africa’s capacity to manufacture cars, process raw materials and build equipment. Some governments are now looking for ways to support infant industries without encouraging crony capitalism.

73 MacroEconoMics Africa sidesteps emerging markets crisis 74 lEadErs Fertiliser firm Guanomad and One Thousand & One Voices CEO Hendrik Jordaan 76 FinancE Capitec spreads its net in South Africa

poLitics 30 East aFrica The new Great Game Fighting in South Sudan has brought East Africa’s political crises into sharp focus at a time of great optimism for the region’s economic take-off. 34 intErViEW UN special representative to the AU Haile Menkerios 36 south aFrica The birth of the new left? 38 intErViEW South African trade unionist Sdumo Dlamini 40 cEntral aFrican rEpublic Still a long way to go

dossiEr

78 transport Kenyan and Ethiopian railway expansion; ports in Côte d’Ivoire and Ghana; South African Airways

Art & Life 88 traVEl 15 wonders of the continent 92 in briEF Tunisian hip-hop, books and an interview with singer Angélique Kidjo

41 libYa Rebels run the show

94 liFEstYlE Working out in Africa; Behind the Scenes with Nigerian actor Kunle Afolayan; and Trendhunter on Africans making it big in Hollywood

42 anansi At the African Union summit

98 daY in thE liFE Alice Nana, taxi driver

41 ZaMbia Sata’s successor

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editorial

The AfricA reporT A Groupe Jeune Afrique publication

By Patrick Smith

57‑Bis, rue d’Auteuil – 75016 PAris – FrAnce tel: (33) 1 44 30 19 60 – FAx: (33) 1 44 30 19 30 www.theafricareport.com

Where are the blessed peacemakers?

s he rushed from meeting to meeting at the African Union (AU) summit in Addis Ababa in late January, Donald Kaberuka, the in-demand president of the African Development Bank (AfDB), was asked to make sense of the latest African dilemma. Why is it, when more investment is pouring into the continent than ever and the International Monetary Fund has just upgraded its forecasts for African growth to an average of 6.2% in 2014, that political violence is on the rise again in both outright civil wars and armed insurgencies? Kaberuka pointed out that there are AU or United Nations peacekeeping missions in 11 African states. That covers about 15% of the continent’s 1.1 billion people. This does not mean Africa is heading for a new Armageddon as its economies are taking off, but there are some dangerous trends. The mass killings in South Sudan and Central African Republic have clear political causes. Better economics can help only if the political dynamics are understood. The AfDB was investing heavily in water and power projects in both countries, but outsiders need a better understanding of the political as well as fiduciary risks, according to Kaberuka. So governments and institutions such as the AfDB have to focus sharply on some core political questions. At the top of the list is political inclusion. Kaberuka has been working with Nkosazana DlaminiZuma, chair of the African Union Commission, and other leaders to find ways to shore up countries wracked by conflict. They are looking for ways to deal with what has become a coalition of losers in too many countries, despite rip-roaring

Cha i r m a n a nd f o und e r Béchir Ben yAhMed P ub l i s he r dAnielle Ben yAhMed publisher@theafricareport.com e x e Cut i ve P ub l i s he r JérôMe MillAn

economic growth across the continent. They concluded that the standard response to political conflict – more trade and investment accompanied by a team of financial experts advocating structural reform – needs a rethink. Smart politics needs to go with the money, and the rationality of the market is no match for the warlords. Liberia’s President Ellen Johnson Sirleaf was trying to shut down the operations of Krahn militia fighters in Grand Gedeh County last year. Her solution was to build a highway, enabling farmers in the area to get their crops to market in a The response tenth of the time. Although the project was to political hopelessly uneconomic conflict in accounting terms, needs a giving people a stake in the local economy is rethink – the an incalculable benefit market is no in the longer term. That kind of local match for politics must be a the warlords critical part of the response to the threatening insurgencies. Africa’s Peacemakers, an intriguing new book about Africa’s nobel laureates edited by Adekeye Adebajo, analyses the successes and failures of the continent’s peacemakers and campaigners from Nelson Mandela and Albert Luthuli to Wangari Maathai and Ellen Johnson Sirleaf. Almost all of them flew in the face of conventional wisdom. Their starting point was always to offer an answer to that ubiquitous question: ‘What stake do I have in the system?’ The next question is where to find the next generation of such peacemakers. ●

m a r K e t i nG & d e ve l o P m e nt AlisOn KinGsley‑hAll e d i t o r i n Chi e f PAtricK sMith m a na G i nG e d i t o r nichOlAs nOrBrOOK editorial@theafricareport.com a s s i s ta nt e d i t o r chArlie hAMiltOn e d i t o r i a l a s s i s ta nt AMA nti Osei r e G i o na l e d i t o r PArselelO KAntAi (east Africa) a rt & l i f e e d i t o r rOse sKeltOn s ub - e d i t o r s AlisOn culliFOrd MArshAll vAn vAlen P r o o f r e a d i nG KAthleen GrAy a rt d i r e Ct o r MArc trensOn desiGn vAlérie Olivier christOPhe chAuvin éMeric thérOnd P r o d uCt i o n PhiliPPe MArtin christiAn KAsOnGO r e s e a r Ch AnitA cOrthier P ho t o G r a P hy clAire vAtteBled o nl i ne JeAn‑MArie Miny Prince OFOri‑AttA sales sAndrA drOuet tel: (33) 1 44 30 18 07 – Fax: (33) 1 45 20 09 67 sales@theafricareport.com cOntAct FOr suBscriPtiOn: Webscribe ltd unit 8 the Old silk Mill Brook street, tring hertfordshire hP23 5eF united Kingdom tel: + 44 (0) 1442 820580 Fax: + 44 (0) 1442 827912 email: subs@webscribe.co.uk 1 year subscription (10 issues): All destinations: €39 ‑ $59 ‑ £35 tO Order Online: www.theafricareportstore.com d i f Co m internAtiOnAl AdvertisinG And cOMMunicAtiOn AGency 57‑Bis, rue d’Auteuil 75016 PAris ‑ FrAnce tel: (33) 1 44 30 19‑60 – Fax: (33) 1 44 30 18 34 advertising@theafricareport.com a d ve rt i s i nG d i r e Ct o r nAthAlie Guillery with AnnGie AvilA cArdenAs r e G i o na l m a na G e r s cArOline Ah KinG FAdOuA yAqOBi liliA BenAceur us r e P r e s e ntat i ve AzizA AlBOu a.albou@groupeja.com

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Printer: sieP 77 ‑ FrAnce n° de cOMMissiOn PAritAire : 0715 i 86885 dépôt légal à parution / issn 1950‑4810 the AFricA rePOrt is published by GrOuPe Jeune AFrique

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

Following rwanda’s example

NIGERIA PDP prays that the opposition fall apart

MOÏSE KATUMBI The reluctant politician in Congo’s powerhouse

PAX AFRICANA Fragile peace and hot conflicts face AU

his kind of economic success ceremony TOP [‘Will the bargain hold?’, TAR57 Feb 2014] is far from taking place in my own country, Sierra Leone, which is endowed with abundant mineral resources and foreign donor African companies funds. But yet we still find ourselves in a dire economic situation. So, when can we get out of this mess? It is a shame and a tragedy for our people! The Rwandan people love their country and have worked very hard in terms of reducing poverty and developing their country. Despite the country’s limited natural resources and enduring a terrible civil war in the mid 1990s, it has grown rapidly. Today, the people of this small country Rwanda are enjoying the fruits of their hard labour in combating their abject problems. Bravo Paul Kagame and his assiduous team. Abdul Sheriff via Facebook w w w.t hea f r ic a repo r t .c om

N ° 5 7 • F E B R U A R Y 2 014

9th EDITION EXCLUSIVE

RANKING

• Corporate boom slows • Firms poised for global recovery • Finance, retail and agribusiness lead rally

GROUPE JEUNE AFRIQUE

INTERNATIONAL EDITION

misleading statistics

“Africa’s economies have been growing steadily over the past decade, but poverty has remained stubbornly high.” [‘You can’t eat GDP growth’, TAR56 Dec-Jan] This is a shrewd observation. The GDP figures announced in the [Ugandan] national budget and which were outlined during the state of the nation address are nauseating. In a situation where people are sleeping with empty stomachs we hear that GDP is growing at 6%. Really? Do these statisticians ever leave the cities and venture deep into the villages? Please move away from the towns and cities to get an understanding of the true figures.

