2020-01-01 the africa report

turkishcargo.com

TURKISH CARGO WEB PORTALCONTINUES TO MAKEYOUR BUSINESS EASIERWITH A NEW NAME:

JEUNE AFRIQUE MEDIA GROUP

Algeria DA610 • Belgium €7.90 • Canada CA$12 • Denmark DK80 • D.R.C. US$10 • Ethiopia Birr200 • France €7.90 • Germany €7.90 • Ghana GH¢35 • Kenya KES1000 • Morocco DH45 • Netherlands €7.90 • Nigeria NGN2000 • Norway NK95 • Rwanda RWF7,500 • Sierra Leone LE79,000 • South Africa R75 (tax incl.) Sweden SEK100 • Switzerland FS10.90 • Tanzania TZS20,000 • Tunisia DT15 • Uganda UGX40,000 • UK £7.20 • United States US$15.99 • Zambia ZMW80 • Zimbabwe US$6.20 • CFA Countries F.CFA3,900 • Euro Zone €7.90

INTERNATIONAL EDITION

N° 110 • JANUARY-FEBRUARY-MARCH 2020 www.theafricareport.com

AFRICA IN

2020Money. Youth. Conflict. Growth.

[email protected]/LiebherrConstruction

Experience the Progress.

3THEAFRICAREPORT / N 110 / JANUARY-FEBRUARY-MARCH 2020

EDITORIAL

It should be a vintage year for the resolutelyhopeful. Two gargantuan ambitions are hit-ting deadlines in 2020. And already, scepticsare sharpening their pencils, checking thespelling of ‘quixotic’. In July, the AfricanContinental Free TradeAgreement goes intooperation.And in January,AfricanUnion (AU)leaders are tomeet to track progress on theSilencing the Guns by 2020 campaign,a bid to crack down on the small-armstrade fuelling conflicts.

On both projects, much of the heavylifting was done in Addis Ababa. TheUN’s Economic Commission for Africa(UNECA) worked closely with the AUand the AfDB on the trade treaty’s plan-ning and drafting. Apart from it beingthe world’s biggest free-trade treaty intermsof the populations it covers, itwasamongthefastestandmost intricatesetofnegotiations, taking justover threeyears.

Yet conditions could not be more ill-starred. Nationalism, protectionism andpopulism are thriving on the internationalstage,with some echoes inAfrica.TheWorldTradeOrganisation,which should play a keysupport role, is beingmarginalised by theUSand other big economies.

If prospects for the trade treaty are tough,how much more so for the anti-arms tradecampaignwithwars raging inLibya, theSahel,theHorn and beyond?Again, the experts areconvening in Addis: Algeria’s veteran diplo-mat Ramtane Lamamra is running a teamout

ALLTHE ANGLES

of the office of AU Commission chairmanMoussa Faki Mahamat.

In fact, the two projects are tightly linked.Even moderate success on the trade treatywould strengthen economies and regionalcooperation. UNECA predicts that withintwo years of the treaty’s take-off, Africa’sGDPwould have grown by $35bn, with localproducers replacing some $10bn of goodscurrently imported fromoutside the continent.

Can that happen when Africa’s second-biggest economy, Nigeria, has shut its landborders to protect its local producers againstsmuggling? In fact, the treaty,with its strongermonitoring systems, could support Nigeria’sbid toblockThaiorVietnamese rice relabelledas local produce. Nigeria is losing billionsfrom contraband imports and illegal exportsof its subsidised fuel. Its diplomats are nowworking with neighbouring states to step upcooperationover these high-stakes problems.

Up close and broken down into theircomponent parts, these mega-projects for2020 are less utopian than they look. Theycould achieve incremental gains at a timethe region’s politics and governance arechanging in unexpected ways.

The drive for democratisation and account-ability is picking up, inspired by the stellarvictories of citizen campaigners in AlgeriaandSudan.Theyhavebecome internationalmodels of how mass non-violent protestcan change politics. But they are far fromone-offs. Over the past two decades, 25non-violentmassmovementshave startedin Africa according to a recent study inForeign Affairs magazine.That compares with just 16 in Asia,

the second-most active region for massprotest. And those movements, buoyed byyouthful demographics and digital media,are picking up momentum and covering allthe angles. Politics and economics aremoreclosely tied than ever in Africa.

ICAREPORT / N° 110 / JANUARY FEBRUARY MARCH

4 THEAFRICAREPORT / N° 110 / JANUARY-FEBRUARY-MARCH 2020

#110 / January-February-March 2020

FEATURES

48 PROFILES / The rematchThe economy and corruption will be in the spotlight in Ghana’s December2020 national election as President Akufo-Addo and former presidentMahama face off again at the polls

60 TECH / Hubs not hypeAfrica has more than 600 tech hubs and rising, ranging from incubatorsand accelerators to co-working sites. While the start-up game is the survivalof the fittest, it is also one where community is power

68 WIDE ANGLE / Beijing callingChina is seriously investing in Africa’s telecoms and other consumer marketsagainst a backdrop of game-changing geopolitical and ideological competition

76 INQUIRY / Buhari vs. BeninThe border battle between Nigeria and Benin shows the high costsof Buhari’s economic nationalism. He wants Talon to change his strategy

86 CULTURE / The Beyoncé bounceArtists like Burna Boy, Yemi Alade and Salatiel were quick to releasetheir own albums on the back of Beyoncé’s The Lion King: The Gift,on which African musicians collaborated with the Afrobeats-obsessed star C

OVE

RCREDITS:EUC-REA;R.SACHS/ZUMA/REA;V.

FOURNIER/JA;XINHUA-REA;D.N

IVIERE/SIPA;M.H

UTC

HIN

GS/REUTE

RS;S.DAW

SON/BLO

OMBERGVIAGETT

Y;ACF/JA

;S.SHRESTH

A/P

ACIFIC

PRESS/ZUMA/REA;

UN

PHOTO

/ESKIN

DERDEBEBE;T.J.

KIRKPA

TRICK/THENYT

/REA;D.BEDROSIAN/ZUMA/REA;UN

PHOTO

/RI.BAJO

RNAS;K.N

IETF

ELD

/ZUMA/REA;HAMILTO

N/REA;ABC/B

ACKGRID

UKVIABESTIMAGE

THE AFRICA REPORT57-BIS, RUE D’AUTEUIL75016 PARIS – FRANCETEL: (33) 1 44 30 19 60FAX: (33) 1 44 30 19 30www.theafricareport.com

CHAIRMAN AND FOUNDERBÉCHIR BEN YAHMED

PUBLISHERDANIELLE BEN YAHMED

[email protected]

EXECUTIVE PUBLISHERYVES BIYAH

EDITOR IN CHIEFPATRICK SMITH

MANAGING EDITORNICHOLAS [email protected]

ASSOCIATE EDITORMARSHALL VAN VALEN

PRODUCTION EDITOROHENEBA AMA NTI OSEI

To find the full editorial team,all our correspondents, andmuch more on our new digitalplatform, please visit:www.theafricareport.com

SALESA JUSTE TITRE

Tel: +33 (0)9 70 75 81 [email protected]

CONTACT FOR SUBSCRIPTION:Webscribe LtdUnit 4 CollegeRoad Business ParkCollege Road NorthAston Clinton HP22 5EZUnited Kingdom

Tel: + 44 (0)1 442 820580Fax: + 44 (0)1 442 827912Email: [email protected]

ExpressMag8275 Avenue Marco PoloMontréal, QC H1E 7K1, CanadaT : +1 514 355 3333

1 year subscription (4 issues):All destinations:€27 - $32 - £24

TO ORDER ONLINE:www.theafricareportstore.com

ADVERTISINGDIFCOMINTERNATIONAL ADVERTISINGAND COMMUNICATION AGENCY

57-BIS, RUE D’AUTEUIL75016 PARIS - FRANCETel: (33) 1 44 30 19-60 – Fax:(33) 1 44 30 18 [email protected]

PRINTER: SIEP 77 - FRANCEN° DE COMMISSIONPARITAIRE : 0720 I 86885Dépôt légal à parution /ISSN 1950-4810

THE AFRICA REPORTis published byJEUNE AFRIQUE MEDIA GROUP

03 EDITORIAL06 MAILBAG08 COFFEE WITH THE AFRICA

REPORT / Louise Mushikiwabo

10 YEAR IN IMAGES18 OPINION / Alan Hirsch

20 QUIZ

94 UK/AFRICABrexit will alterBritain’s relationshipswith African countriesin terms of trade,investmentand diplomacy

114 EXTRACTIVESDOSSIERLicensing roundsin Angola’s oil, gasand mining sectorswill show how deepLourenço’s reforms run

131 KENYAFOCUSIn search of a holisticway to strengthen theeconomy and nationaldevelopment

147COUNTRYPROFILESElections willdecide the futureleaders of fast-growing countrieswhile exportersof naturalresources seekdiversification

25 WHAT TO WATCHThe Africa Report’s exclusive guideto the year ahead features the worldsof politics, business and culture


For all your comments, suggestions and queries, please write to:The Editor, The Africa Report, 57bis rue d’Auteuil -

Paris 75016 - France or [email protected]

MAILBAG

ADVERTISERS’ INDEXLIEBHERR EXPORT P. 2; MSC P. 5; GLOBACOM P. 7; EMIRATES P. 17; MCB GROUP P. 19; REP. OF COTE D’IVOIRE P. 21-24; VEOLIA AFRICA P. 33; UBA P. 35; TOTAL SA P. 37; ZENITH BANK P. 39;BOLLORE TRANSPORT & LOGISTICS P. 41; AFRAA P. 44; BP OIL INTERN. P. 53; OCP P. 55; ENI SPA P. 57; CFAO P. 59; MEDITERRANIA CAPITAL PARTNERS P. 65; RAWBANK P. 67; AFRICA CEO FORUM 2020 P. 73;TONY ELUMELU FOUNDATION P. 81; EKITI STATE GOVERNMENT P. 85; GAWOB 2019 P. 91; GK INVESTMENT HOLDING GROUP P. 93; BLUE SKIES P. 101; INTERTEK P. 103; PIGD P. 107; BBC WORLD NEWS P. 109;SGTD P. 112-113; BAKER HUGHES P. 117; AVEON OFFSHORE P. 119; METHANIA P. 119; BUREAU VERITAS P. 121; DELTATEK OFFSHORE P. 123; TAR SUBSCRIPTION P. 123; GARDAWORLD P. 125; REP. OF TOGO P. 127-130;ATI P. ACA P. 135; CAREER CONNECTIONS P. 139; C2I COMMERCE EASY STEELSHEDS P. 141; METIGLA P. 141; GIZ - AFRIKA KOMMT P. 141; DJIBOUTI TELECOM P. 143-146; EURONEWS P. 152; TAR SUBSCRIPTIONP. 163; LE SUFFREN HOTEL & MARINA P. 165; REP. OF DJIBOUTI P. 174; AFRICA CEO NETWORK P. 194; EKO HOTELS & SUITES P. 208; EDITIONS DU JAGUAR P. 230; MTN GROUP P. 243; TURKISH CARGO P. 244

HOW TO GET YOUR COPY OF THE AFRICA REPORTOn 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, [email protected] – GHANA: TM HUDU ENTERPRISE, T. M. Hudu, +233 (0)209007 620, +233 (0)247 584 290, [email protected] – KENYA, UGANDA, TANZANIA: THE NEWZ POINT, Dennis Lukhoola, +256 701 793092,+254 724 825186, [email protected] – NIGERIA: NEWSSTAND AGENCIES LTD, Marketing manager, +234 (0) 909 6461 000, [email protected]; STRIKA ENTERTAINMENT NIGERIA LIMITED, Mrs Joyce Olagesin, [email protected] – SOUTHERN AFRICA: SALES AND SUBSCRIPTIONS: ALLIEDPUBLISHING, Butch Courtney; +27 083 27 23 441, [email protected] – UNITED KINGDOM: QUICKMARSH LTD, Pascale Shale, +44 (0) 2079285443,[email protected] – UNITED STATES & CANADA: Disticor, Karine Halle, 514-434-4831, [email protected] – ZAMBIA: BOOKWORLD LTD,Shivani Patel, +260 (0)211 230 606, [email protected] For other regions go to www.theafricareport.com

NIGERIA’S BIGGESTBANEI agree with these youngCEOs that infrastruc-ture is the biggest baneof Nigerian businesses[TAR 109, ‘What Nigeria’syoung CEOs want’].Electricity is unreliable,delivery is unreliable, etc.It is easier to ship goodsfrom China to Lagosthan from Kano to Lagos.That is madness, andit has to take an insanedrive by the governmentto improve and sort outinfrastructure. When thishappens, start-up ownersand entrepreneurs canmove funds allocatedto providing backup forthese systemic failures, todoing more in other areasof the business. See howNigeria has managed tobecome Africa’s biggesteconomy, in spite of itsdearth of infrastructure?

Kola Adaramola,ex-Jumia staff, Nigeria

RECYCLED PEOPLEWhen you say ‘peopleto watch for the comingyear’, I expect that themedia will focus onyoung people and not

old politicians likeAhmed Lawan who havebeen in office since 1999[TAR109, ‘People toWatch’]. These are thepeople who set targetsof making Nigeria oneof the top 20 globaleconomies by 2020. [...]That goal is nowhere nearbeing accomplished, butthe same politicians arebeing recycled in officeand now in the media.For me, it is the youngpeople doing incrediblethings against all oddswho should be celebrated.

Sanusi Idris,Lawyer, Nigeria

BUILDING BLOCKSOF TRUSTFintech in Kenya iscreating a layer of trustin a marketplace thatis fraught with cor-ruption, mistrust andcartels [TAR109, ‘Kenya,the world’s fintechlab’]. Trust is the mostimportant ingredient fora successful market. Itmakes the market pre-dictable and as a result,more stable. [...] Digitallenders came together tofurther enhance this trustby forming the DigitalLenders Associationof Kenya. We wanted

to differentiate ourselvesfrom payday lendersin the Western worldwho prey on high-riskcustomers and badplayers in our ownmarket who are tryingto rip off consumers. [...]We have made seriousstrides with severalarms of governmentand are willing to workwith them aroundissues of consumerprotection, regulation,risk-based pricingand taxation.

Kevin Mutiso,CEO of AlternativeCircle,

Kenya

NIGERIA’S MUSICAL EFFORTS PAY OFFKey players in the Nigerian music industry arebecoming purposeful and I am delighted at whatthe industry stands to gain from this [TAR109,‘Nigeria’s musical moment’]. I realised that forthe music industry to grow, despite poor govern-ment support, everyone must pick a purpose andpursue it. [ ...] The different folds of Mr Eazi’semPawa will change what we call ‘industrysupport’ forever. We can’t build a thrivingindustry by giving artists handouts occasionally.But with systematic efforts like emPawa andMavin’s serious-minded structure, we can.

Nauteeq Bello, Music criticJEUNE AFRIQUE MEDIA GROUP

Algeria 610 DA • Belgium €7.90 • Canada CA$ 12 • Denmark 80 DK • Ethiopia 200 Birr • France €7.90 • Germany €7.90 • Ghana GH¢ 35 • Kenya KES 1000 • Morocco45 DH • Netherlands €7.90 • Nigeria 2000 NGN • Norway NK 95 • Rwanda RWF 7,500 • Sierra Leone LE 67,000 • South Africa R75 (tax incl.) • Sweden SEK 100 •Switzerland 10.90 FS • Tanzania TZS 20,000 • Tunisia 15 DT • Uganda UGX 40,000 • UK £7.2 • United States US$ 15.99 • Zambia 80 ZMW • Zimbabwe US$ 6.20• CFA Countries 3,900 F.CFA • Euro Zone €7.90


N° 109 • OCTOBER-NOVEMBER-DECEMBER 2019 www.theafricareport.com

AFRICAN BANKSget ready for disruption

SOUTH AFRICACyril Ramaphosa’sinner circle

MUSEVENI INTERVIEW‘Uganda needsEast Africa for prosperity’

INVESTIGATIONThe darker sideof mobile banking

ETHIOPIAAbiy tries to keepit together

From L-R, Kayode Fayemi,Jim Ovia, Tiwa Savage

AlikoDangote

32-PAGE SPECIAL

Pioneeringa newNigeria

Unlimited

PLUG INTO THE WORLD’SFASTEST GROWING DIGITAL MARKET

Visit www.gloworld.com/ng/business/gatewayFor more info

We are Africa’s largest fully integrated telecommunications serviceprovider, offering our partnership to International and RegionalOperators/Carriers seeking to break into Africa and the rest of theworld. As your preferred Gateway, we have the capacity to connectyou to opportunities anywhere in the world.

With Glo Gateway, you will enjoy the following benefits:


COFFEE WITHTHE AFRICA REPORT

Interview by PATRICK SMITH in London

It was an away match for LouiseMushikiwabo, a foray to the heart ofthe British establishment. ChathamHouse,onLondon’sSt James’s Square,was home to threeBritish primemin-isters before the buildingwas handedover, in the aftermath of the FirstWorldWar, to academics and diplo-mats charged with analysing crisesand preventing war.

Some 16 years later, the SecondWorld War broke out, one of whoseconsequences was the coinage ofthe term ‘genocide’. The terrible re-ality behind the word has shapedMushikiwabo’s life, as it has that ofher country since 1994. Her brotherLandoaldNdasingwa, a businessmanand politician, was killed on the firstday of the Rwandan genocide.

Mushikiwabo’s invitation to speakat Chatham House was centred onthe Organisation Internationale dela Francophonie (OIF), to which shewas elected secretary general in 2018,but the failures of the internationalsystem in Rwanda and neighbouring

countries quickly surfaced in discus-sion.GivenRwanda’s decision in 1996to adopt English as an official lan-guage – seenas anot-so-veiledprotestagainst France and its government’srole in the genocide – it is remarkablethatMushikiwaboemerged as headofan organisation in Paris to promotethe French language.

“It’s not a secret that France andRwanda have had a very, very diffi-cult relationship from the genocide,25 years ago,” Mushikiwabo begins,once we have been ushered into anelegantChathamHousedrawingroom.She pauses then stresses the double‘very’ before allowing an accolade to

the current patron in Paris. “I’m veryhappy thatwith President EmmanuelMacron there isgenuinewillingness tobring the countriesback together.AndI think the key word here is genuine,because there have been attempts be-fore….” Then comes a qualification:“Theproblem that dividedFranceandRwandahasnot been solved, but thereis willingness to advance, tomove tomuch better relations.”

It was shrewd diplomacy on bothsides that boosted Mushikiwabo’scandidacy to head the OIF. Her per-sonal story helped too: “I fit in everypart of the Francophonie, I grew upfrancophoneand I switchedor learnedEnglish, I amsort of a francophoneatheart but a citizen of the world, andthat’swhat our organisation is today.”

As it has elsewhere, Rwanda rana formidable lobbying operation.With the backing of the AU, whichPresident Paul Kagamewas chairingat the time, the mathematics shouldhave clinched it: 29 of the OIF’s 54members are African. Then, with asmilingunderstatement,Mushikiwaboadds: “And the support of France andPresidentMacron in particular was avery good thing.”

That said,Mushikiwabo is in nodoubt that the international systemis in crisis: “We need to translate inclear language for our citizens whatgoodmultilateralism can do for them[…] in terms of fighting terrorism,dealing with climate [change].” Thescepticism is understandable: “If theyonly see our glamorous summits,meetings of ministers, very shinysilk ties, and women in high-heels[…] it’s not going to speak to them.”

Thepoint about relevance is far big-ger than public relations: “If we fail,then we will see more and more in-ward-looking citizens,moreandmoreof these nationalistic tendencies.”

Abigger issue forAfrica iswhetherits governments should engage withorganisations such as the OIF andthe Commonwealth, both with theirheadquarters in the capital of the

LOUISEMUSHIKIWABOFRANK SPEAKER

The head of the francophone countries organisationOIF talks to The Africa Report about her multilateralrole and her political engagement in Rwanda

‘The problem [withFrance] has not beensolved but there is awillingness to advance’

9THEAFRICAREPORT / N° 110 / JANUARY-FEBRUARY-MARCH 2020

respective former colonial powerand heavily influenced by it.

Timeforsomehistory:“Wecameoutof colonialism.TheFrench languageis not the language of the founders ofLaFrancophonie.LaFrancophoniewasnot created by France. It was createdby three Africans and a Cambodian,and founded in Niamey.”

That is the more important point,saysMushikiwabo: “They tooksome-thing positive out of such a horrible

experienceascolonialism.Theyownedthe language, used it to educate, tocommunicate globally, to assert thediplomaticpresenceofourcountries.”

The same point can be argued infavour of theCommonwealth,whosesecretary general, Patricia Scotland,Mushikiwabo gets on well with.Rwanda isamemberofbothorganisa-tions. Its joining theCommonwealthin 2009, like its adoption of English,was seen as a snub to Paris.

Mushikiwabo told the ChathamHousemeeting that sheandScotlandwouldbevisitingCameroontogether

toseehowtheir twoorganisationscould encourage a peacefulresolution of the politicalcrisis there. Pressedonhowthis bilingual diplomaticinitiative might bridge thelinguistical and political di-vides in Cameroon, she was

cautious. She did not press thepoint about the abdication ofresponsibility by theUNand theAU while Cameroon’s crisis hasdestroyed many lives and couldyet spin out of all control.

Asked about parallels withherowncountry’shistory,

Mushikiwabodrawsa thick black line.“Cameroon isvery differentfromRwanda,

where there was a state-backed pro-gramme of genocide.”

Mushikiwabo’s diplomatic careerwas far from beingmapped out. Theconsistent threadisher loveof languag-es. “I started thinking I could becomean interpreter at theUN. I thought thatwas quite cool, but I ended up in thepoliticalworld inWashington instead.”

After a stint in the communica-tions department at the IMF, she wasspotted by Donald Kaberuka, whohad just been elected president ofthe AfDB. After running communi-cations at the Bank’s headquarters inTunisia, Mushikiwabo was made anoffer she could hardly refuse: to dothe same job for President Kagame’sgovernment in Kigali.Within a year,she was appointed foreign minister,where she stayed for adecade. So, hasshe finished with national politics?

“I’m not away from the nationalpolitics, but I’mnowacting in amuchbroaderenvironment.Myprofessionalobligations are formany,manymorecountries than my own.” In otherwords,no.Mushikiwabohardlyskipsabeatbefore thefollow-up:“Icomefromthe political school of Paul Kagame.I remain close to himas a leaderwhoI think is extraordinary.”

Asastreamofwell-wisherseddyintothe room, hands and business cardsoutstretched, Mushikiwabo preparesforhernextmeeting.Herearlierbravu-ra performance prompts a thoughtabout themuch-raisedquestionof thesuccession inRwanda.What joboffermightpersuadeMushikiwabotoreturnhome?Answersonapostcardplease,to theOfficeof thePresident,Kigali.

‘They took somethingpositive out of sucha horrible experienceas colonialism’

JEAN-M

ARCPA

UFO

RTA

R


Yearin images

ByrevolutionortheballotboxitwasoutwiththeoldandinwiththenewinAlgeria,SudanandTunisia.AndwhileAbiyAhmed,SalvaKiirandRiekMachargavepeaceachanceotherswerebusyforgingunitywithapan-Africantradedeal.

YASUYO

SHICHIBA/AFP

FEBRUARY SECOND HELPINGS In Nigeria, President Muhammadu Buhari and vice-presidentYemi Osinbajo held on to power after close-run elections against rival Atiku Abubakar.

JUNE FUEL INJECTION Morocco’s already booming auto-manufacturing sector wasboosted by French carmaker PSA, who opened a new plant at Kenitra, north of Rabat.

DANIELIRUNGU/EPA

/MAXP

PP

JANUARY NAIROBIATTACK Al-Shabaabmilitants claimed21 victims duringa 19-hour seigeat the DusitD2 hotelcomplex in theWestgate areaof Nairobi, promptinga controversialplan to arm privatesecurity guards.


RANIA

G

APRIL MAKING A POINTE PoeticProtest photographed by RaniaG became one of the viralimages of Algeria’s youthprotests, featuring balletdancer Melissa Ziad. Youngpeople were a key part of thecoalition that forced outPresident Bouteflika on 3 April.

FADELSENNA/AFP

VILL

AGEURUGWIRO

MARCH PRESIDENTIAL PALS The Africa CEO Forum inRwanda marked the beginning of a new friendship between

President Paul Kagame and the DRC’s Félix Tshisekedi.The two countries had long been considered enemies.

WALD

OSWIEGERS/BLO

OMBERGVIAGETT

YIM

AGES

MAY LET’S GETDOWN TO BUSINESSLegitimised byan election, CyrilRamaphosa wassworn in as SouthAfrica’s presidentand promised a“new era” after thecorruption-wrackedreign of Jacob Zuma.


APRIL HAFTAR GETS HEAVY On 4 April, with thesupport of France, the UAE, Saudi Arabia andEgypt, Marshal Khalifa Haftar’s LNA troops beganan offensive on western Libya and Tripoli.

JULY WINDS OF CHANGE President Uhuru Kenyatta of Kenya inauguratedAfrica’s largest wind farm, the Lake Turkana Wind Power project. With 365

turbines and 310MW capacity, it marks Kenya out as a leader in green energy.

AFC

FTA

MARCHINTEGRATION

ROCKS! At the AUsummit in Kigali, 44countries signed anagreement to create

the AfricanContinental Free

Trade Area.The AfCFTA enteredinto its operational

phase in July.

LANAH

HAROUN/BALK

ISPRESS/ABACAPRESS

APRIL SUNSET FOR BASHIR Sudanese protesters camped outside the militaryheadquarters in Khartoum finally saw President Omar al-Bashir’s 30-yeardictatorship end in a coup, and Alaa Salah became a symbol of the revolution.

Year in images /


ESAM

OMRAN

AL-FE

TORI/REUTE

RS

THOMASMUKOYA

/REUTE

RS

AKIN

TUNDEAKIN

LEYE

/REUTE

RS

AUGUST DANGOTE DELAY Executives at Dangoteannounced that the oil refinery under constructionin Lekki, Nigeria, would not be completed until theend of 2020 because of problems importing materials. S

UMAY

AHISHAM/REUTE

RS

JULY BACK TO BLACK South Africa suffered repeated electricityblackouts in February, July, October and November due to load-

shedding by cash-strapped state-run utility Eskom. Analysts say stage2 load-shedding costs the economy R2bn ($136m) a day.


OCTOBER NOBEL ENDEAVOUR Ethiopia’s Prime Minister AbiyAhmed was the surprise winner of the 2019 Nobel PeacePrize for his statesmanship in ending decades of war with

Eritrea. On the domestic scene peace is more elusive.

MICHELE

SPA

TARI/AFP

SEPTEMBERXENOPHOBIA IN THE

RAINBOW NATIONSouth Africans took

to the streets toprotest a series of

xenophobic attacksin and around

Johannesburg whererioters looted

businesses ownedby nationals of other

African countries.

Year in images /MICHAELTE

WELD

E/AFP

JULY BREAKING AWAY Leaders of Ethiopia’s Sidama ethnic group declared they wouldestablish their own state, leading to lethal clashes between activists and security forces.


JEKESAINJIKIZANA/AFP

SEPTEMBER HERO TO VILLAIN Zimbabwe’sex-president Robert Mugabe died in Singaporeat the age of 95. The former liberation leaderhad become increasingly autocratic andwas ousted from power after 40 years in 2017.

LISEASERUD/NTB

SCANPIX

VIAAP/SIPA ONSABID

OCTOBER HONESTY PAYS Kais Saied, a law professorwith no prior political experience, became Tunisia’s

president in a landslide run-off election. Thoughsocially conservative, he is perceived by young

voters as trustworthy, unlike his rival Nabil Karoui.

AKUOTCHOL/AFP

SEPTEMBERTHE PEACE TRACKIn a meetingconvened by SouthSudan Councilof Churches chairReverend Peter Gai,President Salva Kiirand former rebelleader Riek Macharpledged to forma unity government.


OPINION

The South African economy hasbeen in the doldrums for years.Growth has been so low that percapita income has declined everyyear since 2013. This is partly dueto global conditions, but muchmoreit is a consequence of low levels ofinvestment resulting from policyweaknesses and uncertainty.

Under the corrupt administrationof President JacobZuma (2009-2017)huge amounts of cash were stolen

from several critical state-ownedenterprises. The government lost thecapacity to invest, and the privatesector lost its appetite.

Since coming tooffice inDecember2017, President Cyril Ramaphosa haspresented aprogrammeof reformandhas begun to implement it: politiciansfrom his African National Congress(ANC) party have been convicted ofcrimes; commissions have revealeddetailed evidence of corruption; and

good appointments have beenmadein key portfolios. But the generalatmosphere of excitement, labelled‘Ramaphoria’, has dissipated.

Sowhat’s tobedone?Theeconomicreform programme seems obvious.There are low-hanging fruit still onthe boughs and longer-term, ‘wicked’challenges to tackle [complex, ofteninter-related problems with no rightor wrong solution].

Some examples of low-hangingfruit are immigration policy, thedigital migration of broadcastingand the allocation of broadbandspectrum. Many such reforms havebeen hampered by years of confusionand disagreement, in some casesbecause planned rent-seeking hasbeen contested.

The ‘wicked’ problems are theprickly combination of the need foran energy transition to renewables,rising Eskom debt due to budgetover-runs on two new coal-firedpower stations, and the rising fiscaldeficit and public debt. The debt,partly due to repeated bail-outs of thestate-owned enterprises, is now

RAMAPHOSA’SPUZZLE

LAN HIRSCHfessor of development policy and practice,iversity of Cape Town

ADRIA

FRUITOSFO

RTA

R

ALProfUni


OPINION

expected to reach nearly 70%ofGDP by 2022 and is rapidly rising.

Older coal-fired power stationsare closing and several more needto go as they are inefficient, massivepolluters. Power stations, coalminesand their service providerswill close,and several towns will lose theireconomic rationale for existence.

Talk of reskilling cannot hide thefact thatmost of theworkers in thesetowns will become unemployed andhave noobvious options.The govern-ment has to find away to compensatetheseworkers and communities fairlywhile allowing renewable energy toreplace the old power stations.

The related ‘wicked’ problemis the fiscal deficit. It will be veryhard to bring down the deficit, payfor a just energy transition and re-start investment without reducinggovernment expenditure. Onemajorcost is the public wage bill. Publicservant salaries grewmore than 66%over inflation in the past decade,and there are now 29,000 civil serv-ants paid over R1m ($67,700) a year,representing a doubling of seniorappointments. Added to this arerising interest payments on SouthAfrica’s debt.

The failure of government to ad-dress these ‘wicked’ problems hasled to the downgrade of sovereigndebt to junk status by two ratingsagencies, and a recent shift to a neg-ative outlook by Moody’s, the onlyagency still giving South Africa in-vestment-grade status.

Is there a way to begin to addressthese problems and to reassure theratings agencies and investors thatwe are moving towards a healthiereconomic trajectory?CanRamaphosaretain the support of public-sectoremployees – a key group of ANCsupporters – andmanage debt whilepaying for a just energy transition?

In spite of their fearless financeminister, Tito Mboweni, treasuryofficials are reluctant to be seenconfronting the public-sector unions

to renegotiate wage agreements. Theunions accept that there are overpaid,under-employed supernumerariesat the top end of the salary scale,but not that the wages of frontlineemployees are too high.

Perhaps they would be willing toopenup the conversation if it includesadealwhere all are seen tobe contrib-uting to getting government financesback on track, including the rich andbig corporations. Gareth Ackerman,chair of retailer Pick n Pay, recentlysaid: “There is enormous goodwillfrom the private sector […] who arecommitted not only to further invest-ment but also to partnershipwith thegovernment to find solutions to oureconomic challenges.”

Magda Wierzycka, the CEO ofasset manager Sygnia, suggested:“[An] option is a once-off tax onindividuals and corporates. It hurtsonce but does not prejudice for-eign investment. Forget blamingthe past.We need drastic solutions.”In 2018, the Davis Tax Committeerecommended that the governmentshould investigate the feasibility ofa wealth tax.

Perhaps there are ingredientsfor a social partnership deal here.Business and wealthy individualscould contribute more to taxation,perhaps for a limited period, andthe public-sector unions could agreeto freeze wages temporarily and toallow some restructuring of the la-bour force to take place.Meanwhile,the government could commit toscale-up investment in social and

economic infrastructure, and to re-duce expenditure.

There have been attempts at socialpartnership deals before. The 1998Jobs Summit, the 2003 Growth andDevelopment Summit, and a seriesof less ambitiousmicro-social pactsin 2009 failed for reasons from poorimplementation to a lack of trust.

InOctober2018,Ramaphosa helda Jobs Summit that brought govern-ment, business and labour together.It concluded a detailed agreementon job-creation measures, but evenmore importantly it agreed to meetmonthly under the attentive eye ofthe president and to be managedby his office. It appears that thesemeetings are taken seriously by allparticipants.

Ramaphosa’s JobsSummitWorkingCommittee is the only possible placeto conclude adeal.What are its chanc-es? In the deal’s favour is that thespectre of externally imposed re-structuring is emerging;Ramaphosa’sstanding and credibility are posi-tive; and the still serious threat ofa fightback by the corrupt, populistwing of the ANC means he cannotbe seen to fail.

Negatives include the relative frag-mentation of organised businessand organised labour, the fact thatthe IMF is not yet knocking at thedoor, and the potential disruption bythe populists in the ANC and moremilitant unions.

A similar deal is needed for theenergy transition. As the differentorgans of state put out confusing andconflictingmessages, the best chanceofa comprehensiveenergydealwouldseem to be one accomplished underfirm presidential leadership andwhich successfully addresses the realfears of the coal regions.

Thenext fewmonthswill be criticalif the twin ‘wicked’ problems of esca-lating debt and energy restructuringare to be cracked. If not, the prospectof further declines in investment andin real income are very disturbing.

Perhaps there areingredients fora social partnershipdeal here


1 Through cooperation betweenGhana and Côte d’Ivoire,

how much more per tonne willsellers get for their cocoa?

2Who was sentenced to18 months in jail for writing

an “obscene” poem aboutYoweri Museveni?

3Which country was accused bythe Financial Times of cooking

its poverty statistics books?a) Zimbabweb) Tanzaniac) Rwandad) Egypt

4Which late African leadersaid this? “The British were

brought up as a violent people,liars, scoundrels and crooks…I am told that [Tony] Blair wasa troublesome little boy at school.”

5Who died in a mysteriouscar crash as his company

was under investigation forstate capture?

6Which strong leader used theexcuse “I don’t know whether

someone can sell tomatoeson a top floor” as a reason forcancelling a project to builda multi-storey market?

7Which African stars werenominated for 2020

Grammy awards in the WorldMusic category?

8Which Nigerian billionairepromised in 2019 to give away

all of his money to charity beforehe dies?a) Aliko Dangoteb) Tony Elumeluc) Abdul Samad Rabiu

9Which long-serving presidentsaid that spy software was

too expensive but he would liketo use it when accused of usingsurveillance on his opponents?

10Which country bannedthe civilian use of red berets

in October 2019?

11 In “The Year of Return”,which Hollywood star learned

of his Gabonese heritage?

12 How many trees didEthiopia plant on

its world-record-winning day?

13Which fast-food chainlaunched its first outlet

in Senegal, provoking asocial-media fury about itsall-female workforce?

14 How many countrieshad ratified the African

Continental Free TradeAgreement by 29 April 2019?

15Which city is home to theplanned new tallest building

in Africa, at 80 storeys?

16Who could not campaignfor the Tunisian presidential

elections because he was in jail?

17 By what percentage will theAfrican Development Bank

increase its capital base?

18Which Nigerian film couldnot get an Oscar nomination

because it was acted in Englishrather than a foreign language?

19Which 2019 African Cupof Nations team had

its shoes delivered by a Britishjournalist?a) Algeriab) Burundic) Chadd) Djibouti

ThinkyouhavehadyourfingeronthepulseofAfricannews?Thefirst fivepeopletoanswerall thequestionscorrectlywill receiveayear’ssubscriptiontoourdigitaledition.Pleasesendyouranswersto:[email protected].

MICHAELTE

WELD

E/AFP

Young girls plant trees in AddisAbaba, Ethiopia’s capital

19questionsfor2019

Quiz

CÔTE D’IVOIRE

Inclusivegrowth

Côte d’Ivoire’s numerous economic advancements are plain to see

but, as President Alassane Ouattara pointed out, there is still a long

way to go on the social front. Efforts are ongoing to improve people’s

access to basic social services, water and electricity supply, as well

as health and education services, and all are a high priority. The

Government’s 2019-2020 Social Programme (PS-Gouv) is designed

to accelerate the pace of social reforms in the country, in accordance

with a genuine strategy being implemented in the interest of themany.

©RICC

ARDO

NIELS

MAY

ER/STO

CK.ADO

BE.COM

ADVERTORIAL

Peace and prosperity for allThe PS-Gouv is intended to strengthen thesocial programmes already initiated bythe government, at a cost of 727.5 billionCFA francs. The programme is structuredaround fivemain areas: provide local healthservices and improve social protection forthe population; strengthen school accessand retention conditions for children aged6 to 16 years - especially girls - and improvestudents’ living and educational conditions;promotepeople’ access to housing, drinkingwater, energy, transport and consumergoods; increase theavailability of decent andstable income and employment for youthand women; and create the conditions forthe well-being of people in rural areas andensure food security. The ultimate goal ofthis programme is to build a prosperousand peaceful Côte d’Ivoire. For all.

Sights set on healthand educationThe country embarked on its path toprosperity in 2012, with an average annualgrowth rate of 8.9%, making it one of the

most dynamic economies on the continent.The next step introduced by the PS-gouvnowseeks to redistribute the rewards of thisgrowth to asmany people as possible, witha primary focus on health and education.A lot has already been achieved in recentyears. In the health sector, major facilitieshave been delivered, such as the AngréUniversity Hospital and the radiotherapyand medical oncology centre in Abidjan.Improvements to the country’s healthcoverage are set to continue until 2020,with the construction of around 15 newhospitals and 200 dispensaries expectedthroughout the country.

Free healthcare foras many people as possibleThe PS-Gouv is committed to continuingthis process, while improving the welfareprotection of Côte d’Ivoire’s citizens. Oneof themain thrusts of the programme is tointensify targeted free healthcare schemesfor pregnantwomen and children aged 0 to5 years. The general population is also likelyto benefit from this for the first 48 hours

PRIME MINISTERAMADOU

GON COULIBALYIS RESPONSIBLE

FOR CARRYING OUTTHE PS-GOUVPROGRAMME

CÔTE D’IVOIRE

©NOLTELO

URE

NS

≥ AlassaneOuattara, President of the Republic of Côte d’Ivoire, and PrimeMinister AmadouGon Coulibaly, officially open the Angré hospitaland university centre.

Inclusivegrowth

SOCIAL PROGRESS DRIVES THE ACTION

of emergency medical and surgical careor for malaria treatment. There is alreadyan Expanded Program on Immunization(EPI) that must now be scaled up to coverall children, from 0 to 11 months, so thatthey can be protected against 13 diseases,as well as all pregnant women and theirchildren yet to be born. The governmentalso plans to strengthen and expand socialsafety net coverage for recipients. At theendof 2018, therewere 50,000 householdscovered, and this figure is expected tomorethan double in two years’ time.

Universal healthcarecoverageHowever, the government’s healthcarepriority remains the gradual roll-outof Universal Health Coverage (CMU –CouvertureMaladie Universelle). Aimed atcovering the cost ofmedical treatment, thesystem is financed by a flat-rate premiumof 1,000 CFA francs per month and perperson. Itwas introduced inMarch2014andcurrently covers only 5% of the population.The PS-Gouv target is 17% by 2020. Anyperson residing in Côte d’Ivoire will then beentitled to reimbursement of up to 70% oftheirmedical expenses, and100% in the caseof themost disadvantagedpeople. To round

off the scheme, the government wants tomake medicines available throughout thecountry, with at least a 30% reduction onthe prices of items sold to the public andprivate sectors.

The education challengeThe government of Côte d’Ivoire has alsoturned its attention to education. Thereis still a long road ahead for the country inthis regard. In 2015, the country’s primaryschool completion rate stood at 63.1%, incomparison to the continent-wide rate of72.6%. Côte d’Ivoire has a population of23million, ofwhich 40% is under 14 years ofage. Everyyear, nearly5millionyoungpeoplein Côte d’Ivoire go to school, supervised bynearly 100,000 teachers. Knowing that thecountry’s population is set to double by2050, the challenge ahead is staggering forthe government, which is aware of theseshortcomings and has spent more than700 billion CFA francs since 2012 to addressthem. This budget has already funded theupgrading and construction of schools, aswell as the recruitment and training ofmorethan 15,000 additional teachers.

FIGURES

100%increase in the numberof doctors and midwivessince 2012.

15new hospitals are plannedacross the country.

180billion CFA francs will beinvested in each of the country’sfuture universities .

5kilomètres will bethe maximum distancebetween healthcare centresand the populationsthey serve, as requestedby the government

2,291billion CFA francs wentinto the government’ssocial commitments in 2018,which is 8.8% of GDP.

900schools will benefitfrom programmesto improve the livingconditions of their students

70% AND 100% COVERAGE OFMEDICAL EXPENSES FOR THE MOSTDISADVANTAGED POPULATIONS

©AD

IMGUZH

VA-S

TOCK

.ADO

BE.COM

©F8

STUDIO/S

TOCK

.ADO

BE.COM

≥ Targeted free healthcare programmeswill be introducedfor pregnantwomen.

≥ Social security coveragewas provided to 50,000 households in 2018 andwill double by 2020.

ADVERTORIAL

DIFCO

M/D

F-P

HOTO

S:PR

ESIDEN

CYOFTH

ERE

PUBL

ICOFCÔ

TED’IV

OIREUNLESS

OTH

ERWISEMEN

TIONED

.

Building on the PS-GouvTo further improve the school system, PS-Gouv plans to continue hiring teachers forall grades of public primary and secondaryeducation. It is estimated that more than10,000 professors and teachers are neededto fill the gap by the end of 2020 at thelatest. The programme also announcesvarious measures to equip schools withdesks, so that they can boost capacity in theclassroom capacity. Nearly 250,000 deskswill be acquired by the various institutionswithin two years. In parallel, a latrinedevelopment scheme has been launchedto ensure that all schools are equippedwith latrines by 2020, compared to lessthan 33% at present.

Classrooms, collegesand high schools for allThe issue of universal access to education,which is enshrined in the NationalDevelopment Plan (NDP), is currently on

track. The school enrolment rate for childrenaged6 to16yearshas increased from75% in2007 to nearly 95% ten years later. Betweennow and 2020, the various programmesset up by the government plan to openmore than 3,400 additional primary schoolclasses, as well as to build 40 communitycolleges and seven high schools, in orderto garner a few more percentage pointsover the coming months. By achieving allthese objectives within the next two years,Côte d’Ivoire will surely consolidate thesignificant progress it has already madein many sectors and be a step closer tothe economic emergence announced byits government and which, thanks to thePS-Gouv, promises to benefit all Ivorians.

©JACQ

UES

TORR

EGAN

O/D

IVER

GEN

CE

ACADEMICAMBITIONS

In 2014, in addition to the PS-gouv, the Ivorian governmentlaunched a vast programmeto rehabilitate the country’suniversity centres, particularlyAbidjan. Apart from the threeregional higher educationunits (URES) in Bouaké,Daloa and Korhogo, whichhave been converted intoautonomous universities,eight other regional centreswill open their doors. TheMan University was openedin 2017, while the futureBondoukou and San PedroUniversities, currently underconstruction, are expected toopen in 2020. Other centreswill gradually be established inAbengourou, Adiaké, Dabou,Daoukro and Odienné.

CÔTE D’IVOIRE

95% OF CHILDREN AGED6 TO 16 ATTEND SCHOOLAND BY 2020, THENATIONAL DEVELOPMENTPLAN AIMS TO ACHIEVE100% ENROLMENT

≥ Abidjan university campus.

©RE

NAU

DVA

NDE

RMEE

REN/

LESÉD

ITIO

NSDU

JAGUA

R

Inclusivegrowth

ADVERTORIAL


TheAfricaReport’sexclusiveguidetotheyearaheadfeaturestheworldsofpolitics,businessandculture. LibyaandtheSahelareontheconflict-resolutionagenda,whilepoliticiansfromTanzaniatoCôted’Ivoirepreparetheircampaigns.Businessesarelookingfortechnologiestoback,asartbothreturnshomeand stepsout internationallyEU

C-REA

;R.S

ACHS/ZU

MA/REA

;V.F

OURNIER/JA;X

INHUA-REA

;D.NIVIERE/SIPA;

M.HUTC

HINGS/REU

TERS;

S.DAW

SON/BLO

OMBER

GVIAGETT

Y;ACF/JA

;S.S

HRESTH

A/P

ACIFIC

PRESS/ZUMA/REA;U

NPHOTO

/ESKIN

DERDEBEBE;T

.J.K

IRKPA

TRICK/THENYT

/REA;D

.BEDROSIAN/ZUMA/REA;U

NPHOTO

/RI.BAJO

RNAS;K

.NIETF

ELD

/ZUMA/REA;H

AMILTO

N/REA;A

BC/B

ACKGRID

UKVIABESTIMAGE


ForAfrica tobeable topushback,it needs tobuildupthe rightmuscles

With the US in retreat from its roleas global policeman and the rise ofpowers likeChina, India andTurkey,theworld is entering a long-term shifttowardamultipolar balanceof power.African governments should be ableto play one side off the other in orderto get a better deal.

Some already are. Tanzania’sPresident John Magufuli has shownthat he can apply his tough nego-tiating skills to all comers. He hasalready forcedCanada’sBarrickGoldinto a $300m settlement to pay offoutstanding taxes forAcaciaMining.

When talking about a planned$10bn newport at Bagamoyo in June,he denounced the “tough conditionsthat can only be accepted by madpeople. They told us once they buildthe port; there should be no otherport to be built.” The investors, inthis case, were Chinese.

Sadly, the resolveofMagufuli is theexception, not the rule (althoughTheAfricaReport is keen to point out thatwhilewe are a fan of his resolutenessin getting a good deal for his country,we abhor his pursuit ofmedia critics).

Most African governments are notyet taking a tougher line. On the eveof theRussia-Africa summit in Sochi,a Cameroonian executive recentlylamented toTheAfricaReport: “This isridiculous.Africa is theonly continentwhere youwill see 40 or 50 heads ofstate with each of these conferences

that themajor powers hold. It needsto stop. You do not see leaders fromother continentsbehaving in thisway.”

Russia’s increasing influence in theconflict in Central African Republichighlights the weak role African ne-gotiators are playing in hard-powerpolitics. Despite rhetorical commit-ments toanAfricanpeaceandsecurityarchitecturebackedbyanAfricanrapidresponse force, progress is glacial.Global powers are calling the shotsin the Libyan peace negotiations,whileTurkish andChinesedrones arebattle-tested in theskiesaboveTripoli.

TheAUforce in Somalia has strug-gled to improve security.Africanme-diators have proved more effectiveon less-charged conflicts, like withECOWAS’s seeminglysuccessful inter-vention in Guinea-Bissau.

On the economic front, whileWestern complaints about China’s‘debt-trap diplomacy’ are on the rise,

relations between Beijing and cer-tain African countries are changing.President Xi Jinping has spoken outabout not wanting to lendmoney forAfrican “vanity projects”, and theChinese government funders haverefused to bankroll a third phase ofKenya’s standard gauge railway untilit is convinced that it can make themoney to pay back the loan.

But someAfrican governments arealso getting more robust on Chinatoo. Kenyan lawmakers are startingto criticise the railway. The CentralAfrican Republic’s government hasblasted the environmental practicesof Chinese mining companies.

InNovember, the formerhead ofthe UN Economic Commission forAfrica,CarlosLopes,wroteaboutoth-er toughAfrican negotiating stances:“Another extraordinary example ofcollective political resistance canbe observed in the trade discussionstaking place between Africa andEurope. [...] Almost 20 years intothe negotiations, only 15 countrieshave signed them.”

ForAfrica to really be able to pushback, however, it is going to need tobuild up the right muscles.

It could start with its continentaldiplomatic voice, currently fundedby foreigners. Rwanda’s PresidentPaulKagamepushed through reformswhen he held the rotating presi-dency of the AU in 2018, includingmembership dues.

It isa toughposition tobe in:Africandiplomatswant a bigger voice in con-tinental and international debates, butAfrican governments are unwilling tobankroll the institution thatwascreatedto protect their interests.Donors paid59% of the AU’s 2019 budget.

Howtogeta seatat the table


ILLU

STR

ATION

BYRAFA

ELRICOYFO

RTA

R

Next, Africa’s financing. The con-tinent’s infrastructure funding comesfrom three main sources: Westerngovernments and multilateral in-stitutions; African institutions; andChina, according to the InfrastructureConsortium for Africa.

AfDBpresidentAkinwumiAdesinascoredabigvictory in2019bywinningover reluctant international sharehold-ers to increase the capital base of thepan-African institution by 125% to$208bn. That will allow it to vastlyincrease its commitments to electric-ity, transportation and technologyinvestments.And justweeks earlier, itsigned a cooperation agreementwiththeBRICS-backedNewDevelopmentBank, which seeks to be a counter-weight to theWestern-controlled IMF.

A clutch of African governmentshave big hopes about the promise offree tradeon the continent as ameansto strengthen ties, build economicinterdependencies and shelter thecontinentmore frompotential globaleconomic shocks.

One big bellwether for the conti-nent’s diplomats is the developmentof theAfricanContinentalFreeTrade

Area (AfCFTA),which is due to beginoperations in Julyof 2020.Withmanygovernments looking inwardat fixingproblemsathome, theAfCFTAoffersthe potential for benefits across thecontinent. The challenge will be instrikingacompromise thatwill spreadadvantagesamongst countriesbigandsmall, landlocked and coastal. Thatwill surely keepAfrican leaders busyat work for much of the year ahead.

Thereareequallycriticsout therewhodoubt theabilityofAfrica’s leaderstoagreeonaway forwardand thenputit into practice. And its not just thosesuffering fromMuhammaduBuhari’sclosure of the Nigeria-Benin border.

TanzanianbusinessmanMohammedDewji, who is investing more andmore outside of his home base, saysthat there is too much hype aboutthe AfCFTA and that governmentsare not respecting the previous dealsthat they signed up to. He tells TheAfrica Report: “I don’t want to seemlike a pessimist but beforewe go anddiscuss the Africa trade agreement,we East Africans have the modelin place, which is the East African

Community.Youare talking about sixcountries –Tanzania,Kenya,Uganda,Rwanda, Burundi and South Sudan.What was the agreement? Commonexternal tariffs harmonised. But theyare not harmonised.”

Perhaps theway forward iswith adhoc groupings around a set of cleareconomic incentives.Onesuchmaybeseen in thecooperationbetweenGhanaand Côte d’Ivoire, two of the world’stop cocoa producers, also pointing away forward formore practical coop-eration in extending the continent’seconomic power.

InJuly, thetwogovernments imposeda$400 surchargeon a tonneof cocoasold inorder tosupporthigher revenueforcocoafarmers.These interventionsare possible because of the govern-ments’ strong roles in the industry.Bringingother sizeableAfricancocoaproducers that do not have big stateinstitutions in the sector – likeNigeriaand Cameroon – will prove difficult.

But the fact that competitors arefindingaway towork together – ratherthan race to the bottom– is a templatethat policymakers could look to inorder to get better deals.


After 2019’s year of big elections– Nigeria and South Africa went tothe polls – 2020 promisesmore of thesame,with votes seen as referendumson the policies of incumbent govern-ments including in Ethiopia, Ghanaand Tanzania. Meanwhile, votes instates in conflict, like Burundi andBurkina Faso, will be key in shapinghow the fighting will play out.

BurkinaFasoSecurity is set to be the top polit-ical issue as President Roch MarcChristianKaboré runs for re-electionin November. Jihadists and rebelgroups now control about a thirdof the country’s population, andmilitary-focused solutions have notworked. A November attack on aminingconvoywasa firstmajorattackon a civilian target, and it killed 38people. Some of former presidentBlaise Compaoré’s allies, like for-mer transport minister Gilbert NoëlOuédraogo,areplanning tomake theircomebacks in2020.Opposition leaderZéphirin Diabré of theUnion pour leProgrès et le Changement is likely tobeKaboré’smost serious challenger.

BurundiThecountryhasyet to recover fromthepolitical crisis surroundingPresidentPierreNkurunziza’s controversial runfor a third term in 2015, which led toa coup attempt and a return to con-flict just 15 years after the end of thecivil war. Nkurunziza says he is nowready to retire, but the party backinghim has yet to have its final say andcould try tonominatehimagain.WithNkurunziza’sdeparture still uncertain,noneof his allies have yet comeout to

say that theyare interested in replacinghim.The longer thewait for clarityonwhatwill happen, themore hectic theMaypolls are likely to be.Withmanyopposition leaders in exile, formerrebel Agathon Rwasa looks like thestrongest opposition candidate. Anyopposition candidate is likely to havea tough time campaigning becauseof the influence of the ruling party’sImbonerakure militia. Its backingwill be important for whoever wantsto replace Nkurunziza.

Côted’IvoireWill he stay or will he go? PresidentAlassaneOuattara, 77, sayshedoesnotwant to run again in 2020 and that the

constitutional amendment adopted in2016 allows him to run for twomoreterms. He says, however, that if hisgenerational peers – LaurentGbagbo,74, and Henri Konan Bédié, 85 – arein the race, he will be too. Gbagbo’slegal worries at home and abroad arelikely to keep him out of the race,but Bédié – who is trying to whip upxenophobic sentiment – seems set totake his chances. Bédié andOuattarahave broken their alliance formed inthecontested2010election, so itmightbe difficult for any of the threemajorparties to claim victory in the firstround of the vote. Strategic alliancescould decide the victor.

A choice betweenmembers of theold guard will not make the young

HeadingfortheballotboxOFF

ICEOFTH

EPRIM

EMIN

ISTE

ROFETH

IOPIA

Abiy Ahmed has promiseda free and fair election

Elections


gunshappy.Formernationalassemblypresident and ForcesNouvelles rebelleader Guillaume Soro is warningthat there could be trouble if theruling party tries to use the powersof incumbency to win the vote.

EthiopiaEthiopia’s model of ethnic federal-ism will be put to the test by PrimeMinister Abiy Ahmed’s political andeconomic reforms inMay’s legislativevote. With strong-arm tactics anda system that favoured the incum-bent, the ruling Ethiopian People’sRevolutionary Democratic Front(EPRDF) government and its allieswonall 547 parliamentary seats in the2015 vote.Muchof theoppositionhadbeen banned but now oppositionistBirtukanMedeska is in charge of theelectoral commission.

Meanwhile, Abiy is attempting tomeld the five ethnic-based parties intheEPRDFcoalition to support a new

national party called the ProsperityParty. That is proving a hard sellfor the Tigray party, which enjoyeddisproportionate influence under theleadership of former premier MelesZenawi, and Abiy’s Oromo people,the country’s largest group.

Faced with an uptick in violencethat seeks to protect ethnicity-basedterritory and control, Abiy is usingsomeofhis predecessors’ authoritari-an tools.Hecould facemoreproblemsif the May 2020 vote is not held ontime or is not seen as free and fair.

GhanaTheDecember 2020 general election(see page 48) will be a presidentialre-run, withNanaAkufo-Addo com-petingagainst JohnDramaniMahama.But this time, the roles are reversed:Akufo-Addo is president and formerpresident Mahama is the face of theopposition. In 2020, the government’sfinances are inmuchbetter shape thanthey were in 2015, but how about thepeople’s?Headline economic growthis rising rapidly due to the oil andgas sectors, but little of that tricklesdown to the average citizen. Thegovernment’s free senior high schoolprogrammeand rural industrialisationefforts are designed to share someofthe wealth around. But the govern-ment’s handling of poorly negotiatedenergy deals means that it now hasmore electricity than it can use andis wasting hundreds of millions ofdollars per year. Mahama’s govern-ment was voted out due to its poorperformance, and his electionwouldbe a first for the country, which hasnever brought back a leader voted outof power. Each of them have abouta year’s time to make their case thatthey have the strategies to put Ghanaon a good path.

SeychellesThe presidentials planned for late2020 represent Linyon DemokratikSeselwa coalition leader Wavel

Ramkalawan’s best chance to unseatthe former single-party andPresidentDanny Faure. He has been leaderof the opposition since 1998, andhe and his allies chipped away atthe ruling United Seychelles Party’ssupport until it won amajority in the2016 legislative vote. Ramkalawan iscampaigning on a platform of doingmore to help poorer families.

TanzaniaAfter the opposition boycotted theNovember 2019 local elections dueto claimsof government interference,President John Magufuli may beunopposed by his principal rivals inthe October 2020 vote. The formerpublic works minister known as the‘Bulldozer’ is crushing debate andlimiting civil society activity in orderto strengthen the ruling ChamaChaMapinduzi (CCM) party. But theCCMremains popular at the ballot box, aspopulist Magufuli takes onmultina-tionalmining companies he says giveTanzania bad deals. The oppositionChamachaDemokrasianaMaendeleohas been weakened by legal cases,with its leader Freeman Mbowe andothers on trial for sedition. It is inZanzibar, home to years of contest-ed elections, that the ruling party islikely to have themost difficulties inthe election to come.

TogoHaving finally agreed to change theconstitution to impose term limits,President Faure Gnassingbé is setto win April’s vote against a dividedopposition. Hewill be campaigningonhis economic achievements,whichfocus on turning Togo into a stronglogistics hub serving its landlockedneighbours. Since getting the gov-ernment to accede to some of itsdemands, the opposition coalitionhas broken up and shows no signs ofreuniting.They say the constitutionalcourt and the electoral commissionmust be reformed.

ISSAM

ZEJLY/TR

UTH

BIRDSTU

DIO

FORJA

AmadouGon Coulibalycould run inCôte d’Ivoire

MICHELE

SPA

TARI/AFP

John Magufuli’s CCMparty remains popular


Early in 2020, a group of mortal en-emies are due to gather in the grand-est conference centre in Berlin tochart the future of Libya. Berlin hashistorical resonance for Libya ontwo counts, neither of them auspi-cious: the Congress of Berlin in 1874tried to broker a peace deal betweenRussia andTurkeyover control of theBalkanstates inEurope;and theBerlinConference of 1884-1885 carved upswathes of African territory betweenpredatory European states.

Both failed in their ultimate aims,creatingmore chaos andwars in theirwake.Sohopes that thisconferencecanstop thewarforTripoli start fromalowbase. Just asEuropeanrulerswrangledoverCongo’s riches in 1884-1885, theUS, Russia, France, Italy, Turkey,Qatar, Egypt, Saudi Arabia and theUnitedArabEmirates (UAE) all stakea claim to the future of Libya today.

MoststrikingistheabsenceofAfricanstates, individually or collectively, atthe negotiating table. Marginalisedby the UN Security Council when theNorth Atlantic Treaty Organisationdecided to bomb Muammar Gaddafiinto submission in2011,Africanstatesare missing in action again.

Instead, at the centre of thewar forTripoli are some arcane Euro-Arabrivalries. Holding the Libyan capitalis theGovernment ofNationalAccordof Fayez al-Sarraj, recognised by theUNas the legitimate power. Italy andBritain give Sarraj diplomatic back-ing. Qatar and Turkey, as regionalsupporters of the Ikhwan (theMuslim

Brotherhood), have sent in arms, cashanddrones to help Sarraj’swar effort.

Egypt’s Ikhwan-phobic leaderAbdelFattah al-Sisi is backing the roguegeneralKhalifaHaftar andhis LibyanNational Army, leading the siege ofTripoli since April 2019. Prior to theHaftar offensive, diplomats had beenworking on a national conferencethat had the goal of organising anational vote for parliament and thepresidency.AlongwithSisi, theUAE’sMohammed bin Zayed and SaudiArabia’sMohammed bin Salman arebankrollingHaftar’smercenary armyand flying bombing sorties over thecity and its environs.

Theotherthreepowersontheground–France,Russiaand theUS–appear toback both sides as the standoff dragson. At one point, France’s diplomats,spies andgeneralswere pursuingmu-tuallycontradictorypolicies.TopacifyItaly, Paris has pulled back from itssupport forHaftar.Now, likeGermany,it is talking about a political solution.

At theUNSecurityCouncil,Moscowbacks the Sarraj regime. Russia’s for-eign minister Sergei Lavrov has metHaftarnumerous timeswithout givinghis formal support.Buton theground,YevgenyPrigozhin, a business ally ofPresidentVladimirPutin, has sent hisWagner Group mercenaries to backHaftar.Who is paying for theWagnermercenaries is an interestingquestion.

Although US President DonaldTrump has spoken with Haftar sev-eral times and is close to his mainbackers, State Department officialshavewarned about the rogue general.Haftar lived inWashington formuchof the 1980s-1990s on aCIA stipend,drawingupmadcapplans tooverthrowGaddafi. When Gaddafi fell, Haftarwas thousands of kilometres away.

Neither Sarraj norHaftar commandmuchpopular support inLibya.Thereis popular support for a credible bid toend thewar – but the disarray amongthe powers backing theBerlin confer-ence does not inspire confidence.

Chad

Egypt

Tripoli

Niger

Algeria

Tunisia

Sudan

Libye

HaftarUN-backed governmentIslamic State rebelsMisrata rebels

TouaregTebuZintanLocal militias

Misrata

SirteBenghazi

LIBYA BEFORE THE REBEL OFFENSIVE

Nouakchott

MAURITANIA

SIERRA-LEONE

GUINEA

SENEGAL

GUINEA-BISSAU

GAMBIA

MAROC

CapitalUrban areaG5 SahelCountries

FoesandmediatorsareBerlinbound

Libya


The galloping progress of Islamistinsurgents andsecessionists across theSahel over the past five years presentsthe region’s governments and theirforeign backers with a clear policychoice in 2020: whether to redoubletheirmilitary and police response tothe insurgency, or switch track to apolitical, dialogue-led strategy.

Starting in Mali, insurgents frommore than 25 different groups havepanned out across the region to de-stabiliseBurkinaFasoandNiger.Theynow have countries to the south andeast in their sights.As climate changedestroys agrarianeconomies andgov-ernments lack an effective response,this zone of instability is widening.

With a shared opposition to estab-lished regimes and an appetite forgrabbing local resources, the insur-gents rely on their military prowessrather thanan ideologicalmasterplan.Many have now won backing fromAl-Qaeda and Islamic State rebels.

Mali’s President IbrahimBoubacarKeïta long ago lost the battle forhearts and minds. His promise ofa “national conversation” on a lim-ited agenda for 2020 was met withderision. It will rehash a five-yearold plan to devolve power to thenorth and will not include any ofthe combatants or their supporters.

Underfunded and poor lyequipped, Mali’s troops have been

comprehensively outgunned. Morethan 100Malian soldierswerekilled inNovember alone.AUNpeacekeepingforce, 15,000-strong,works alongsideregional forces. It has struggled tohold the line – back at HQ in NewYork, it is known as the most dan-gerous mission in the world.

Most chilling has been the unravel-ling ofBurkinaFaso. Insurgents havetaken about one third of the countryin three years. First, they attackeda couple of international hotels inOuagadougou to show the weak-ness of the government. Allies of theousted president Blaise Compaoré,who kept ties with a range of jihadiand secessionist groups,may see thecampaign as a way to push out thegovernment of Roch Marc Kaboré.

As the insurgency spreads,Kaboré’sbackers amonghis ownMossi peopleare jumping ship. Ouagadougou’ssecurity system has been hobbled bythe exit of so many intelligence andmilitaryofficers afterCompaoré’s fall.

French troops,welcomedas libera-tors after insurgents capturedmost ofthe north ofMali in 2012, are accusedof incompetenceatbest, andcomplici-ty atworst, by angrydemonstrators inBamako and other cities. Some havebeenburning theFrench tricolor in thestreets. French president EmmanuelMacron insists the breakdown in theSahel threatens European security.That is not apopular argument amongnationalist politicians in countriessuch as Italy, Austria and Hungary.

Macron’s strongest European allyin the mission is Germany’s AngelaMerkel. Britain promises to send insome limited military support nextyear. By then, the Sahel conflictmayhave reached a new stage. An inves-tigation by Reuters news agency inNovember found that insurgents inBurkina Faso, Mali and Niger havetaken over much of the region’s in-formal gold trade, about 50tn ofproductionworth about $2bn a year.Buyers in Saudi Arabia, the UnitedArab Emirates and India are cuttingdeals with the smugglers.

REGIONAL SECURITY RESPONSES IN THE SAHEL

MALI

NIGERCHAD

BURKINA FASO

NIGERIA

CAMEROON

C.A.R

BENIN

GHANACÔTE D’IVOIRE

LIBERIA

ALGERIA

LIBYA

TOGO

NémaTimbuktu

Gao

Kidal Aguelal

Agadez

Niamey

Madama

Faya-Largeau

Abéché

N’Djaména

Tessalit

Mopti

OuagadougouBamako

MINUSMA deploymentOperation Barkhane (France)

European Union Trading Mission (EUTM)and European Union Capacity Building Mission (EUCAP)

G5 Sahel Permanent SecretariatG5 Sahel Joint Force HeadquartersG5 Sahel Command PostG5 Sahel Joint Force Focus Areas S

OURCE:RISKLINE,AFR

ICACENTE

RFO

RSTR

ATEGIC

STU

DIES

SahelSpreadinginstability


African art is finding its right-ful place in the world: both oninternational markets and withstolen artefacts being returnedto their homes. InNovember, lateNigerian artist Ben Enwonwu’spainting ‘Christine’ sold for$1.4mat auction,much higher than ini-tial estimates had suggested.Thatmonth also sawone of the lootedBenin bronzes returned toNigeriafrom theUK’s JesusCollege in theUniversity of Cambridge.

The year 2019 was dubbed“The Year of Return” as peoplethroughout the African diaspo-ra made their way back to thecontinent. However, it isn’t onlypeople. Over the last two years,African governments have beenrequesting the return of stolenartefacts from former colonialgovernments and other holdersof stolen African art.

According to a report com-missioned by France’s PresidentEmmanuelMacron last year, 90-95%ofAfricanhistorical artefactscan be found in Europe.

All arguments have not beensettled – far from it. In the debatebetween permanent restitutionversus long-term loans, manyEuropean art experts argue thatmost museums in Africa do nothave enough infrastructure tosupport precious artefacts.Otherssay that European powers areresponsible not only for returningAfrican artefacts but investing inthe infrastructure of the Africanart industry as well.

At the same time,as internation-al art enthusiasts fall in lovewiththeworksof artists likeGhana’sElAnatsui andZimbabwe’sKudzanaiChiurai, contemporary Africanartists seem to be taking biggerroles in the creativeworld.Africanart festivals like ART X Lagosand the CapeTownArt Fair havereceived countless sponsorshipsfrom international foundationsand celebrities. In an effort toexpand the African art market in2020, entrepreneurs, artists andcurators will focus on improvingthe infrastructureof the industry.

ArtReturnandrenown

TRISTA

NFE

WIN

GS/GETT

YIM

AGESFO

RSOTH

EBY’S

The 1971 painting‘Christine’ byNigerian artist BenEnwonwu soldfor $1.4m at auction

Grand corruption scandals, resourcenationalism and mundane contractdisputes will all see big companiesin court next year. Often, no onewill benefit, save the lawyers hiredfor the occasion.

On form, Nigeria sets the stagefor the costliest courtroom dramain 2020. P&ID, a company foundedby Irish construction and militarycontractors, is claiming more than$9bn in damages – for the loss ofpotential earnings – for a gas plantthat was never built. Back inAbuja, acouple of P&ID associates have beencharged with corruption. The casesare to be continued, in courts on atleast two continents.

Nigeria’s other long-running legalsaga pits the government againstRoyal Dutch Shell and Italy’s Eniover their acquisition of the megaoil block 245 at a bargain basementpriceviadisgraced formeroilministerDan Etete. That one will play out inMilan and in London, snagging JPMorgan bankers.

And not to be underestimated isMozambique’s capacity to upset fi-nancial apple carts as the prosecu-tion continues of those implicated inthe $2bn secret loans scandal. Thatcase, with a Credit Suisse banker inthe dock, will play out in court inBrooklyn as well as South Africa,whereMaputo’s former financemin-isterManuel Chang is trying to avoidextradition to the US.

And for those geeks who track thedoings of the international commod-ity trading combines – Glencore,Trafigura and Vitol – 2020 is setto be a somewhat bumper year forlegal investigations.

Seeyouincourt

Trials

CREATINGVALUEFORTHEMINING INDUSTRY INAFRICA

In Ghana, Veolia has been working with South AfricanindustrialistAngloGoldAshanti, theworld’s third largest goldproducer, since 2014. It began with the Iduapriem open-pitmine in the west of the country followed by the Obuasi minein southern Ghana in 2019. Contracts cover operation and

maintenance of all themine’swater treatment plants.


The outlines of the much-vauntedFourth IndustrialRevolution inAfrica– with technologies like 3D printing,big data, artificial intelligence andoff-grid power – will be drawn inmore detail in 2020. Tech training,financial innovations, solarpowerandagricultural improvements all have theability to transform livelihoods – butwhich ones have the markets, scaleand policy frameworks to make thebiggest change?

Solar and other renewable formsof power hold great promise to pro-vide households with electricity andpower for all sorts of businesses,

from agro-processors to factories.Solar power and other renewablesare getting backing at the householdlevel through start-ups like Kenya’sM-KOPAandat the industrial scale bybigger companies like those involvedin Kenya’s Lake Turkanawind farm.The International Energy Agencypredicts thatmore thanhalf ofAfrica’sgeneration capacity will come fromrenewables like solar, hydro andwind by 2040.

But other elements of the tech rev-olution are having difficulties withmarkets, finance and scale. Andela,which trains African programmers

forWesternmarkets, dialled back itsambitions in 2019 due to the dryingup of jobs in the US.

Meanwhile, agritech start-ups likeNigeria’s Farmcrowdy and Kenya’sTwiga Foods are helping farmers toget access to finance and marketsthrough tech. However, they haveyet to reach the scale where theycan work with tens or hundreds ofthousands of people.

Fintech holds out hope but alsolots of hype. With investors alwayson the lookout for the ‘next bigthing’, mobile lending was slatedto become the panacea that mi-crofinance did not pan out to be.Mobile-powered micro loans havetaken off in Kenya. But with highinterest rates and other problems(see ‘Kenya, the world’s fintech lab’,TAR 109), it is not a solve-all eitherand the mobile-money revolution iscurrently having a limited impact.

Redlight,greenlightTechnology

Fromthemakersof thegreat financialcrash of 2008 comes a brand newproduction: the great development-finance crash of 2020-something.Starring the same technique thatgot the planet in hot water last time:securitisation! For those not too sureabout what that is, the IMF definessecuritisationas “theprocess inwhichcertain types of assets are pooledso that they can be repackaged intointerest-bearing securities.”