Emmanuel B’Gisha via Facebook

Facing up to the economic truth

leave propaganda behind and join hands to solve the problems facing us. The reality is that the cedi has The economic crisis we are flirting depreciated consistently over the past with [in Ghana] has persisted 20 years, even as the GDP has grown because people with no real and without regard to Ghana grounding in economics and business becoming an oil producing nation. realities keep preventing objective Let us put partisan political games discussion about our problems. aside and stare at the real, They see everything as part of fundamental problem straight, then a propaganda battle between the offer solutions to attack the problems party in power and opposition at the root level. What Nkrumah, parties. So everything bad must Busia, Limann, Rawlings, Kufuor, be painted positive and goats turned Atta-Mills and others did not do into cows so their party does not lose is interesting but is behind us. This favour with the people. So we discuss is the time of the NDC with John the symptoms but not the real Mahama in front to solve problems. Papa Kwesi Nduom fundamental or underlying problems. in an open letter via Facebook The election was in 2012 so we should

stymying ghanaian growth How do I sum up the Bank of Ghana rules? Bad for business. To introduce so many restrictive rules at a time when business confidence is low, inflation is rising and interest rates are high only further shatters confidence in the cedi, leading to a rush for more foreign exchange on the black market and ‘under-the-bed’ banking. My forecast is that this month the cedi will experience its biggest monthly drop for five years and could end up selling at three to a dollar before March.

Gabby Asare Otchere-Darko in an open letter via Facebook

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. ghana: GREENWICH MAGAZINES & BOOKS, Mr Ernest Asare, +233 (0)208 142 374, greenmaghana@gmail.com – Kenya: NATION MEDIA GROUP, Josephine Bonareri Abuga, +254 (0)20 32 88507, JAbuga@ke.nationmedia.com – nigeria: NEWSSTAND AGENCIES LTD, Solomon Otinwa, +234 (0)709 8123 459, newsstand2008@gmail. com – sierra leone: RAI GERB ENTERPRISES, Mohammad Gerber, +232 (0)336 72 469, raigerbenterprise@gmail.com – southern aFrica: MCS CAXTON, Luisa Rebelo, +27 (0)11 602 9800 • luisar@magcservices.co.za – tanZania: MWANANCHI COMMUNICATIONS, Erasto Matasia, +255 (0)713 512 551, ematasia@ tz.nationmedia.com – uganda: MONITOR PUBLICATIONS LTD, Stephen Eselu, +256 (0)702 178 198, seselu@ug.nationmedia.com – united Kingdom: COMAG, Mark Swan, +44 (0)1895 433791, Mark.Swan@comag.co.uk – united states & canada: LMPI, Sylvain Fournier, +1 514 355 5610, lmpi@lmpi.com – ZimBaBwe: MUNN MARKETING (PVT) LTD, Nick Ncube, +263 (0)4 662755, nickncube@munnmarketing.co.zw For other regions go to www.theafricareport.com

ADVERTISERS’ INDEX TOTAL p 2; UBA p 5; NCT NECOTRANS p 7; BANK OF AFRICA p 9; HAROPA*PORT DE ROUEN p 13; VODACOM BUSINESS p 15; OLAM p 21; THE AFRICA CEO FORUM p 27; GMA p 39; CBS p 43; STANBIC IBTC BANK p 44; NESTLE p 49; NOVIGNIS p 51; KAPPAFRIK p 54; FCMB p 55; LAGOS CHANNEL MNGT p 57; SWISS BIOSTADT p 59; TAR SUBSCRIPTION p 61; PHOENIX GLOBAL CAP. MKTS p 62-63; THE AFRICA HEALTH FORUM p 67; DDP OUTDOOR p 69; GMA p 69; GCC p 71; EMS - SAITEX p 71; ADEXEN p 77; EMRC p 77; CMA CGM p 81; REGUS p 83; NATIONAWIDE EQUIP. p 83; TOTAL SA p 85; METALGALANTE SPA p 87; FRISOMAT p 87; OXFORD AFRICA SOC. p 87; CNN EMEA p 95; EKO HOTELS & SUITES p 97; ECOBANK p 99; INVESTEC GROUP p 100 the africa report

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

investors pulled $9bn from emerging market stock and bond funds in the last week of January due to concerns about lower growth rates and the winding down of the united states Federal Reserve’s quantitative easing programme

Are emerging markets less attractive than they used to be?

Yes Sharmin moSSavarrahmani Chief investment officer Private Wealth Management Group, Goldman Sachs

Growth in emerging economies fell well short of expectations in 2013, marking the second consecutive year of below-trend expansion. The failure of emerging countries to implement meaningful structural reforms is holding back their growth potential. For the year ahead we fear this trend will continue, as looming elections will again delay needed reform measures. After all, countries holding elections in 2014 account for almost a quarter of emerging market gross domestic product (GDP). Despite these structural challenges, the cyclical backdrop for emerging economies is arguably improving. The stronger global growth we expect should increase external demand, boosting emerging market exports. However, tighter financial conditions arising as the Federal Reserve tapers its bond purchases will likely temper this improvement. The interplay between these structural and cyclical dynamics will not be uniformly felt. Those countries with twin fiscal and current account deficits, such as Turkey, South Africa and India, will have to curtail domestic demand growth and raise rates as the Federal Reserve tightens monetary policy, or else risk even larger deficits and destabilising capital outflows. By contrast, countries with stronger balance sheets, such as South Korea and Mexico, will have more freedom to pursue pro-growth policies and let their exchange rates absorb external shocks. With structural and cyclical forces pulling in opposite directions we project only a moderate rise in GDP growth in emerging economies, from 4.9% in 2013 to 5.2% in 2014. ●

No Pravin Gordhan Finance minister, South Africa

What we have is a regrettable short-term view about prospects in emerging markets, which doesn’t align with the long-term view – that this is where billions of consumers are. This is where there are millions of people getting into the middle class. This is where there are rich natural resources, new forms of innovation taking place and both new markets and sites of production. So this period that we are experiencing in relation to what we can call the ‘post-quantitative easing’ turbulence is just that: a period. And one in which we will have to absorb surprises and shocks. Every economy in the world today has to confront certain constraints. Every government in the world has to command the technical and political will to overcome those constraints. We have our fair share in emerging markets, but so too have developed countries. But if we recognise we are in an interconnected world, then there will be periods where advanced economies support emerging markets and also vice versa. ●

RESpONSES to last month’s question:

Can government regulation and internet spying be justified? How does government spying make you a victim? [It is a] violation of privacy, but what is private with information communications technology and tech? Twitter or Facebook? Joseph Onwuamaeze via Twitter Sensible 21st-century regulation should protect journalism and freedom of expression on every platform. Online surveillance threatens digital freedoms, which are still to be defined and understood. Andy Heslop via email Government regulations [in Zimbabwe] compel telecommunication companies like Econet Wireless, Tel•One and Telecel to have a database of network users and to make these records available to the government if needed. The government justified [this law] as being in the interest of national security and research. Charles Auernheimer Nyamudze via Facebook I think that the scope of the US government’s programme is both impressive and disgusting. Jeremiah Walker via Facebook

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briefing

SiGNPOSTS

EGyPT Pro-army demonstrators gathered at Cairo’s Tahrir Square on the third anniversary of the revolution.

TUNiSia President Moncef

Marzouki signed into law a muchdebated constitution.

ETHiOPia Security was high on the agenda at the African Union summit held in Addis Ababa, after recent violence in South Sudan and CAR.

Piracy

30% Dangote

Some safer shores

cement

70% rest of

the nigeria stock exchange

the nse posted stellar

45% growth

NiGEria a fraGilE STOck ExcHaNGE?

in 2013

Aliko Dangote’s cement company represents nearly a third of the value of the Nigerian Stock Exchange. The NSE posted stellar 45% growth in 2013… but 80% of that growth was provided by Dangote Cement. If it stumbles, so does Nigeria.

GHaNa THE fall aNd fall Of THE cEdi

elief for captains navigating the Gulf of Aden. The International Maritime Bureau reports that hijacking incidents off the coast of Somalia fell to 15 events in 2013, compared to 75 in 2012 and 237 in 2011. Just two of those hijack attempts were successful, and the attackers released both ships the following day. Good news stories about Somali pirates recycling themselves into other professions abound, perhaps because of the dense network of middlemen who got a cut of the action. The World Bank says companies paid between $315m and $385m in ransoms there since 2005. While the decrease in East African piracy is celebrated, piracy in West

Africa gets less attention – but it is spreading beyond its usual reaches. On 3 January, a ship owned by Spanish company Martínez Hermanos disappeared between Malabo and Bata in the waters off Equatorial Guinea. On 30 January, Nigeria’s State Security Services announced they had saved the crew who had been taken hostage. Despite the claims of the Nigerian authorities, the government in Malabo confirmed that the Spanish firm had paid a ransom for the release of the ship. And on 18 January, a Nigerian gang used a stolen tugboat to attack the MT Kerala, an oil tanker, off the coast of Luanda – the southernmost point yet recorded for West African piracy. ●

18/4/08 1 = $1

Beginning of election season, end of Kufuor govt.