Cinema-goers need not worry.This film is unlikely to be made.But finance ministers across the

continent should pay attention tothis new trend: multilateral develop-ment banks such as theWorld Bankand AfDB want to use the $150bncurrently pushed into global devel-opment aid each year as leverage toraise trillions of dollars.

Economist Rick Rowden, ina report for the Heinrich BöllFoundation, writes: “The WorldBank had initially called the initi-ative ‘From Billions to Trillions’,before finally calling it ‘MaximisingFinance for Development’.”

He warns that use of the shadowybanking networks that securitisationrelies on will introduce unregulat-ed risk into African developmentfinance. It would also drive up theuse of public-private partnerships,despite the poor track record theseinstruments have.

Moreover, it would force morefinancial deregulation on economiesin Africa, robbing them of criticaltools to drive national development– just asmany countries seek to copy

Asiangrowthpaths that require tightercontrol of the financial sector.

But African policymakers alsohave another trend to worry about:declining aid commitments (seegraph) from Western countries thatare turning inward and questioningthe value of some donor funding.As more African presidents lookto a future without aid, the focus isshifting to raising more domesticresources through strengthening taxpolicy and collection.

AidAtrillion-dollarfreelunch?

2010

140

120

100

80

60

40

20

011 12 13 14 15 16 17 18

OFFICIAL DEVELOPMENTASSISTANCE (ODA) NET FLOWS

Constant 2017 US$bn

In-donor countries’refugee costsOther ODA

SOURCE:OECD


Imagining SouthAfrica’s future is thepolitical equivalent of the Rorschachinkblot test: everyone sees somethingdifferent based on the details theyfocus on. President Cyril Ramaphosahopes he can convince supporters tokeep lookingon the bright side aheadof a major conference of the rulingAfrican National Congress (ANC) in2020, the National General Council.

He will struggle. Economists willpoint to the recent decision by tworatings agencies, S&P and Moody’s,to determine the outlook for SouthAfrica’s credit rating as negative.Thatwas based on forecasts of sluggishgrowth and government debt hitting70% of GDP by 2023.

Many fund managers are alreadymoving theirmoney out of the coun-try’s bondmarket, todaywortharound$150bn, which will push up the costof South Africa’s borrowing.

Ramaphosa loyalists will counterthat there is progress in the longgameof regaining control of the institutions

that govern the country’s potential forsuccess – and here the picture ismorecompelling. Installing honest lead-ership at the South African RevenueService, reinstating civilian oversightfor the intelligence services and re-booting the National ProsecutingAuthority (NPA) are a solid start.

Pragmatists admit that the newlyreinforced justice team will requireyears to unpick the damage createdby years of ‘yes-men’ installed byprevious president Jacob Zuma. Thevery fact that South Africa’s courtsand civil society worked to counterZuma’s worst tendencies in the firstplace should belie any narrative ofhopeless decline.

Led by Shamila Batohi, the NPAis not sleeping. It recently servedan explosive writ against RegimentsCapital, a fund it believes is linked tothe Gupta-era asset-stripping underZuma. The recent arrest of a formercabinet minister Bongani Bongo forattempting to tamperwith an inquiry

into power utilityEskom– thebeatingheart of state capture andanexemplarof SouthAfrica’s wider problems – isa case in point.

The fate of Eskom is a good bell-wether for progress in another keynational conversation: between theunions and government over thestaffing levels. The struggle withSouthAfricanAirwaysmaynowhaveshifted in the government’s favour.Andre de Ruyter, previously head ofJohannesburg StockExchange-listedNampack, will take over as EskomCEO in January. Will he nudge thecompany in the same direction?

If he turns Eskom around,Ramaphosa will be able to do somemore vital ‘deep work’ at the ANC’smid-term conference in 2020: tostrengthen pro-reform factions of theparty loyal to him and dispatchmoreof the Zuma-era holdouts. Keep aneye on the fates of deputy presidentDavid Mabuza and ANC secretarygeneral Ace Magashule.

Thelong-termgameandshort-termpain

SouthAfrica

RAJE

SH

JANTILA

L/AFP


Amorose Jacob Zuma, ousted pres-ident of South Africa, sitting in thedock, suggests to his foes that pop-ulism is on the wane – at least inSouth Africa. Next year, the judicialpressures will increase on Zuma andhis allies as they facemulti-prongedindictments.Manywill beprosecuted,andmanymorehavebeen forced fromoffice. Already, the numbers of theirsupporters turning up at the court aredwindling. They will fight back by

whatever means necessary, callingup their assets in the spy services.

Leader of the Economic FreedomFighters Julius Malema – by turns acheerleader for, then fierce opponentofZuma–also faces court time in2020on charges of illegal use of firearms.

All populists say they oppose theestablishment and are taking up thepeople’s cause. The skill of Africanpopulists ensconced in the politi-cal and business elite is to promise

convincingly to fight the vested in-terests of both the ousted colonialelite and the international capitalistsystem. One last heave, comrades!

ThatwastheplaybookofZimbabwe’sRobert Mugabe and Namibia’s SamNujoma,which took a couple of dec-ades towear thin. It does notwork sowell for their successors.

FormerZambianleaderMichaelSatawas hugely effective in winning sup-port fromworkers on theCopperbeltfor economic nationalism. PresidentEdgar Lungu’s efforts to imitate Sata’stactics have failed, leavinghis regimehobbled by corruption and debt.

Two more students in the SataschoolTanzania’s JohnMagufuli andKenya’s RailaOdinga. ButMagufuli’sobsession with crushing all dissentandOdinga’s artful opportunismmaywork against them next year.

Over in West Africa, defeatedGhanaian presidential challenger andbillionaire Atiku Abubakar relishedcomparisons between himand Italy’sSilvio Berlusconi. Ex-PSG footballerGeorgeWeahwonLiberia’spresidencyon the populist playbook – fightingthe establishment allies of outgoingleader Ellen Johnson Sirleaf – but isstruggling now in power.

Onthebackfoot

ROGAN

WARD/AP/SIPA

Trial’s not over forJacob Zuma

Celebrations are in store for the July2020launchof theAfricanContinentalFreeTradeAgreement,which is set toencourage African countries to trademore with each other and developeconomic synergies.But there is still alotmorehardwork tobedone:policy-makersneed toagreeonrulesoforigin

and other crucial elements of the thetradedeal,whileNigeria (seepage76)demonstrates thekindofproblemsthatthe new continental trade secretariatmay come across as governments tryto reconcile national and continentalinterests. UNCTAD secretary generalMukhisa Kituyi wrote in September:

“Rules of origin are situated at thenexus of trade and industrial policy.Make them soft and a free trade zonerunstheriskofnotspurringthecreationof local value. Make them too strongand countries risk being consideredtoo protectionist, and firmsmay findthem too difficult to comply with.”

AfCFTAThetradetake-off

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

16151413121110

403020100-10-20-30

INTRA-AFRICAN TRADE

% change (right axis)% of total trade %

Intra-African trade

SOURCE:IM

F,DIRECTION

OFTR

ADE

STATISTICS,AFR

EXIMBANKRESEARCH

Populism


AFRICANUNIONSUMMITJANUARYADDISABABA /ETHIOPIAau.int

MINING INDABA3-6FEBRUARYCAPETOWN/SOUTHAFRICAminingindaba.com

BLOCKCHAIN&AIAFRICACONFERENCE11-12MARCHJOHANNESBURG/SOUTHAFRICAblockchainafrica.co

LEGISLATIVEELECTIONSINETHIOPIAMAY

AFDBANNUALMEETINGS25-29MAYABIDJAN/CÔTED’IVOIREam.afdb.org

BURUNDIPRESIDENTIALELECTIONS20MAY

FRANCE-AFRICASUMMIT4JUNEBORDEAUX/FRANCEsommetafriquefrance2020.org

WORLDECONOMICFORUMAFRICASEPTEMBERADDISABABA /ETHIOPIAweforum.org

OPENINGOFTHE75thUNITEDNATIONSGENERALASSEMBLYNEWYORK/US15SEPTEMBERun.org

CÔTED’IVOIREPRESIDENTIALELECTIONSOCTOBER

TANZANIAPRESIDENTIALELECTIONSOCTOBER

IMF/WORLDBANKAUTUMNMEETINGSWASHINGTON D.C. /US17OCTOBERimf.org

AFRICACOM10-12NOVEMBERCAPETOWN/SOUTHAFRICAtmt.knect365.com/africacom

EU-AFRICABUSINESSSUMMIT28-29NOVEMBERMARRAKECH/MOROCCOhttp://eu-africasummit.eu

Calendar

AFRICACEOFORUM9-10MARCHABIDJAN/CÔTED’IVOIRE

Côted’Ivoire’s economiccapital, Abidjan,will playhost for the8theditionof thepremierehigh-level Africanbusinessconference. TheAfricaCEOForum isdue to includeabout 100speakersand 1,500participants frommore than70countries, providingkey insightsaboutbusinessandgreatnetworkingopportunitieswith topprofessionals fromvarious industries.Theannual highlight, theAfricaCEOForumAwards,will celebrate thebestofAfricanbusiness, rewarding leadersandcompanies incategoriesincludingGenderLeader, InternationalCompanyand thehighlycovetedCEOof theYear.

theafricaceoforum.comACF/JA

Theyear’shighlights

Bolloré Transport & Logistics is a major playerin international transport and logistics.

Through its infrastructure and investments,Bolloré Transport & Logistics brings people closertogether, contributes to human well-being, fostersthe development of local economies and innovatesto provide the best to its clients in a world in motion.

bollore-transport-logistics.com

SCBTL-12/19


OPINION

Give credit where it is due. The couporchestrated by Zimbabwean spychief EmmersonMnangagwa and hismilitarycomradeGeneralConstantinoChiwenga two years ago was geniusof a kind, a particularly malevolentkind. Mnangagwa told us that thevoice of the people was the voice ofGod. Now the chickens are cominghome to roost.

Mnangagwa is more excoriatedthan themanheousted – his erstwhilechief RobertMugabe.As 93-year-oldMugabe was humiliated and harriedfrompower by greedy politicians andpower-hungry soldiers, a worse fatecould await Mnangagwa as popularanger grows towards elite corruptionand repression.

The first test for the post-coupregime was its openness to politicalfreedom. Under Mugabe, the ruling

Zimbabwe African National Union-Patriotic Front (ZANU-PF) party hadshown extreme intolerance.WitnessGukurahundi inwhich 20,000 oppo-sition supporters in Matabelelandwere massacred in the mid-1980s.Two decades later, the ruling elitemassacred opposition after it lostthe first round of elections in 2008.

What didMnangagwa do to breakwith thishistory?Hepromised toopenup politics. He visited the terminallyill oppositionist Morgan Tsvangiraiand offered state funds to pay for histreatment and a new house.

Forawhile,hetoleratedcriticismin the media and by civil society onsubjects such asGukurahundi.He, orhis handlers, started postingon socialmedia about the “new Zimbabwe”.Some foreign diplomats, especiallyBritain’s ambassador, offered fulsomepraise of Mnangagwa’s leadership.

Between the putsch and electionsin July 2018, therewas an outbreakofliberalism.Opposition partiesmadefull use of it. But inside the rulingparty complex,Mnangagwa’s peoplepurged all those associatedwith their

rivals – that is, GraceMugabe and herG40 group.Many were arrested andprosecuted on corruption charges.Restrictions on public meetings andprotests remained. Therewas a brieffeel-good factor after the putsch butit was not enshrined in law.

Contrary to pledges of free elec-tions,Mnangagwa and his camradesstuck to their old script. They keptcontrol of the election commission,with a complement of state securityagents monitoring operations.

Thecommission failed to releasethe voters’ roll on time.When it waspublished, it was plaguedwith irreg-ularities. Again, the ruling party usedthe army to intimidate voters in thecountryside.ZANU-PFdominated thestatemedia, denying equal time to itsopponents.Mugabe-era strictures onaccess to information and rights ofassembly stayed in place.

The tabulation, transmission andannouncement of election resultspointed to interference.With all thathelp, Mnangagwa managed only toget 50.8% of the votes. There werefar more protests than celebrationsas the reality dawned on the country.

As Mugabe’s security capo,Mnangagwa struggled to convincethe sceptics hewould respect humanrights. On 1 August in response toprotests against delays in the elec-tion results, Mnangagwa sent in themilitary. Six unarmed civilians werekilled and scores more were injuredin full view of election observers andinternational media.

As the furore grew, Mnangagwaappointed a commission of enquiryled by KgalemaMotlanthe, a formerpresident of South Africa. It recom-mended that the officers be heldto account. Instead, Mnangagwapromoted the commander of theunit responsible for the killings, andnone of the other perpetrators weresanctioned.

In January 2019, citizens, angeredby spiralling fuel prices, took to thestreets.Mnangagwa sent in the army

ZIMBABWE:HEAR THEVOICE OF GOD

HOSAMI MALUNGAutive director, Open Society InitiativeSouthern Africa

SIPExecufor S


again. After public sector workersmobilised in protest at wage cutsafter a massive devaluation of thecurrency, the leader of the doctors’union PeterMagombeyi was abduct-ed, detained for five days, torturedand then dumped in the outskirts ofHarare.

Under Mugabe, a predatory eliteof ZANU-PF officials and theirbusiness allies prioritised person-al wealth over public interest. ButMnangagwa allowed businessmensuch as Kudakwashe Tagwirei andhis company Sakunda, in partner-ship with the Dutch-based TrafiguraGroup, to retain amonopolyover fuelimports. The government’s businesscronieshavehadpreferential access toforeign exchange,which they recycleinto Zimbabwean dollars at hugelyprofitable rates.

Thegovernmenthit rock bottomas the worsening regional droughtmeant that half of Zimbabwe’s 15million people would face seriousfood shortages. It emerged frominternational agencies that the gov-ernment had signed a secret contract

to import maize from Tanzania atmore than twice the market price.

Chanting his ‘open for business’mantra,Mnangagwa pledged to turnaround the economy. He appointedMthuli Ncube, a former chief econ-omist at the African DevelopmentBank, as financeminister to presideover a reformprogramme. It includesmore swingeing cuts to public spend-ing and the reintroduction of theZimbabwe dollar. But Ncube lackedpolitical muscle. ZANU-PF’s chiefsand their business pals circumventedthe reforms and continued to exploitthe system.

Theeconomic tallyofMnangagwa’srule is a return to hyperinflation. The

reintroduction of the Zimbabwedollar has been sabotaged by hisbusiness friends, and the healthand education services, the bestachievement of the Mugabe years,are in ruins. Any prospect of thegovernment restructuring its foreigndebt and bringing in new capital havereceded into the distance.

NotonlyhasMnangagwa’s regimefailed all the tests he set it, but thesituation has now reached breakingpoint. The best way out of the crisiswould involve inclusive negotiations,preferably mediated by a credibleregional mediator. Naledi Pandor,South Africa’s foreign minister,says her government, which is owedbillions by Mnangagwa’s regime,stands ready to help Zimbabweansarrive at a solution. Her proviso wasthat it must include civil society andopposition politicians.

As regionalism and ethnic nation-alism gain ground, there has been aspate of localised violence. Thereare some in the regime who want toexploit chaos and cling to power.The only conceivable beneficiarieswould be the people with guns – notthe fat-cat generals, air marshalsand spymasters, but the angry youngofficerswhohave seen this predatoryelite steal their futures.Their revenge– for the ruling elite’s crass betrayalof the liberation cause – could turnintoZimbabwe’s ugliestmoment yet.

The economic tallyof Mnangagwa’srule is a returnto hyperinflation

ILLU

STR

ATION

BYRAFA

ELRICOYFO

RTA

R

OVERVIEWThe African continent is home to 17% of the global population butits air traffic accounts for less than 3% of global traffic.African airlines lose an average of $1.54 per passenger carriedwhile globally airlines earn $6.12 per passenger carried.Today, in several parts of the world you can fly for 1.5 hours for lessthan $100 while in Africa total taxes on the ticket are often higherthan $100.Passenger traffic between Africa and the rest of the world isdominated by non-African carriers often charging exorbitant fares.Out of 55 African states, only 8 have direct flights to more than20 other African states. Quite often, the passenger is obliged totransit through one or several stopovers.This data should challenge all stakeholders to commit to creatingan conducive environment for the development of air traffic inAfrica.\

The air transport industry is facing a host of challenges:- High operating costs due to high taxes on ground and

in air- Inadequate infrastructure- High price of fuel compared to the rest of the world- High level of taxes on airlines and passengers- Restrictions on traffic rights- Restrictions on visas to passengers

Nevertheless, alongside the challenges there are opportunitiesand all the stakeholders should work towards harnessing themfor African aviation to prosper:

- The Single African Air Transport Market (SAATM) toimprove connectivity

- The African Continental Free Trade Area (AfCFTA) toboost intra African trade

- The Free movement protocol for people, goods, capitaland services to facilitate investment

These various projects initiated by the African Union shouldcontribute to improving the fortunes of airlines.The high economic growth rate, the young African populationand the emergence of a middle class are all great opportunities tobe grasped.

ENVIRONMENTAL ISSUESPublic opinion is increasingly sensitive to environmental issues.The environmental impact of air transport is particularly about airpollution, noise pollution and global warming.Aviation accounts for about 2% of global emissions.It should be remembered that aviation is the first global industryto have voluntarily committed to stabilizing its CO2 emissionsfrom 2020 and to reduce by half by 2050 despite growth forecastsfor the sector.

AFRAA

AFRICA

NAIRLINES ASSOCIATION

ASSOCIATIO

NDES

COMPAGNIES AERIENNES AFRICAINES

AIR TRANSPORT IN AFRICA There are several ways to contain aviation environmental impact:- Renewal of fleets with fuel-efficient aircraft,- Use of biofuels- Use of new propulsion methods- Use of shorter air routes

At AFRAA, we support industry efforts (aircraft manufacturers,ICAO, IATA, …) to reduce aviation environmental footprint. Wefocus on awareness raising and training of our member airlines onenvironmental issues.

ROLE OF AFRAAAFRAAmembership currently stands at 43 African airlinescarrying more than 85% of intra-African traffic. The Associationwas created in 1968 and is based in Nairobi, Kenya.It focuses on promoting a sustainable, interconnected andaffordable Air Transport industry in Africa where AfricanAirlines become key players and drivers to African economicdevelopment.”It serves African airlines and champions Africa’s aviation industry.

PRIORITIES FOR THE NEXT FIVE YEARSØ To maintain a good level of safety and security.Ø To increase African airlines market share in the global

air transport.Ø To achieve a sustainable air transport:

• To lobby stakeholders and policy makers for aconducive environment for the development ofaviation

• To develop the human capital required to supportthe growth of civil aviation

Ø To promote cooperation between the African airlines: toundertake the implementation of joint initiatives aimedat reducing operating costs for airlines, increase revenueandmarket share: Joint purchase programs, AfricanAlliance.

Ø To strengthen data intelligence through:• market surveys and statistical studies• consultancy services

We want an air transport where African airlines will beeconomically successful with enhanced connectivity andcontribute to the economic integration of the African continent.

THE FUTURE OF AFRICAN AIR TRANSPORTAfrica is a continent with great development potential. To harnessthis potential, all stakeholders will have to play their role andpromote an efficient and sustainable air transport system.Considering the vast area of the African continent, the absence ofadequate ground infrastructure, the high growth rate of Africaneconomies and population, air transport will play a key role in thedevelopment of the continent.According to experts, air traffic in Africa is expected to doubleevery 15 years. Wemust be prepared to absorb this growth.

ADVERTORIAL


Features

48 PROFILESThe rematchThe economy andcorruption will be in thespotlight in Ghana’s 2020presidential election asAkufo-Addo and Mahamaface off again at the polls

60 TECHHubs not hypeAfrica has more than600 tech hubs and rising,ranging from incubatorsand accelerators toco-working sites. Whilethe start-up game isthe survival of the fittest,it is also one wherecommunity is power

68 WIDE ANGLEBeijing callingChina is seriouslyinvesting in Africa’stelecoms and otherconsumer marketsagainst a backdropof geopolitical andideological competition

86 CULTUREThe BeyoncébounceArtists like Burna Boy,Yemi Alade and Salatielwere quick to releasetheir own albums on theback of Beyoncé’sThe Lion King: The Gift

76 INQUIRYBuhari vs. BeninThe border battle betweenNigeria and Benin showsthe high costs of Buhari’seconomic nationalism.He wants neighbouringPresident Talon to changehis economic strategyand stop seeking tosupply Nigeria with goodsit can produce at home

ABC/BACKGRID

UKVIABESTIMAGE


With the dawning of the twentiethyear of the twenty-first century, thereis at least one certainty. We will nolonger be invited to endlessly tediousconferencesentitled“Vision2020”.Yetfor political activists, unlike optom-etrists, 2020 does not signify clarity.It is too cloudy for the crystal-ballgazers guessing the directionof travelafter the last year.

A quick glance shows the pace ofcultural, economic, demographic,technological andgeopolitical changeis accelerating as is the rate of envi-ronmental destruction and frustrationwith deepening inequities. It ismuchharder toknow thewinners and losers.Searching for patterns, global punditspen confident predictions, alternatingbetween doom and redemption.

Africa saw two revolutions in 2019– in Sudan andAlgeria – wheremasspopularmovementsorganisedagainstcorrupt and oppressive regimes, andpushed out their putative leaders.

But authoritarians also had a goodyear. A group photo of the leadersof the BRICS group – Brazil’s JairBolsinaro, Russia’s Vladimir Putin,India’s Narendra Modi, China’s XiJinping and South Africa’s CyrilRampahosa – presented a bleak tab-leau to democrats.

Only Ramaphosa espoused anyserious commitment to pluralism,consultation and accountability.Yet his fellow BRICS leaders are

set to dominate capital flows andtrade with Africa.

There is not a deep reservoir ofhope and goodwill among govern-ments in the richWestern economieseither. As the post-Western worldarrives and the geopolitical balancetilts eastwards, conservativeUSwriterRobert Kagan warns of “when thejungle grows back”.

For Kagan, the retreat ofWashington from democracy pro-motion will usher in a new era ofdictators. His thesis is simplistic andoutdated: the US and Europe backednumerous autocrats, from AugustoPinochet to Saddam Hussein.

Rather, one of themost importantchangesweare seeingacross theglobeis the rise of non-Western supportfor progressive political change.This comes from social movements,from more spontaneous politicalalliances rather than governments

and official structures. Such are theeffects of global migration and dig-ital communication that the supportbase for pluralism, secularism, andrepresentative and accountable gov-ernment is growing appreciably, ifnot exponentially.

A remarkable point about themassprotest movements from Chile andAlgeria to Iran and Hong Kong isthe almost total absence of Westernpolicy and people. As in the NorthAfrican spring in 2011, Washingtonand its European counterparts pulledback and stayed shtum.

Thatmessage iswell understood inAfrica. Protestmovements no longerqueue formeetingswithWestern dip-lomats in the hope that their moneyor threatened sanctionswill help theircause.AuthoritariansuseanyevidenceofWestern associations as a reliableway to undermine their opponents.

Despite their historyof interventionand depredation inAfrica, Europeanpowers for the most part are in 'for-tress' mode – anything to pull up thedrawbridge on mass migration. Asin the US, the nationalist right inEuroland has the liberals on the run.

There is little new thinking outthere. An exception is a new study byMichael Clemens from the respectedCenter for Global Development, ar-guing that global GDPwould doubleif everyone who wanted to migratewas able to do so.

Here,thelackofresponsibilityofEurope’s governments competeswiththeir lack of imagination. One of thebiggest beneficiaries of this failureis Egypt’s President Abdel Fattahal-Sisi, lauded by top EU officialsfor his role in the fight against peopletrafficking. Even themildest rebuke

Howtoget20/20vision

Socialmovementsandpoliticalalliancesaredrivingchange


of the Sisi regime’s calamitous recordon torture and political assassina-tions is off the table. Europe’s bigidea – anti-immigration pacts withgovernments – has fuelled a paralleleconomyand shores up local regimesbut does little to deter committedtravellers from seeking newpastures.

Instead, global security compa-nies profit from the militarisationof swathes of North Africa. Withfortresses reinforced, liberals in re-treat, plenty of stolen elections andautocrats entrenching themselves,bolstered by a defensive use of digitaltechnology and social media – 2019should not have been a promisingyear for political change.

Yet itwaspunctuatedby twoAfricanrevolutions, although thousands ofactivists across theworldwere target-ed with brutality by security forces.There were philosophical casualtiestoo: a dearth of evidence-based ar-gument, overwhelmed by knee-jerknationalism and populism.

A year of rebellion nontheless. As2019 stuttered to a close, protestswere raging in Bolivia, Cameroon,Chile, Ecuador, Ethiopia, Hong

Kong, Iran, Iraq, Lebanon andZimbabwe. However specific eachset of conditions were, there weremany commonalities.

The cry of the neglected majoritylocked out from the metropolitancitadel has become the politicalsoundtrack of this century. Eachyear the volume increases.

Whathassupercharged those re-bellions was themost serious failureofmarket economics for80years: theinternational aftermath of the 2008financial crash. It ricocheted acrossEurope and developing economies,delivering a clear message aboutrigged capitalism and the damageit can wreak on life chances andpolitical culture.

Beyond US borders, several na-tional economies in Europe wob-bled, governments imposing evermore draconian austerity policieson the people, paving the way forextreme-right organisations to pushtheir way onto the stage.

And the shockwaves are still man-ifesting themselves in differingwaysacross emerging markets. Capital

flight and capital drought, with theirorigins in the US crash of a decadeearlier are still working their waythrough the system.

As nervous bankers and investorstakeacue fromtheangeron thestreetsandpullout theirfunds,frustrationsandpushbackcouldescalate, leavingharshchoices for activists andgovernmentsthat want to restructure their econo-mies. It was the spectre of economicdestitution that drove the protests inAlgeria, Sudan and Zimbabwe.

Sudan’s revolution,whereyoungac-tivists risked everything, has becomean international inspiration.Womenprevailed against state discriminationto claim their freedoms and assumehighoffice.Old structures of regionalandethnic rivalrieswere challengedasthe political culture sawmore changein six months than in 30 years.

Nowtherearetoughquestionsfor theSudanesepeopleandactivistsacrossthecontinent aboutthepaceofchange,howto fashionacredibleplan to rescue thenational economyand how to sustainthe social gains of the revolution, allthe harder with a predatory securityelite waiting in the wings.

ILLU

STR

ATION

BYRAFA

ELRICOYFO

RTA

R

FEATURES /

reThe economy and corruption willbe in the spotlight in the December2020 presidential election asAkufo-Addo and Mahama faceoff again at the polls

By NICHOLAS ADJEI and PATRICK SMITH in Accra

PROFILE

S

Ghanaian PresidentNana Akufo-Addo

MIKEHUTC

HIN

GS/REUTE

RS

The

GHANA

VINCENTFO

URNIER/JA

Former presidentJohn Dramani Mahama

match


FEATURES / PROFILES / Ghana: The rematch

ItwasaKwameNkrumahmoment forPresidentNana Akufo-Addo in Upper East Region atthe end of November. That is, a point whengrand vision meets high funding and ambi-tious politics. Across the political spectrumin Ghana, Nkrumah is the gold standard formega projects, whatever their outcome.

This time, Akufo-Addo wanted to shownorthernGhanaians, accounting formore than16%of the population, that the government’smodernisation plans were relevant to them –although regional inequities are deepening.More than half of the people in the northare living in extreme poverty, accordingto the International Institute for StrategicStudies. And alarm bells have been ringingbecause of a surge of extremist attacks inneighbouring Burkina Faso.

Unlike many of its troubled neighbours,Ghana has had a stable and functionalmulti-party political system for 25 years, unthreat-ened by insurgencies or extremist groups.That history has encouraged a dangerouscomplacency, according toKwesiAning, headof research at the Kofi Annan InternationalPeacekeeping Training Centre.

Thehistorical lackof investment in thenorth-ern region is part of the problem. Belatedly,politicians have been trying to remedy that.GatheredaroundAkufo-Addo tobreakground

On political reform:

‘It is time to make sure that we have a trueseparation of powers between the various armsof government. Our parliament [...] must growinto its proper role as an effective machineryfor accountability and oversight of the executive,and not be its junior partner.’ACCRA, JANUARY 2017

On developing the economy:

‘We must create wealth and restore happinessto our nation. We can only do this when we havean educated and skilled population that is capableof competing in the global economy. Sixtyyears after attaining nationhood, we no longerhave any excuses for being poor.’ACCRA, JANUARY 2017

Talking about the need to mobilise Africa’s diasporas:

‘The Chinese diaspora has been able to transformthe lives of millions of Chinese.Why can we notreplicate that same phenomenon on our continent?’PARIS, JULY 2019

Announcing plans to fight corruption:

‘State coffers are not spoils for the party that winsan election but resources for social and economicdevelopment. [...] Public service is just that –service and not an avenue for making money.’ACCRA, JANUARY 2017

Defending his 110 ministers:

‘If we deliver on the programme that peopleelected us on, the brouhaha about the numberof ministers will quickly die down.’GENEVA, MARCH 2017

NANA AKUFO-ADDONPP presidential candidate

FRANCIS

KOKOROKOFO

RTA

R


on the$993mPwalugudamprojectweremem-bersof thegovernment’s top team–vice-presi-dentMahamuduBawumiaandenergyministerJohn Peter Amewu – together with a crowdof favoured MPs and traditional dignitaries.

AtadiscreetdistancestoodadelegationfromSinohydro, a Chinese state-owned companythat iscentral toGhana’s industrialdevelopmentand infrastructure plans. Earlier in the year,thegovernmentannounced thatSinohydrohadconcluded a barter deal to buy some $2bn ofbauxite, the proceeds ofwhichwould be usedto build roads, dams and factories.

‘We do not renege on promises’The PwaluguDam is one of the first items onthe shopping list. But the financing process,outside of the country’s agreed debt limits,raises questions about accountability andvalue for money. It is also a grand entry forSinohydro into theGhanaianmarket: by rais-ing the cash from the barter deal, it avoidedthe difficulty of a competitive tender process.

Brimmingwithpride as heplanted a saplingon the construction site, Akufo-Addo said thedamwas the biggest construction project everseen in the northern regions. It would includetwo turbines generating 60MW, alongside asolar power plant producing 50MW and anirrigation scheme servicing 25,000ha.

After three years in power, Akufo-Addois facing critical scrutiny across the country,especially outside his party’s heartlands ofEastern and Ashanti regions. That explainsthe grandiose ceremony at Pwalugu.

It is one of a series of projects in thenorth such as a road interchange networkin Tamale, the country’s third-largest city.Again, the finance comes from the barterdeal with Sinohydro, which also picks thecontractors for the works.

“This is in fulfilment of the pledge thegovernment made to the people,” Akufo-Addo told the crowd. “We do not renege onour promises.” Questions about promisesare to the fore as Ghana heads into a year ofcampaigning ahead of elections inDecember2020. At the presidential level, it will be a re-turnmatch between theNewPatriotic Party’s(NPP)Akufo-AddoandJohnDramaniMahamaof theNational Democratic Congress (NDC).

It will be the third time they have raced forthe top job together.Mahamawonin2012,afteraprotractedappeal launchedbyAkufo-Addo’s

On running for a second presidential term:

‘I’ve taken into consideration the groundswellof support and the never-ending calls andencouragement from a large section of our partyelders and Ghanaians of diverse backgrounds.’ACCRA, AUGUST 2018

On getting fertiliser to farmers:

‘When we started giving out free fertilisers,it was because we realised it will improve yield.[…] I cannot understand why this governmentwill decide to stop that and sell the fertiliser.’ENCHI, JULY 2019

His response to reports judges demand bribe money:

‘The response to the investigation was prompt. [...]The judges have been dismissed for impropriety.’ACCRA, MARCH 2016

Replying to claims that power deals cost too much:

‘[The contract] goes through the finance ministry.It comes to cabinet. It goes to parliament, wherewe have both the opposition and the majority totake a look at it. [...] I think that the transparencyof that process is a good thing, but then wemust continue to sharpen our negotiation skills.’

ACCRA, MARCH 2016

Analysing regional security threats to Ghana:

‘Any president who does not [have concernsabout security] is not living in the realityof our current time. Ghana has a long historyof political and religious tolerance. [...]And so I don’t see that threat yet.’ACCRA, MARCH 2016

JOHN DRAMANI MAHAMANDC presidential candidate

FRANCIS

KOKOROKOFO

RTA

R



legal team;Akufo-Addowon in2016byalmosta million votes, his party running a textbookand very expensive election campaign.

Both Mahama and Akufo-Addo got intocampaign mode in late 2019, months beforetheir partieswere due to launch theirmanifes-tos. A spat also emerged over why Mahamareneged on a promise to support the planto hold a referendum to introduce partisanpolitics into local elections inmid-December.

The 2020 race is likely to be closer than thelast one.Mahama’s advantagewill be that thebulk of the blame for the current economicdiscontents are laid at the door of Akufo-Addo and finance minister Ken Ofori-Atta.The sins of the last NDC government havelargely been airbrushed out.

Politicians to the coreThereare signs that theelectioncouldget reallybitter.Bothpoliticians to thecore,Akufo-Addoand Mahama have quite different styles. Anexperienced barrister, Akufo-Addo thinksfast on his feet and is seriously interestedin policy intricacies. By contrast, Mahama,whosemost high-profile job outside politicswas as an information officer at the Japaneseembassy, is more interested in big-picturearguments or conversations with voters.

MahamaduckedadebatewithAkufo-Addoin2016butmayseeanadvantage in takinghimonpublicly in2020.Thepolitical climateseemsto have become a littlemore poisonous sincethen.Eachparty accuses theotherof thuggery.NDCactivists claim theNPPhas integrated itsfootsoldiers into the state security apparatus.

Postings on socialmedia showingmembersof the government driving uber-luxury carsor on yachts partying in the south of Franceare going down badly given thatmost peopleare experiencing a stagnant economy – evenif the IMF’s stats say otherwise. They alsomake it easier for the NDC to paint the NPPas a party of privilege and raise questionsabout the origin of that wealth.

Mahama lacks the mega resources of theNPPand its advantagesof incumbency.But theNDC is a much more activist and grassrootsparty than theNPP. IfMahamaand associatescan pay key officials on the ground, they canget out the vote. Turnout will be key in 2020,and that helps the NDC.

That national networkhas allowed theNDCto strengthen its presence across the country

and accuse the NPP of being an Akan party,with little support inVoltaRegionor thenorth,fromwhereMahamahails.Withvice-presidentBawumia rubbishing Mahama’s legacy innorthernGhana, it’s evident that the northernregions will be a key battleground in 2020.

So will Greater Accra, where there aresome of the loudest complaints about theslow economy. To counter that, the govern-ment says it will launch a new series of urbanrehabilitation projects in January.

Althoughheorganised big, free concerts in2016, that did not giveMahamaenoughyouthvotes to counterAkufo-Addo’s challenge.Thistime,helackstheresourcesandwillbereliantonhis charmandhonedcampaigning skills.

<20%>40%>50%>70%>80%NDC

<20%>40%>50%>70%>80%NPP

DECEMBER 2016 PARLIAMENTARY VOTE RESULTS

SOURCE:PEACEFM

,ELE

CTO

RALCOMMISSION

OFGHANA

The politicalclimateseems tohave becomea little morepoisonous

Natural gas burns 50% cleaner than coal in power generation.

From renewable energy and cleaner-burningnatural gas to advanced fuels and newlow carbon businesses, BP is working tomake energy cleaner and better.

We see possibilitieseverywhere.



When The Africa Report caught upwith Akufo-Addo in Kumasi on 1 December,he said that the campaign would be aboutmaking the link between his policies andliving standards, motivating the faithfuland galvanising the waverers. “It’s going tobe about our success in rehabilitating theeconomy, our social interventions in healthand education, improvements to transport.”After his victory in 2016, Akufo-Addo toldThe Africa Report that a key measure of thegovernment’s success would be whether itimproves the lot of the market woman whogets up before dawn, often working 12-hourdays to feed and school her family.

Was her plight any better now? “I think itis,” Akufo-Addo claimed in December. “Herchildrenwould be eligible for free senior high

schooleducationandaccess topublichealthcareunder the revamped state insurance system.”

Yet his confidence about voter sentimentis not borne out by a recent survey fromAfrobarometer, which found just 30% ofrespondents thought economic conditionswere fairly good or very good. And in termsof social equity, 66%of respondents said thegovernmentwas doing a bad jobof narrowingincome gaps; 54% said it was not creatingenough jobs. More widely, 59% said thecountry was going in the wrong direction.

One reason for such views, according toNPP officials, is the state of the economythey inherited in January 2017. Then, thegovernment’s debt was ballooning, sur-passing 70% of GDP, much of it to financeunsustainable power projects.

The NPP’s 2020 prioritiesOn the centre-right, the NPP is in the Danquah-Busiatradition in Ghanaian politics. There are several factionsin the party: the biggest schism is between the Akyemgroup (now in the ascendancy) and Asante group ledby John Kufuor. The NPP is pro-market and supportslow taxes and light-touch regulation.

THE ECONOMY Finance minister Ken Ofori-Atta, thefounder of Databank and a cousin of President Akufo-Addo,has overseen the doubling of the rate of GDP growth to 7%since coming to office in 2017 and the halving of inflationto 7.7%. But he has to contend with a combined cost ofabout $5bn to restructure the power and financial sectors.

EDUCATION A commitment to a free secondaryhigh school until the age of 17 is a key promise.But parents say there are not enough schools orteachers to meet the demand. That means educationneeds a higher budgetary allocation.

INDUSTRIALISATION The One District, One Factoryprogramme set a target for the NPP governmentto coordinate the establishment of at least 260new factories. It claims that 90 factories were builtby December 2019, but critics dispute this.

TRANSPORT With the treasury trying to resolvethe crisis in the banking and energy sectors, it under-funded road and transport projects. It promisesto ramp up spending in 2020 ahead of the election.

The NDC’s 2020 policy proposalsOn the centre-left, the NDC has heterodox roots. Founded byFlight Lieutenant Jerry John Rawlings, it also attracted sup-porters of the ousted founding president Kwame Nkrumah.Another faction, now led by John Dramani Mahama,grew out of various student and civil society groups.

THE ECONOMY It was the NDC’s poor record oneconomic management and corruption that was in partresponsible for the party’s and Mahama’s defeats in2016. The NDC now proposes increasing funding to smallbusinesses and raising government revenue.

EDUCATION NDC officials talk about reviewingthe free secondary high school system but would notend it, given its popularity. Instead, the party maypropose changing the funding mechanisms, gettingwealthier families to pay special levies.

INDUSTRIALISATION The NDC accuses the governmentof falling woefully short of its One District, One Factorytargets with only 25 out of the promised 260 factories asof December 2019. It wants the government to be involvedin industrial projects, like with the Komenda Sugar Factory.

TRANSPORT The NDC confidently claims this as anarea of great success from 2008 to 2016. They pushedthrough projects such as the Nkrumah Circle interchangein Accra. Party leaders say the popular criticism of theNPP for not getting enough money into the system throughnew projects will help it in 2020.



There was also, according to financeministerOfori-Atta, a looming financial-sectorcrisiswhich, if it hadn’t been dealtwith, couldhaveparalysed the economy.According to thelatest figures fromOfori-Atta’s 2020 budget,restructuring the banks, savings and loanscompanies, as well as the power sector is setto cost more than ¢30bn ($5.3bn) – or about10% of Ghana’s GDP.

The subsequent drag on the economywiththat much money allocated to complex re-forms, with little short-term benefit to livingstandards, has prompted analysts such asDavid Cowan, Africa economist at Citibank,to ask if the timing of the reforms was right.The cost of the banking reforms, according toCowan, was higher thanmany had expected,including some inside government. “Thecombination of these two policy battles issapping some of [the government’s] politicalenergy,” Cowan wrote in a briefing note, “inparticular the one-off spending costs whichseem to have attracted considerable attentionand have domestic political implications.”

By that,hemeant themoneycouldhavebeenspent onmore growth-enhancing projects, toboost incomesandcreate jobs.DidAkufo-Addohave regrets about those reforms? “The realitywas that we met these issues head on. […] Itwould have been irresponsible not to havetackled these crises in thewaywedid,”he said.

However, Cowan makes a wider politi-cal point about the government’s mindset.Althoughmost of themacroeconomic trendsarepositive, thegovernment ison thedefensive.

In the last week of November, Ofori-Attawrapped up the debate on the 2020 budget in

parliament with a set of glittering statistics:GDP growth doubling to 7% over the lastthree years; inflation halving to 7.7%; thefiscal deficit is under 4.5%ofGDP; the tradebalance is in a surplus of $2.6bn in 2019; and1.2millionGhanaians attend secondary schoolfree of charge, justifying the outlay of ¢2.2bn.

Despite the cheerleading, Ofori-Atta wasconcerned enoughabout the throughput of hispolicies to announce a 21% boost to govern-ment spending in 2020. And he plans to raiseanother $3bn on the eurobondmarkets to payfor some delayed road-building projects andhelp restructure medium-term debt.

Under pressureNone of that, insists Ofori-Atta, is aboutpriming the treasurypumpaheadof elections.Twoyears ago, thegovernmentpasseda fiscalresponsibilitybill limitingbudgetdeficits to5%ofGDP,constraining its spending impulses –atleastonpaper.Like thebankerhe is,Ofori-Attahas been adept at cutting debt service costs,by stretchingout thematurities of someof thegovernment’spaper.Hehasbeen lesssuccessfulin resolving the revenue-spendingmismatch.

The business-minded NPP stood on aplatform of cutting taxes in 2016, and it triedto cut rates and specific taxes for individualtaxpayers. With a tough three years ahead– lower oil production and prices, a big taxholiday for the country’s topgoldmining com-pany and a commitment to uphold improvedbuying prices for cocoa farmers – Ofori-Attaand the treasury are under pressure.

In 2020 the government is determined tofund itspre-electionroad-buildingprogramme.That will not cost them support as long astheydo itwithout raising taxes on individuals.Themain complaint from interviewees on thestreet was about the government’s reluctanceto spend, not its extravagance. Ofori-Atta’sgoal is to raise tax revenue to 20% of GDPfrom the current level of 13% over the nextthree years - just as GDP is forecast to dip toan average of 5.7% from about 7%.

Thebestexplanationforwhythegovernmentappears to beon theback foot,Cowanargued,is the divergences between the economicdata,investor views and popular sentiment, muchof which is negative. Less than a year beforeelections, that worries a governing party.

And it delights the NDC, according toSamuel Okudzeto Ablakwa, the party’s

FELIXLIPOV/SHUTT

ERSTO

CK

Both Mahama andAkufo-Addo want tomake the stool-shapedpresidential palacein Accra their residenceand office after theDecember 2020 election

1.2 millionGhanaiansattendsecondaryschool freeof charge



foreign affairs spokesman in parliamentand a former deputy minister of education.“Our internal polls are looking good,” he toldTheAfricaReport. “Peoplewho voted for theNPP are asking about all those promises.”

Ablakwa is particularly exercised by theNPP’s claims thathisparty is tarnishedbecauseof abuses of office.Many of the accusationsconcern the ‘emergency’ power deals negoti-ated underMahama. It established a ‘take orpay’ system for producers. Because Ghananow has too much electricity, that system iscosting between $30m and $50m a month.

Akufo-Addohas cancelled thoseprovisions,triggeringfresh legal fights.Ablakwadismissesit all asposturing: “Lookat the contract forgasturbines with Ameri in the UAE [United ArabEmirates] – theNPPsaid the cost of$510mwastoo high and the deal was corrupt.”

But the NPP government’s investigationinto the contract was bogus, he said: “TheyallowedAmeri to sponsor the investigation.[…] They paid first-class airfares to Dubaiand for five-star hotels. […] Then the inves-tigators proposed that the contract should beextended and another $300m added to it.”

A rowblewup inAugust about theproposednew deal withAmeri and the energyminister

Boakye Agyarko was sacked. Angry at thegovernment, he tells friends he was made ascapegoatandwill explainall “at theright time”.

Ablakwa added: “We are going to gettougher on these cases in 2020.” He is push-ing for a more activist parliament too: “arebalancing away from the excessive powersof the executive.We lack the ability to hold abloated government to account. […]We seemto be ruled by family and friends.”

That last remark referred to the myriadcharges of nepotism against the NPP gov-ernment, appointingmore than 100ministersand business colleagues to sinecures withinthe system. One of the prime targets forthose accusations, Gabby Otchere-Darko, acombative corporate lawyer, is known as the‘primeminister’, a soubriquet he laughed off.

Otchere-Darko robustlydefended twoof themost criticised deals approved by the govern-ment. “The $2bn Sinohydro deal offering thecompany bauxite is not really barter at all,”he toldTheAfricaReport. “It was just a smartway of avoiding the IMF’s limits on taking onfresh debt. […]We’re going to repay the loanswith the revenue from the projects.”

Voterswill have the chance to have their sayon it all at the ballot box inDecember 2020.

HEIKOJU

NGE/NTB

SCANPIX/AFP

After three years inpower, Akufo-Addo facescritical scrutiny acrossthe country, especiallyoutside his party’sheartlands of Easternand Ashanti regions


FEATURES /

Hubsnothype

Africa has more than 600 tech hubs andrising, ranging from incubators and acceleratorsto co-working sites. While the start-up game

is the survival of the fittest, it is also one wherecommunity is power

By MARIÈME SOUMARÉ, QUENTIN VELLUET and MATHIEU GALTIER for Jeune Afriqueand NICHOLAS NORBROOK

TECH


The iHub technology innovation centrein Nairobi supports local start-ups

WALD

OSWIEGERS/BLO

OMBERGVIAGETT

YIM

AGES


FEATURES / TECH / Hubs not hype

Groups of youngish Nigerians are sittingaround a room arguing. Post-it notes colonisewalls, connected by lines onwhiteboards likean unorthodoxpolice investigations unit. Thecolours are bright, the mood concentrated.We are at a hackathon in the Co-CreationHub (CCHub), one of the famed tech hubs ofLagos, located in Yaba, which is consideredNigeria’s Silicon Valley.

“We’re structured as a social innovationcentre, and from time to time we pick issuesthat are of critical social economic relevanceand see howwe can stimulate new solutions,”says Femi Longe, co-creator of CCHub.“What that typically entails is bringingpeopletogether from sectors that ordinarily don’tinteract, with the intention that they cancome up with new products or services thatcan solve a really clear, distinct problem.”

Entrepreneurswho tackleAfrica’s thorniestproblemsmaywell emerge from the proteansoup of ideas, support and stimulus that is atech hub. Nigeria’s award-winning BudgITnon-governmentalorganisation forexample–astart-upwhosemission is to explainNigeria’sbudget to citizens and trackpoliticians’ spend-ing – was born in a CCHub hackathon.

African tech hubs are on the rise. A jointreport byBriterBridgesandAfriLabs identifies643 tech hubson the continent.Thedefinition

is broad: accelerators, incubators, university-linked start-up support labs, maker parks,even co-working spaces. And while somehave deep pockets and big projects, aroundtwo-thirds have fewer than 10 members ofstaff. But their purposes are often clear: tohelp tech entrepreneurs take their first stepstowards launching a viable company and tosupport a growing ecosystem.

Briter Bridges founder Dario Giuliani,a co-author of the report, tells The AfricaReport: “I have always thought we have beengauging hubs’ work with the wrong scale.Hubs have been playing a catalyst role acrossAfrica’s cities that transcends themere act ofsupporting start-ups. Although several suchorganisations still offer only co-workingfacilities, an often understated role these hubsplay is that of safe havens for the youth inotherwise poorly conducive environments,as well as forward-looking training centrespromoting digital literacy.”

Giuliani continues: “Our research andconversations with hub managers show thatthe majority of hubs rely on hybrid modelsthat consist of consultancy services, equityin exchange for support and/or cash, donorfunding for programmes […]. This showsthat chasing a unique identity for hubsmightresult in a waste of time.”

The next big thingFor CCHub’s Longe, rather than companyvaluations, “themeasure for us of success forour start-ups is their ability tobuild sustainablebusinesses thathavebeen real concretevalue inimprovingqualityof life forpeople inNigeria.”His hub also puts venture capital money intocertain start-ups – including a blood-deliveryservice calledLifeBank,whose founder,TemieGiwa-Tubosun, justwon the inaugural JackMaentrepreneur award in November.

Nevertheless, the valuations of Africanstart-ups have been rising. In the first halfof 2019, the top 15 venture-capital fundingrounds for African start-ups raised $286m,compared to $175m in the first half of 2018– growth of more than 60%.

And in just the past few months, the pacehas picked up: Visa pumped $200m intoNigeria’s payment fintech Interswitch, andChinese investors put a combined $170minto another Nigerian fintech, OPay. Andyet another African fintech, PalmPay, raised

Tech hubsoftentranscendthe mere actof supportingstart-ups


$40mfrom investors led byChinese telecomscompany Transsion. It, too, is targeting theNigerian market.

There isnosurprise, then, thatmanyof thesetech hubs are funded by big tech companies,which are always on the look out for thenext big thing. Facebook, Google, Amazon,Microsoft and IBM are the largest sponsorsof tech hubs. But African companies arebacking them too, including Liquid Telecom– the data infrastructure company owned byZimbabwean billionaire Strive Masiyiwa

– Standard Bank, Africa’s largest bank, andMTN, Africa’s largest telecoms company.

Nairobi, Johannesburg and Lagos are thetop cities for African tech, attracting globalgiants – including those fromSiliconValley –and a host of start-up entrepreneurs. Theircountries have ecosystems favourable tostart-up activities: largemarkets, widespreaduse of the internet on smartphones, as wellas excellent network coverage, supported bygroups suchasMTNandSafaricom.Moreover,this development of technological sectors is

50+ hubs

20-49 hubs

10-19 hubs

5-9 hubs

2-4 hubs

0-1 hub

INNOVATION ACROSS THE CONTINENT

64339%

14%

24%

41%

ESTIMATEDACTIVE HUBS

co-working

accelerator

innovation hub

incubator

AFRICA’S $1M+START-UP DEALSIN 2019

$100m

$50m

$42m

$41.7m

$30m

GHANA

Redavia

PEG

mPharma

NIGERIA

Farmcrowdy

Kobo360

Andela

Gokada

MAX.ng

Kudi

OneFi

OPay

TechAdvance

TeamApt

Arnergy

54gene

MDaas Global

TUNISIA

InstaDeep

EGYPT

MoneyFellows

Swvl

ArabyAds

Yumamia

KENYA

MYDAWA

M-TIBA

Twiga

Lori

Sokowatch

Shortlist

TANZANIA

Jibu

ZAMBIA

Rent to Own

MAURITIUS

Daystar Power

ZIMBABWE

Payitup

deep tech

ride hail

fintech

logistics

mobility

education

retail

energy

jobs

agtech

water

govtech

housing

health

SOUTH AFRICA

Intergreatme

Inclusivity

Retail Capital

Lulalend

Centbee

RapidDeploy

TymeBank

FlexClub

Aerobotics

SweepSouth

Kalido

Sun Exchange

WhereIsMyTransport

GovChat

Wealth Migrate

Flow

Enko

UGANDA

Tugende

Neopenda

SolarNow

SafeBoda

SOURCE:AFR

ILABS,BRITERBRIDGES



supported by both governments and majorcompanies, which form partnerships withstart-ups and take stakes in their firms.

Francophonemarketsare smallbutgrowing.Partech’s latest report, which tracks fund-raising by start-ups, says that Senegal is thebest-performing French-speaking country.It ranked seventh on the continent in 2018,aheadofRwanda (8th),Tunisia (12th),Morocco(15th) and Côte d’Ivoire (18th).

But just like the incubator-swaddled start-ups themselves, tech hubs are fragile. Afrilaband Briter Bridges’ research “identifies over110 hubs that have shut operations in the lastfew years due to bankruptcy, pivoting or theexpiration of their mandate”.

One of the key roadblocks is capital:manyhubs are unable to help companies reachinvestors to fund their growth. Another is afailure to provide the connections and adviceto help companies evolve. “You can count thenumber of investment funds on the fingers ofonehand, and the statusof angel investor doesnot exist,” says Amel Saidane, co-founder ofthe association Tunisian Startups. She alsosays government should reservemore publiccontracts for local start-ups.

RaymondMendy, theheadofCTIC, agrow-ing incubator in Senegal, points out some oftheproblemsheand thewider ecosystemface.

The education systemdoes not offer practicalskills and struggles to adapt to the evolutionoftechnological tools. “Academic training doesnot prepare students for entrepreneurship,” hesays,adding that incubatorsalso lackexpertise.He also criticises the big events organised bymajor companies: “Brands want to have theimage of being close to the digital pioneers,but it’s only an institutional positioning. Start-upswin competitions and small envelopes butdo not focus on the essentials.”

Regional agilityAsaresultof thesechallenges,hubsareformingalliances to deepen networks, to catalyse thebest advice from around the continent and toaccess newmarkets.OumarCissé is a42-year-old entrepreneur in Senegal who enjoys thelaboratory feel ofDakar: “If youhave an idea,you canbe sure five other people havehad thesame. If you can make it work, you can besure that it can be exported to othermarkets.”

As inmanysecondaryFrancophonemarkets,all eyes turn to the opportunities of Abidjan.“There, thereare fewerstart-upsand themarketis much bigger,” says Cissé, whose financialservices company InTouch has now enteredseveral West African markets. “We realisedthat we had done the same turnover in sixmonths inCôte d’Ivoire aswe do in two yearsin Senegal.” Like many of its competitors,Intouch provides businesses with the abilityto access digital and other forms of payment.

Infrastructure is key. Abidjan has threeundersea fibre-optic cables linking to theglobal web and also the presence of globaltech giants. Orange and MTN, for example,both have incubators in and aroundAbidjan.

Morocco is another importantFrancophonetech pole. “Global giants likeAtos, IBM,

5

$2,500,000 - $4,999,999

$1,000,000 - $2,499,999

$500,000 - $999,999

$250,000 - $499,999

$100,000 - $249,999

$50,000 - $99,999

$0 - $49,999

Not applicable

Prefer to not disclose

TOTAL FUNDING RECEIVED (Number of tech hubs)

DONORS

0 10 15 20

21%15% 12%

10%

5%

3%

3%

16%

15%

corporate sponsorsdev finance institutionsgovernment

NGOsphilanthropic orgsfoundations/grants

private investorsventure capitaluniversities

SOURCE:AFR

ILABS,BRITERBRIDGES

• Facebook

• Google

• Microsoft

• IBM

• Amazon

• Liquid Telecom

• Standard Bank

• Vodacom

• BNP Paribas

• Access

• Barclays

• Deloitte

• Mastercard Foundation

• Orange

• MTN

Key corporate partners* Key donors

• UKaid

• USAID

• British Council

• AFD

• La francophonie

• Bill & Melinda Gates Foundation

• The World Bank

• GIZ

*The surveyed hubs were asked to mention partners who supported them eitherdirectly or funded any of their programmes

PARTNERS AND DONORS

SOURCE:AFR

ILABS,BRITERBRIDGES



Oracle, Sage have chosen to set up inCasablanca and to make it a launch pad toAfrica,”saysSalouaKarkri-Belkeziz,presidentof theFédérationMarocainedesTechnologiesde l’Information, desTélécommunications etde l’Offshoring. In the wake of these largegroups, the network of start-ups is graduallyexpanding, with around 2,000 companies.Casablanca is home to three-quarters of theincubators and support structures for start-ups.

With the impact of the jobs crisis filteringthrough to even themost hard-headed of leg-islators on the continent, the state is gettinginvolved. Some governments give assistancein kind. The CCHub, for example, was givenassistance by Lagos State, with provision ofsubsidised high-speed internet. Côte d’Ivoirehas launched the Village des Technologiesde l’Information et de la Biotechnologie inGrand Bassam, a free zone which cost thegovernment $65m. It provides 624ha ofoffice and factory space.

Revolution and innovationOthers prefer focusing on the legal frame-works first. Senegal has a start-up act work-ing its way through the legislative pipelinethat will give a six-year tax holiday to firmsand finance tech hubs, among other things.Tunisia’s 2018 start-up act pays social chargesfor employers, lightens customs proceduresand facilitates banking services.

The Tunisian revolution of 2011 playedits role, which may point to a link betweeninnovation and the openness of political

institutions. Without the revolution, “it isinconceivable that the ICT minister at thetime, Noomane Fehri, would have been ableto get government officials and entrepreneurstogether to dream up the start-up act,” saysNader Bhouri, an adviser at the ministry.

The ability ofEthiopian start-ups to survivedespite regular internet blackouts also has tobe applauded. They remain slim in number,which points to awider problem; a start-up ofwhatevernatureonthecontinenthasbighurdlesto clear in access to finance, infrastructure andthe cost of logistics in a fragmented market.

Rwanda wants to solve the problem byclustering tech actors in one place. Today, thecampus of theUS university CarnegieMellonappears a little lonely in Innovation City, inthe north-east of Kigali. It was going to bejoined by the famedAfrican start-upAndela.However, Andela prefers the neighbourhoodof Nyarugenge. Reinforcements are arrivinginKigali. IT security firmKaspersky Lab hassaid it will set up an office in 2020. Alibaba,the Chinese e-commerce giant, is already inKigali to set up a platform to help increaseAfrican exports to China (see page 68).

AsAfrica’s techenvironment strengthensandgrows in the years to come, therewill bemoreupheavals asweaker firms shrinkand strongerones take over their rivals. There are alreadysigns of this amongst the continent’s top techhubs,whichseekprime-moveradvantages.Thisyear, Nigeria’s CCHub took over its Kenyanpeer iHub.CCHub’s co-founder BosunTijanitoldTechCrunch: “It strengthens our ability tosupport innovation […]. It gives us a chance toattract greater resources and talent.”

CHALLENGES AND TOOLS FOR SUCCESS

Access to reliable, constant capitalLinking entrepreneurs to investorsTalents and skilled staffHelping entrepreneurs scaleExposure and brand awarenessMentors’ ability to provide valueto participantsCompetition from other tech hubs

Greater access to financialresourcesCollaboration with othersupport organisationsGreater networksMore success stories/exitsIncreased exposureGreater access to physicalresources

28.3% 11.2%27%

11.6%

12%

13.7%24.5%

20.2%

19.7%11%

9.4%

9%

1.8%

SOURCE:AFR

ILABS,BRITERBRIDGES

IT securityfirmKasperskyLab will setup in Kigaliin 2020

$1,000,000$500,000 - $999,999$250,000 - $499,999$100,000 - $249,999

$50,000 - $99,999$0 - $49,999

0

0 5 10 15 20

5 10 15 20 25

TOTAL INVESTABLE CAPITAL (Number of tech hubs)

$500,000+$250,000 - $499,999$100,000 - $249,999

$50,000 - $99,999$20,000 - $49,999$10,000 - $19,999

$5000 - $9,999$1,000 - $4,999

$0 - $999

FUNDING PROVIDED PER START-UP (Number of tech hubs)

SOURCE:AFR

ILABS,BRITERBRIDGES


FEATURES /

Huawei’s tech brings opportunity but also the threatof increased surveillance for Africa’s future citizens


Beijingcalling

In a new wave of engagement, Chinesecompanies are taking Africa’s telecoms andother consumer markets seriously. But it

is not merely about money, as this is playingout against the backdrop of geopolitical

and ideological competition that will shapethe world for decades to come

By COBUS VAN STADEN in Johannesburg

WIDE ANGLE

BLO

OMBERGVIAGETT

YIM

AGES


FEATURES / WIDE ANGLE / Beijing calling

IIn 2017, American Gloria Parkhurst* washired by China’s largest dairy company, Yili.She was trained for six months in Beijingand was due to head back to the US to helpYili there. Then President Donald Trumpstarted a trade war with China. Overnight,Yili’s targets changed. “Instead, they sentme to Inner Mongolia to start working onmarket entry for Southeast Asia first… andthen Africa next,” says Parkhurst. China’ssecond-largest dairy company, Mengniu,has also been sending commercial envoysto East Africa.

It is not just the trade war that is rewiringChina’s corporate engagement with Africa.Chinese companies are perhaps better atspotting and seizing opportunities on thecontinent, too.ManyWesternmultinationalsstruggle to see Africa as a consumermarket.A Nestlé executive famously said in 2015that the African middle-class boom hadbeen overestimated.

Infrastructure and extractive industriesmadeupChina’s firstwaveof recent economicexchange with Africa, and consumer-facingcompanies aremaking up the second, startingwith technology and finance. But a questionremains from the first wave: can Africancountries and companies seize Chinese op-portunities, too?

In the history of China-Africa relations,2019 may go down as the year of the mobilephone – not only because it was the yearwhenChinese companies proved howmuchmoney

you can make by selling African consumersaffordable smartphones.Mobile telecoms, andtheAfrican networks that underlie them, alsocropped up at the centre of one of the year’sbiggest geopolitical battles: the spirallingtensions between the US and China.

The last emerging marketOneof this year’s definingmoments inAfrica’srelationship with China did not happen inAfrica.Rather, theShanghai-basedSTARmar-ket – a competitor to theUS-basedNASDAQ–saw the launch of a very strong initial publicoffering.ChinesecompanyTranssionattractedaround $400m in financing, which at onestage pushed the firm to a $7bn valuation. Yetvery few Chinese even recognise the name.This is because Transsion’s Tecno and otherbrands of phones are mainly sold in Africa.

Africa is the world’s last real emergingmarket for mobile phones. While phonesales in China are slumping, some Africanconsumers are only buying their first phonesthis year. Transsion knows this andworks onrazor-thin profit margins to keep prices aslow as possible. It has also adapted designto African realities, including longer battery

JAMESAKRENA/REUTE

RS

Can AfricancompaniesseizeChineseopportunitiestoo?

China is exportingsmart-city technology toAfrica, such as this CCTVsystem over Hoima Road

in Kampala, Uganda


life and a camera calibrated for darker skintones. Phone companies shipped 52mmobilephones to Africa in the first quarter of 2019,and Transsion phonesmade up 37%of that.

The success of theTecnophone did not justboost Transsion’s handset sales. The compa-ny launched the phones with its Boomplaymusic streaming service preloaded. Thismeans that while Western music stream-ing services like Spotify, Apple Music andDeezer are still nibbling around the edges,Boomplay suddenly becameAfrica’s biggestmusic streamer. It revealed a reality that hasbeen hiding in plain sight: consumer mediais exploding in Africa.

One problemkeeping some investors awayis that reaching these consumers can bearduous.While the average international costto manufacturers to cover the so-called lastmile to the consumer comes to about 28%of the cost of the product, Africa’s trickylogistics inflates this cost to 55%.

This is where Chinese companies have anadded advantage: the might of the Chinesegovernment and policy banks. Financingfor large-scale projects like data networks isnegotiated at the state level. This financing is

frequently tied, whichmeans that a Chinesecontractor is locked into the deal. In return,they are frequently turned intowin-win narra-tives byChina’s official propagandamachine.

Take the Chinese satellite TV providerStarTimes. With the Chinese government,it has launched the 10,000 Villages project,expanding satellite TV networks to poorcommunities across East,West and SouthernAfrica. A recent visit to StarTimes’s head-quarters in Beijing revealed booth afterbooth filled with African students translat-ing the dialogue to popular Chinese soapoperas into languages like Kiswahili andHausa. The dubbed dramas will roll out atvery low costs, while StarTimes undercutscompetitors like South African satellite TVprovider MultiChoice.

Geopolitical power of techBut tech is never just fun. In Africa, it is in-creasingly becoming a space for geopoliticalwrangling between China and the US.

In July, themayor of Tshwane departed ona junket to China to view smart city technol-ogy. The tripwas sponsored byHuawei, onlyone of several Chinese companiesmarketing

Transsion brands

Transsion brands

60%

50%

40%

30%

20%

10%

0

30%

25%

20%

15%

10%

5%

0

Nokia

Africa smartphone market share (%)

Alcatel Samsung

TELCO LEADERS

Samsung Huawei

2016 2017

Africa feature phone market share (%) 2016 2017

SOURCE:IDCWORLD

WIDE



systems including facial recognition cam-eras and machine-learning algorithms as asolution to crime and inefficiency. Many ofthe African governments considering thistechnology are far from liberal, and somefear Chinese tech will be used to crack downon political opponents.Western critics haveaccused China of exporting authoritariantools to Africa via tech. Iginio Gagliardone,author ofChina,Africaand theFuture of theInternet, disagrees: “Chinadoesn’t really havea template approach, and it tends to fit […]into the scheme that is being created by thecountries in which China is doing business.”

Facial recognition softwareAbout 25%ofAfrican countries are investingin artificial intelligence systems. Uganda hasconfirmed that its $126m smart city projectuses Huawei facial recognition software.Huawei has also installed 1,800 cameras and200 traffic surveillance systems in Nairobi.The companyclaims the systemalmost halvedcrime rates in the city.

TheUSadministration’s targetingofHuaweias a security threat in its larger tradewarwithChina is putting pressure on African leadersto choose sides. The financing dynamicsunderlying the current dominance ofChinesetech inAfricameant that, for several of them,the choice was a no-brainer.

The support for Huawei in the globalsouth goes beyond ideology. The host ofthe Africa Tech Roundup podcast, AndileMasuku, sees African leaders evaluating the

Huawei dispute in very different terms thanWashington: “We’re hearingAfrican nations,even the stronger economies, coming out andsaying we need to think what is best initiallyfor our national citizens, and more broadlywhat’s good for Africa.”

Adam Lane, Huawei’s senior directorof public affairs in Southern Africa, em-phasises the corporate over the political:“It’s business-to-business. That means you

workwith the Safaricoms, with theTelkoms, with the MTNs, with theAirtels, for decades, ideally.”

But behind this cosy B2B’ingMasuku sees a wider ideological

struggle in which the fights with Huawei area proxy for the formation of a new ‘ThirdWorld’: “As China and America duke it outfor ideological and commercial dominance,where the Third World was [previously]mostly about who sided with America andits allies vis-à-vis the Communism issue, Isee a new ThirdWorld forming around whogets to dictate how the world should be run,what constitutes fairness, what constitutesa more equal spread of wealth perhaps, orwhat constitutes the brand of capitalismthat should prevail.”

China is now the largest single financierof African infrastructure. It finances one ofevery five projects in Africa, and builds onein three. However, this role has not beenwithout controversy. This year was also theyear of the ‘debt trap’ narrative – the idea thatChina uses loans to weaken poor countriesand in so doing gain leverage over them. USgovernment officials have recently doubleddown on this narrative (see page 140).

The problemwith the debt trap narrative istwofold: in the first place it underestimatesthe decision-making power of African gov-ernments and thus underplays the barriersthey face to infrastructure financing. It alsooverestimates Chinese power, as if Beijinghas endlessly deep pockets. In truth, Chineseconcern about African debt is all too real.

InApril, Kenya’s President UhuruKenyattatravelled to Beijing to get financing for thethird phase of the Standard Gauge Railway,a Chinese-funded project to connect severalEast African countries. ToKenyatta’s embar-rassment, Beijing declined to fund the thirdphase, requesting that thegovernment conducta new project-wide feasibility study

SUN

RUIBO/XIN

HUA-REA

The US tradewar putspressureon Africanleaders tochoose sides

Transsion’s Tecnohandsets are speciallymade for Africa -and have cornered37% of the market

8th edition

GALA DINNER

@africaceoforum#ACF2020

9 & 10 March 2020

The foremostinternational meetingfor African CEOs,bankers and investors

www.theafricaceoforum.com



before more loans will be considered.Uganda said it will seek alternative lendersfor its section of the railway, after China alsorefused Kampala a $2.2bn loan.

The question then becomes why China fi-nanced parts of the project in the first place.Chineseofficials frequently characterise theirengagement inAfricawiththeidiomof‘crossingthe river while feeling the stones.’ It could bethatBeijinghaswadedupagainst a submergedboulder: that one should not necessarily trustfeasibility studies when African governmentshave a lot at stake.

Allies against the WestChina’sdomestic economic slowdown isalsoareason for thenewhesitancy. InApril,China’sPresident Xi Jinping emphasised “quality”projectsandcriticisedso-calledvanityprojects.This and the reduction-via-accounting of thefinancing target offered at the 2018 ForumonChina-Africa Cooperation are clues that thedays of ever-escalating Chinese financing forAfrica are coming to an end.

That said,ChinaremainsAfrica’smain infra-structurepartner.ThisearnsBeijingsignificantpolitical capital.But the tensionbetween theUSandChina ispushingAfricancountries toadoptunfamiliar political positions in multilateralforums.Recently, aUNvote led by theUSandUK to censure China for human rights abusesin Xinjiang was defeated due to pro-Chinapressure.Manygovernments, includingSudan,Egypt, Somalia, Algeria and Nigeria, signeda letter praising China’s policies targeting theMuslim Uyghur population.

Uganda also recently came out in supportof China’s position over the ongoing protests

in Hong Kong, while African votes have beeninstrumental ingettingChinesecandidates intotop jobs at multilateral organisations.

The reality underlying this shift is a wid-er decline in Western economic influencein Africa. This trend is lessening Westernleverage, as Washington found out when itexpelled Cameroon from the African GrowthandOpportunity Act for human rights abusesthis year. The measure drew barely a shrugfrom Yaoundé, with a reminder that China isnow Cameroon’s main trading partner.

One way that African countries can benefitfromChinese interest is throughsupplying thehugeChinesemarket. Earlier this year, super-marketsinShanghaiandBeijingputupelaboratedisplaysofSouthAfricancitrusfruits.Exportershad justpassedafour-yearcertificationprocessto use a different shipping technology, but thesplashy displays had nothing to do with thedetails of pallets versus containers. Rather,theysentamessage toproducers inFloridaandCalifornia thatChina can get producewithoutbending toWashington’s demands.

These developments reveal two realities:African agribusiness is making inroads intoChina despite its complex certification proce-dures,and the tradewarhasdraggedcommerceinto the heat of geopolitics, opening up unex-pected opportunities for African producers.

But getting into the Chinesemarket is onlyone step. The real struggle is communicatingwith Chinese consumers and positioningproducts in a crowdedmarketplace. Rwandaand Kenya have been particularly effectivein this. Java House, Kenya’s largest chain ofcoffeeshops, has signedwith Shanghai-baseddistribution company Green Chain.

VISUALCHIN

AGROUPVIAGETT

YIM

AGES

Jack Ma smelled the coffee and decidedto launch eWTP in tech-friendly Rwanda

The daysof ever-escalatingChinesefinancingare ending


Rwanda is also cooperatingwith the Chinesee-commerce giant Alibaba (see box) to sellits coffee on the Chinese market.

In China, Alibaba’s e-commerce networkmade it easier for small-scale farmers to sellproducts in cities.A similar systemcouldhelpAfrican farmers and boost intra-African andChina-Africa trade. But the reality is also thatgetting into theChinesemarket is amulti-yearrollercoaster of trade negotiations, andmanyAfricancountries lack thecapacity tonegotiatethe entry and to position their products.

A shorter-term solutionmight lie in greaterChineseengagement insupportingintra-Africantrade. The African Continental Free TradeAgreement is starting to erase some of thebarriers to cross-border trade.Chinese corpo-rate support forAfricanpayment systems like

M-Pesaand the expansionofChinese serviceslike Alipay from Chinese tourists to Africantraders could speed that along.