3/1/09 0.79 = $1

14/12/09 0.69 = $1

Election of President John Atta Mills

FARAh Abdi WARSAMeh/AP/SiPA

First commercial oil pumped from Jubilee field

27/1/13 0.41 = $1 24/7/12 0.51 = $1 Death of Atta Mills. John Mahama takes over

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bRIeFING

NIGERIA Africa said goodbye to one of its Mandla Maseko to be first most beloved photographers, JD ‘Okhai Ojeikere, who died at his home in Lagos aged 83. black African in space.

SOUTH AFRICA

RWANdA The trial of

suspected genocidaire Pascal Simbikangwa opened in Paris.

ISRAEL Hundreds of asylum seekers from Sudan and Eritrea protested outside the Interior Ministry in Tel Aviv.

AuguSTIn LE gALL / HAYTHAM PICTuRES; ELIAS ASMARE/AP/SIPA; THEMbA HADEbE/AP/SIPA; uwE ZuCCHI/EPA/CORbIS; InTERPOL/AFP; LAuRA CHIESA/DEMOTIx/CORbIS

“Rwanda did not kill this

person—and it’s a big no. But I add that, I actually wish Rwanda did it. I really wish it”

EGYPT vS ETHIOPIA HYdRAULIC dAM

Rwandan President Paul Kagame in an interview with The Wall Street Journal in which he compared the death of dissident former intelligence chief Patrick Karegeya to the assassination by the US of Osama Bin Laden

CONSTITUTIONS NORTH AFRICA RENEWS ITS FOUNdING TExTS The wave of protests that erupted in Tunisia and shook North Africa has resulted in a shake-up to the legal frameworks that govern countries. For some this is an opportunity to enshrine basic protection for civilians, but the old order has not been entirely swept away.

MOROCCO Royal rights

TUNISIA Islam light

A constitution was voted in July 2011 after protesters demanded democratic reforms. The palace is less involved in daily politics, but the king retains complete control of the armed forces, foreign policy and the judiciary; he appoints the prime minister and maintains control of all religious matters.

Taking two years to draft (see photo page 10), Tunisia’s constitution is not founded on Islamic law, unlike others in North Africa. A chapter is dedicated to citizens’ rights, including protection from torture, right to due process, and freedom of worship. It guarantees equality for men and women before the law.

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LIBYA Work in progress After the overthrow of Gaddafi and more than two years of chaos, Libya will elect a Constitutional Assembly on 20 February to draft a new constitution. Political divisions, demands of tribal and regional interest groups and rivalries among rebel groups all complicate the drafting process.

EGYPT Army on top The two-term president can be impeached by parliament, the state guarantees “equality between men and women”, and parties may not be formed based on “religion, race, gender or geography”. But the military can haul civilians in front of military courts, and gets to appoint the defence minister for the next eight years.

Ethiopia has refused an Egyptian request to put its multibillion-dollar dam project on hold, following a visit by an Egyptian delegation to Addis Ababa. The dam will generate 6,000MW, but Cairo fears it will affect the throughflow of water in the Nile.

CLIMATE CHANGES CROP PATTERN CHAOS Research by the CGIAR shows areas in Africa where cassava will grow better (green) and worse (red) with rising temperatures.

briefing

international

3 1

7 2 8

taiwan

Taiwan’s President Ma Ying-jeou visited São Tomé e Príncipe and Burkina Faso in January. Together with Swaziland, these are the only three African countries that officially recognise Taiwan.

United StateS

Uncle Sam’s summit

BASSEL TAWIL/AFP

Syria

Talks in Geneva; misery in camps

A temporary ceasefire in the rebel-held city of Homs in early February allowed civilians to flee and aid agencies to deliver supplies. The government has conducted a siege of the city for more than a year and a half. Government and rebel forces held talks in Switzerland. However, there was no sign of consensus within the United Nations (UN) Security Council for a change in policy. The rebels continue to fight for the creation of a transitional authority with full governmental powers, something that President Bashar al-Assad’s government refuses in principle. Refugees continue to flee as the civil war grinds towards its third anniversary. UN agencies estimate there to be about 2.5 million, with almost a million in Lebanon and more than half a million each in Jordan and Turkey. Hundreds of thousands more have travelled to Iraq and Egypt. Nearly half of the refugees are under 18. Conditions in the camps in which they cluster remain grim. Limited schooling is attempted in some, while others still face huge shortages of food and basic medical supplies. ●

The United States (US) is playing diplomatic catchup in Africa. President Barack Obama is inviting 47 of Africa’s 54 presidents to a first ever US-Africa Leaders Summit in August to discuss boosting trade and security ties, as he seeks to counter China’s economic foothold on the continent. Egypt and Zimbabwe were the only (unsuspended) members of the African Union not to receive an invite to the Washington event. Secretary of state John Kerry says that the main topics of discussion will be initiatives on trade, electricity production and youth. Meanwhile, India’s foreign minister Preneet Kaur visited Côte d’Ivoire in late January as Delhi sought to court African leaders ahead of the third India-Africa Summit scheduled for May. ●

Germany

Marijn Dekkers, chairman of German drug giant Bayer, responding to a decision by Indian authorities to allow the manufacture of a generic version of anti-cancer drug Nexavar.

“We did not develop this medicine

for Indians. We developed it for Western patients who can afford it ” ER

BAY

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briefing

african angles

Thailand

Protests disrupt polls The country was left in limbo when anti-government protesters disrupted hastily organised elections in early February. Prime Minister Yingluck Shinawatra’s troubled government called the polls but oppositionists blockaded polling stations in Bangkok and southern Thailand. Millions of voters were unable to cast their ballots. The elections were a bid to break the deadlock caused by more than three months of protests that followed an attempt by Yingluck to pass an amnesty that would allow her brother, former prime minister Thaksin Shinawatra, to return. ●

india

Agriculture accounts for

14%

of India's GDP,

but over

50%

of India's labour is in agriculture.

The World Bank’s chief economist says that while India’s large population is a potential strength, much of the workforce is tied up in agriculture, compared to the more efficient Chinese use of labour.

Ukraine

EU threatens sanctions The tug of war over Ukraine continues as the European Union (EU) said in mid-February that it would consider sanctions against Kiev if the crisis worsens. Anti-government campaigners have held street demonstrations since November in protest at President Viktor Yanukovych’s decision to forge closer ties with Russia rather than the EU. Yanukovych accepted the resignation of pro-Moscow prime minister Mykola Azarov at the end of January in a bid to ease tensions, but the Russian government responded by announcing it would freeze a $15bn bailout payment. ●

Solomon KaPErE

Social worker and advocacy officer, africa Gay and lesbian Organisation against homophobia

Playing politics with homosexuality From Putin to Museveni, politicians look to score points with policy related to sexual rights

he Sochi Olympics in Russia have been in the headlines, but not just because of the sporting achievements of the athletes. Much of the attention has focused on Russia’s hostile stance on gay rights. President Vladimir Putin had hoped that hosting the Olympic Games would be an opportunity to gain international credibility for his country on the world stage. Instead, the gay rights issue has stolen the limelight. Decisions like that of United States president Barack Obama to select an openly gay athlete, Billie Jean King, to lead the US Olympic delegation send a powerful message to Russia that will resonate with many African leaders. The reception that gay people in Africa receive varies country by country. In my country, Uganda, the issue of homosexuality is heavily politicised, with the media and government ministers always seeking to bring negative attention to the subject. However, the reality in Kampala is that there are many gay organisations that operate openly, and the government tolerates it. For the majority of the population, it is not an issue. But among the political elite, there are a large number of evangelicals who hate homosexuality and are trying to politicise the matter in the minds of the public. Ultimately, what we are talking about is politicians trying to moralise about people’s behaviour. Mostly, this politicisation comes from the evangelical quarter. It began in the 1990s, when the issue of HIV

and AIDS came to the forefront of people’s minds as there were few proper programmes set up to fight the disease. In contrast, in Kenya now, there is some progress on the issue of sexual rights. They have clinics to treat HIV/ AIDS patients and toll-free telephone lines to offer advice. Kenya is not necessarily welcoming to homosexuals, but the country seems more tolerant than Uganda. For Uganda’s President Yoweri Museveni, homosexuality is simply a political issue. He does not have a strong personal opinion on it. He is a politician, and he plays politics with the issue. When he talks about homosexuality, sometimes he is against it and sometimes he is for it. In my opinion, he is not against homosexuality, not at all. He is simply playing the political game and trying to keep the evangelicals on-side. What will make a difference for him is if the country’s economy is affected. UK businessman Richard Branson announced in December 2013 that he was not investing in Uganda as a result of negative attitudes towards homosexuality. Now that kind of consequence will be noted. Uganda has a growing tourism industry. If the government’s stance on homosexuality starts to have a negative economic impact – if it becomes harder to sell Uganda to the European tourist market – that is when the government is likely to really stop and listen. After all, the president is a good economist. He will listen to the numbers. ● the africa report

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briefing March

AfricA Business conference At HArvArd Business scHool 28 feb-2 March Boston | united stAtes www.africabusinessconference.com

Power & electricity world AfricA 11-12 March JohannesBurg | soutH AfricA terrapinn.com/events

guineA-BissAu PresidentiAl And PArliAMentAry elections 16 March Citizens are seeking post-poll stability after the november 2013 general elections were postponed and 2012 elections cancelled because of a military coup.

cAlendAr

engineers, suppliers and operators will come together to tackle issues facing the power generation sector.

powergenafrica.com

tHe econoMist nigeriA suMMit 2014 19-20 March Lagos | nigeriA turning growth into prosperity. economistinsights.com

MozAMBique Mining, oil & gAs And energy conference & exHiBition 27-28 March Maputo | MozAMBique mozmec.com

euro-AfricA youtH PArliAMent 27 March-4 April BerLin | gerMAny More than 100 young africans and europeans will come together to thrash out social, economic and politicial issues at this event organised by the Youth Bridge Foundation of accra, ghana – which also organises the annual african Youth and governance Conference – and the european Youth parliament. youthbridgefoundation.net

15tH

april

eAst AfricA ProPerty investMent suMMit 2-3 April nairoBi | KenyA eapisummit.com

gHAnA suMMit oil & gAs 8-10 April aCCra | gHAnA cwcghana.com

PresidentiAl election AlgeriA 17 April May

AfricA HeAltH foruM 16-17 May

28-29 March Cape town | soutH AfricA capetownjazzfest.com

geneva | switzerlAnd theafricahealthforum.com

tHe AfricA ceo foruM 17-19 March

Abdelmalek sellal and Mugabe at the Au summit

geneva | switzerlAnd the african Development Bank, groupe Jeune afrique and rainbow unlimited bring together the continent’s top business leaders for two days of conference and high-level panels.

Jiro ose/reDuX-rea

4tH AfricA-euroPeAn union suMMit 2-3 April theafricaceoforum.com

Power-gen AfricA 17-19 March Cape town | soutH AfricA a range of experts including policy makers, project developers, financiers,

BrusseLs | BelgiuM Diplomats expect a bumpy road to the africa-European Union (EU) summit. The European commission hopes to shake off its dry and technocratic image to create a style based more on diplomacy and political engagement. it is perhaps an attempt to compete with emerging partners such as china, india and Brazil. The European Union finally invited Zimbabwe’s president robert Mugabe to the summit after the african Union had threatened to withdraw from proceedings if he was not allowed to attend. There are tense discussions to be had over the controversial Economic partnership agreements. as we went to press Botswana, Namibia, cameroon, Ghana, côte d’ivoire, Kenya and Swaziland were yet to sign up. consilium.europa.eu the africa report

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country focus Nigeria

PIUS UTOMI EKPEI/AFP

Children celebrate Nigeria’s independence, though the legacy still hangs heavy

Divide or conquer D In the century since unity Nigeria has experimented with federalism in myriad forms. Today, as President Jonathan plans a national conference in the face of growing criticism, he fields demands ranging from restructuring and the division of states to autonomous control

By Monica Mark in Lagos

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own a rutted track in the neglected railway town of Zungeru in the Middle Belt lies a dilapidated building where a couple of British colonial governors drew up the frontiers of Africa’s most populous nation. With the stroke of a pen on 1 January 1914, what had formerly been the northern and southern protectorates became the single country of Nigeria. A century later, the abandoned house replete with history is for some a potent symbol of the current state of the

country focus | nigeria

300 km NIGER

CHAD

Kano

BENIN

ABUJA

NIGERIA Lagos CAMEROON

Port Harcourt Gulf of Guinea

naija by numbers GDP

$263bn

GDP/caPita

$1,555

PoPulation below Poverty line

70%

Main oPPosition Party All Progressives Congress (APC) aDMinistrative Divisions 36 states and 1 territory Political control oF state GovernMents: ■ 18 (PDP) ■ 16 (APC) ■ 1 (APGA – All Progressive Grand Alliance) ■ 1 (Labour Party)

Source: WorLD BANK 2012 for GDP fiGureS

rulinG Party People’s Democratic Party (PDP)

jOininG The GianTs millions 2,000 India

1,500 1,000

Nigeria

500

USA

0 1950

2013

2050

Source: uN

China

2100

POPuLaTiOn by aGe 80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 12

Male Female

Source: uS ceNSuS BureAu

nation. Nigeria’s tangled federalism is an issue that is bedevilling President Goodluck Jonathan’s administration with growing ferocity. Groups agitating for more regional autonomy or even secession have burgeoned since the end of military rule in 1999. Some totally reject the authority of the federal government in Abuja. At the extreme end are the militant Islamists of Boko Haram based in the north-east. The Movement for the Emancipation of the Niger Delta (MEND) has reconfigured itself in the south-south, and the Oodua People’s Congress still has support in the southwestern heartlands. In the middle – and less easily dismissed as ‘mischief-makers’ by the government – is a broad range of activists calling for a restructuring of the federal government, with its 36 states and federal capital territory in Abuja. Dissatisfaction with the way Nigeria is governed and the cost of governance is a popular sentiment. “one nigeria consciousness”

It was those concerns that President Jonathan was tapping into when he launched his “national conversation” last year about the future of the country. For some, the move to reopen the debate about a national conference and reform of the federal structure looked like political opportunism ahead of a national election. For others, it was a great opportunity to make their positions felt. Jonathan referred approvingly to a “one Nigeria consciousness” when he launched a year of centenary celebrations in October 2013. Addressing a large crowd at Eagle Square in Abuja, Jonathan drew cheers as he called the amalgamation “a blessing”. Commemorative events had been carefully stage-managed, right down to a game show quiz that included participants from each of Nigeria’s six geopolitical zones. Alongside the pomp and cheers celebrating nationhood, the president’s speech included a warning to wouldbe secessionists. “No one should insist on reversing history; those who seek a return to pre-1914 Nigeria only seek to diminish our collective heritage,” he said. That warning has fallen on deaf ears in many quarters. A few days after Jonathan’s speech, the Movement for New Nigeria, a small

but vociferous campaign, told a crowd of youths in Lagos that the country was on the verge of a “monumental disaster” if a “sovereign national dialogue” was not held early this year. “The range of problems that Nigeria is facing requires a resetting of the foundations. We propose a number of federations, each with the right to self-determination,” said Oguchi Nkwocha as his fellow campaigners distributed inch-thick documents emblazoned with the words “True Federation Character”. Nkwocha heads this multi-ethnic movement that advocates that Nigeria should split into several smaller federations. In many other countries, such groups would be seen as fringe sideshows. But Nkwocha caused newspapers to sit up, and, at times, stung the odd politician into responding. Now, as elections approach in February 2015, the pressure has been turned up. Since its inception, Africa’s giant has wrestled with various formulae to give its 250 ethnic groups better representation. Calls for a sovereign national conference have grown louder since 1993, when the dictator General Sani Abacha annulled the election win of Moshood Abiola. Aiming to legitimise his regime, Abacha commissioned a watered-down constitutional conference commission. Those talks produced one important result: that all states in the Niger Delta would be entitled to 13% of the revenue earned from their oil production. Since then, the oil-producing states have been militating for ever higher percentages.

a century of argument: the

1885

1914

Sir George Taubman Goldie claims British dominion over the lower Niger at the Berlin Conference on West Africa. He makes treaties with more than 400 chiefs and obtains a trading charter for the Royal Niger Company. the africa report

Area now known as modern Nigeria is brought together as the Colony and Protectorate of Nigeria. The country was still divided administratively between the North, the South and the Lagos Colony. •

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nigeria | country focus

Scepticism may surround Jonathan’s national conference, but there is a real call for debate

As several senators convened a meeting another senior aide dismissed the chances of far-reaching constitutional reform: “The presidency holds so much power in this country that I cannot see any man in that position relinquishing it.”