But if the year of the mobile phone provesanything, it is that these developments willalso bring political complications. The manyChinese phones flowing to the continent, andthedatanetworkssetupby the likesofHuawei,can help African citizens to question localelites – and the deals they sign with China.It will allow Africans to ask hard questionsaboutwhat kindof global economy theywantandwhich international partnerswill help theworld’s youngest population to thrive. Justbecause theirphonesweremade inChinadoesnot mean they will choose Beijing.

* An alias

From Alibaba to AfricaWhen Jack Ma stepped down asAlibaba’s chairman in September 2019,he announced that he wouldbe spending his retirement in a surpris-ing way. The tech legend, who grewChina’s Alibaba into a $450bn successstory, said he is turning his attentionto African ‘netpreneurs’. Ma says he wasnot hunting for the next Alibaba in Africawhen he visited Togo on 14 November.“People like e-commerce, today peopletrust e-commerce,” said Ma. “It’sjust like virgin land. People need it.”

Ma’s approach to Africa oscillatesbetween philanthropy and business.On the developmental side, his AfricaNetrepreneur Prize offers aspiring entre-preneurs the chance to competefor a $1m grant that can be used to funda start-up. He talks about wanting to boostthe “Three Es” in Africa: e-government,education and entrepreneurship.

But Ma also wants to do businesswith the continent. A year ago, Alibaba’sElectronic World Trade Platform (eWTP)was expanded to Africa. It allows smalland medium-sized enterprises tosell directly on its e-commerce platform.

Dean Diabate, a project leaderon this expansion, recalls: “Jack Mamet with President Paul Kagame in Davosback in January 2018, and they really

had a great communication around whatthe future of Africa should be, how therelationship between Africa and Chinashould look in the future – so much thatJack and President Kagame came intoan agreement that eWTP in Africa shouldactually start with Rwanda.”

eWTP’s Rwanda-centred launch showshow Ma’s different African interestsoverlap and keep driving Alibaba’sexpansion. In March, Alibaba announceda collaboration with Kenya’s Safaricomto allow customers to buy from Chineseshops on its e-commerce site Aliexpress

via the M-Pesa payment system. M-Pesaalso allows users to send money viaWeChat Pay, an Alibaba competitor.In July, Alibaba’s online payment system,Alipay, teamed up with Nigerian-foundedfintech start-up Flutterwave to facilitatepayments between China and Africa.

In November, Ethiopia becamethe next eWTP country. In conversationwith The Africa Report in February,the late Safaricom CEO Bob Collymoreadmitted that global tech giants likeFacebook and Alibaba were now thegreatest rivals to his business.

CHEN

CHENG/XIN

HUA

Jack Ma with Kenyanentrepreneurs in Nairobi

FEATURES /

BuharINQUIRY

ri76 THEAFRICAREPORT / N° 110 / JANUARY-FEBRUARY-MARCH 2020

The border battlebetween Nigeria andBenin shows the highcosts of Buhari’seconomic nationalism.He wants neighbouringPresident Talon tochange his economicstrategy and stopseeking to supplyNigeria with goods itcan produce at home

By PAUL MELLY in Cotonou,RUTH OLUROUNBI in Lagosand PATRICK SMITH

The two leaders were together at the lavish inaugurationof the Sèmè-Kraké joint borderpost in October 2018

RODRIGUEAKO/PRESIDENCEDU

BÉNINBenin


FEATURES / INQUIRY / Buhari vs. Benin

It was a lavish ceremony to mark the lateststage in Africa’s economic integration – theopening of a gleaming new hi-tech jointborder post in October 2018 costing a cool12bn CFA francs ($20m), at Sèmè-Kraké,one of the busiest frontiers on the continent.

Two presidents – Benin’s Patrice TalonandNigeria’sMuhammaduBuhari – standingshoulder-to-shoulder with top officials fromthe Economic Community of West AfricanStates and the European Union celebratedthis coming together of technology and thepursuit of free trade in the region.

The Sèmè-Kraké frontier was one of theworst choke points on the Lagos-Abidjanroute, along which more than 70% of WestAfrica’s transit trade passes. It was amagnetfor anyone trying to smuggle contraband intoNigeria, Africa’s second-largest economy,from Benin, one of its smallest.

Trucksandeventaxiscouldgetstuckfordaysat thecrossingwhilecustomsofficers languidlyinspected a long line of lorries and batteredminivans overheating in the tropical sun.

All that would change, promised Talon attheopeningceremony,was that theborn-againborder post would “improve the coordinationof our customs officials and facilitate themovement of people and goods”. Buharigave a knowing smile.

Irritated by the free flow of cheap butbanned imports, usually from Asia, throughSèmè-Kraké heading for themega-market ofLagos, successiveNigerian leadershave lashedout at their smaller neighbour for failing tocontrol the traffic.Ultra-modern facilities atSèmè-Kraké and sophisticated inspectionequipmentwould change all that, saidTalon.A businessman-politicianwho ran an importverification company called Benin Control,Talon has a clear interest in high volumes oftrade with Nigeria, as it accounts for an esti-mated 20%ofBenin’s grossdomestic product.

Paralysing effectsSo choked is Apapa port in Lagos, manycompanies inNigeriaprefer tobring in rawma-terials, commodities andmachinery throughthe ports at Cotonou or Lomé further downthe coast.That business boomedafter the newborder post opened, and so did the Talon-linked import inspection empire.

That lasted until August of this year whenBuhari shut the border to all goods. Onlypeople would be allowed through. Now theSèmè-Kraké border is all but deserted.

Theparalysing effects of the border closurehave reverberated along the coastline as faras Côte d’Ivoire. Companies – both fromNigeria and neighbouring states – complaintheir businesses have been wrecked.

For Buhari, that is collateral damage in awider campaign. Using a form of commandeconomics, hewants to restructure the country.Thatmeansdiversifyingaway fromoil andgasexports, boosting the farming economies ofthe northern states and ending food importscosting more than $10bn a year.

For critics, General (retired) Buhari isreturning to type, barking orders across theparade ground. “Buhari’s record says that hedoes not understand a gradual approach tosolving economic, or even political issues,and it shows here,” says Cheta Nwanze, headof research at the Lagos-based consultancySBM Intelligence.

Somepolicymakers inAbuja seemsurprisedby the pushback, thinking that the effects onNigeriancompanieswouldbeverylimited.“Theimpact onNigerian businesses who export toWestAfrican countries could be severe,” con-tinuesNwanze,“ because theNigerianmarketis broadbut not deep.The risk is that they losea lot of their export market to competitors.”

TOGO

Ouidah

Border market

Benin customs

Nigerian customs

Nigerian observation station

Cities with smugglers

0 20 km


Although the border remains open fortravellers on foot and by car, trade betweenBenin and Nigeria now goes either by sea oracross the smugglers’ routes further north ofthe shiny new border post.

Customs officials inAbuja say this closurewill continue until at least the end of January.On 29 November the central bank governorGodwinEmefiele toldbankershewouldadvisethe government to keep borders shut. Earlier,he had said they could stay shut for twoyears.

He added that problems caused by theclosure in Nigeria – such as shortages andinflation –were “temporary and reactionary”.The medium-term benefits would outweighthe short-term costs. “We should encourageNigerians to consume goods that can beproduced in Nigeria,” Emefiele concluded,echoing one of Buhari’s favourite dictums.

With the African Continental Free TradeAgreement due to start in July 2020, Buhari’sborder shutdown flies in the face of the ‘openAfrica’ talk. Benin and Nigeria were amongthe last governments to ratify the free tradetreatyat agrandceremony inNiamey last year.

Niger, their landlockednorthernneighbour,likes regional free trade. And the regionaleconomy is not responding toAbuja’s orders.

Fuel in glass bottlesEach evening, lorries queue to collect cargofromCotonou port, destined for Lagos. Nowthat themain border is closed, those cargoesare smuggled across the border, earning arich premium for the operators.

On the Nigeria side of the border, smug-glers ridingmotorbikes laden with jerrycansof subsidised gasoline cross into Benin tosell their fuel in glass bottles by the roadsideat a 50% mark-up.

In Kano, the commercial capital of north-ern Nigeria, factory owners prefer to bringin raw materials through Niger instead ofLagos. There are smugglers carrying bagsof cement across the border fromNiger intoNigeria’s far-northern state of Katsina. Buton examination, the cement had originallybeen produced in Nigeria.

How and why it was trucked up to Nigerandwho benefited from this weird triangulartradewas not clear. Sometimes,West Africa’sborder economies are as intricate as a deriv-ative trade onWall Street. But market forcesusually dictate the terms: things like

Okuta

Saki

Ijio

Save

NIGERIA

BENIN

Méko

KétuIdi-Emi

Ilara

Oja-Ota

Igbogila

Abeokuta

Ibadan

PobeKobèjo

Oja Odan

Obawojo

ModoganSakete

Ilonintedo

IgoloAvrankou

BjoboMaridjonou

Porto Novo

Cotonou

Oke OdanIlaseIdiroko

IjofinPonton

Sèmè

Badagry

Gulf of Guinea

Lagos

Yashikera

Chicanda

Nikki

Parakou

CONTROLLING THE TRAFFIC

SOURCE:JA

CKSON

A.ALU

EDE



cost, consumer demand, productioncapacity and competitiveness.Withmore than200million people, Nigeria has a legendarydemand for food, cars, electronics and allmanner of consumer goods.

At the same time, it hasWest Africa’smostdeveloped manufacturing sector, albeit oneweakened by trade liberalisation. Smugglersprofit from taking Nigeria’s subsidised fuelacross the border to neighbouring states andlocally grown grain to the arid states of theSahel. These trade flows, illicit or official,are robust, based on supply and demand.They’re not amenable to fiscal policy andregulations. Closing borders can have unin-tended consequences.

Solomon Alade won a contract to exportmore than 1,000tnof cocoa to theNetherlandsjust before Buhari closed the border. Cutoff from his suppliers in the region, Alade’sbusiness is struggling.

Rotting produceAchronic shortageofbagsNigerianproducersuseforexports is snagging the trade.“Asexport-ers,we buy jute bags andother products fromGhana because they are cheaper,” says SegunOluwaji, themanagingdirector ofWoodgate,which ships cocoa to Europe. “As we speak,there are truckloads of bags stranded at thebordersdue to theclosure.”Without thosebagsfor export, producemay rot or orders will beheld up indefinitely. “What is likely is thatwe will exhaust all the bags here in Nigeria.We have contracts to fulfil andmissing thosetargets will cost us greatly,” adds Oluwaji.

WithinNigeria,pricesof importedfoodstuffs– now including a smugglers’ premium – have

gone up by at least 20%, but overall, the re-gional economy has slowed down. Benin islosing its trade-based revenues andTogolesefarmers see their producedestined forNigeriarot at the Sèmè-Kraké border crossing.

OnNigeria’s northern border in the Sahel,prone to drought and food scarcities, theconsequences could be stillmore serious.Theshutdown of the busy Jibia crossing, northof Katsina, is stifling economic activity andemployment inMaradi,Niger’s second-largestcity. It also undermines the longstandingmutual trade between northern Nigeria andthe southern provinces of Niger.

Each region sees the other act as its naturalreserve of cereals according to changes inrainfall, yields and harvest times. Niger isan important supplier of livestock to citiesin northern Nigeria and beyond. That trade– already hit by clashes between herders andfarmers inNigeria’sMiddleBelt – is under newpressure. Again, the shortages are pushingup prices in the markets.

On paper, the border closure was to cutNigeria’s food imports – particularly thosefrom outside Africa that were being broughtin via Cotonou. So far, there is little sign thatthe shutdown is achieving this. When it wasimposed inAugust, the cereal farming seasonformost crops innorthernNigeriawas alreadyunderway. It is too late to boost this year’soutput, except perhaps for rice, which is ona different seasonal cycle. And increasingfarm production depends onmany variables.

Credit, seed and fertiliser must be readywell in advance, to influence farmers’ plantingdecisions. Fertile land and reliablewater sup-plies are the bedrock, alongwith better

PIU

SUTO

MIEKPEI/AFP

Companies in NIgeriaand neighbouring states

say that the borderclosing is destroying

their businesses

Trade flows,illicitor official,aren’t alwaysamenable toregulations



roads and efficient ports. Closing theborder and chasing smugglers is not enough.

The centrepiece of Buhari’s campaign forfood self-sufficiency, the “rice revolution”,has worked, say farmers. To boost localproduction, the central bank released $150min loans to local rice farmers at 9%, abouthalf the commercial rate.Then the presidencyslapped tariffs and levies of about 70%on riceimports. That has boosted local rice produc-tion, but it falls far short of national demand(see graph). According to Aminu Goronyo,president of the Rice Farmers Association,the border closure has saved about N300bn($829m) on imports.Nigeria is producing ricelocally for a fraction of the cost of imports,argues Goronyo, and is creating jobs.

Yet theUSDepartment of Agriculture fore-casts that by 2020, Nigeria is to import 2.4million tonnes, making it the third-largestrice importer after China and the Philippines.

Benin is a big rice importer too (see graph),and that suggests that traders will find waysto circumvent Nigeria’s ban on imported ricefrom Asian producers.

In principle, Nigeria will buy rice grownin Benin and Niger. In reality, vast consign-ments of rice from Thailand and Vietnamare dumped in Benin through Cotonou’svast container port, then re-bagged andre-labelled as ‘made in Benin’.

‘We are pleading’ForNigeria’s exporters ofmillet and sorghum,the border closure is evidently bad for busi-ness. The third-largest sorghum producer,Nigeria produces about 7.4m tonnes a yearbehind the US’ 11.5m tonnes and India’s7.5m tonnes, according to the UN’s Food andAgriculture Organisation.

“Sorghum is one of the crops we producein surplus in Nigeria … we export to NigerRepublic and other countries inWest Africa.Closing the bordermeans that we cannot ex-port,” says Rikotu Isa, who farmsmore than5,000ha of sorghum in Kebbi State. “We arepleadingwithPresident Buhari to help us findothermeans of selling our products,” he adds.

According to traders in the once-busyKaracattle market in Ibadan, in western Nigeria,their business has taken an even bigger hit. Atrader calling himself Alhaji Abdusalam saysthey will suspend business once the currentherd of cattle imported fromNiger are sold:

“Animal business is a tricky thing. We can’tafford to order animals until the borders arereopened.”He tellsTheAfricaReport that thereare trucks of food stranded at the border dueto the government’s directive. “Live animalsneed food,water and care, and they can’t havethose if they are stuck at the border. Thatwillbe a huge financial loss for us.”

AccordingtotheUN,Nigerianseat380,000tnof beef a year and opinions vary about howmuchof that,most importedon thehoof fromNiger, will avoid the border shutdown.

“The closurewill affect the cattlemarket,”says SalehAlhassan, national secretary of theMiyetti Allah Cattle Breeders Association,“but not to the extent that it will disturb themarket. It is functioning right now.”

But it is also encouraging local producers.“There has been improvement in security,”Alhassan said, referring to the clashes overland andwater between herders and farmers.“By stopping the importation of livestock, itwill raise local livestock production.”

These are tough times in the sprawlingIdumotamarket, just outside of Lagos,whichsells everything from consumer electronics

8

7

6

5

4

3

2

1

01989 1999 2009 2019

NIGERIA’S ‘RICE REVOLUTION’(million metric tonnes)

IMPORTS OF THAI RICE(million metric tonnes)

Domestic consumptionDomestic production

2014

2.2

1.8

1.4

1.0

0.6

0.2

2015 2016 2017 2018

BeninNigeria

SOURCE:TH

AIRICEEXP

ORTE

RSASSOCIATION

SOURCE:USDA

Traders cancircumventthe ban onrice importsfrom Asianproducers


to all manner of motor vehicles to heavyindustrial machinery.

TochukwuOyeoku, chief operating officerof Partzshop, a retail store at Idumota thatstocksmore than 50,000different items, sayshis costs have risen by nearly 30% since theborders closed.Nowhehas to relyon theportsto bring in goods for hiswealthiest customers.

Import tariffs at theportson luxuryconsum-er goods and cars are about 75%.The duty onalcohol and tobacco is between 75%and95%.Buhari’sgovernment looksdetermined tocrackthe highly organised international cigaretteand liquor smuggling racket – operatingwiththe complicity ofmultinational companies –that hasmeant local producers inWestAfricahave been pushed out of their own markets.

“It’s difficult now. Business is really, reallytight for us,” saysOyeoku. “It’s really difficultwhen you’re in a country where it has notyet reached a certain level of production.If we had dealerships in Nigeria as we usedto have, this [border closure] wouldn’t be aproblem.But right nowwe are trying to battlewith running costs which [are] going up rightnow and so many things at the same time.”

Doubtless, the border closures have pushedmore trade through the ports, according toAdams Jatto, spokesman for the NigerianPorts Authority (NPA) in Lagos.

Associated Port & Marine DevelopmentCompany,whichoperates a terminal atApapa,says traffic has increased by a third. And itexpects that to rise asmore companies have touse theLagosport, boosting their revenuesandprospects for expansion.That prospect has tobe set against the grim reality of lengthyback-logs in processing cargo, creaking equipmentincapable of clearing shiploads of containersat the speeds seen inCotonou andLomé, plusa reputation formalfeasance among customsofficials inLagos, furtherholdingup the trade.

A crude toolLogistics are critical. InMarch, eightweeksofgridlock in theLagosports delayed the exportof 50,000tn of cashewnuts valued at $300m,said Tola Fasheru, president of the NigeriaCashewExportersAssociation.TheNPAsaidcocoa exports crashed by 86% over the pastyeardue to congestedports andpoorharvests.

Jatto at the NPA says they have assurancesfrom terminal operators about handling cargoinfluxes driven by the border closure. “Thecargooperators assuredus they shouldbe ableto cope in terms of capacity and equipmentto move these cargoes,” said Jatto.

When it comes to trade, the border closureis a crude tool. Buhari’s government says itit would be happy to import food that wasgrown inBenin but not the rice or pasta that isdumped inWestAfrica fromAsia andEurope.

Abuja has set the imposition of new importand packaging rules as a condition for anyreopening of the border. But how this couldbe enforced in informal rural economies isanother question.

Responding to complaints fromneighbour-ing states,Nigeria’s foreignministerGeoffreyOnyeama has been on joint missions withhis counterparts to boost border patrols andcrack down on smuggling.

If Abuja wants to change the direction oftrade and to foster production within theregion, there are practical impediments totackle: border bureaucracy, cumbersomecentral bank rules, poor infrastructure andaccess to credit and land. Such changes areunglamorous and technical. They do not pro-duce political ‘quick wins’ or cheeringTH

OMASIM

O/PHOTO

THEKVIAGETT

YIM

AGES

The central bank hasreleased lower-interest

loans to local ricefarmers which, combined

with hefty tariffs onimports, has boostedproduction in Nigeria



media headlines. Ending the rackets –whether smuggling out Nigeria’s subsidisedgasoline or smuggling in cheap imports fromAsia andEurope – and boosting local farmingandmanufacturingmeans confronting vestedpolitical and economic interests.

That iswhatBuhari’s teamclaim tobedoing.But those interests are already pushing backandcouldyetmake things verydifficult for thegovernment, with the prospect of gallopinginflation and mass shortages.

Those in Abuja bracing for a fightmay seethe tussle over tradebetweenTalonandBuharias the opening skirmish, proving Nigeriais getting serious. The border closure maypressure Talon and Benin Control to rethinktheir business models.

For years, reform-minded Beninois econ-omists have been arguing that their countryshould stop living off earnings from theimport and transit of goods declared as des-tined for Cotonou. Cotonou port generateshalf the government’s fiscal revenue. But thiscannot last forever. If Nigeria modernisesits logistics – with the new container port atLekki – Benin will be left exposed.

Buhari andTalonareatoddsonmany things.Insiders sayBuhari tried topressureTalon intonegotiating a compromisewith theoppositionparties excluded fromBenin’s parliamentaryelections in April. It was Nigeria’s pressureon Talon that got former president ThomasBoni Yayi released fromde facto house arrestto travel abroad for medical treatment.

As Talon gets more repressive and strikeshis own nationalist stance over theCFA franccurrency, Buhari’s tough line against himmay be applauded by others in the region.But Nigeria’s relations – on border trade andsecurity –withNiger andCameroon aremorecomplex.Nigeria’smilitaryneeds cooperationfrom those countries in the fight against thejihadist insurgents in Boko Haram and thelocal franchise of the Islamic State group.

Buhari is close to Niger’s PresidentMahamadou Issoufou, a key regional allywhose political base includes Maradi, a re-gion hurt byNigeria’s border closure. In theireagerness to resetNigeria’s economic relations,officials in Abuja are going to have to workhard to stop their country being seen as thebiggest spoiler to free trade in the region.

Dangote’s golden ageAs President Muhammadu Buhari triesto wean his country off its dependenceon oil exports and rebuild its factories,he has found an improbable figureheadfor his economic nationalism in thecement magnate and agri-business kingAliko Dangote. Certainly, Dangote isnot an obvious fit for Buhari, given themysteries about the sources of Dangote’sfortune and his friendship with formerpresident Olusegun Obasanjo, a loudcritic of the current government.

Dangote struck a Faustian bargain withObasanjo: a ban on cement imports if heinvested in local production. Now he haspulled off the same trick with Buhari – hehas made hundreds of millions of dollars

of investments in local farms growingrice, sugar and tomatoes, and thegovernment is discouraging food imports.Even more, it has closed the bordersand launched patrols for rice smugglers.All that is a boon for Dangote Inc.

There is also Buhari’s war on Benin’sPresident Patrice Talon, which Dangotemust be cheering from the sidelines.Closing the borders has decimated thethroughput for the Talon-linked BeninControl import verification company.

It had been earning a large chunkof revenue from Dangote’s cementtrucks plying the Lagos-Abidjan route.Now most commodities are goingby sea, and Talon is losing out.

The next stage in Nigeria’s restructur-ing is Dangote’s biggest gamble yet:his building of the $12bn refinery outsideLagos. He wants it to be the largestsupplier of petroleum products to WestAfrica. To do that, Dangote has to face twocrime syndicates in Nigeria: the dieseland generator importers who sabotagedthe power industry, and smugglers.

Dangote will not discuss his fuel pricingpolicy but has had exploratory talks withcommodity companies such as Trafiguraand Glencore. If Buhari can shut downthose fuel rackets, then Dangote’s glorywill be assured as the billionaire who ledthe charge for the industrial renaissance– Nigeria’s Andrew Carnegie. P.S.

HAMILTO

N/REA

Cement magnate Aliko Dangote has muchto gain from bans on imports


• A strong leadership team with provenpublic and private sector experience

• Clear and concise laws protectinginvestors and investments

• Efficient land management processto protect private property rights

• A dedicated Investment Promotion Agencyresponsible for investment promotion,after care and doing business reforms.

• Public Private Partnership (PPP) frameworkto protect investments in the state

• Key focus on agriculture, knowledgeeconomy, tourism and criticalinfrastructure upgrade.

Ekiti knowledge zoneA 1000 hectare space for education andinnovation – universities, research centres,business process outsourcing, AI/MachineLearning labs etc.

Agriculture• Straddles savannah and rainforest, over

40% of the state’s productive activity,supporting infrastructure

• 3 functioning dams and access roadsfrom farmlands being built

• Storage - 100,000 MT silo

TourismOne of Nigeria’s safest states, naturaltopography suitable for vacationand wellness tourism, clear strategyto attract business tourists.

Solid mineralsEndowed with numerous naturalresources such as charconite, granite,clay, quartzite, iron ore, baryte, cassiterite,columbite, feldspar.

INVEST IN EKITI

EKITI STATE GOVERNMENTOke Ayoba - Ado Ekiti

Email: [email protected]

Phone: +234 817 377 7900

ekitistate.gov.ngwww.ekdipa.ng

H.E. Dr John Olukayode Fayemi,Governor of Ekiti State

MESSAGE

JAMG-P

ictures:A

llRigh

tsRe

served

Ekiti State at a glance

Ekiti State is open for business

Population3,270,800 people

1.76 million labour force

1.4 million employed

GDP of $. billion

GDP growth (2016): 11.77%

52.7% Male47.3% Female

Literacy rate of populationaged 15–24Male:99% - Female: 96.7%

Gateway to Northern NigeriaBoundary with 4 states

4th out of 36 states on easeof dealing with constructionpermit

A young population: 70% of thepopulation under the age of 30.Rated 3rd on life expectancyamongst the 36 states of theNigeria and the FCT


FEATURES /

Beyoncé with the characterof Nala, whose voice sheincarnates in The Lion King


TheBeyoncébounce

Artists like Burna Boy, YemiAlade and Salatiel were quickto release their own albums on

the back of Beyoncé’s TheLion King: The Gift, on which a

host of African musicianscollaborated with the

Afrobeats-obsessed star

By DAMI AJAYI

CULTURE

ABC/BACKGRID

UKVIABESTIMAGE


FEATURES / CULTURE / The Beyoncé bounce

In the music world, the year 2019 will beremembered as the year Afrobeatsmusic gotendorsed by theCarters. TheCarters – rapperJay-Z and singer Beyoncé, arguably themostpowerful living couple in the global musicbusiness – are at the height of their influence,if not their creativity.

It has been a long journey since ‘Crazy inLove’, that monstrous hit song that cleavedBeyoncé from Destiny’s Child and annealedher to her husband Jay-Z. In that time therehas been a marriage, offspring, expansivecareer trajectories, a brief elevator altercationbetween theCarters andsister-in-law,Solange,and the birth of three highly acclaimed al-bums: Beyoncé’sLemonade, Jay-Z’s4:44 andSolange’s ASeat at the Table.

The release of Beyoncé’s Homecomingdocumentary onNetflix inApril set themoodfor things to come. In July, The Lion King:The Gift, the 54-minute long, 27-track sonicaccompaniment to the digitally enhancedremake of The Lion King was released. Shedescribed it as her love letter to Africa.

TheLionKing:TheGift is the thirdBeyoncéalbum to figure in the top 20 of this year’sBillboard. It peaked at number two behindEd Sheeran’s No. 6 Collaborations Projectand is nominated for Best Vocal Pop Albumat the Grammy Awards.

Beyoncé (centre),flanked by actor/

musician Donald Glover(aka Childish Gambino)

and actor ChiwetelEjiofor at the world

première of Disney’s2019 remake ofThe Lion King

There is an emotional currency in the nos-talgia and the kind of conversations Africa’sdiasporas try tohavewith themotherland. It isarguable that this kind of engagement and itstensions are partly responsible for the successofBlackPanther, theMarvel superhero film.

Beyoncé, for themost part of a decade, hasbeen seeking out creative ways of engagingwithAfrica. Either by posing in photographschannelingOsun, theYorubagoddessof fertil-ity, or by creating a 20-track album samplingmaterial from Fela Anikulapo Kuti’s discog-raphy, which was never released, Beyoncéhas applied her intimidating work ethic toher vision for engaging with African music.

Sounds of Africa nowInTheLionKing:TheGift, Beyoncé relies onthe skill of African musicians to convey hermessage of affirmation and solidarity. Therewas a deliberate leaning into the dominantcontemporary sounds on the continent. In thepast two decades, West Africa, specificallyNigeria andGhana, has pioneeredAfrobeats,that digital dancemusicwith strong elementsof percussion and sparse lyrics, drawinginfluences from more traditional forms ofAfrican music as well as from hip hop andthe Caribbean soca and dancehall. Gqom,that uptempo house-influenced progeny ofkwaito from South Africa, has also grown tobecome the rave of the moment. Hence theproducers and musicians reflected this bias.

A-rated producers of African descentlike Michael Uzowuru (Nigeria/America),GuiltyBeatz (Ghana/London) and DJ Lag(South Africa) line up alongside a colourfuldramatis personae drawn fromselectAfricannationalities likeBurnaBoy,TiwaSavage,YemiAlade,MrEazi,Wizkid andTekno (Nigeria),Salatiel (Cameroon), Shatta Wale (Ghana),Moonchild Sanelly and Busiswa (both fromSouth Africa), who contributed vocals.

It has become signature for albums byBeyoncé to spring a surprise. This one wasno different. The production period wasshrouded in secrecy.The albumwas recordedin a studio complex in Los Angeles wheresingers and producerswere flown in to recordand produce their songs. In the end, the 150songs created were trimmed to an LP-sized14 tracks, which was layered with skits ofvarying lengths from the filmwhere Beyoncéalso voice-acted as the character Nala.


agreements are common in the business andsecrets are a Beyoncé mainstay, he providedonly the roughest of outlines. Asked how hegot involved with The Gift, Bankulli hintedthat “a friend invited him”.

Artists from the motherlandThe word on the street is that he was crucialto accessing the artists invited to the project,but he disabused The Africa Report of thisnotion. “I was invited to sing on the tracks Isang on […], I was not involved in any artistesourcing,” Bankulli insisted.

This seems odd, especially since Bankulliis known in the industry as amanager, ratherthan as a recording artist. Although he hascontributed background vocals in the paston songs like D’Banj’s ‘Igwe’ and others,Bankulli’s expertise has always been on thebusiness side of things.

ALB

ERTO

E.RODRIGUEZ/GETT

YIM

AGESFO

RDISNEY

TheLionKing: TheGift is a shape-shiftingthing, a smorgasbordof selectAfrican sounds,mastered for an international audience.WithBeyoncé as curator and anchor, the albumexpounds on the politics of black optimism,bodypositivity andAfrocentric pride. ‘BrownSkin Girl’, sung by Beyoncé, her daughterBlue Ivy and Nigerian pop singer Wizkid, isarguably the biggest moment of the album.

Therearecatchphrases imbuedwithuncannynostalgia from different African languageslikeYorubaand isiXhosa.There aredelightfulhints of Nigerian-speak. There aremomentsof spiritual introspection that relocateone intothe early African syncretic church, as well asslang reminiscent of the boisterously vibrantLagos suburb of Mushin in the contributionsofmanagerOluseun ‘Bankulli’ Abisagboola.

Bankulli talked to TheAfricaReport aboutthemakingof thealbum.Butasnon-disclosure

A-listproducers,top nameartists and amessage ofaffirmation



Hecontinued: “Afrobeats andAfricabenefit-ed from thehypeand co-signby theAmericanmusic mainstream mega superstar Beyoncé.Workingwith artistes from themotherland ismajor for entertainment business.”

Afrofusion star Burna Boy was similarlycagey in his public pronouncements. He an-swered “I don’t know” to a question on TheBreakfastClub radio showabout howhis song‘Ja Ara E’ got on the album.

Nonetheless, the African musicians andproducers involved have leveraged their col-laborations with Beyoncé. Burna Boy, YemiAlade,Salatiel andDJLagareall alreadyridingthis significantwave of attention to their ownbenefit: they all released auspicious albumswithin one month of the release of The LionKing:TheGift. DJ Lag, co-producer of gqomanthem‘MyPower’, released the ‘SteamRooms’EP with Okzharp on the same day.

No to tokenismBurnaBoyrecentlyreleasedthepopularAfricanGiant album. It is his personal protest againstthe tokenismwith which theWest treated hisstature, as evidencedby the small-print posterimbroglioat theCoachella festival.Thealbumhas been nominated at the Grammy Awardsfor Best World Music Album.

Nigerian singer Yemi Alade has also re-leased the most important album of hercareer.Woman of Steel positions her for thecritical acclaimhabitually reserved formusicamazons like Miriam Makeba, AngéliqueKidjo and Cesária Évora.

Salatiel, the only Cameroon artist on thealbum, releasedAfricaRepresented. Perhapstitled to capture his optimism, the album fea-tures a remix of ‘Water’, which he performedwithBeyoncéandPharrellWilliams.However,MadeinLagos,Wizkid’s elusive fourth album,slated for tentative release, has failed to ridethe Beyoncé wagon.

But if themusicians acknowledge the impactof Beyoncé’s album, some critics are a bitcircumspect. “I don’t think the album was a‘gift’ asmuch as it is Beyoncé’s incursion intoAfrobeats,” chief content officer atBoomplay,JideTaiwo,mused toTheAfricaReport.“Thoseartistes already have some sort of reach inthemarket where she rules. She wanted a bitof the African market as well, and the LionKing reboot afforded her that opportunity. Atthe same time, it’s not a curse […]. We

BACKGRID

UK/BESTIMAGE

BACKGRID

UK/BESTIMAGE

WALT

DISNEYRECORDS/BACKGRID

UK/BESTIMAGE

WALT

DISNEYRECORDS/BACKGRID

UK/BESTIMAGE

With her characteristic multiple costume changes, Beyoncé evoked afantastical Africa in the video for Spirit, a song composed for The LionKing. With her daughter Blue Ivy in several of the scenes and choruses

of dancers she segues from desert to waterfall to baobab tree

The AFRICA CEO FORUM in partnership with KPMG proudly

presents “Get AfricanWomen on Board”, our first certified training

program designed specifically for ambitious women executives

whowish to build and strengthen their boardroom expertise. The

intensive skills-building program is a unique opportunity for women

C-suite executives to acquire the tools for board-qualification, and

understand the responsibilities that define the role.

Executive Training Program

Take your seatat the board table

GetAfricanWomenonBoard

Location:Paris: Sept. 30-October 1st

Abidjan: December 2-3Nairobi: January 13- 14

Language:English

Participants:30 female senior-level executives

Duration:3 modules of 2 days,

between September 2019and January 2020

Cost:6,000 EUR per person

If you are interestedin corporate offers,

please contact us atwomen@

theafricaceoforum.com

[email protected]

In partnership with

Get registeredfor the next sessions

ABIDJANDecember 2-3

NAIROBIJanuary 13- 14



saw how much it meant to the artistesfeatured on the album.All of themcelebratedas though they won a Grammy.”

The publishing credits reveal that the fran-chisewasdrivenbyBeyoncé.Shehasawritingcredit on Burna Boy’s song, but he claims tohavenotmetheror exchangedemailswithher.

Exploited or exploiting?Cross-cultural projects can often bring thebaggage of cultural appropriationwith them.Critics pointed out that Beyoncé and Jay-Zwere photographed for an album promotionin 2018 that copied the classic Senegalese filmToukiBoukiwithout crediting the original orits director, Djibril Diop Mambéty.

The Lion King has its own long history ofexploitation. South African singer SolomonLinda initially recorded a song called ‘Mbube’in the 1950s. It was then exported to theWest,where it got mislabelled as a traditional folksong. Itwas later recordedas ‘TheLionSleepsTonight’,whichbecame the sound track for thefirstTheLionKing. Lindadied inabject penuryin 1962,whilehis songbecameassociatedwith

a commercially successful animated film.Hischildren said theywerewere ignorant of theirfather’s legacy until RianMalan reported it ina feature article for Rolling Stonemagazine.

If The Lion King: The Gift has escaped thetag, thephenomenonof cultural appropriationinfluences today’sdebatesaboutart,ownershipand power. While African music is having amajor globalmoment (see TAR 109,Oct-Dec2019), African musicians are often not treat-ed the same as their Western counterparts.Amongst Africa’s many cross-over stars,there is a fear that they will be kicked off thetable as Caribbean soca music was after themid-noughties in the US.

Bankulli may have been economical withhis words, but he had a point when he said:“It is music. It’s […] whoever wants to lashon to the gains via hype to move his or herown business forward.” With the way thatstars like Yemi Alade and Burna Boy havebeen using their Beyoncé bounces, they aredefinitely out there getting their accoladesand points across at home, on the continentand to the wider world.