Akintunde Akinleye/ReuteRs

what lies beneath

Olusegun Obasanjo, the first elected president after the return to civil rule in 1999, organised the National Political Reforms Conference near the end of his administration in 2005, but little changed on the ground. Then, last October, Jonathan set up a 13man committee to head a promised national conference “within a month”. logic of the splinters

Senate president David Mark, a People’s Democratic Party (PDP) loyalist who has long lobbied for the creation of additional states, tells The Africa Report that a convention – and a constitutional overhaul in the longer term – is much needed: “Nigeria has too many bright

candidates in each region not to have them all represented at national level. That is not in doubt. Rather the issue is how to make sure each region is fairly represented. This is not something that is decided overnight, but it is an issue that cannot be avoided.” The planned convention would not have “legally binding status,” but state creation would be a key point on the agenda. “I have not yet heard anybody who has cogent reasons as to why [state creation] would not be viable for the development of Nigeria,” adds Mark, who has called for his home region, Benue State, to be divided into two to provide a separate new state for his Idoma ethnic group.

Oil, as with so much in Nigeria, is at the heart of the debate. Some of the recent infighting that has erupted in the PDP stems from attempts by Rotimi Amaechi, the governor of Rivers State, to exert greater control over the flow of locally produced oil. Resource control has long been the cri de coeur of militants in the Niger Delta. The Delta, with its myriad creeks, accounts for some 40% of the country’s oil output. “[One] factor that caused the erosion of state autonomy was oil. Quite frankly there was too much money at stake to allow individual states to develop at their own pace and do as they pleased,” argues the historian Max Siollun, whose book Oil, Politics and Violence examines the military coup culture that followed Nigeria’s First Republic (see page 50). “It would have caused spectacular disparities in wealth between the Delta and the rest of the country – even worse than is the case today. Nigeria was created as an economic union and has remained so even 100 years later,” adds Siollun. ●●●

shifting states of the Federal Republic of Nigeria

1960

keystOne-FRAnCe

On 1 October Nigeria gains independence. The 1961 plebiscite results in greater political power for the north. Nigeria becomes a threeregion federal republic in 1963. In 1967, General Gowon divides the country into 12 states. the africa report

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1970

Nigeria emerges united from its 30-month civil war, provoked by the Eastern Region’s declaration of independence. A succession of military leaders follows.

1979-1983

The Second Republic is declared as General Olusegun Obasanjo hands over power to the civilian regime of Shehu Shagari. Regional diversity is underlined by the ‘federal character’ of the nation.

1999

Nigeria regains democracy after another 16 years of military rule, including the short-lived Third Republic of 1993. Obasanjo is elected president of the Fourth Republic, which formalised the current 36-state system.

2014

President Jonathan launches constitutional talks on resource control and devolution. Some are calling for yet more states, but others want the existing states consolidated into larger semiautonomous regions.

country focus | nigeria

A lasting and deep suspicion that the country’s ruling class is holding Nigeria together solely to feed off its resource riches fuels popular anger. It is hard to deny the truth of the sentiment. Northern governors fear a renegotiation of Nigeria’s constitution would endanger their access to southern oil. So in the topsy-turvy world of Nigerian politics, the Arewa Consultative Forum (ACF), the voice of the northern elite, has thrown its backing behind Jonathan’s calls for national unity. That is a rare case of northern and southern leaders seeing eye to eye. ●●●

vote of no confidence

GeorGe esiri/epa/Corbis

“The ACF has made it clear long ago that it is not opposed to any national dialogue that can calm nerves and away from being ‘glorified economic bring about the strengthening of the Nigeria project, provided such national subsidiaries’ of the federal government. dialogue would not take the form of “Calls for a sovereign national conference are an accurate barometer of a sovereign national conference,” explains Anthony Sani, the group’s public the political climate […] that seems to secretary. “This is because a sovereign heighten whenever things seem to be national conference amounts to a vote going awry in the polity,” argues Ekiti of no confidence on our democracy State governor Kayode Fayemi. The and its institutions […] which nobody system of “asymmetric federalism”, [and no] group has the right to do.” says Fayemi, explains why his state, However, southern activists such as with just three million people, is somethose in MEND accuse the 12 northtimes buffeted by political violence. ern states of doing exactly that when “The choice is between competitive they opted for sharia law more than a federalism and a revenue allocation decade ago. Regional autonomy has formula that encourages hard work been shrinking since the military seized and competition on the one hand, power in 1966. With the country’s three and the post-civil-war order with its regions turning to four regions, then 12 highly centralised governance that states and now 36 states, the centre has stifled local creativity and autonomy become stronger at the expense of the on the other hand. In effect, the choice periphery. And the military still wields was no choice.” enormous power on-stage and behind the scenes. Critics accuse the ruling class “First and foremost the of holding Nigeria together military came to power as a unifying force, and its to feed off resource riches credo was to maintain the corporate existence of Nigeria, even Although there is distrust when calls for greater devolution have come from fighting a war to do so. Their fear was some at the top, there are signs that it that increased state autonomy would could boost development. Certainly encourage secessionist sentiment. It history shows the average Nigerian was got to a stage where calls for devolubetter off under the First Republic, when tion became interpreted as treason,” the three large regions had substantial Siollun points out. political authority and autonomy from A whiff of this is reflected in the recent heavy-handed reaction by securthe centre. Even after discounting the ity officials – controlled by the centre rapid population growth and inflation, the average income in Nigeria then was – who have prevented the dissenting almost twice as much as today’s figure Rivers State assembly from sitting. of around $1,500 per capita. Others Many believe loosening Abuja’s hold would force local governments to move point to the success of the commer-

MEND militants increased their attacks and kidnappings in the Niger Delta in 2013

cial capital Lagos, where the opposition All Progressives Congress nurses a long-running feud with the PDP-controlled government in Abuja. “There has to be a loosening of federal control and impetus for states to have greater control of their affairs. At some point the oil is going to run out, and when it does the raison d’être for keeping such a unified structure will expire,” says Siollun. three become one

There is a final twist. When the country’s Richards Constitution was drawn up in 1945, creating a federation of three regions, national experts argued it would undermine national unity and encourage separatist tendencies. Into the fray entered Bernard Henry Bourdillon, the former colonial administrator whose popularity can be seen in the abundance of squares that bear his surname. “In fact, this measure represents not the division of one unit into three, but the beginning of the fusion of innumerable small units into three and from these three into one,” he declared. Bourdillon could hardly have foreseen the political and constitutional maelstrom that would occur 70 years later, after Nigeria had adopted an elaborate and costly federal system: now some activists demand a return to three semi-autonomous regions, while politicians are still lobbying for the creation of ever more states. ● the africa report

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country focus | nigeria

PeoPle to Watch

Billionaires, booty and brains: the many faces of Naija

saying it is “beset with many crises, mostly leadership-induced crises” and it has “lost touch with Nigerians”. The defection gives the opposition All Progressives Congress (APC) a muchneeded boost and could be pivotal in how much ground it can claw away from the party that has been in charge since the return to civilian rule in 1999. The founding member of the PDP, whose presidential ambitions saw him briefly forced out of the party in 2006, is now a favourite presidential candidate for the APC, which has struggled to find a unifying figure for its divergent lobbies. But Atiku’s loyalty is by no means certain. The PDP has downplayed the significance of his defection. “We are waiting for Atiku to go on this voyage and to come back. He has done it before. This is not the first time, and we will welcome him back when he comes [back],” quips Uche Secondus, the PDP’s deputy chairman. pernicious pop star

HectoR iSlAS www.Hec9.com

he Nigerian Prize for Literature combines two things Nigerians love best: books and money. At $100,000 it is one of the richest literary prizes in the world, and is joined this year by the new Etisalat Prize for Literature. Meanwhile another neglected patch of the literary landscape is quietly growing: historical non-fiction. After Oil, Politics and Violence: Nigeria’s Military Coup Culture (1966–1976), Max Siollun recently released Soldiers of Fortune, which tackles the decade in which power rotated between generals Ibrahim Babangida and Muhammadu Buhari. Siollun’s articles and talks have helped bring historical context to the current crisis buffeting Nigeria. “There’s a tendency to think the country’s problems are solely brought on by the leaders but there is little appreciation that some problems are embedded in Nigeria’s structure,” says Siollun. The brash and outspoken businessman Femi Otedola fell off the Forbes rich list in 2009 but returned with a bang at the end of last year. The reason? A 1,395% rise in the share price of the Lagos-listed Forte Oil, formerly African Petroleum. This was a result of Otedola’s branching out into the privatisation of power plants. Forte subsidiary Amperion Power took operational control of the 414MW Geregu power plant last year. Fellow business magnates Tony Elumelu and Aliko Dangote have similarly won bids for power plants. Observers will be closely watching whether these investors can kickstart the country’s crumbling power infrastructure. No less rich, former vice-president and political heavyweight Atiku Abubakar (1) quit the ruling People’s Democratic Party (PDP) in February,

AfolAbi Sotunde/ReuteRS

Otedola, Elumelu and Dangote are finding new ways to get richer, Dencia wants to get whiter, and it seems Atiku Abubakar wants to be president, but for which party?

eASy tAxi

If there are two things guaranteed to set the Nigeria blogosphere afire they are pop stars and skin bleaching. NigerianCameroonian singer Dencia (2) set off a round of debate about skin bleaching after launching a new range of creams called Whitenicious. Critics have questioned the ethics and medical credentials of the cream, whose claim to banish “pigmentation and spots forever” is demonstrated by the spotlessly white-looking singer on the packaging. Still, the $150 price tag for a tiny tub has not stopped the range from selling out. Meanwhile, a wave of young returnees are bringing more skills and innovation to Nigeria. Among them is 25-year-old Bankole Cardoso (3), who has plugged a gap in the market for reliable taxi services with the mobile application Easy Taxi, which was originally founded in 2012 by the German tech incubator Rocket Internet. Cardoso, a former New York-based PwC employee, has adapted it to Lagos. In a city of millions of cars and epileptic public transport, the app connects users to the nearest registered cab driver. After confirming a pick-up point with the click of a button, clients can follow the driver’s approach in real time. “We’re trying to solve the challenges standing in the way of Lagos being a model megacity,” says Cardoso, who has further apps in the pipeline. ● Monica Mark in Abuja

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country focus | nigeria

Central Bank of nigeria

Lamido Sanusi’s legacy The central bank governor will step down in June, having saved the financial sector and created plenty of enemies along the way

“

love controversy,” Sanusi Lamido Sanusi, Nigeria’s central bank governor, said at a conference in Lagos on 3 February. Hours earlier he accused the state-run Nigerian National Petroleum Corporation of operating illegally and diverting $20bn of state funds, an outburst that embarrassed President Goodluck Jonathan. His claims followed a leaked letter he wrote to Jonathan that exposed problems in remitting oil revenue to the federation account. The state oil firm denies any wrongdoing. When Sanusi leaves his post in June, he will be remembered by some as a swashbuckling graftbuster, while others may always view him as an irritant who stepped beyond the boundaries any

central bank governor should. Detractors andsupportersaliketendtopraiseSanusi for perhaps his most impressive achievementsincecomingtooffice.Heprevented a financial sector meltdown in Africa’s second-largest economy. When he became governor in June 2009, he had only recently taken over as the new managing director of FirstBank. He wasted no time in cracking the heads of his former peers. Justweeksaftertakingofficeatthehelm of the apex bank, he overhauled the banking sector. “Sanusi came like a wrecking ball on frail banks standing on false fundamentals,” says Oluseun Onigbinde, co-founder of number-crunching website BudgIT. “Sanusi knew the rot in the system, and he moved in with a bang destroying the quietude that enveloped the banking sector.” shockwaves

Sanusi bailed out nine lenders, nationalised three banks and removed eight chief executives, sending shockwaves through

the establishment. “He was able to act very quickly to sort out the good banks from the bad banks and get the banks back to health. That is a huge legacy,” says Wale Shonibare, managing director of investment banking at UBA Capital. Failed banks morphed into bridge banks – Enterprise, Mainstreet and Keystone banks – and were acquired by the Asset Management Corporation of Nigeria, a rapidly formed state-backed bad bank to soak up toxic assets. The fate of these bridge banks is still unclear. “Going through the process of actually fixing a crisis without depositors losing money and getting the banks to pay for that is a major thing, so one would like to see an agreement that the Nigerian banks – over the next 10 years – are the ones that pay for the cost of the bailout after I’ve gone,” Sanusi tells The Africa Report. Sanusi has bagged a string of banking awards and was included in Time magazine’s list of 100 most influential people in 2011. But for all his foreign plaudits, his controversial policies and statements have won him more enemies than friends at home. At the advent of his reforms, jobs were lost, credit stagnated for months and interbank rates spiked. His critics argue that his inability to

Fall and rise oF the nigerian stock exchange 2008-2014 15 September 2008

Lehman Brothers files for bankruptcy. Global liquidity moves from periphery to core. Confidence in Nigerian banks shaken as questions asked about corporate governance. Stories filter out about a build up of ‘toxic assets’ in banks exposed to margin lending, energy companies and state governments.

19 July 2010

The Asset Management Corporation of Nigeria created to absorb and restructure the bad loans that had accrued during the crisis period, and act as a bridge bank in order to manage three of the rescued banks, now called Enterprise Bank, Keystone Bank and Mainstreet Bank.

1 March 2008

The top of the precipice: After several years of accessing the capital markets, Nigerian banks pump up a huge bubble in the Nigerian Stock Exchange (NSE).

3 June 2009

Lamido Sanusi appointed as new central bank governor in the middle of global and Nigerian financial crisis. Three months later, Sanusi sacks the heads of Afribank, Intercontinental Bank, Union Bank, Oceanic Bank and Finbank, and injects N400bn to stabilise the banking sector. A controversial anticorruption fight ensues, with bad debtors named and shamed in national newspapers. the africa report

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Jerome FAvre/BloomBerg viA getty imAges

nigeria | country focus

adopt the reticence typical of a holder of his job threw him into the ring of controversy. Sanusi made a number of public donations in 2012, drawing fire from politicians who accused him of only taking care of his own. The government’s management of Islamic banking and an attempt to introduce the N5,000 ($30.60) note and coins generated media frenzy. Never afraid to criticise Jonathan’s government and the National Assembly, he made enemies who questioned the need for an independent central bank. “Such approach and bluntness, especially his incessant outbursts on the expensive structure of Nigeria’s statecraft, propelled the Nigerian legislature to craft a failed unpopular bill which tinkers with the independence of the apex institution,” observes Onigbinde. Another controversial hallmark in the central banker’s legacy was pushing for the removal of a fuel subsidy in January 2012. The move sparked violence and strikes, whichforced the government to reinstate it partially. The central bank maintains the

benefits of removing the fuel subsidy far outweigh the costs of a higher pump price. Few Nigerians agree. By rewriting the regulatory framework of banks, institutionalising tenure limits for bank chief executives and abolishing the universal banking system, Sanusi managed to strengthen some aspects of banking regulations. However, some of his critics argue that there is still not enough supervision. industry funds

“His mandate is to stabilise monetary policy – so why introduce intervention fundsforagriculture,powerandaviation? It is not his job to be promoting funds for industries,” says Atiku Samuel, a business owner and analyst. “He seems to be more interested in industry policy and fostering an environment for big corporate investments, neglecting banking supervision.” Plenty of ire is also directed towards the central bank’s tight monetary policy. It has kept its benchmark interest rate at 12% since October 2011, despite

calls to cut it. The central bank also increased banks’ cash reserve requirements from 8% to 12% in July 2012. In October 2013, the central bank extended penalties for large cash transactions to bolster the cashless policy Sanusi has been supporting. His supporters maintain that his stringent approach has seen a return of profitability toabankingsector thatwasheavily subsidisedwithhigh-interestgovernment bonds. He has pledged to crack down on money laundering and speculation by enforcing a 75% cash-reserve requirement on public sector deposits. He wants banks to lend to ordinary Nigerians, not to take state funds and lend them back to the government to make an easy profit. His hawkish approach has reined in inflation, which was around 15% when he took office and is now stable well within single digits. Sanusi will also be hailed for bringing relative exchange rate stability, a credit to the central bank and its ability to keep money supply tight, says Shonibare. It is unlikely that the new governor will depart from the central bank’s historic stance on foreign exchange stability, especially given the currency’s critical role in the forthcoming election. Analysts expect that political pressure may push it to lower policy rates and shift to a more expansionary monetary regime ahead of the 2015 elections. ● Gillian Parker in Abuja

12 December 2013

The central bank dissociates itself from the leaking of a letter from Sanusi to President Jonathan, detailing $48bn of revenue that the Nigerian National Oil Corporation had failed to account for.