Burn it down, buildit up with Burna Boy“Afrofusion” hitmaker Burna Boy,the Port Harcourt native comfortablein a vast array of musical styles, is justgetting started. The 28 year old releasedhis second album, African Giant, thisyear to rave revues, the highest rankingfor an African album on the UK charts,and is selling out concerts. But with achill public persona, he says that heis not chasing after fame in the West– even though he is getting it – tellingRolling Stone: “At the end of the day,everything you chase will run.”

He is a natural performer, letting thecrowd take over with singing the lyrics,and stripping down and jumping acrossthe stage. Fans are looking forwardto him headlining the Afro Nation MusicFestival in Ghana in late December.Another of his strong suits is in develop-ing successful collaborations, be it withBeyoncé, the UK's Dave and Lily Allen.

Helped by his mother and grandfather,who was legendary singer Fela Kuti's

first manager, Burna Boy is a man with amessage. With nods to Fela in his musicvideos, he has picked up the ganja-haloed mantle to criticise his govern-ment. He laments Nigerian poverty in hissingle ‘Dangote’. He says he wants to seea United States of Africa, “because atthe end of the day, we are all the same”.

A man of contradictions, he is alsoquick to anger. When getting his start

in 2017, he called Kenyans “peasants”after a critical reception. He got in afight with South Africans on social mediaafter saying he would not go to SouthAfrica until the government addressed theproblem of xenophobic violence. He thensigned up for the Africans Unite concertin Cape Town on 24 November beforepulling out due to threats of violence.

HONORÉ BANDA

ANDYKROPA

/AP/SIPA

Burna Boy has taken upFela’s mantle of

government critique

The albumhas to dealwith thebaggageof culturalappropriation

GK INVESTMENT HOLDING GROUP Chairmanand Founder Kamel Ghribi, a Tunisian business leaderbased in Switzerland, has always firmly believed thatthe business world has a duty to help strengthen na-tional institutions through strategic investments insectors that provide support and services to the popu-lation.

He is President of GK Investment Holding group; ViceChairman of the Board of Gruppo Ospedaliero San Do-nato (GSD) Italy’s largest private health care organi-sation and President of Dubai based GSD HealthcareMiddle East. GSD operates in partnership in severalcountries in the Middle East and Africa.

Having spotted an opportunity a few years back to in-vest in GSD – Gruppo Ospedaliero San Donato, Italy’sleading private healthcare group, Kamel Ghribi made ithis mission to address the shortcomings that he seesin current thinking when approaching public healthprojects not only in Europe but also Africa and theMENA region.

That is to say, long-termsustainability is too of-ten sacrificed due toflawed fundamentals,aging systems, and alack of connected sup-port. Specifically, inthe African continent,outdated post-colo-nial models as well asinadequate infrastruc-tures have resultedin Africa’s best andbrightest medicalstudents being sentabroad for training. Thisreality ultimately leaches the continent’s human re-sources as inevitably students generally end up stayingat European and American hospitals, where good sala-ries and world-class facilities beat the frustrations ofill-equipped facilities and unstable environments.

Furthermore, many nations do not have the medicalstructures available to cure many treatable diseases,consequently, thousands of patients cannot seek treat-ment in their home country while those who are in aposition to do so will seek treatment solutions in deve-loped nations offering private healthcare.

Kamel Ghribi, in his role as Vice President of GSD andPresident of GSD Healthcare Middle East, has helped

to create a robust portfolio of international medicalpartnerships across Africa. He was key in the creationof a collaborative health and hospital contract that sawnew facilities and programmes being planned for Mo-zambique, Egypt, Tunisia, Morocco, Senegal, Nigeria,and Cameroon. In July 2019, he signed a ground-brea-king Memorandum of Understanding with Botswana’sMinistry of Health and Wellbeing.

Kamel Ghribi has often stated how he finds it tragicallyironic that on the one hand, we insist on the identity ofAfrica as 54 independent nations, while on the other,we search for unified policy applications for the entirecontinent.His experiencehas shownhim that the rangein lack of basic needs is far too broad for policy makersto impose standard fixes. What is needed is an ove-rarching political and philosophical statement of valuesand a nation-by-nation action plan for coordinated na-tional health planning that is supported by internationalprivate-sector health management contracts.

He has pledged toprovide on-site trai-ning, infrastructurereinforcement andcross-discipline carein cardiology, pae-diatric medicine, andurology by giving insitu universities andhospitals access to,and the full supportof, the GSD Europeannetwork of hospitalsthrough collaborationprojects.

Kamel Ghribi has pu-shed hard and seen

much invested in the development of regional trainingcentres, both financially and through the exchange ofexpertise and skills in areas of greatest need.

GSD wants to see the available local talent be used asleverage in public-private-partnerships and share com-petencies tomanage African hospitals in contracts thatinclude themanagement trainingwith local companiesready to assume the long-term task.

To conclude, he feels that well connected, appropria-tely scaledmedical centres and clinics in geo-strategiclocations across Africa will accelerate the herculeangoals being discussed today for a shared outcome ofuniversal health coverage.■

Improvinghealthcarein Africa

ADVERTORIAL

DIFCOM/JAMG©DROITSRÉSERVÉS

GK Investment Holding Group Chairmanand Founder Kamel Ghribi


INSIGHT /

Beyond


THOMASMUKOYA

/AP/SIPA

Brexit

By DAVID WHITEHOUSE

Brexit is unlikely to change the faceof Britain’s trade with Africa in theshort term, but Britain’s ability tonegotiate new trade deals globallymeans African goods are likely toface increased competition in UKmarkets. With most polls showingthe Conservative Party primeminister Boris Johnson set to wina general election majority, onlylarge-scale tactical voting seemedto offer the possibility of prevent-ing him from forming a govern-ment and delaying Brexit furtheras The Africa Reportwent to press.

The withdrawal deal Johnsonagreed in October with theEuropean Union (EU) meansthe risks of a no-deal Brexitand its disruptions have alsoconsiderably receded. Even in theevent of no deal, the immediateimpact of Brexit on Africancountries is likely to be limited.The government said in June thatat least 48 least-developedcountries (LDCs) will continueto have duty-free, quota-freemarket access post-Brexit.

An eye on energyOn 2 October, minister of statefor international trade Conor Burnsannounced the government’s planto establish a transitional protectionmeasure, which would come intoeffect in a no-deal scenario. Thiswould temporarily maintain currentduty-free market access for somelower-middle-income countries.

Burns says that the measurewill ensure continuity of marketaccess and expects Kenya, Ghana,Cameroon and Côte d’Ivoire to beeligible. The measure would endafter 18 months, by which timethe UK aims to have new duty-freetrade agreements in place.

In the longer term, the UK aimsto be the largest G7 investor inAfrica by 2022. Energy is a majorfocus of British investment, with

Boris Johnson at theLewa Wildlife Conservancy

in northern Kenya

Britain’s withdrawal from the EuropeanUnion will alter its relationships withAfrican countries in terms of trade,

investment and diplomacy in the yearsahead. Some of the consequences may

be intangible, such as underminedconfidence in regional integration


INSIGHT / Beyond Brexit

companies like British Petroleumpresent in many of Africa’s biggestoil-producing countries. Dutch-British firm Unilever is a bigplayer in the consumer goodsmarket. And Britain has a deepnetwork of mid-size companiesactive on the continent. In termsof development finance, theUK’s CDC Group is investingin renewable energy projectsand infrastructure upgrades.

‘Preference erosion’Such a smooth investment scenariocould face numerous obstacles,including the fact that London islikely to focus on trade deals withcountries like the United States andChina first. The UK may well havea lot of work to do to establish newtrade relationships and will havemany trade agreements to negotiatewith countries around the world,says Gilles Chemla, professorof finance at Imperial College inLondon: “This is a lengthy processand may well slow down its invest-ment in and trade with Africa.”

Rolling over existing EUagreements with African countriesdoes not mean that the statusquo will be maintained. Britishtrading relationships with the restof the world are likely to havea significant impact on Africa.If the UK removed tariffs oncountries that currently do nothave preferential access, suchthe US, Brazil and China, manyAfrican countries would lose dueto “preference erosion”, DavidVanzetti, Paul Baker and PabloQuiles of International Economicsin Mauritius argued in a paperpublished after the Brexit referen-dum in 2016. “Lower tariffs for therest of the world to the UK would bevery negative for Africa,” they said.

Contagion effects from tradewars, which were not modelledwhen the paper was published, are“a real threat now”, Baker, who ischief executive of the consultancy,

said in an interview in October.The private sector in Mauritius, headded, is currently concerned aboutits long-term trading relationshipwith the UK, as well as a possibledrop in British demand for sugarand textiles products.

South Africa is positioned to beone of the potential economic casu-alties as it remains one of the UK’slargest trading partners, with totaltrade of about $11.6bn in 2018, saysLukman Otunuga, senior researchanalyst at ForexTime in London.At a timewhen the country faces per-sistent global trade uncertainty andthe threat of inflation from a weakrand, “the ripple effects of Brexitare the last thing the nation needs”.

Major British trading partnerslike Nigeria, Kenya and Egyptare still exposed in the eventof a no-deal Brexit, Otunuga says.The UK was Nigeria’s sixth-largest

trading partner last year with totaltrade of about $5bn. Weakeningoil prices will not only reduceNigeria’s government revenues butalso the ability for the country tomove forward with its 2020 budget.“Trade disruptions with Britainin the event of a no-deal Brexitwill only rub salt into the wound,”Otunuga adds.

Still, the fallout in any Brexitscenario is likely to be eclipsedby the direction of the Chineseeconomy. For sub-Saharan Africa,total trade with Britain onlyaccounted for roughly $23bn in2018, compared with $146.4bn withChina, Otunuga says. That meansthat the impact of Brexit will palein comparison with the “scorchingheat” caused by a Chineseslowdown, argues Otunuga.

A role model for the EACFor African countries, tradechanges are of “second-orderimportance” in comparison withother factors that drive growth andincomes – namely, labour, capitaland productivity, the InternationalEconomics paper argues. Africancountries should “implement

Rolling over existingEU agreements doesnot mean the statusquo will be maintained


policies that upgrade the skillsof the labour force, maintainan inflow of capital and ensure thatlabour and capital are used produc-tively,” the research said.

Security and political relation-ships between the UK and Africawon’t change much after Brexit,says Harry Broadman, chairof the emerging markets practiceat Berkeley Research Group inWashington DC. The UK may find

it easier to pursue its own intereststhrough the Commonwealthwithout the “ball and chain” of 27other countries, he says.

If there is a sense that the countryhas taken back control of itsborders after Brexit, it is conceiv-able that British policy on immi-gration (see box) could becomemore liberal, Broadman says.Africans, he says, are not aboutto start competing with Poles and

Romanians in the British labourmarket. Still, there is a “cognitivedissonance” between the UKleaving the EU free trade zone andthe African free trade agreement,Broadman says. “If Brexit meansa recession, it will be a concernfor Africa,” with development aidlikely to be less of a priority.

The most important consequenceof Brexit may be intangible. Brexitcould undermine confidence inregional integration processes likethe East African Community (EAC),argues Andrew Mold of the UnitedNations Economic Commission forAfrica in a 2018 paper: “Implicitly,if not explicitly, the EuropeanUnion has been an important rolemodel for the EAC”. Africa’s bestresponse, he says, is to “redoubleefforts to implement the AfricanContinental Free Trade Area.”

With the US having made majorcutbacks to its aid budget, leverag-ing foreign assistance to achievedevelopmental goals is likelyto become more challenging forEAC member states in the comingyears, Mold says. He argues thata further “channel of contagion”from Brexit is through remittances.He estimates Kenya is the mostexposed, followed by Uganda.

What immigration policy will work for ‘Global Britain’?The vision of post-BrexitBritain as a liberated globalbusiness centre is, at best,a work in progress. Britain’simmigration system does notgreatly help its relationshipswith many African citizens.The Royal African Societysays that African applicantsare more than twice as likelyto be refused a UK visa thanapplicants from any otherpart of the world. Accordingto an All-Party ParliamentaryGroup for Africa report in July,the current visa regime is

“manifestly unfit for purpose”and is hindering day-to-daybusiness with Africa as wellas the government’s effortsto promote the UK asthe best place in the worldto do business after Brexit.

UK Visas and Immigration,the report found, lacks anymeaningful customer feedbacksystems and displays “verylimited accountability”.If the situation were reversed,the report wonders whetherBritish nationals would beprepared to visit Africa if

they had to first travel acrossthe UK in person to providebiometric data and hand overto a private company theirpassport, birth and marriagecertificates, plus a heftybatch of documentation fromtheir employer. And how theywould react to having to paythe equivalent of two to threemonths of the average nationalwage for someone to assesstheir application.

The whole UK visa process,says the report, suffersfrom a “fundamental lack of

dignity, respect, parity andself-awareness”. The reportgives wide-ranging recommen-dations to try to address thosefailings and argues that visitorvisas will need to be part ofa wider review of immigrationpolicy. Many applications arerejected because the applicanthas little money, even in caseswhere all costs have beenguaranteed by a sponsor.This has often preventedchurches, NGOs, charities anddevelopment agencies sendingpeople to the UK.

ADAM

BERRY/BLO

OMBERGVIAGETT

Y

HENRYNICHOLL

S/POOL/AFP

Britain’s former prime minister Theresa May with Africanleaders at Windsor Castle in April 2018; In Salah Gas,a British Petroleum joint-venture project in Algeria


INSIGHT /

By DAVID WHITEHOUSE

According to figures from theUnited Nations Conferenceon Trade and Development(UNCTAD), British investment inAfrica declined from $60bn in 2013to $46bn in 2017. That leaves itbehind France, the Netherlands andthe US, but still marginally aheadof China. There is certainly scopefor Britain to invest more in Africa:the current levels are a smallfraction of the total value of Britishinvestments abroad, which stood at$14trn in 2017. Despite the fact thatFrance and Britain have economiesof roughly similar sizes, total UKinvestments abroad in 2017 werenearly double the French level.A challenge for African countries,then, is to secure a bigger sliceof the UK foreign investment pie.

Doing so would certainly resultin job creation. Figures fromprofessional services firm EY showthat between 2014 and 2018 Chinawas by far the country whoseinvestments created the mostjobs in Africa. Britain is in fourthplace on that measure, also behindthe US and France.

There are some signs ofincreased corporate investment:British Petroleum has increasedits commitments in Egypt to morethan $30bn, and South Africa’sVodacom, majority owned by theUK’s Vodafone, will spend R9bn($610m) this year on strengtheningits rural network. In May, Britainannounced $110m of investmentby British companies in Nigeriaand Ghana, which will createup to 1,600 new jobs.

A continent-wide approachBut Britain will need to reachbeyond its traditional anglophonesphere of influence if it is torealise its ambition of becomingthe largest G7 investor in Africa.France’s President EmmanuelMacron in 2017 became the firstFrench president to visit English-speaking Ghana in 60 years. Andin 2018, he led French corporatedelegations to Ethiopia and Kenya.China’s top political and businessleaders, meanwhile, have been tire-lessly criss-crossing Africa everyyear for well over a decade.

To date, visits by British primeministers to Africa have con-centrated on English-speakingcountries that were formerly partof the British empire. Once Britainis outside the EU, British primeministers and bosses will likelyhit the road in Francophone andLusophone Africa if British invest-ment potential is to be maximised.

TRADE AND INVESTMENT

Drawing a newUK/Africa trade mapTo become the top G7 investor in Africa, Britainand its companies will have to leave their comfort zonein the Anglophone sphere

THE SHARE OF UK IMPORTS FROMAFRICA HAS DECLINED(Goods and services, %)

TOP INVESTOR ECONOMIESIN AFRICA,

2013 AND 2017 (US$ billions*)

France

Netherlands

United States

United Kingdom

China

Italy

South Africa

Singapore

Hong Kong, China

India

6320

5061

4660

4326

28

19

2722

1916

169

1314

2017

2013

1999 2002 2005 2008 2011 2014 2017

4

3

2

1

0

6464

2016UK PM David Cameron cancelleda trip to Africa with five days notice

when the British voted to leave the EU SOURCE:UNCTA

DSOURCE:ONS©FT


2000

CanadaGermanyUnited KingdomFrance

China, P.R.:MainlandItalyUnited StatesJapan

250,000

200,000

150,000

100,000

50,000

002 04 06 08 10 12 14 16 2018

G7 + CHINA TRADE WITH AFRICA (US$ millions)

1995 2000 2005 2010 2015

60

50

40

30

20

10

0

Africa Europe America Asia

AFRICA’S TINY SHARE OF UK EXPORTS

(Goods and services,%)

LONDON COMPANIES DRILLING FOR AFRICA’S OIL

African Petroleum

Cap Energy

Ensco

New Age African Global Energy

Ophir Energy

Premier Oil

Savannah Petroleum

Serica Energy

SOCO International

Soma Oil and Gas*

Sterling Energy

Tullow Oil

Companyheadquarters

Senegal

Gabon

Cameroon

Guinea-Bissau

Gambia

Angola

Ghana

Niger

Mauritania

Republicof Congo

EquatorialGuinea

Rwanda

Burundi

Uganda

Morocco

SierraLeone

Nigeria

Tanzania

Zambia

Namibia

Ethiopia

SouthAfrica

Somalia

Somaliland

Kenya

Côted’Ivoire

London

Droplets indicate company’s presence in country,not specific project locations

* Company has licence agreements but currently no assets in country SOURCE:DESMOGUK

SOURCE:ONS©FT

SOURCE:IM

FDIRECTION

OFTR

ADESTATISTICS


INSIGHT /

By DAVID WHITEHOUSE in Johannesburg

Fresh from the Africa InvestmentForum in Johannesburg inNovember, Britain’s TradeCommissioner for Africa, EmmaWade-Smith, was hopeful aboutthe continent’s ability to create jobsand build infrastructure for thecoming generations. Job creation“can’t be something that only

governments do,” Wade-Smithtold The Africa Report at the UKDepartment for International Tradeoffices in Johannesburg. “Theanswer has to be to invest in smalland medium-sized companies.That’s where the job creation lies.”

Part of the solution to onboard-ing small businesses will have to be“policy driven”, Wade-Smith says.That means helping bring informal

traders into the formal economy.Women entrepreneurs often facean uphill struggle in Africa, sheadds, despite the research showingthat women often generate betterinvestment returns.

According to an Associationof Chartered Certified Accountantsreport, Africa’s infrastructureinvestment gap stood at $45.5bnin 2018. By 2040, that’s expectedto increase to $1.59trn, with Africaneeding to increase investment by39% to close the gap.

“The mega-cities of the futurewill be in Africa,” Wade-Smithsays. But while investment inAfrican infrastructure has beenincreasing, most of this has comefrom African governments andChina. The private sector will haveto take a much bigger share of theburden if there is any prospectof the gap being closed.

‘Building relationshipsis more important’

EmmaWade-Smith

Trade commissioner for Africa,Wade-Smith talked toThe Africa Report about the need for UK businesses to lookbeyond “traditional capitalism” when working in Africa

ALL

RIGHTS

RESERVE

D

INTERVIEW

From its first operations in Ghana, the award-winningcompany has expanded to Egypt, South Africa, Senegal,Cote d’Ivoire and Brazil and soon will open its first factoryin Benin. Fruit is cut, packed and airlifted to Europe within48 hours, supplying over 300 retailers in 11 markets withfresh cut fruit, juices, dairy-free ice cream and more.

The company’s operations revolve aroundits philosophy of mutually beneficialpartnership.

“The ethos of the business is of course to produce the hi-ghest quality product but also to do it in a way that is res-ponsible and equitable by doing it in the countries wherethe fruit grows,” says Simon Derrick, head of corporatecommunications.

“We call it ‘value adding at source’, which means as muchof the profits as possible stays within those countrieswhere the fruit is grown.”

Today they employ over5,000 people, of which

4,000 work in Ghana duringpeak harvest seasons. The

ompany provides a health-are clinic, libraries, internetafes and sports facilities,nd supports employees’

professional development.

Meanwhile the Blue Skies Foundation contributes tolocal communities in which the company operates bybuilding medical clinics, sanitation facilities and class-rooms and training the smallholder farmers it relies onfor their supply, to enable them to improve their agri-cultural practices. Their School Farm Project seeks toencourage the next generation of farmers, ensuring thatthe company has a sustainable supply of fruit and ruralcommunities can sustain their livelihoods.

“Our focus is on growing in partnership with the com-munities where we work” says Mr Derrick. “We want toensure that people know when they work with us thatwe’re in this together and that we’re there for a mutualbenefit. We’re in it for the long term.”

THE FRESH CUT FRUIT SUPPLIER WITHSUSTAINABLE PARTNERSHIP AT ITS CORE

MESSAGE

JAM

G-P

ICTU

RES

:©D

FID

Blue Skies Holdings LtdPaddock View Spring Hill Farm Pitsford NN6 9AA United KingdomTel.: +44 (0) 1604 881230

Twenty-two years ago, British entrepreneur Anthony Pile had an idea. Rather than transportwhole fruit thousands of miles from farms to the UK to be cut and packaged, what if that wasdone at source, and the product exported straight to supermarkets?The resultwould be a fresherproduct, andmore opportunity and benefit for the countrieswhere the fruit was harvested. BlueSkies Fruit was born.

Blue Skies Fruit

www.blueskies.com

54,

pcocacaanp


INSIGHT / Emma Wade-Smith

Two-thirds of the urban spacethat Africa will need in 2050 willhave to be built over the next 30years, according to a report fromthe European Investment Bank, buthigh levels of national debt hamperinvestments in infrastructure.

British state investment isfocused on the mining sector.TheUK’sAfrica Infrastructure Board,launched in 2018 and co-chairedby the British government andindustry, promotes the UK as apartner to develop mining projectsand the associated infrastructurearound them. Loans through theUK Export Finance export creditagency can be made for projectsincluding transportation, miningand construction, though they mustinclude at least 20% UK content.

Bringing added valueFor companies that are interestedin Africa it might be necessaryto make some “modifications”,Wade-Smith says, such as buildinglocal supply chains and understanding the need to engagein skills provision. Jaguar SouthAfrica’s apprentice programme,for example, provides three yearsof on-the-job training as it seeks

to address the country’s shortageof qualified technicians.Wade-Smith stresses that the size

of the market is a key parameterfor potential investors in Africa.“UK companies want to know thesize of the consumer population”as well as the level of access toneighbouring markets. She citesTradeMark East Africa (TMEA),which works with governments,the private sector and civil societyorganisations to reduce barriersto trade, as an example of howmarket access can be facilitated.

Brexit may breathe new life intothe Commonwealth. The vision ofthe emergence of a British-drivenglobal vehicle that can help to

throw off the chains of protection-ism is clouded by the prospect ofBritain leaving the European Unionfree-trade zone. In terms of scale,the Commonwealth pales into com-parison with the EU.

Yet the Commonwealth, whichhas 19 African members, is oneof the UK’s largest trading partners.The UK is already the largestEU goods-export destinationfor Commonwealth member SouthAfrica, the second-largest forKenya, and the third-largest forMalawi and Zambia. “It pays tobe in the Commonwealth,” Wade-Smith says. “There are countriesthat have expressed interest”in joining, she adds.

More broadly, she believes thatinvesting in Africa requires a shiftaway from “traditional capitalism”,which focuses firstly on the bottomline, to include consideration of thewider benefits. More meaningfulthan Britain’s target of becomingthe G7’s largest investor in Africais the positive impact British invest-ment can create. There is £34bnof UK investment stock in Africa,but, in itself, equity has little realimpact on the ground: “Buildingrelationships is more important.”

What DIT does: the facts and figuresThe Department forInternational Trade (DIT)Africa has more than 100 stafflocated across 23 of Africa’s54 countries. This representsa nearly 20% increasein personnel in the regionsince 2018.

• Over the past 12 months,trade between Africa andthe UK increased by 7.7%and is currently worthnearly £34.2bn.

• Last year, DIT Africa helpedUK companies secure business

that generated £1.2bn of valueback to the UK economy. UKExport Finance covered £600mof exports on the continent.

• The DIT focuses on addingvalue for UK companiesthrough country andsector expertise.

• The DIT supports UKcompanies exporting to orinvesting in Africa. It alsofocuses on the businessenvironment. This includestrading arrangements, as wellas market-access barriers.

• The DIT operates acrossall sectors, but focusesparticularly on infrastruc-ture, oil and gas, mining,agribusiness, defence andsecurity, renewable energy,financial and professionalservices, healthcare,education and skills.

• The DIT is helping to useaid funding to alleviatepoverty and also address theUK’s prosperity objectives.

• DIT Africa has beenseeking to replicate the

effects of the current EUEconomic PartnershipAgreements and AssociationAgreements with Africancountries. To date, the UKhas transitioned four of theseagreements: the SouthernAfrican Customs Union plusMozambique; the Easternand Southern Africacountries of Mauritius,Seychelles, Madagascar andZimbabwe; an AssociationAgreement with Tunisia;and an AssociationAgreement with Morocco.

TRADING PLACES

2012Received an Order of the British Empirehonour for her diplomatic service

February 2016Named trade directorfor Southern Africa

June 2018Appointed Britain’s first tradecommissioner for Africa

MESSAGE

ImportanceofQualityAssurance inMeetingSustainabilityChallenges

Intertek TestingServices SA (Pty) LtdBlock D,Stoneridge Office Park,8 Greenstone Place,Modderfontein,Gauteng, SouthAfricaTel.:+27 66 280 14 64Email: [email protected]

EXPERTADVICE

related to carbon footprint, wastediversion, supplier assessment,product lifecycle and many more.Also, Intertek recently launchedCorporate Sustainability solutionswhich provide assurance that corpo-rations are functioning sustainably,whether its related to risk, securityand compliance or people, govern-ance,finances and communications.With more than 1,000 offices andlaboratoriesworldwide, 50 ofwhichare inAfrica and focused on Oil andGas, Agriculture, Food, Minerals,Textile and Trade sectors, Intertekis well positioned to be a trustedpartner for total quality assurancein the region. We hold extensiveglobal accreditations, recognitions,and agreements,and our knowledgeof and expertise in overcoming reg-ulatory, market, and supply chainhurdles is unrivalled.

Q ualityisan importantpartof

everygrowingbusiness and

economy.Whether it’s related to a

process, product or asset, meeting

quality standards helps organi-

sations capitalise on sustainable

activities, build a trusted brand,

gain access to global markets, and

reduce costs by minimising their

business risks.

Today’s supply chains are growingin complexity, andTotal QualityAs-surance should be executed at everystage of the operations, from R&D,rawmaterials sourcing, componentssuppliers,manufacturing,transporta-tion,distribution and retail channels,and consumer management. WithIntertek’s presence supportingdevel-opment on theAfrican continent,ourlocal andglobal experts areprovidingassurance, testing, inspection andcertification services, to give organ-

isations the peace of mind neededto make informed decisions abouttheir business.This is applicable to corporationsacross different industries, fromCommodity Trading, Energy, andMining to Food, Agriculture, FMCgoods and Textile, where quality,safety and sustainability of assets,environments, facilities, processes,products and systems,have becomeimperative.

We have reached a tipping point inthe world of sustainability, leadinggovernments and industriesworld-wide and in Africa, to continuouslyannounce new and bold sustaina-bility goals. This is complementedwith increased interest and demandfrom clients and consumers in sus-tainability practices. Consequently,Intertek already offers more than130Operational Sustainability solu-tions supporting organisations invalidating their sustainability goals,

JérémyGaspard,

Managing DirectorSub SaharanAfrica

“meeting quality standards helporganisations capitalise on sustainableactivities,build a trusted brand,gainaccess to globalmarkets,and reducecosts byminimising theirbusiness risks.”


INSIGHT /

By DAVID WHITEHOUSE

The prospect of Britain outsidethe European Union means thatAfrican companies planning tolist on the London Stock Exchange(LSE) have another element tofactor into their calculations. WillLondon really provide the deepestpool of potential investors?Or will there be better financingroutes to consider?

London’s status as a globalfinancial centre is not aboutto be lost in the short term.Its concentration of highly spe-cialised financial architecturecannot be quickly replicated.At the Africa Investment Forumin November, Ibukun Adebayo,the LSE's co-head of emergingmarkets, told media: “There is a

very, very well-oiled mechanismand very, very deep understandingfrom investors, from the analystcommunity, from the very, verywell-heeled group of professionaladvisory services who help to tellthat Africa story to the investors.”

Protracted uncertaintyBut the listing plans of individualAfrican companies may be moreeasily displaced by competingbourses. Brexit “creates uncer-tainty for everyone” in a marketcontext which is not generallyfavourable for initial publicofferings (IPOs), says GuillaumeArditti, founding partner atBelvedere Africa Partners in Paris.African companies are perceivedby the market as carrying higherrisk, he says, so need to show

that they will provide higherreturns. “Brexit is another reasonto wait and see,” he adds. Ardittiexpects that uncertainty over thefinal ramifications of Brexit willstill exist in two to three years’time, after which London is likelyto regain its attractiveness as alisting venue. There is the possi-bility of a drift by some companiesto alternative European listingvenues, such as Amsterdam andDublin, though Arditti expectsthe largest companies will likelycontinue to list in London.

London has missed out ona series of high-profile AfricanIPOs. When South African holdingcompany Naspers listed its Prosusunit containing its investmentin Chinese tech giant Tencentin September, it chose Amsterdam

FINANCE

Brexit’s impact on African IPOsAmidst general uncertainty the development of African stock markets appears to beleading to new alliances with sources of potential investors in alternative listing venues

COURTE

SYOFLO

NDON

STO

CKEXC

HANGEGROUP

Airtel Africa openingLondon Stock Exchange

markets on 28 June 2019


and pointedly said that “Euronextmarkets are some of the largest,most integrated and proven capitalmarkets in Europe”. Smartphonemaker Transsion, which sellsits products in Africa rather thanits domestic Chinese market,chose China’s new tech-focusedstock market to list in September,while African online retailer Jumiain April favoured New York. At theend of October the African ImportExport Bank postponed a planto list in London due to “unfavour-able market conditions”, just daysafter saying that the IPO, toutedas “Brexit-proof”, would go ahead.

African bourses are well placedto benefit from the protracteduncertainty. “Brexit will giveAfrica an impetus to developdeeper markets,” Arditti says.Regional integration, he argues,favours the development of deeperAfrican stock markets. Liquidityhas already improved in partdue to pension funds becomingless restricted in terms of havingto invest in their domestic markets,he says, pointing to South Africa,Kenya, Botswana and Namibiaas having led the way. Ardittiexpects this trend to continueand says that Johannesburg,Nairobi, Lagos and the BourseRégionale des Valeurs Mobilièresin Abidjan are examples ofexchanges that could play a moreprominent role after Brexit.

Sitting things outOnly a total of three companieslisted in London in the thirdquarter of this year, raising £332m($426.5m) – the lowest third-quarter total since the 2016 Brexitreferendum, according to figuresfrom professional services firmPwC. Meanwhile, EuropeanIPOs in the third quarter increasedslightly from a year earlier.“Companies are generally sittingthings out, waiting for Brexitand global trade uncertainty to

resolve,” according to PwC. Still,Helios Towers, which operatestelecoms towers in Africa,successfully listed in London inOctober. It listed nearly 25% of itsshareholdings and raised $318mto finance its expansion.

The uncertainty createdby Brexit is “bad for investmentand bad for listings,” says GillesChemla, professor of financeat Imperial College in London.The prospect of uncertaintyover the full impact of Brexitmeans that African companiesare more likely to list in SouthAfrica or “more stable Europeancountries,” he says.

A key test in 2020 will bethe planned listing of Nigerianpayments company Interswitch.It has been talking up theprospects of an IPO for years, witha dual listing in London and Lagosas a possibility. Financial analystswill be watching to see if the IPOends up on another major bourseinstead of London’s.

Nigeria's Nollywood-focusediROKOtv, founded by investorJason Njoku, is also talking upplans for a London listing. He says

it could take place by the firsthalf of 2021.

Harry Broadman, chair ofthe emerging markets practiceat Berkeley Research Groupin Washington DC, disagrees.He says that the London stockmarket could come under pressurepost-Brexit. But he does notexpect a wholesale shift in listingbehaviour. “It’s conceivable theUK will lose in the short term,”but Johannesburg, he says, doesnot offer the same access to capitalas the EU or the UK. “It’s notobvious that Johannesburg wouldbecome the market of choice.”

Fierce competitionThe uncertainty caused byrepeated elections since theBrexit referendum has reducedthe numbers of companies listingin London since the 2016 referen-dum, Chemla says. Whetherthe next British governmentproves itself to be pro-businessor not will have important ram-ifications for African companylisting plans, he argues.

Chemla predicts fierce competi-tion for listings from China,the Middle East, Paris, Amsterdamand US markets, which willbe “more than many actors antici-pate in London”.

He expects the developmentof African stock markets tolead to alliances, perhaps ledby the Johannesburg exchange.He also expects that the upwardtrajectory of private-equityinvestment in Africa is likelyto continue after Brexit.

The trend will be supportedby the fact that Britain will tryto develop direct ties outsidethe EU and for prospects for fasteconomic growth in Africa incoming decades. “African firmsseeking international equityinvestors are more likely to turnto private equity rather than publicequity,” Chemla concludes.

HELIOS TOWERS’ POST-IPOPERFORMANCE

(UK pence)123.00

121.32

119.64

117.96

116.28

114.6016Oct

22Oct

26Oct

30Oct

5Nov

11Nov

$318mFunds raised to finance expansion

of Helios Towers telecomtower infrastructure company

SOURCE:LO

NDON

STO

CKEXC

HANGE


INSIGHT /

By DAVID WHITEHOUSE

African horticultural exportersare hopeful that Brexit will givethem new opportunities to exportto the UK, but it is clear that theprolonged uncertainty has alreadyhad a direct cost. African exportersof products such as flowers havesuffered from the weak pound,as they receive less moneyfor the same amount of produce,says Anna Barker, senior supplychain manager for flowers at theFairtrade Foundation in London.

Barker has heard anecdotalevidence that some suppliers havebeen losing long-term contractsto the UK as a result of the uncer-tainty. However, in theory, the pro-tection for African exporters looksincreasingly complete. The UKwill roll over economic partnershipagreements for least-developedcountries (LDCs). The governmenthas also said that in the eventof a no-deal Brexit it will extendexisting levels of market access fora group of non-LDCs for 18 months.Liz Dodd, trade spokesperson forthe Traidcraft Exchange in London,calls this a “good move”.

Double-edged swordBut businesses need visibilityfor longer than 18 months, Doddsays, arguing that there is noreason why the extension shouldnot form the basis for longer-termpreferential access. Africa, sheargues, “should not be made topay the price for our uncertainty”.

UK supermarkets, Dodd says,have been asking suppliersto tender on a duty-paid basis,

meaning that the risk of futurehigher tariffs is being passedon to exporters. Higher food pricespost-Brexit are likely to meanpressure on African producersto lower their costs.

New direct trade deals withBritain are also likely to prove adouble-edged sword. UK farmers insearch of new markets, for examplein poultry, could turn their attentionto areas such as West Africa, Doddargues, meaning those countriesmay seek safeguards to protectdomestic producers.

Britain is the second-largestdestination for Kenya’s cut flowersafter the Netherlands, takingalmost 18% of Kenyan production.

According to the Kenya FlowerCouncil, the country is the leadingexporter of roses to the EU, witha market share of about 38%.About half of that is sold throughthe Dutch auctions, and theNetherlands has highly developedinfrastructure for ensuring floralhygiene and quality control.

In the event of a no-deal Brexit,however, flowers may be delayedfor between 1.5 and 2.5 days forplant health checks, documenta-tion, customs declarations andrevenue collection, Barker says,“creating enormous volumes ofwaste,” and putting price pressureon the producer. Kenyan suppliershope that they will be able to selldirectly to the UK after Brexit.