1 January 2012

Nigeria cuts fuel subsidy. Sanusi becomes strong defender of the action – if not the implementation – on account of huge corruption within the subsidies payment system. A report to Nigeria’s parliament later suggests $6bn was defrauded from the system over the previous two years. the africa report

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Africans Building KappaCity

Hydro Power Generation Gas Fired Power Generation IPP NIPP PPP

Ka Petrol Indigenous Oil & Gas Companies Production Exploration

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Kano residents shop after Friday prayers

K ano State

Political pathfinder for the north

Kano State governor Kwankwaso defected to the opposition in late 2013 as security and economic growth returned to the region

heady mix of radical politics, brash commercialism and Islamic tradition, Kano is West Africa’s oldest city and holds onto its pioneer role in a region in political and economic turmoil. It started life 1,400 years ago as a trading centre on the trans-Sahara route, and today tens of millions of Nigerians depend on its success as the commercial capital of the north. With much of north-eastern Nigeria ravaged by the Boko Haram insurgency, the centre of gravity in northern Nigeria is with cities in the north-west such as Kano and Kaduna. Now Kano is in the ascendant again. “It is going through a major overhaul, partly as a result of the relative security attained in the past year […] as well as rapid infrastructural development,” according to Muktar Dodo Lamido, who works with a civil society group in the city. But security worries persist. Kano was rocked in January 2012 when Boko Haram insurgents opened fire in the city centre and killed about 200 people. A year later, insurgents tried to assassinate Ado Bayero, the emir of Kano, now in his mid-eighties. Political Islam has failed to win many supporters in Kano, despite the underground recruitment efforts of both Boko Haram and its affiliate Ansaru. The city’s two most celebrated figures, Kano State governor Rabiu Kwankwaso and central bank governor Lamido Sanusi, have openly criticised the Islamist insurgents, a stand that many mainstream imams have declined to take. Better security in Kano should not be taken for granted, according to Addo Ahmed, a local civil servant: “We are the africa report

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traders here since time immemorial, but because of lack of employment youths are finding succour in religion extremism.” Kwankwaso, along with local magnates such as cement billionaire Aliko Dangote, is working hard to fire up business in the state and to create jobs. New building projects are springing up all over the city, along with new roads and flyovers. There is also a state-led drive to improve social services. There are more than 20 vocational schools, teaching subjects such as rearing poultry, managing fisheries and information technology. HonEy AnD HEALtHcArE

Abdullahi Abass, the commissioner for the environment, talks about taking agriculture to the next stage. He enthuses about a beekeeper training programme organised by Kano State government. “Agriculture is the way out of poverty,” he argues. Partly to deal with the local healthcare crisis and to find work for unemployed graduates, the state government has launched the Lafiya Jari programme, which gives management training to young people, encouraging them to set up pharmacies in the countryside. So far it has trained more than 1,400 people. Politics is never far from the economic struggles in the state. Kwankwaso’s defection from the ruling People’s Democratic Party to the opposition All Progressives Congress (APC) last year has put the state at odds with the central government under President Goodluck Jonathan. People in Kano are used to being in opposition. Aminu Kano, one of the city’s most famous sons, was a radical activist. He contested national elections in the 1950s on a socialist platform

and abjured material wealth – a highly unusual position for a Nigerian politician. Kwankwaso is a far less ascetic figure. Local politician Ibrahim MohammedcompareshimtoBabatundeFashola,thereforming governor in Lagos, who has done much to promote business, generate local revenue and clean up the city. “The 35MW Tiga and Challawa Gorge dams under construction by the state government have sparked interest in Kano from industrialists,” according to activist Lamido, who points to the revival of the city’s manufacturing companies at the Bompai and Sharada industrial estates. Some Kano activists see Kwankwaso as a future president, perhaps even as the APC’s candidate in next year’s election. Kano has already produced two headsof state – generalsMurtala Mohammed and Sani Abacha. The first was one of Nigeria’s most revered heads of state, but he was assassinated in a failed coup attempt. The second was one of the country’s most reviled military leaders – he was accused of stealing $4bn from state coffers and was poisoned by some of his military rivals. That has not stopped Abacha’s son Mohammed from trying to run for the state governorship in league with Major Hamza al-Mustapha, who was acquitted in July 2013 of charges of running a political hit squad for the late dictator, having spent the past decade in detention. Also in the ring is Ibrahim Shekarau, a presidential candidate in the 2011 elections, who has just pronounced himself a loyal supporter of President Jonathan. Kano’s election year will be far from dull. ● Leo Lawal in Kano and Patrick Smith

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country focus | nigeria

interview

Kola Karim

Chief executive, Shoreline

Building a formidable, nimble African company with the swagger of a new generation, Karim’s Shoreline swept up former Shell assets in 2012 to join the vanguard of nigeria’s indigenous upstream revolution

klearpICS

TAR: How are things changing in the oil sector with regard to the financing of projects? KolA KARim: What is happening today is we’ve now got a commanding position as African corporates because of the paradigm shift in capital – the pool of capital is shifting. African banks and financial institutions can write cheques now. I can sit down and say: “GTBank, write me a cheque of $350m,” done!

Shell was producing about 1m barrels a day [bpd] from all these onshore/shallow water licences. Then they went deep offshore, and in one field called Bonga they knocked 250,000 barrels a day! So someone in The Hague is thinking ‘Hang on, why do I go through all this mess for 36 assets – some producing 3,000, 5,000, 15,000 [bpd] – if I can consolidate my position, go deep offshore where the guys from the Delta can’t reach me easily?’

ShellandChevronaregettingout of onshore operations. How big is this and where is it leading? These guys are just restructuring. Let me tell you something, they’re just ripping people off as well, but the reality is it’s an opportunity. There’s a great opportunity for people like us to build humongous companies in a short time. You will never find these opportunities again. It happened in Russia. Mark my words, in two to three years you’ll see gazillionaires coming out of a place called Africa from the world of business. I’ll give you a typical example so you can follow this analogy well. Shellhasabout36onshorelicences in Nigeria. Now, if you look at the history of the Niger Delta problems, these guys had to shrink their operations or stop working in a lot of places because of these problems, then 12 years ago they went deep offshore.

So perhaps in about 10 years there won’t be any foreign companies operating onshore? I don’t think in 10 years, I give it five.

I’ve gone to ground zero to make sure our engagement is with every community How do you compare in size with other local operators such as oando? Oando’s not very big – there’s no one as big as we are today in exploration and production. In Nigeria, there are marginal field operators who are producing 2,0005,000 bpd. People like us, today we’re producing 44,000 bpd! So the game has changed. We’re just doing our numbers. This year alone we should do about 4.5-5m barrels – that’s a local company, and the game is

changing! But what have we done better than SPDC [Shell Petroleum Development Company] or Shell? Simple, it’s to interface with the local community. It’s not easy, don’t get me wrong. They don’t see you as a big lagos boy who’s coming down to throw his weight about? No, not at all. Which side of the divide do you want to sit? We’ve said that we want to sit on the divide of the people because if you sit on their side and work them well, you’ll achieve what you want to achieve. I’ve gone to ground zero to make sure our engagement is with every community. I’ll give you an example. There is a pump station that’s been closed for seven years. Shell called me and said how the hell did you get it opened? It’s pumping 4,800 barrels today. How’s it going with your partner Heritage oil? Are you able to pull some of its technical knowhow into your own company? Oh, big time! The most senior director [of the joint venture] – Steve Kobak – is from Heritage. All the 22 engineers underneath himareNigerianswhoarelearning from him. We’ve got some in the United Kingdom back and forth. Because you see, for me, my focus is: learn, build a formidable, nimble African company. ● Interview by Nicholas Norbrook

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country focus | nigeria

If Nigeria is to realise its industrial potential, it will need a step change at its ports

PIUS UTOMI EKPEI/AFP

ports

Progress and purloining

New equipment and investment make slow progress against endemic corruption and waiting charges

n a sweltering morning in West Africa’s largest port, an official from a Swiss company watched as a container lifted from a ship was transported towards a warehouse for inspection. Inside the bustling Apapa quay, one of three docks in the Lagos port complex, the container was first checked using state-of-the art scanners installed as part of a $210m upgrade that began in 2004. It should have been cleared in a matter of minutes. Instead, several hours later, dockyard workers were carrying out a laborious manual inspection. “The port has modern equipment which the bosses at the top have been quite meticulous in installing, but there is no willpower on the ground to switch to quicker methods. For every minute the ship is delayed, the more demurrage charges officials can collect,” says the foreign official, whose company works in five other African countries. According to internal documents seen by The Africa Report, the clearing of all goods in Nigeria’s seven port complexes is initiated online, but at least 80% of cargo still ends up being inspected manually. In 2004, the country began implementing an overhaul of the crumbling port infrastructure. The adoption of a “landlord model” saw the Nigeria Ports Authority award 20 concessions to companies by the end of 2006. Five years

angered traders. “There is not even a singlecarmanufacturerinNigeria,there’s no electricity and you’re talking about building cars? How?” asks a businessman who imports cars from Germany and who requested anonymity. A damning internal report last year by the Bureau of Public Procurement uncovered systematic corruption across all the country’s ports. Red tape remains the single biggest headache. In the Niger Delta’s Onne port, 74 signatures are required to clear a cargo, the report said. owners abandon cargo