The prospect of a weakerBritish economy will also affectflower demand. At the TraidcraftExchange Dodd says: “Thereis no question that Brexit will addcost and complication.”

AGRICULTURE

Picking up the bill for Brexit uncertaintyWhile new direct trade deals with Britain are likely, a weak pound and the inability to predicthow and when Brexit will take place has put pressure on food and flower producers

NICHOLE

SOBECKI/VII/REDUX-REA

Life will not be a bed ofroses for Kenyan flowerexporters after Brexit

The prospectof a weaker Britisheconomy willaffect flower demand

MESSAGE

Infrastructure to thepoorest,sustainable return to investors

The Private InvestmentDevelopment Group6 Bevis Marks - LondonEC3A 7BA - UNITED KINGDOMTel:+44 (0) 203 848 6740Email: [email protected]

EXPERTADVICE

rican Development Bank (AfDB),our guarantee arm and three otherguarantors to offer joint solutionswhere theremaybe a larger need interms of the quantum required forguarantees.

We are also working with DFID,which is the largest contributor toPIDG,andhas its ownDFI (CDC) andtheUKexport credit agency (UKEF),to see how the three UK entities canimprove theUK’soffering.TheUKInctoolkit of national products makesfor an attractive offer available toUKinvestors and financial institutions.

E ighteen years ago a group ofdonors launchedaninnovative

pilotprogrammetosee if theycouldfill a gap in the market to deliverpioneering infrastructure in thepoorest andmost fragile countries.What began as a pilot programmehasbecomeanestablishedcorporategroupwhich, bytheendof2018,hadmobilised$35.8billiondollars fromprivate sector investors and DFIs.

In 2002,DFID sawa huge gap in themarket for long-term debt productsto finance infrastructure projectsin sub-Saharan Africa, and set up

the PIDG Trust and The EmergingAfrica Infrastructure Fund (EAIF).Since 2002, DFID has been joinedby the governments of Switzerland,the Netherlands, Sweden,Germany,Australia,Norway and the IFC, andtoday PIDG provides a vehicle forinvestment that delivers life-chang-ing opportunities in over 40 of thepoorest andmost fragileAfrican andSouth East Asian countries.

Our niche arises from taking onprojects that others can’t or won’t,focusing on scale, replicability, af-fordability and transformation. Wehave incorporated six companies,eachwith its own toolkit, to operatealong the infrastructure project

life cycle and across the projectcapital structure,with three pots ofcapital: one for upstream technicalassistance, another for early stagedevelopment and a third for debtguarantee equity solutions as weget closer to financial close and co-struction.Wehave committed$3.6bnto support the development of 250projects, of which 113 have becomeoperational, in sectors ranging fromagribusiness to sanitation with astrong emphasis on energy.

Our transactions comeabout throughregular dialogue with governments

and the private sector.Our success lies in ourminimal loss ratio, stay-ing power and ability tohave that honest brokerrole to ensure that theproject gets done prop-

erly. We also combine forces withotherDFIs andMDBs to address theclear gap in the early stage projectdevelopment necessary for healthypipeline and bankable projects toattract capital. The Co-GuaranteePlatform was formed with the Af-

PhilippeValahu,

CEO,Private InvestmentDevelopment Group Ltd

$3.6bn committed to support250projects,ofwhich 113are operational


INSIGHT /

By DAVID WHITEHOUSE

More needs to be done toencourage large companiesto set up in Africa and to helpsmall firms grow by removinginfrastructure constraints. Butthe costs of financing in Africacould increase if interest rates inadvanced countries rise faster thanassumed, the African DevelopmentBank says in its African EconomicOutlook 2019.

Export finance is one of theoptions to help to reduce thatrisk. UK Export Finance (UKEF),which was set up in 1919, is theworld’s oldest credit export agency.It aims to help buyers in Africaby providing attractive financing

terms and enabling them to borrowat competitive interest rates frombanks backed by a UK guarantee.

Local currency optionsUKEF projects “can contributeto closing Africa’s infrastructuregap,” says Steve Gray, the agency’srepresentative based in Ghana.“The UK government believes noviable trade with the UK should failfor lack of finance or insurance.”

Local currency options areoffered, which allows buyersto control foreign-exchange risk.UKEF can currently guaranteelocal currency-denominated trans-actions in 15 African markets.

In 2018 and 2019, UKEFsupported a range of infrastructure

projects in Ghana, Angola andUganda. In Angola, UKEF providedsupport worth $106m to connectaround 7,000 homes to electricitythrough a project by the IQA Group.IQA is upgrading two power substa-tions in Viana and Gabela, reducingthe north-west Angola’s relianceon oil-generated power.

In Ghana, UKEF backed a projectby Contracta Construction todevelop Kumasi Central Market,a major trading centre in the Ashantiregion, as well as guaranteeing aloan to support the modernisationof Tamale airport.

In Uganda, a direct loan of€270m ($297.2m) is financing theconstruction of a new airport inHoima, Western Region. This willbecome the country’s second inter-national airport, opening accessfor the delivery of equipment,materials and services for the futureUganda Oil Refinery.

The AfDBwarns that it isimportant not to neglect soft logisti-cal infrastructure, which is essentialto reap the gains from investmentsin the hard stuff. UKEF is active insuch projects, supporting an agricul-tural project delivered by UK-basedIncatuk that aims to reduce Angola’s$1.5bn annual spend on foodimports, and helps to diversifyan economy focused on oil.

This project, which hasfinancing structured by StandardChartered Bank, includesproviding power distribution lines,training farmers, improving roadsand rehabilitating farms damagedduring the civil war.

INTERVIEW

Steve Gray‘We can contribute to closingAfrica’s infrastructure gap’From Accra, UK Export Finance’s West Africa regionalrepresentative Steve Gray ensures that UK-backed loanshelp important infrastructure projects get off the ground

UKEXP

ORTFINANCE

FIRM FOUNDATIONS

April 2018 Joined UKEF as regionalrepresentative for West Africa

2017 MBA at Heriot-Watt University, UK

2011-2017 Recruited by Lonhro Groupand promoted to CEO of Atuabo Freeportoil and gas services project in Ghana

A monthly programmeon BBC World NewsEach month on Talking Business Africa in association with Zenith Bank,

Lerato Mbele-Roberts visits different parts of the continent and meets African

business leaders. From the leaders of large multinational companies through to

entrepreneurs just starting out, Talking Business Africa finds out how they got

there, what motivates them and the challenges they face.

In association with


INSIGHT /

Interview by NICHOLAS NORBROOK

Vodafone has 650million customersaround the world, of which 170million in Africa, with an additional39 million mobile financial servicescustomers. These are sharedbetween South Africa, Egypt, Kenya,the DRC, Ghana, Mozambique,Tanzania and Lesotho. Africanmarkets deliver in approximately20% of Vodafone Group’s revenue.

Vodafone's African marketsrange from rural areas relyingmore on prepaid voice 2G handsets– for example, the DRC – to moreaffluent urban hubs, with post-paidsmartphones leaning heavily ondata in South Africa and Egypt.

“In the more advancedeconomies, we are halfway upthe curve that transitions fromvoice to data, so we are tryingto add additional services, such

as entertainment, content, music,”says Vivek Badrinath, Vodafone'sregional CEO for Africa, MiddleEast and Asia. “In less advancedeconomies we grow along two axes,transitioning to more data services,for those with smartphones, andon the other hand mobile paymentservices, which tends to go withthe unbanked countries.”

Level playing fieldVodafone is keen to deepen digi-tisation, of course for the bottomline, but also as a good in itself.“It is about the ability to commu-nicate, the ability to transfer funds,the ability to access information forfarmers, for education, creating alevel playing field. Expand mobilebroadband penetration in Africaby 10%, [and it is] estimated to yielda 2.5% increase in GDP per capita,”Badrinath tells TheAfrica Report.

The company works in threeof the big five telecoms marketsin Africa – but it has yet to establisha foothold in Nigeria or Ethiopia,two of Africa's most populousmarkets. A recent wobble fromNigeria’s fourth telecoms operator– now known as 9Mobile after thewithdrawal of Etisalat – promptedmuch speculation on who mightpounce. Badrinath says Vodafonewas never interested. “We were notintent on pursuing that, honestlythe money at stake is very high,and the complexity [...] We arenumber one in South Africa,number one in Egypt. Gettingto a number one place in Nigeria isa very big step to achieve. We didn'tfeel that opportunity was necessar-ily obvious for us to pursue. Notto insult the Nigerian government,but the stakeholder scene in Nigeriais complex, and we might be abit out of our depth at the moment.”

Ethiopia appears higher on thelist. “We have been looking atit, with the Vodafone team, theSafaricom team, and the Vodacomteam, and we have a clear interest,”

‘We have a keeninterest in Ethiopia’

VivekBadrinath

Vodafone’s regional CEO for Africa, Middle East andAsia Pacific talks to The Africa Report about expansionplans, 5G and the geopolitics of technology

INTERVIEW

CALLED UP

May 2013 Appointeddeputy CEO of Frenchtelecoms firm Orange

March 2014 Nameddeputy CEO for distributionand marketing for hotelcompany Accor

October 2016Became rest of the worldCEO for Vodafone

1 April 2019 Named interimCEO for Vodafone Business

April 2020 Will becomeCEO of Vodafone’s Europeantower company TowerCo


says Badrinath, referring to theinterlocking levels of ownership thatVodafone has across Africa. “Wefeel we can bring a lot, the paymentabilities of Safaricom, the very deepability to roll out networks in Africathat Vodacom has built up overthe years, and Vodafone's tech-nology and experience in runningbusinesses in the telecoms sector.”

Data protectionThe clear advantage Safaricom hasin mobile payments is clear. “Ifyou look at M-Pesa, it’s a journey.You start with peer to peer, and thenit moves on to merchant payments,then to small overdraft, then tomerchant lending so that they canfund their working capital and you

move on up the value chain,” saysBadrinath. “We have a good startingposition with M-Pesa and we wouldbe remiss not to leverage on it. ”

So is he worried about thearrival of ‘big tech’ into the mobile-money sphere, with WhatsApp, forexample, running trials with tens ofmillions of people in India?Not too much. “India is a differentcase because the populationis much more largely banked.WhatsApp is linked to a bankaccount in India, which is not thecase in many African countries,where there is often less than a20% banked population.”

That thrust phone companieslike Vodafone and its subsidiar-ies into important but potentiallyuncomfortable roles, with mobilephone numbers often frontlineindicators of identity in Africa.Badrinath is unfazed: “In oursector, we have always been inconversation with government,and our compliance requirementshave always been high,” he adds.

He is not a huge fan of Europe’slatest data protection legislation

– “accepting cookies on pageone is not exactly mankind’sgreatest invention” – and arguesthat internal policies are alreadydefensive enough of Africancustomers’ personal information,while making the right trade-offsto keep costs low.

‘Splinternet’South African consumers inparticular complain about thesecosts – particularly data, the priceof which compares unfavourablyto peer countries like Brazil andChina. The reason: “We have nothad new spectrum in the last 10years in South Africa. So how doyou roll out 4G?”, says Badrinath,who notes the government is finallygetting ready to release spectrum,“which will definitely help us bringdown the price of data”.

He does not, however, expect 5Gto arrive wholesale any time soon.“It is time to reduce 3G and moveto 4G in Africa, for the simplereasons of affordability. 4G is muchmore spectrum efficient than 3G.”

5G equipment, most often madeby Chinese telecoms giant Huawei,has sparked concern inWashingtonand led to fears of a ‘splinternet’as different parts of the world adoptdifferent technology standardsdriven by the wider geopoliticalschism between the US and China.“[The Kenyan and South Africangovernments] do not wish to excludeHuawei from their customer baseand do not believe it to be a risk thatthey cannot live with.”

With Vodafone simplifying itsboard structure, Badrinath will bemoving on from the job in March,to Vodafone’s new infrastructure unitin Europe, with some regret, andnot just because of the exhilarationof double-digit growth or fast-paceddecision-making. “This kind ofrole is one where telecoms are doingwhat they are the best at,” he says,“bringing communications and datato people who often lack access.”

MIKEELL

ISPHOTO

GRAPHY/VO

DAFO

NEGROUP

‘WEHAVE ALWAYSBEEN INCONVERSATIONWITHGOVERNMENT’

MODERN ANDTECHNOLOGICALLY ADVANCEDTERMINAL MANAGEMENT COMPANYLEADER OF THE REGIONAL TRADE AND GLOBAL SUPPLY CHAIN

Doraleh, Djibouti, Republic of Djibouti - POBox 2081 - Email: [email protected] - Phone: (+253) 21 317 317

Société de Gestion du Terminal àConteneursdeDoraleh (SGTD) is the operator of themostmodernand technologically advanced container terminal inthe east coast of Africa, leading the regional trade andthe global supply chain. Launched in 2009, it is the biggestport infrastructures project undertaken byDjibouti Portsand Free Zones Authority (DPFZA).

QUARTERLY THROUGHPUTTRAFFIC

BERTH PRODUCTIVITY

MESSAGE

JAMG-Picture:AllRightReserved

Located in the Republic of Djibouti at the entrance of the RedSea, the terminal’s exceptional geographical position at thecrossroad of three continents (Africa, Asia and Europe) allows itto position itself at the heart of global containerized traffic and

the port-of-choice of the dynamic East African markets as wellas a regional hub of the vast transhipment business from theRed Sea and the Indian Ocean. Our partners include the world'stop carriers such as Maersk Line, MSC, Cosco Line, CMA CGMand PIL.The port is connected to Ethiopia by roads and railway. Thetrain station, operational since November 2019, has a capacityof 4 to 5 trains per day.

SGTD IN FIGURES› Capacity of 1.6 million TEUs

› 1050 m quay length

› 18/20 m depth

› 31 RTG

› 8 super post panama twin liftgantry cranes

› 2 RMG› 10 RS and 3 ECH› 65 ITV

Visit ourwebsite :www.sgtd-terminal.com

“Customers benefit from a safe and cost efficientEthio-Djibouti corridor as well as the shortestconnection to the main sea-lane.”

2018 BMPH 2019 BMPH


By THALIA GRIFFITHS*

President João Lourenço surprisedsceptics who expected little changeafter the departure of his veteranpredecessor José Eduardo dosSantos in September 2017. Lourençohas moved swiftly to introducereforms, and nowhere more so thanin the vital oil sector, the backboneof Angola’s economy. An oil andgas licensing round which launchedon 2 October will provide a litmustest for whether the measures takenby the government are sufficientto revitalise the sector.

Angola’s oil production hassagged from a high of 1.9mbarrels per day in 2008 to 1.5m

Licensing roundscurrently under wayin Angola’s oil, gasand mining sectorswill show whether

Lourenço’s reformsare superficialor ultra-deep

TestingAngola’sturnaround

EXTRACTIVESDOSSIER

115N° 110 / JANUARY-FEBRUARY-MARCH 2020

in 2018, placing Angola behindNigeria as sub-Saharan Africa’ssecond-biggest producer. Foryears, Angola’s leaders had paidlip service to reform, talkingvaguely about developing thenon-oil economy while relyingalmost entirely on oil, whichaccounts for more than 90% offoreign exchange. While oil pricesremained buoyant, this was fine,but the 2014 price crash hit theeconomy hard, and the government,hamstrung by inertia in the latterdays of the Dos Santos presidency,initially failed to take action.

Conflict of interestHowever, Lourenço has shown heknows what needs to be done, andappears to be doing it. New lawspassed in 2018 created a frameworkfor monetising gas, much of whichwas previously flared, and fordeveloping smaller oil fields thatwere overlooked by the big multina-tionals who focused on the largestones. All gas discovered in Angolapreviously belonged to state-runcompany Sonangol, which meantit had no value to private companiesthat found it. The new terms offera framework for the developmentof commercial gas finds.

The potential conflict of interestbetween Sonangol’s roles asindustry regulator and participantin production-sharing contractswas ended by the creation of theAgênciaNacional de Petróleo, Gáse Biocombustíveis (ANPG), whichis overseeing a competitive biddingprocess for 10 blocks in unexploredareas offshore southern Angola.

These blocks are the first ofabout 55 that the government plansM

IKECOHEN/BLO

OMBERGVIAGETT

YIM

AGES

Headquarters of parastatal oilcompany Sonangol in Luanda.

to sell off between now and 2025.The ANPG held roadshowsin London, Houston and Dubai,in a process quite unlike the opaquelicensing of the past. The blockson offer are Block 10 in thesouthern Benguela Basin andblocks 11, 12, 13, 27, 28, 29, 41, 42and 43 further south in the NamibeBasin. The hope is that the NamibeBasin will yield discoveries ofpre-salt oilfields trapped beneatha layer of salt under the ocean floor,similar to giant fields discovered inBrazil’s Santos and Campos basins.Licensing terms and a modelcontract are on the ANPG website.

The new ANPG team ran thewell-attended London licensinground roadshow as a charmoffensive, with presenters crackingjokes, answering questions andgiving media interviews, veryunlike the austere, opaque imageprojected by Sonangol in thepast. This new approach is needed

because theindustry

itself is changing. The deals withprivate Angolan companies linkedto senior regime figures are provingto no longer be attractive forinternational oil companies facingscrutiny under the US ForeignCorrupt Practices Act and similarEuropean legislation.

New smaller playersWhile many of the roadshowattendees were familiar players,the Luanda government wantsto attract new smaller companiesto help the industry to survive.Potential bidders will take comfortfrom the arrival in the region ofExxonMobil, which signed prelimi-nary agreements in December2018 for three deepwater NamibeBasin blocks and has also licensedfour adjacent blocks on theNamibian side of the border.

ANPG executive directorNatacha Massano said Angola’snew strategy, backed by new lawsand more favourable tax terms,aimed to bring a new dynamic intothe sector and attract new business.“It has two main objectives. One

is accelerating exploration,and the other is expandingpetroleum prospectivity, and,of course, increasing reserves,”she said in an interview.

An initial priority for the agencywould be to look at bringingsmaller satellite fields into pro-duction in blocks that are alreadyproducing from larger fields,she explained: “We do believethat these blocks still have a lotof potential. That’s why we arenow able to continue exploring ondevelopment areas, looking for newstratigraphical horizons. We believethat the blocks that are in produc-tion still have a lot of potential, andwe are continuing to encourage ouroperators, our contractor groupsto continue to work on that.”

In looking to develop gasreserves, she said, the governmentwas focusing on domestic applica-tions such as converting existingpower plants to gas from costlydiesel fuel and building fertiliserfactories, rather than consideringexpansion of the Angola LiquefiedNatural Gas plant at Soyo.

Other ways to mint itThe government is seeking torevitalise the mining sector andlaunched an auction process inOctober for two phosphate mines,an iron ore mine and two kimber-lite diamond mines. The phosphateand iron projects will be whollyprivately owned, while thediamond mines will be operatedin partnership with state diamondtrading company Endiama.

The phosphate concessionsare located at Cácata, in CabindaProvince, where geologicalstudies indicate a resource of393m tonnes, and at Lucunga, inZaire Province, where explorationdrilling indicates 286m tonnes.Domestic phosphate resourcescould increase in value as the

government focuses on agricultureas part of plans to develop thenon-oil economy and create jobs.

The iron ore concession is atKassala-Kitungo in Kwanza NorteProvince, and the diamond minesat Camafuca-Camazambo in LundaNorte and Tchitengo in Lunda Sul.

Roadshow presentations wereheld in September in Luanda,Dubai, Beijing and London, high-lighting recent changes to privateinvestment laws and the diamondsector. The government is seekingto double production of diamonds,which earned the country$1bn of gross revenue in 2017,and introduced auction salesfor high-quality stones in 2019in a bid to increase transparency.OL

IVIE

RPOLET/RE

PORT

ERS-REA

EXTRACTIVES DOSSIER / Testing Angola's turnaround

We takeenergy forward

We’re committed to making energy safer, cleaner,and more efficient for people and the planet.By combining industry-leading technologies andservices with operations in over 120 countries,we’re collaborating with customers to transformthe future of energy—everywhere.

bakerhughes.com


The ANPG’s board is largelymade up of ex-Sonangol figures,chaired by Paulino Jerónimo, whowas previously director generalat the parastatal. But while criticsmight contend that little haschanged in the institutions of state,familiar faces can be reassuring tothe oil industry, which values conti-nuity as well as reform.

Angola’s last offshore licensinground was held in 2011 under verydifferent conditions.

The round offering 11 pre-saltblocks in the Kwanza Basin wasrestricted to 13 invited companiesand terms included a generousaverage stake of 35% for Sonangol,plus stakes in four blocks for theChina Sonangol joint venture linkedto China International Fund andcontroversial businessman Sam Pa.

A subsequent round in 2014offered 10 onshore blocks in theKwanza and Lower Congo basinsto mainly Angolan companiesin a bid to encourage an indigenousindustry. A 30% stake in each blockwas reserved for Sonangol; another20%was reserved for Angolancompanies. However the blockawards had to be cancelled afterthe oil price crashed and the termsof the awards were no longer eco-nomically viable. These blocks areexpected to be re-tendered in 2020.

Lack of communicationWhile the ANPG has taken overlicensing, far-reaching reformis under way at Sonangol, whereone of Lourenço’s first moves wasto remove presidential daughterIsabel dos Santos as chair. Shewas appointed by her father inJune 2016 and announced a reformprogramme to tackle issues ofoverstaffing and managing the par-astatal’s $10bn debt, but companiesoperating in Angola made it clearthat the measures did not go farenough for their needs. Lourençoreplaced her with industry veteranCarlos Saturnino, who was sacked

in May 2019 over fuel shortagesand replaced with Sonangol veteranSebastião Pai Querido GasparMartins. The presidency blamedthe fuel supply crisis on a lackof communication between thegovernment and Sonangol.

Buoyed by oil earnings,Sonangol had become a massivestate company with subsidiariesin sectors as diverse as property,health and aviation. A leakedmemo in May 2015 from Sonangolchairman Francisco de Lemos JoséMaria sharply criticised the legacyof his predecessor Manuel Vicenteand spelled out problems, particu-larly the practice of using consult-ants to carry out day-to-day oilindustry functions while executivesneglected training and capacitybuilding within the company.The memo urged Sonangol tocontrol core operations costs whileensuring that non-core operations,such as airline SonAir and telecom-munications provider MSTelcom,were financially sustainable.

Some 50 Sonangol subsidiariesare included in a massive govern-ment privatisation programme,known as ProPriv, which aims tosell off 195 state-owned companiesbetween 2019 and 2022 via an initialpublic offering (IPO), tender or saleon stock exchanges.

End to government subsidiesThe list includes Sonangol itself,which will be part-privatised viaan IPO by 2022, and affiliatedcompanies such as China SonangolInternational; the state’s 30% stakein distributor Puma Energy; 20%in Ivorian refiner Société Ivoiriennede Raffinage; 51% in Sonangalp;100% of Sonangol Cabo Verde(which owns 39% of distributorEnacol); and 78% of São Tomée Príncipe’s Enco. The proceeds areto be invested in programmesto encourage domestic production.

As part of a $3.7bn agreementsigned in December 2018 betweenLuanda and the InternationalMonetary Fund, the economy willface greater scrutiny. The govern-ment has committed to endingsubsidies and to halting Chineseloans secured by future oil sales.Poorly performing banks have beenclosed and the government removedthe kwanza’s peg to the dollar,allowing the market to determinea more realistic exchange rate,though an amnesty on Angolanfunds deposited abroad didnot result in the hoped-for flowof funds back into the country.

The ANPG’s Massano said shehoped the latest tensions in theMiddle East could benefit Angolaby reminding investors of the needto maintain a range of sourcesof supply. “The problems for someare the opportunities for the others,and the Middle East issue gives usa chance to show to investors thatthey need to diversify,” she said.

*ThaliaGriffiths is editor of AfricanEnergy, www.africa-energy.com

AMPEROGERIO/EPA

/MAXP

PP

Sonangol chairman Gaspar Martins

50Sonangol subsidiaries are included in aprivatisation scheme which aims to selloff state-owned companies by 2022

EXTRACTIVES DOSSIER / Testing Angola's turnaround


EXTRACTIVES DOSSIER

By XOLISA PHILLIP in Johannesburg

After years of difficulties in theplatinum group minerals (PGM)sector, South Africa’s AngloAmerican Platinum (Amplats)is leaner and making more money.Factors that have helped Amplatsinclude a favourable exchangerate, an upward swing in the priceof PGMs, healthy demand againstthe backdrop of a moderate supplydeficit and improvements in thedomestic operating environment.

During a panel discussionat the Joburg Indaba confer-ence on 2-3 October, Amplatschief executive Chris Griffith

proclaimed on stage that the“fundamentals for PGMs are goodand will continue to be good forthe next number of years.” In midJuly, Amplats presented its interimresults for the six months to June2019. The company declared aninterim dividend of R3bn ($196m)or R11 per share. It also recordeda 120% rise in headline earnings toR28.15 per share. Amplats resumeddividend payments in March lastyear after stopping them in 2011.

Scaling downAmplats’s “balance sheet [is] ingood shape. South Africa [has] thebest resources for PGMs and assets

in the world,” said Griffith to loudapplause in October. Amplatsis conducting studies for the nextwave of growth. Griffith sayshis mantra these days is “do notgenerate volume, generate money”.

The good, though, comes withmyriad other challenges. Amplats,the world’s biggest platinum miner,has been on a long, hard journeyfor years. It adopted a new strategyin 2013 amid fierce political resist-ance and a backlash from labourunions, which feared deep job cuts.

It forged ahead with thesupport of its board and AngloAmerican, which owns an 80%stake in the company. Through

PLATINUM

HowAmplats regained its shine

Streamlined operations, better response to market forces, negotiations with unions andpower production have given the world’s top platinum producer renewed confidence

Amplats plans to builda 75MW solar power plantat its Mogalakwena mine

ANGLO

AMERICAN

PLC

MESSAGE

Patrick LibihoulVice PresidentAfrica NorthernandMarket LeaderMetals and

MineralsAfrica

variety of parameters that are driv-en bymineralogy. Beside increasedaccuracy, this technology allows asubstantial saving in capex.

Explainwhy BVM plays a vitalrole in the mining industry inAfrica.

We provide spectral analysis &machine learning services to var-ious major mining clients aroundthe globe and have implementedthe technology onto two majorBauxite mine sites in Guinea.

BVM believes in the continuousimprovement of existing assaytechniques and the pursuit of newmethods that provide analyticaland physical information to ourclients.We endeavor to providethese innovations cost effectivelyto provide clients with increaseddata information for improvedbusiness decisions.

How is the situation in the min-ing sector in Africa?

The mining sector is an accelera-tor of development in Africa. Theroyalties and taxes paid to localGovernment boost the publicspending, thus infrastructure,often in non-urban areas. Some ofthe minerals in Africa are crucialto the world economy, like copper,iron ore, bauxite, cobalt or manga-nese. Gold production inWest andSouth Africa is booming.

Furthermore, Africa is hostingenormous identified reserves(40% of world reserves for gold,30% for bauxite, and 60% forcobalt and manganese). Thosereserves will guarantee dec-ades of contribution to Africaneconomy.

What are the latest innovationsat BureauVeritas Minerals (BVM)and how can it benefit the miningsector?

We are innovation leaders in thecommercial minerals laboratoryfield.

BVM is the only minerals lab-oratory to offer Laser AblationICP-MS. This method allows toattain a broader range of elementswith lower detection limits at areduced price.

We are pioneers in developingspectral scanning and machinelearning.We are providers ofcommercial-scale HyloggerTMservices, the innovative corelogging system measuring reflec-tance spectra. In parallel, we havedeveloped our own advancedspectral services (FTIR).

Could you explainwhat is infra-red spectroscopy and FTIR?

During infrared spectroscopy,a sample is presented to a lightsource and the response from thesample is measured by a detector.The response exploits the differ-ences in chemical compositionand lattice structure of mineralsto produce a characteristic spec-tral feature.

BVM’s spectral and machine learn-ing service on pulps can providequantitative determinations for a

Innovative solutions for themetals&mining industry in africa

EXPERTADVICE

How technical developments andartificial intelligence improve testingresults and decrease capex

Bureau VeritasCôte d’IvoireBoulevard Roume,Abidjan,Plateau CITél :+225 20 31 25 00Email : [email protected]/markets-services/commodities-agriculture/metals-minerals


EXTRACTIVES DOSSIER

its repositioning, Amplatsscaled down its portfolio from 19managed and joint venture opera-tions in 2013 to six currently.

Its operations span the lengthand breadth of the platinumbelt in the North West andLimpopo, South Africa’s northernprovinces. Although endowedwith an abundance of naturalresources, the areas where thecompany’s operations are situatedare far from ports and big cities.Infrastructure is a big challengeand those mining areas are hometo some of the poorest rural com-munities in South Africa. In manyinstances, the mining operationsare the only source of large-scaleemployers, leading to a mismatchof expectations. This oftenmanifests in community proteststhat result in disruptionsand delays to mining activity.

“The restructuring and repo-sitioning came as a result ofstructural changes in demandfor our products followingthe global financial crisis in2008/2009,” said Griffith. In late2008, the spot price of an ounceof platinum dropped just below$800. The price skyrocketed tomore than $1,850 in August 2011.

‘Dieselgate’The swings in price were exac-erbated by the 2015 ‘dieselgate’scandal, he added. Demandfor platinum, which is usedin catalytic converters fordiesel-powered cars, was hurtafter German manufacturerVolkswagen was found to havefaked emissions tests in theUnited States. The ensuing badpress provoked a reduction inthe demand for diesel cars andas a result the price of an ounceof platinum failed to break the$1,000 threshold in the first10 months of 2019.

The PGM sector was caughtoff guard. Used to years of

continuous growth in demandfor diesel, Griffith explained,“the industry continued to investin growing volume […] The resultwas an increase in unprofitableounces being supplied intothe market, leading to ballooningdebt levels.”

Amplats anticipates overallautomotive demand to remainstable this year and over themedium term as heavy-duty-vehicle emissions rules aretightened in China and India.Griffith added: “We expect amodest deficit in 2019, with animproving medium-term outlookfrom the potential of somesubstitution of platinum intogasoline autocatalysts.”

On the labour front, Amplatsimproved relations with workersat its Mototolo mine in Limpopoearlier this year. Amplats boughtout its joint venture partnersat the mine, Glencore, in 2018.As part of the transition,employees had concerns aboutmedical aid, pensions andpay. “Although there was someopportunism, we needed toimprove our communication

and engagement with Mototoloemployees. [...] We [...] resolve[d]the unprotected strike in Maywithout incidents of violenceand settled through negotiation,rather than the courts, whichwas positive,” said Griffith.

Labour talks in the PGMsector began in June with theAssociation of Mineworkers andConstruction Union (AMCU)making an opening demand fora 45% wage hike. The harder-lineAMCU has replaced the AfricanNational Congress-alignedNational Union of Mineworkersas the dominant force in theplatinum mines. In September,AMCU declared a dispute withemployers and approached theCommission for Conciliation,Mediation and Arbitration(CCMA). Going through theCCMA is one of the proceduralrequirements in the event a uniondecides to embark on protectedstrike action. Although AMCUhas gone this route, it has “alsorequested a meeting with thecompany outside of the CCMAprocess”. To Griffith, this shows“the willingness of the partiesto continue engaging”.

And electricity supply isproving a problem too. Load-shedding by the state-run powerutility Eskom in the first quarterof 2019 hurt production. Amplatsexpects to recover its productionlosses by year-end.

To mitigate against furtherdisruption, Amplats is planningto build a 75MW solar powerplant at its Mogalakwena minein Limpopo. The companyexpects this new 75MW solarplant to provide about 21%of its electricity needs atMogalakwena. The plant couldbe expanded to a total of 100MWas Griffiths and the rest of theAmplats team look to put theiractivities on a more sustainablefooting in the future.

AMPLATS NET CASH DOUBLESIN SIX MONTHS

(Billion rand)

-12.8

2015 2016 2017 2018 20191H

-7.3

-1.8

2.9

6.0

SOURCE:COMPA

NYREPORT

45%The dominant platinum mines tradeunion demanded a massive salaryincrease during labour talks in June


Date and signature: TAR11

0

SEND TO: [email protected]: Webscribe Ltd - Unit 4 College Road Business Park - College Road North -Aston Clinton - HP22 5EZ - Tel: +44 (0) 1442 820580

Firstname .................................................................................Surname......................................................................................

Address .......................................................................................................................................................................................................

Zip code ......................................................................................City....................................................................................................

State ..............................................................................................Country.........................................................................................

Tel. ....................................................................................................E-mail ...........................................................................................

❏ US Dollars ❏ £ Sterling ❏ Euros❏ Cheque enclosed payable to WEBSCRIBE LTD❏ Visa ❏Mastercard ❏ AmexN°ExpiresLast 3 numbers on back ❏ Sendme a receipt

of payment

❏Mr ❏Ms ❏Mrs

Subscribe Now !Subscribe now to The Africa Report quarterly magazine,print and digital editions, with deeper long formcontent, cutting-edge features and extensive businesscoverage including exclusive rankings of Africa’s top500 companies and top 200 banks as well as detailedpolitical and economic profiles of Africa’s 54 countries.

www.theafricareport.com

FRICA IN

020Money.Youth.Conflict.Growth.

NE AFRIQUE MEDIA GROUP

AF

2

Connect online to www.theafricareport.com

SUBSCRIPTION ORDER FORM

PLEASE COMPLETE PAYMENT IN

❏ Yes, I would like to subscribe to The Africa Report

1 year / 4 issues Euro

zone

UKonly

Other

countries

❏ Print €27 £24 $32

❏ Digital €19 £17 $21

❏ Print Digital €42 £38 $46

Understand Africa’s Tomorrow, today


By HONORÉ BANDA

Interest in Ethiopia’s oil and gaspotential is heating up, with $4bnin deals to unlock natural gasreserves found in the Ogaden Basinmaking progress. The countrycould soon enjoy a big revenue risefrom the exports of its natural gas.The backers of the project expect toaward an engineering, procurementand construction contract shortly,which will allow work to start.

In February 2019, the govern-ments of Ethiopia and Djiboutisigned a deal to allow the

construction of a 749.4km gaspipeline that will hook up to a newliquefied natural gas plant andexport terminal. The Ethiopiangovernment has yet to ratifythe February deal and has beenworkshopping its draft oil policyfor the nascent sector.

China joint ventureThe pipeline will be built andoperated by Poly-GCL, a jointventure between the state-ownedChina Poly Group Corporationand the Hong Kong-based GoldenConcord Group. Poly-GCL has

been operating the Calub andHilala fields since 2013. Thecompanies expect that the pipelineand other construction projectswill take at least three years tocomplete once the contracts aresigned. The companies have notreleased details about how theyintend to finance the major con-struction works.

On 16 February, Djibouti’senergy minister Yonis Ali Gueditold the news agency Reuters thatthe agreement defines “the keyterms that will serve as the basis”for the establishment of

ETHIOPIA/DJIBOUTI

Amarriage of logistics, energyand necessityContracts are due to be awarded for the construction of the pipeline needed for Ethiopiato exploit its trillions of cubic feet of natural gas from the Ogaden Basin

New, huge,Chinese-builtcranes at Djibouti’sDoraleh port

VINCENTFO

URNIER/JA

EXTRACTIVES DOSSIER

https://avxlive.icu/

MESSAGE

OpportunityandRisk -MeetingtheSecurityChallenges inAfrica

GardaWorldGardaWorld,Boulevard du Régent 35,Brussels,1000,BelgiumTel.:+32 2 537 94 96garda.com

EXPERTADVICE

in assisting our clientsmitigate andreduce risks in Africa. Our team of32,000people on the continent keepour clients safe and secure everysingle day through our guarding andtechnology solutions. We supportourclientsnewmarket entry throughin - depth threat assessments andsecurity risk assessments using in-ternational standards to define howbest to operate in each environment.