“There are just too many departments in the port. A few years ago there was a form forthefirebrigade,thenthatdisappeared. Now you need to get clearance from the bomb squad, on top of the intelligence services and the police. And believe me, if you don’t pay up, you won’t get clearance,” says one Lagos-based importer who claims soaring costs caused all his foreign clients to quit in recent years. Insiders told The Africa Report exorbitant demurrage charges sometimes lead to owners abandoning their goods. “It can be for the simplest thing, and your cargo will be delayed for weeks. It’s true, sometimes for weeks the [port authorities] will just tell you the server is down. If it gets to a point where it becomes overtime cargo, some people just cut their losses and leave the cargo,” the chief executive of a local company says.

after the reforms began in earnest, cargo throughput more than doubled to some 75m tn, according to the Nigerian Port Authority (NPA). “Nigeria is one of the few countries in Africa successfully rolling out private-public partnerships. It’s certainly the way forward in Africa,” says Cornelis Van Der Waal of Cape Town-based analysts Frost & Sullivan. The concession rounds drew global multinationals such as Julius Berger, Global Infrastructure and Addax Logistics. ShipIn the Niger Delta’s Onne port, pers say waiting times and portsecurityhaveimproved, a total of 74 signatures with one trader saying vanare required to clear a cargo dalism of containers had all but vanished. Authorities Equally worrying, according to the reare also pushing ahead with the buildport, were signs of state monopoly. An ing of two deep-sea ports. Last year the investigation is underway in Onne port government approved $1.35bn for the where “concessions have been given Lekki deep-sea port, which is expected exclusively to Intels [Nigeria Ltd] as a to handle 4m tn of cargo annually. terminal operator exclusively for all oil red tape tangles and gas sector imports.” Some see potential for progress. Seven Still, much remains to be done. Policy years ago, a frustrated Alhaji Sani reloflip-flopping has continued. From March, car importers will face a hike in import cated his import-export business from Apapa in Lagos to Benin’s Cotonou, frusduties from 10% to 35% as Nigeria aims trated with obsolete equipment and corto become the first sub-Saharan African ruption. On a visit last year, he was struck country since South Africa to build a doby the improvements. “I decided to start mestic car manufacturing base. doing business here again,” he says. ● Such moves, ostensibly designed Monica Mark in Lagos to stimulate the local economy, have the africa report

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prOfile

Folorunsho Alakija Executive vice-chairwoman, Famfa Oil

Fine threads and crude oil make a powerful combination Africa’s first female billionaire started out as a secretary. She now owns a share of a major Nigerian oil field and is said to be contemplating a move into politics

ne recent morning, Folorunsho Alakija walked into an exclusive dressmaker’s shop and began ordering dozens of hand-embroidered fabrics imported from India and Dubai. Having made purchases worth several thousand dollars, she told the happy store owner: “I don’t mind paying money for something that’s worth it.” Alakija should know. Recognised for her one-of-a-kind fashion sense, Nigeria’s first female billionaire started off as a dressmaker herself. Armed with a fashion degree from London, Alakija quickly made a name for her label, Supreme Stitches, after its launch in 1986. With an estimated net worth of $2.5bn, she was listed by Forbes as Africa’s 13th richest person in 2013. BLOCKS FOR FROCKS

FF/AP/SiPA

In the late 1980s, Alakija’s label landed its biggest client: Maryam Babangida, the wife of then military dictator Ibrahim Babangida. The details remain murky, but in 1993 Alakija’s Famfa Oil acquired the deep offshore oil prospecting licence 126, which is now oil mining licence (OML)127andconDiAnE BOnDArE

around 250,000 barrels per day, the field is now one of Nigeria’s most lucrative. Evidence of Alakija’s quiet but undisputed clout can be seen in a six-year-long legal battle against then President Olusegun Obasanjo, insiders say. In 2000, Obasanjo’s government forcefully acquired a 50% stake of OML 127. The Nigerian Supreme Court reinstated Famfa’s rights in 2012. “It is not everybody who could have taken on Obansanjo at the height of his power and walked away with victory,” an insider points out. PROPERTY EMPIRE

tains the Agbami field. There was no public tendering process. For years, many questioned the wisdom of the acquisition. “Most serious, long-sighted business people at the time were looking at telecoms,” explains an investment banker close to the businesswoman at dinner at his exquisitely furnished flat in one of Abuja’s most prestigious apartment blocks. “It wasn’t a particularly smart acquisition in relation to oil prices at the time,” he says. Famfa discovered commercial quantities of light and sweet crude in 1999, but commercial production did not begin until 2008, when surging global oil prices made the field profitable. Producing

Almost as remarkable as her ascent is her own background. Among her father’s 52 children, she and her sister were the only two educated abroad, causing a stir in the Yoruba community at the time. Upon returning from the UK, she applied for a position at a newly opened American bank on the advice of her husband, Modupe, himself a successful lawyer. Her time as executive secretary at The First National Bank of Chicago, now Finbank, exposed her to many members of the country’s banking elite. Friends say she invested most of her salary in stocks and property. “She was very determined. She had built her first house in Lagos even before her 30th birthday,” says a longtime family friend who requested anonymity. She has built a dizzying property portfolio in the United Kingdom. Rose of Sharon 5 Limited, an Isle of Man-headquartered company managed by Barclays, reportedly manages a property portfolio worth £60m ($98m). Alakija herself snapped up a property at London’s exclusive One Hyde Park last year, and acquired a Bombardier Global Express 6000 jet. There have been whispers that Alakija is eyeing the political field. In late January, dozens of campaign posters cropped up in the Lagos neighbourhood of Alausa. Alakija was quick to say that she did not sanction the posters. ● Monica Mark in Abuja

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day in the life Extraordinary storiEs of ordinary pEoplE

SHIFTING GEAR Alice Nana is a motorbike taxi driver in Cameroon’s economic capital, Douala. She braves the insults of her male counterparts to put her kids through school

see it each and every day: the prying stares of surprise. But I don’t care, and who are they to judge me? All I have at the back of my mind is how to feed and cater for my three kids. I was born to a family of 13 girls in the West Region of Cameroon, and I lost my dad at a very tender age. I dropped out of primary school like most of my other sisters. Only three of them made it to university. Living with a jobless mother, we all knew from early on that we had to struggle to survive, and so I followed my boyfriend to Douala a couple of years ago. He ended up losing his job and finally travelled to Europe, abandoning me with the kids. I did not hear from him for six long years. In fact, I’ve still not heard from him, and I can neither tell if he’s alive or dead. So two years ago, I decided to get into the motorbike taxi business, and I don’t regret a thing. Where did I get the money from? I must be frank with you. I am still a beautiful girl, so I have had several boyfriends since David left me. Some have been kind enough to support me in bringing up the kids, and I saved enough to buy this bike. That’s close to 400,000 CFA francs ($825). I am still saving, and I can beat my chest and say that today I am the proud owner of two bikes.

A ruthless jungle

Of course, it’s a man’s world and the challenges keep swelling on a daily basis. In Douala today, you can easily count 300,000 motorbike taxi drivers and even more. It is a ruthless jungle where disrespect for the highway

Ntaryike DiviNe Jr

code is the norm. I witness fatal accidents every day, and look at my leg! I’ve been a victim of four accidents, but I survived. Every day, I am served the most abominable curses by some of my male contemporaries who think I should be in the kitchen cooking for my family and bearing children. But that’s life, and I know I must be courageous and bear it. And the police officers are not making life any easier. They will go any length to squeeze a bribe out of your pockets, even if your documents are all in order. My passengers are mostly men. I criss-cross both urban and rural Douala on a daily basis, covering at least 200 kilometres every day and penetrating some the city’s furthest enclaves. Some of the men I transport seek me out of curiosity, while others come to try and seduce me. Others have tried to seize my bike by taking me to a bar to get me drunk. But I know what I want and that’s making as much money as possible for my kids and it takes tons of courage. I can boast of a day-to-day profit of about 7,000 CFA francs. I’m not sure what the kids think, but I guess all they know is that their mum is a hard worker. They hardly go hungry, and their school fees are paid on time. They dress well for an average woman like me and are all working hard at school. I’ll not encourage any of them to engage in the motorbike business in future. I want all of them to get the best education possible, and that’s why I’ll keep saving as much as I can. How much I have in the bank? No. I cannot tell you that, it’s like showing you my pants. I can’t. ● Ntaryike Divine Jr in Douala the africa report

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