Our crisis experts help our clientsprepare for the unexpected and wemanage crisis from kidnap to evac-uation every day, with on averageclose to 150 managed incidentsper year. We support the safe in-ternational travel of our clientsemployees from home to projectsites,with over 3 million successfulmissions completed. No matter thecircumstances, GardaWorld has thereach and expertise to helpyou,yourbusiness and your employees staysafe and secure.

I ncreasing shareholdervalue re-quiresgrowth. Thisnecessityfor

growth isdrivingbusiness to investinmorecomplexoperatingenviron-ments where the balance betweenopportunityand risk can be fragile.The right approach to ensuring thesecurityof investments,assets andpeople in these environments isessential to meeting duty of careand fiduciary responsibilities andsafeguarding reputation.

When designed and executedwell,the right securitystrategy is a com-petitive differentiator and enablesbusiness success. GardaWorldensures ourclients’success in chal-lenging environments.

Africaprovides aunique opportunityforbusiness. Rich innatural resourc-es, requiring improved infrastructure,with changingdemographicspredict-ed to drive household consumptionto over $2 trillion by 2030, it is notsurprising to learn that since 2000over half of theworlds fastest grow-ing economies have been in Africa.This opportunity is drawing FDIand expertise from the developedworld and offers a unique platformfor growth. Africa shines as an ex-citing and sustainable opportunityfor business.

However commercial success isnot guaranteed. Across the Sahela complex Jihadist threat is under-mining Government control of keyregions, exacerbating already fragilerelationships between communitiesandweak rule of law. Over the last12months security inmanyparts ofthevast area that runs fromSenegalto the Sudan has continued to dete-riorate, with reportedly a threefoldincrease in security incidents inthis period.

Commercial organisations operat-ing in these regions have sufferedsignificantly. Terrorist attacks havecausedhuge loss of life of employees,resulted in the kidnap for ransom ofsenior business executives, led tothe temporary closure of businessoperations impacting short termprofitability and eroded shareholderand market confidence, smashingshareprice anddamaging reputation.

A deliberate approach to under-standing security risk and devel-oping the right security strategyis now essential. Consult withGardaWorldhowwecanhelpensureyour success.

GardaWorld, the world’s largestprivately - owned security servicescompany has a proven track record

Colin Brown,

SeniorVice President,Strategic Client Group,

GardaWorld

Reach out to GardaWorld to see howwecan support you stay safe inAfrica


future gas contracts. “Thisis the most expensive project everbuilt in the Horn of Africa. Bothparties have reached an agreementthat will allow them to benefitfairly from the project,” he added.

Diplomatic shiftsPoly-GCL’s fields in the Ogadenhold an estimated 8trn cubic feetof gas. And in May, British firmNew Age announced that it hadfound 1.6trn cubic feet of its ownat its Ogaden operations. WithMoroccan firm OCP planning tobuild a fertiliser plant at Dire Dawathat uses Ethiopia’s potash and gasreserves, some of the gas finds willbe directed to the domestic marketrather than export.

The planned gas pipeline alsomarks the further deepening ofthe economic integration betweenEthiopia and Djibouti. But therelationship is no longer quite sostraightforward. Whereas, before,Djibouti was Ethiopia’s only accesspoint to the sea, handling 90%of it’s freight needs, a flurry of

diplomatic and logistical upheavalshave changed the game.

The main Ethiopia-Djiboutiroad corridor, which is heavilycongested, needs to be rehabili-tated. Japanese and Saudi fundshave been mobilised for thispurpose. Meanwhile, the decisionby Ethiopia’s Prime Minister AbiyAhmed to reopen diplomaticrelations with Eritrea in 2018 givesrise to the hope that access by landto Eritrea’s Assab port may nowbe an option for Ethiopia traders.

While Assab is currently undermilitary use, it once used to handlethe bulk of Ethiopian shipping.The Massawa port is also an optionfor the potash fields of Tigray, withjust a few kilometres of paved roadsto build to the Ethiopian border.

There are also commercialinterests driving the relationship.When the Emirati-run DP Worldwas kicked out of a contract to runDjibouti’s container port of Doralehby the Djibouti government,it made a move on Somaliland’sBerbera Port, which will alsoserve the Ethiopian market. On11 October 2018 building worksbegan, with the objective to invest$100m of a total of $442m, tobuild 400m of quays and a freetrade zone. Somaliland also angledfor the planned gas pipeline togo through that region of Somaliarather than Djibouti.

But the Djibouti government ispressing its first-mover advantageand seeking to cement its infra-structure links. It is launchinga new road corridor to servicenorthern Ethiopia (see box),which has big potash reserves.A third Ethiopia-Djibouti roadcorridor is currently underconstruction in the south of thecountry, towards Galilee and theEthiopian city of Dire Dawa.

This pipeline isthe most expensiveproject ever builtin the Horn of Africa

Djibouti launches a new road transport corridor to EthiopiaOn an old track, nestledin the heart of the mountain-ous terrain that marks thenorth-central part of Djibouti,the construction work wasnot easy. After severalpostponements, Djibouti’sPresident Ismaïl OmarGuelleh, accompaniedby many officials from bothKuwait and Djibouti, inaugu-rated work on the northerncorridor on 6 November– the 112km of road linkingTadjoura, the country’s sec-ond-largest city, to Balho onthe Ethiopian border. The roadthen goes to Mekele, capitalof the Tigray region.

The Kuwait Fund for ArabEconomic Development, which

financed the road betweenTadjoura and Obock that wasbuilt by Kuwait’s Al-Kharafi,is providing $156m infunding for the new road,officially named SheikhSabah, after the Emir of thesmall petro-state. The roadis strategic for bothEthiopia and Djibouti,and for the northern partsof both these countries.

Ethiopia’s late primeminister Meles Zenawibacked the project initiallyto facilitate the export of largepotash reserves via the portof Tadjoura. But the highdemand for imports from thismarket of 105 million inhabit-ants has redefined plans.

The new road has nowbeen resized to accommodate60-tonne trucks. And the portof Tadjoura, where the traderVitol already delivers liquefiednatural gas, will become amulti-purpose port so that the

road can be used to transportall kinds of goods. Thiswill help decongest the RouteNationale 1 corridor aroundDjibouti port in the south.

By RÉMY DARRASin Djibouti for Jeune Afrique

VINCENTFO

URNIER/JA

The new road will bringrelief to the congested RN1

EXTRACTIVES DOSSIER

Togo has performed excep-tionally well, moving up40 places in theWorld Bank’s

Doing Business 2020 ranking,the international benchmark for

measuring ease of doing business.Ranked 97th out of 190 evaluatedcountries, Togo is the only West Africancountry to feature amongst the first100positions.This performance, the resultof strong leadership and a demonstratedpolitical will, is a win-win situation forthe Republic of Togo and its President,Faure Essozimna Gnassingbé, who sethis sights on making Togo the sub-region’s top reformer by 2020. However,the Head of State stressed at the resultspresentation ceremony, this outcome isnot an end in itself.

It is, in fact, an obligation, as the coun-try cannot dispense with a competitivebusiness climate, which is the basis for

leveraging its many comparative advan-tages. These advantages are those foundin Lomé, now an international financialcentre, where the International FinanceCorporation has recently set up. They arealso those of a West African trade hub,a strategic infrastructure nexus at theheart of the ECOWAS economic commu-nity of 300 million people, defined by aroad network undergoing renovation,an ultra-modern deepwater port and anairport officially opened in 2016, nowhome to the up and coming Asky airline.

The favourable economic environmentcommended by Doing Business shouldenable Togo to continue attractingprivate investment under its NationalDevelopment Plan (2018-2022NDP), afterhaving spent 10 years re-structuring itsagriculture sector,modernising itsminingindustry and closing its infrastructure gap,with the support of its public partners.

©PITA

EMMANUEL

DOING BUSINESSRANKING

+59 PLACESIN TWO YEARS,

TOGO HAS MOVED UPFROM 156THTO 97TH PLACE

TOGO _

AFRICA’S TOP REFORMER

DOING BUSINESS 2020 ADVE

RTORIAL

PHOTOS FROM LEFT TO RIGHT:

TERMINAL OF THE GNASSINGBÉ EYADÉMAINTERNATIONAL AIRPORT IN LOMÉ.

PRESIDENT FAURE ESSOZIMNA GNASSINGBÉOFFICIALLY LAUNCHES THE CROSS-BORDERELECTRIFICATION PROJECT.

THE 3RD WHARF AT THE PORT OF LOMÉ LCT

©PITA

EMMANUEL

Top of the list of countriesto have made the mostprogress in the worldin Doing Business 2020

Togo tops the list of countries in terms of climbing up theranking in Doing Business 2020, followed by Saudi Arabiaand Jordan. In addition to its progress in registeringproperty, the country has especially endeavoured toimprove its performance in the criteria of starting abusiness, dealing with construction permits, gettingelectricity connections and getting credit, which tookit to the top of the list in Africa and 15th in the world.Five significant reforms are what enabled the countryto climb 40 places:

Starting a businessTogo has continued its endeavours over the years bysetting up a single window for starting a business,thereby drastically reducing the procedures, costand time required for company registration.

Handling of construction permitsTogo has simplified construction permit processing

by introducing an online submission service and reduc-ing the costs of this procedure. The online service hasalso made the handling of construction permits moretransparent, as the required documents, fees due orthe pre-approval process are now available online. Thecountry has also improved the quality control of its newbuildings by introducing a regulated inspection before,during and at the end of construction, with the optionof issuing a certificate of compliance on completionof the inspection.

TOGOTHEWORLD’STHIRDBEST REFORMER

DOING BUSINESS 2020

Togo’s dazzling progress in the Doing Business

2020 ranking didn’t just come out of nowhere.

The country’s score has been changing dramatically

over the past six or so years and, since 2018, with the

establishment of a dedicated division, the country

has gained 19 places – the biggest leap in the world

– due to the country implementing its bold reforms.

It was already one of the five African countries ranked

among the top 10 reformers in the world, alongside

Djibouti, Kenya, Côte d’Ivoire and Rwanda.

Paperless administrativeproceduresIn 2018, Doing Business particularly welcomed theintroduction of online systems for paying corporateincome tax and declaring value added tax. Togo hadalso sped up the company name availability verificationprocess by fully implementing its online single window.The country had already embarked on its paperlessprocess for building permits and property registration,which was praised in this year’s Doing Business ranking.

THE TIME IT TAKESTO REGISTER A COMPANYDECREASED FROM 85 DAYSIN 2012 TO AN AVERAGE OF

4HOURS

IN 2019

THE COST OF STARTINGA BUSINESS WENT DOWNFROM 262,250 CFA FRANCS

IN 2012 TO

28,250 CFAFRANCS

IN 2019 GNASSINGBÉ EYADÉMA INTERNATIONAL AIRPORT, LOMÉ.

LOMÉ’S NEW FISHING HARBOUR.

©PITA

EMMANUEL

Getting electricityTogo has made electr icitymore affordable by further re-ducing connection times andthe costs of new connections.After undergoing an initial30% cost reduction in 2017,medium-voltage connection costsdropped by 50% in 2018.

Property registration and ownershipTogo has simplified property registration by streamliningprocedures through the setting up of a single windowand reducing the costs: registration fees have gonefrom 4% of the value of the property to a flat fee of35,000 CFA francs (compared to 9% in 2012).

THE PRESIDENT OFFICIALLY OPENING THE SOLAR POWER PLANT IN ASSOUKOKO.

Getting creditAccess to credit information has been improved inTogo by expanding the scope of the Credit InformationBureau (BIC), implemented in 2016 under WAEMUdirectives to reduce information asymmetry betweenlenders and borrowers and to improve credit oversight,ultimately increasing access to these services at reducedcosts. To this end, the government has introduceda law to speed up the availability of information inthe BIC database, mainly from major utilities (water,electricity, telecoms).

DEMANDFOR ELECTRICITYCONNECTIONS HAS

TRIPLEDOVER THE PAST

3 YEARS

TOGO

OECD

SUB-SAHARAN AFRICA

62.3—100

78.4—100 51.8

—100

TOGO SCORES WELL ABOVE THE AFRICAN AVERAGE

(Source: Doing Business 2020)

ADVE

RTORIAL

ROAD 2, THE DÉFALÉ BYPASS.

CONSTRUCTION OF NEW HOUSES UNDERWAY.

©LO

UISVINCEN

T

©LO

UISVINCEN

T

©PITA

EMMANUEL

DIFCOM/D

F-P

HOTO

S:UNLESS

OTH

ERWISEMEN

TIONED

.

Faure Essozimna Gnassingbé,President of the Republic of Togo“Two years ago, we were 156th in the Doing Businessranking. I was not at all happy because we wereregressing and we were second-last in the WAEMUspace. This was a big wake up for us... Now we areall proud of the steps that have been taken (...),we should be proud that there are so many newbusinesses being started.Reforming our country was also a prerequisite forfinancing our National Development Plan (NDP 2018-2022). When you meet with private investors, theyhave available funds, but they look at whether thecountry is attractive or not. This is why there was anurgent need to reform our habits, institutions andprocedures (...). There is still a lot of room for improve-ment and I know that if we are able to continue in thisspirit, in this alliance between the administration andthe private sector, between other trades, architects,notaries, lawyers... together we will succeed.”(Excerpt from the speech delivered at the Doing Business reportpresentation ceremony in Togo, 31 October 2019).

Sandra Ablamba Johnson, Ministerand Advisor to the Presidentof the Republic, National Coordinatorof the Business Climate Unit“All these reforms have generated – and willcontinue to generate – positive effects forour country. This is demonstrated by theincrease in foreign direct investmentinflows to Togo (...). For the second year,maritime traffic maintained its upwardtrend, making the Autonomous Portof Lomé the leading container port inthe sub-region. The Centre de Formalités

des Entreprises also experienced an upward trend in thenumber of companies registered, including a substantialshare of women-owned businesses, which stood at 26%at the end of September 2019. In addition, loans in thedecentralised financial services sector have increased (...).I would like to assure you that we will continue our effortsto (...) deepen the reforms under way and address thoseindicators where our country has room for improvement.”

56,606BUSINESSES HAVE BEEN

STARTED OVER THE LAST 5 YEARS,OF WHICH 9,000WERE

FOUNDED DURING THE FIRSTTHREE QUARTERS OF 2019

(+11%)

ADVE

RTORIAL

TOGO“TOGETHERWEWILL

SUCCEED”

DOING BUSINESS 2020

THE IFC SETS UP IN LOMÉ

The International Finance Corporation

(IFC), the World Bank Group’s development

assistance institution specialising in private

investment, opened a country office in

Togo in October. “We wish to contribute to

creating quality jobs, generating income

and contributing to shared growth,” said

Sergio Pimenta, World Bank Vice President

for Africa and the Middle East, during the

Doing Business report presentation in

Togo. This country office also consolidates

IFC’s contribution to Togo. Active in energy,

financial markets and logistics with a

portfolio of more than $330 million, the

institution could develop projects in the

water or digital sectors. “Togo really is a

country in which the private sector should be

investing,” said Sergio Pimenta.

Togo is an example of good performance for manycountries to follow across quite a few indicators.”HAWAWAGUÉ,World Bank Resident Representative for Togo

©PITA

EMMANUEL

©PITA

EMMANUEL


SIM

ON

MAIN

A/AFP

The Kenyan government is learning that infrastructure alone willnot supercharge the country’s economic growth. After a spendingsplurge, Nairobi can now look for a more holistic way tostrengthen the economy and support national development

Visions of growth

Kenya’s flagship, costlyStandard Gauge Railway


KENYA FOCUS / Visions of growth

ByMORRIS KIRUGA in Nairobi

In mid-October, Kenya’s PresidentUhuru Kenyatta launched thesecond phase of the cross-countrystandard gauge railway (SGR).That same morning, he had brokenground on a new expresswaytraversing Nairobi’s main airportand the city beyond. While bothprojects are key enablers of theVision 2030 development planand built and funded by Chineseactors, the major differencewas in their mode of financing.

While the SGR was builtthrough a part-concessional,part-commercial loan from EximBank of China, the expresswaywill be funded through a pub-lic-private partnership contract.The Chinese company that willbuild the dual carriageway has a30-year concession to operateit. The reason for the change isthe East African country’s spiral-ling debt, which increased fromKSh2.12trn in January 2014 toKSh5.4trn ($52.5bn) in March 2019.Its debt-to-GDP ratio rose to 62%,according to a recent reportby ratings agency Moody’s.

Big FourThese are worrying figures,as 2019 marked the mid-point forVision 2030. Launched in 2008by then-president Mwai Kibaki,the blueprint was supposed tomake Kenya a high middle-incomecountry. It has three main pillars:economic, political and social,meant to be achieved by investingin multiple enablers. The blueprintis divided into five-yearmedium-term plans. In the latestone, known better as Kenyatta’sBig Four Agenda, the broader planwas whittled down to four focusareas: manufacturing, affordablehousing, universal healthcareand food security.

Vision 2030’s goal is to facilitaterapid economic growth, with an

annual target of 10% or more after2012. This rate has never beenachieved. Kenya crossed the lowermiddle-income mark in 2014,after updating its economic figuresand rebasing its GDP upwards by25%. In Kenyatta’s medium-termplan, the goal is a more realistic7% growth by 2022. The IMF andWorld Bank have cut projections,with growth at 5.5% and 6%for 2019 and 2020, respectively.

The reasons why the country of47 million people is not achievingits own predictions are multiple.The wider problem, economistsargue, is that under the JubileeParty government, the visionwas pared back to its infrastruc-ture bones. “Since this govern-ment came to power, they havedefined infrastructure investmentas a stand-alone item that drivesthe economy,” says Tony Watima,a Nairobi-based economist.“Infrastructure investment shoulddevelop people, leading tothe improvement of the qualityof their lives and sustainableeconomic development.”

Government mandarinsdisagree somewhat with thisview. Infrastructure, describedin blueprint-speak as ‘enablers’,formed the core of Kenya’splans. The first major project,launched just six months afterthe vision itself, was the eight-lane50km Thika Road. It took threeyears to build and cost KSh32bn.

“Drive along ThikaSuperhighway any morningtoday and the traffic jam is back.That is the best indicator that itwas a right investment,” WahomeGakuru, the late founding director

KENYA’S AVERAGE AGRICULTURAL YIELD

2000 2005 2010

12

10

8

6

4

2

0

metric tonnesper hectare

62%Kenya’s public debt-to-GDP ratio,at KSh6trn, according to a recentreport by ratings agency Moody’s


of Vision 2030 and later governorof Nyeri County, wrote in the DailyNation in 2017. “Was Aswan Damin Egypt a mistake? Was Sun Cityin South Africa a bad project?Some economists are paralysedby their analysis.”

Financing stalledOther projects in the vision areKonza Technopolis, the SGR, a newairport terminal, the Lamu Port-South Sudan-Ethiopia Transport(LAPSSET) corridor, specialeconomic zones and energy gen-eration projects. While some, suchas several new power plants, havebeen successful, most of the othershave either been delayed, cancelledor are still incomplete. Kenya nowhas 18,655km of paved roads andan installed energy capacity of2,711.7MW, with an increasing sharefrom renewable sources.

While the second phase of theSGR is complete, financing for thenext phases has stalled after Chinadeclined to fund it. The new airportterminal project was cancelled in2016. The first berth at the LamuPort, the launchpad of the KSh2trnLAPSSET corridor, was completedin August 2019 while other elementsof the corridor plan are in limbo.

The Konza project has alsostalled, despite pumping billionsof shillings to prop the oversightauthority and infrastructureto attract private investment.By mid-2019, the only structureon the ground is the authori-ty’s headquarters, with basicinfrastructure missing.

Nairobi has a strong start-upscene, but many companieshave struggled to raise finance.Agriculture-focused Twiga Foodshas been a bright spot in a sectorthat employs a vast number ofKenyans. The country has beenclimbing higher in the WorldBank’s Doing Business rankings,but much more in terms of policy,education and finance is still to be

PRESSOFF

ICE

The Pinnacle will be amongAfrica’s tallest buildings

2015 2020

80

70

60

50

40

30

20

10

02025 2030 2035

millions

2040

Population (Kenya)Kenya

Lower-middle-income countriesUpper-middle-income countries

SOURCE:FA

OSTATANDUNPDDATA


KENYA FOCUS / Visions of growth

done to build up manufacturing,agribusiness and tech ecosystems.The business and other commu-nities want to have more opportu-nities to talk with the governmentabout and help formulate its plans.

Devolved governanceGovernance and the geographicalconcentration of economic activityare other obstacles to growth.In 2010, Kenya adopted a new con-stitution that restored a devolvedsystem of governance. Kenya nowhas 47 county governments withelected governors and legislatures.

The devolved system has moredefinition but is still strugglingto clear up its relationship withthe central government. The maincomplaint is sharing of revenue. Inmid-2019, the Council of Governorsfiled a case in the Supreme Court,another creation of the new consti-tution, seeking more money.

While the reasons for the currentcrises are mainly economic,implementation of the new con-stitution ran into its first majorhurdles almost as soon as it waspromulgated. In 2010, six people,including the current president anddeputy president, were indicted bythe International Criminal Court forcrimes against humanity. The cases

shaped Kenya’s politics between2010 and 2016, by which time bothKenyatta andWilliam Ruto werealready in office and the countrywas due for another election.

That period also coincidedwith increased insecurity, as terrorattacks by the Somalia-basedIslamist rebels of Al-Shabaabincreased in Nairobi and northernKenya. Tourism growth stagnatedas a result, affecting one of Kenya’sbiggest foreign-exchange earners.

Affordable housing is anothergovernment priority. “Kenyacurrently needs to put up about200,000 houses each year to fixits low-cost housing shortage of 2munits by 2030,” says George Mburu,the operations director at MiziziAfrica Homes. Meeting that highdemand, even with Kenyatta’s BigFour Agenda, will be hard becauseof what Mburu sees as “low supportand output from the private sector.”

Kenya’s real estate markethas been booming for more than

a decade, so it has gaping holeson affordable housing. The marketbegan stalling five years ago,a situation worsened by the 2016interest rate cap (see page 138).Banks shunned lending to theprivate sector for governmentsecurities, further slowing growth.

‘Stick to the path’With those challenges, howrelevant is Vision 2030? Whilelaunching the blueprint in June2008, Kibaki implored Kenyans“[to] never again fight one anotherbut instead stick to the path ofdevelopment we [had] embarkedon.” While the country has avoideda repeat of its 2007-2008 electoralviolence, a post-election crisisin 2017 created another com-plication in implementing thevision’s political and social goals.The plan to create “issue-based,people-centered, result-orientedand accountable democraticpolitical systems” has beenhampered by runaway corruption,mismanagement and 2022 politics.

After Kenyatta’s now-famous2018 handshake with his chiefrival Raila Odinga, the twoembarked on a new plan that mightchange Kenya’s political landscape.In November, Kenyatta receiveda joint committee’s report thatsuggests major changes to laws onpolitical structures and corruption.

Mugambi Laibuta, a Nairobilawyer who was part of theteam that worked on thoseproposals, tells The Africa Report:“Unfortunately Kenya suffers fromhaving so many development initi-atives. In my view, they should allbe consolidated into one.” With theeconomy in dire need of mending,and political temperatures rising,Vision 2030 is now a blip inthe immediate plans of Kenya’spolitical class. Economist Watimaconcludes that in the end, Kenyansnever really owned the blueprint asits “driving wheel into the future”.

TONYKARUMBA/AFP

Agribusiness stillstruggles to find financing

47county governments were formed

with elected governors and legislaturesunder the new constitution

John Lentaigne, the Ag CEO of ATI, Africa’s guarantee provider, discusses the importance ofrisk mitigation in Africa’s quest to attract more FDI.

WhydoesAfrica need to de-risk?Whether the risk is real or perceived, many African countries are seen to be amongst themore risky global investment destinations. Investors make long-term investment decisionsconsidering factors such as a country’s credit rating, transparency, the rule of law and po-litical stability. Investment insurance is behind most major project finance investment deci-sions and credit insurance is a requirement of most international lenders.

Does this added component of insurance increase the cost of lending?Commercial lenders may not openly state that investment insurance is part of the fee struc-ture because the risk premium is typically built-in to the lending margins. One alternative isfor governments to structure their borrowing requests with explicit insurance to protect thelender against sovereign non-payment risks. Governments can then obtain more competitivelending offers at longer tenures, which results in annual savings and more manageable debt.

What is the net gain forAfrica?Africa currently attracts about US$46 billion annually of FDI and over 5% of this is alreadyinsured by ATI. If more African countries were to utilize ATI, this amount could increase signifi-cantly. With an expected 4 new member countries joining ATI in early 2020, we expect to sup-port close to US$2 billion of new investments into these countries in the next 12 to 24 months.ATI’s presence in a lending structure allows countries to use their sovereign guaranteesmore sparingly in order to free up their fiscal headroom. In 2019, ATI expects to close theyear by supporting a total of c.US$6.5 billion in exposures. With a significant number ofAfrican member countries joining, the potential to do more for Africa’s growth is significant.

De-risk and investors will comeInvestment insurance attracts US$2bn new FDI to Africa

AFRICAN TRADE INSURANCE [email protected]

www.ati-aca.org

(l to r) John Lentaigne, Ag CEO of ATI and Sébastien Rozès,Executive Officer & MD of MUFG sign a MoUto support millions of additional financing to Africafrom Japan’s largest bank.

MESSAGEJA

MG

-P

ictu

re:A

llR

ight

Res

erve

d


KENYA FOCUS /

By NICHOLAS NORBROOK

The sheer volume of large projects is keeping the Kenyan admin-istration busy. It is not just the two completed legs of the standardgauge railway (SGR) that cost nearly $5bn and connects Mombasaon the coast to Naivasha deep inland via Nairobi. Across thecountry, a vast number of road and other projects are underway.If they are all completed, Kenya will have a well-connectedeconomy, with strong road links to neighbouring countries,a rejuvenated airport and a solid port complex at Lamu.

The transport network dubbed the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) corridor is back in play, with newmomentum injected after a two-day Kenya-Ethiopia trade confer-ence. Greater rapprochement could yield more concrete progress.

One glaring absence, however, is progress on the SGR railwayconnection through to Uganda and beyond to Kigali. Theproblems on getting finance calls the profitability of the originaldeal into question, as revenue generated by a regionally integratedrailway line could justify the large investments made.

Another missing element from the project line-up is the largecoal-fired plant near Lamu that was blocked by Kenya’s judges aftercompanies failed to deliver a proper environmental assessment.

Construction remains a key driver of the economy. The NairobiGate industrial park is set to open early in 2020, situated near theairport and the inland container depot. The Pinnacle Tower underconstruction will be one of Africa’s tallest buildings. Not every-where is blossoming, however. Tatu City, an exurb of Nairobi, isstill awaiting permission from the county government to proceed.

PROJECTS

Keeping theplanners busyDespite concerns about the government’s debtlevels, many major public and private investmentsare moving ahead in 2020

It has not been a story of gushers andquick returns for Kenya’s oil sector.Kenya’s geographydoes not allow forit. Tullow Oil, Africa Oil and Totalwant topumpsome560mbarrelsofoilfrom the Lokichar Basin inTurkana,but it is far from the coast. The firstoil shipments from the region thisyear required a fleet of trucks to haulthe crude to cargo ships inMombasa.

They will continue their back andforth for at least the next 18 months,says Tullow chief executive PaulMcDade. The company will makeits final investment decision on apipeline to the coast in 2020. Chineseand Indian refiners are set to be thethe key customers for those exports.

Thepipelineplans are nowwith theKenyan government, with a price tagof at least $1.1bn. The price is drivenby having to heat the waxy crude tokeep it liquid enough to pump.

Another issue that the governmentandcompanieshave todealwith is thatlocalcommunitiesalsowant theirshareof the benefit. “When you slaughtera goat, the owner of the goat is leftwith the leg,”TurkanaCounty deputygovernor Peter Emuria Lotethiro toldreporters. “Turkanawant their leg.”

OILInfrastructureneeded

BAZRAT

NER/REUTE

RS

A Tullow Oildrilling site inLokichar Basin

THOMASMUKOYA

/REUTE

RS

The new Chinese-builtstandard gauge railway


By the end of 2020, Kenya’s national airline will be fullyownedby the state. In a bid to halt the debt-ridden free-fallof Kenya Airways, it will become a unit of a state-ownedholding company, alongside Nairobi’s Jomo KenyattaInternational Airport, Kenya Airports Authority andKenya Civil Aviation Authority.

The model is one used by neighbouring EthiopianAirlines and Emirates. Michael Joseph, the chairman ofKenya Airways and acting chief executive of telecoms

firm Safaricom, suggested the idea to the Nairobi gov-ernment. “Theway it’s designed is to have a strong boardthat will have the authority and the mandate to leveragethe balance sheets to expand the aviation business inKenya,” Joseph told Bloomberg.

Local rivals are certainly increasing the pressure. Thegovernment of Rwanda is spendingmore than $800m inpartnership with Emirates to boost Kigali’s role as a hubfor travellers coming throughAsia and theMiddle East.

After years of talk about the poten-tial for the northern city of Lamu,progress is being made. The first$320mberthofLamuPortofficiallyopened in November. Two moreberths are set to open in 2020.Thismarks a turnaround of sorts. TheLAPSSETproject, a vast collectionof pipelines, roads and ports, hadbeenfalteringduetoconflict inSouthSudan and a lack of interest fromAddis Ababa. However, a recentagreement by Ethiopia to take aterminal at LamuPort has given it ashot in thearm.Ethiopia is currentlycasting around forways todiversifyits import-export corridors awayfromDjibouti.ThegrowthofLamuwill add yet another to a growingconstellation ofEastAfrican ports.But theprogressof the roadbetweenLamu andGarsen is aworry, as the135km route is far from ready.

PORTSLamu’s uptick

The much-awaited road connec-tion between the Tanzanian portof Bagamoyo and Kenyan port ofMombasa could now see the light.The460kmhighwayhas alreadybeenrescheduled several times, having tofind a less damaging route throughSaadani National Park.

TheAfricanDevelopmentBankwillmeet 70% of the estimated $750mproject cost,withKenyaandTanzaniameeting the rest. It will be the thirdsuch highway connectingKenyawithTanzania. Kenya’s connections willalso improve with Ethiopia with thebeginning of work on the Kenol-Marua dual carriageway, which willlink regions in central Kenya to thenorth of the country and beyond.

ROADSHighways abound

THOMASMUKOYA

/REUTE

RS

AVIATIONKenya Airwaysreborn

The government plans tonationalise the airline

Moyale

Isiolo

NairobiLamu

400 km Mombasa

SOUTHSUDAN

ETHIOPIA

KENYA

SOMALIA

UGANDA

TANZANIA

IndianOcean

LakeTurkana

Newrailway

TURKANA

Railway Highway Pipeline

LakeVictoria

LAPSSET CORRIDOR PROJECT(proposed)

Kampala

SOURCE:KENYA

MIN

ISTR

YOFTR

ANSPORT



KENYA FOCUS /

By MORRIS KIRUGA in Nairobi

Kenya finally lifted its interest ratecap on loans – which was opposedby banks and President UhuruKenyatta’s administration – inNovember. The country’s lowerhouse failed to raise a two-thirdsmajority that would have allowed itto push through the crucial FinanceBill 2019 with the cap intact, whichKenyatta had refused to sign.

The vote, held on 5 November,ended Kenya’s experiment with ratecaps, which were first introducedin 2016. Kenyatta signed the billtwo days later, freeing banks todetermine what interest to chargeon credit. In his memo to parlia-ment, he had cited multiple reasonsfor his refusal, chief among themhow caps had shrunk credit to theprivate sector. A May 2019 IMF

working paper explained: “Theintent of the controls was to reducethe cost of borrowing, expandaccess to credit and increase thereturn on savings. However, wefind that the law on interest ratecontrols has had the opposite effectof what was intended.”

Kenya’s top bank executivesand central bank governor PatrickNjoroge blamed the rate cap forthe declining access to credit, asbanks preferred to loan to low-riskborrowers such as the governmentand large corporations. On the

other hand, legislators, some ofwhom stormed out of parliamentafter the vote, have insisted thatthe cap was necessary to protectborrowers from high interest rates.

KCB Group CEO Joshua Oigara,however, says that rates will notrise sharply any time soon because“the macroeconomic and businessenvironment where we are todaydoes not at all support an environ-ment of high rates,” he told media.“For customers with high-riskprofiles, we may see a 2-3%increase. We are not goingto see a massive change.”

‘Credit positive’Credit rating agency Moody’scalled the decision to removethe caps “a credit positive”in a recently publishedreport. Christos Theofilou, avice-president and banking analystat Moody’s wrote: “Removing therate cap positions Kenyan banksto better price risk. We expecthigher loan growth in the next12-18 months and increased lendingto parts of the economy that havehad subdued development andaccess to credit, primarily SMEsin sectors like trade and real estate.”

Analysts predict that EquityBank, Kenya’s biggest bankby customer numbers, will be thebiggest beneficiary among thecountry’s lenders as its “net interestrate spreads have dropped the mostsince the implementation of the ratecaps because it is more focused onSME lending than the other banks,”Moody’s said. Ronak Gadhia,a director of sub-Saharan Africabanks research at EFG HermesFrontier, told Bloomberg that thebank “has a low loans-to-depositratio, so its capacity to lend isstronger than everybody else”.

Equity Bank, which covers ninemarkets, is on a regional expansiondrive and announced in Novemberthat it will take over BanqueCommercial du Congo for $105m.

FINANCE

The end of the rate-capexperimentLegislators insisted on the cap on lending interestrates, but the government and the IMF said it wasdoing more harm than good

3%Customers with high-risk profiles willnot see rates rise by more than this,says KCB Group CEO Joshua Oigara

SIM

ON

MAIN

A/AFP

Equity Bank is poised tobe the biggest beneficiary

careerconnections


KENYA FOCUS /

By MORRIS KIRUGA in Nairobiand ERIC OLANDER

The competition between theUS and China over infrastructureprojects – and their financing –is heating up in Kenya. Sois the rhetoric. On 1 November,the US ambassador to Kenya,Kyle McCarter, tweeted his exas-peration over an article in The Starnewspaper claiming the US had“ditched” the planned 473km,KSh300bn ($3bn) Mombasato Nairobi expressway project andthat the Kenyan government wasnow looking to Chinese contractorsto do the job. He called the report“total RUBBISH!” and publisheda photo of it with the words “FAKENEWS” blazoned across it.

Later the same day, Bloombergran a story including commentsfromMcCarter saying the US is still“fully committed” to the project.Then, the next day, StandardDigital reported that the project isstill under US management but maybe delayed by as much as two years.The Standard piece quoted thehead of Kenya’s highways authority,Peter Mundinia, saying: “Nobodyother than the Americans haveshown interest as far as I know.”

The furore started a few daysbefore, when McCarter madecomments about Kenya’s debt.Washington is keen to paintits development model as morevirtuous than China’s, whoit accuses of predatory lending:“Kenya’s debt is spiralling outof control. We don’t want to putdebt on Kenyans. We want to dobusiness in a transparent way andthe onus is on Kenya to put its debt

in order,” he said. Kenya’s cabinetsecretary for transport, JamesMacharia, confirmed the express-way plans had been put on holdfor one or two years, as the govern-ment struggles to rein in its debt.

Uncle Sam’s corruption-busterAmbassador McCarter talked upBechtel’s role in the expresswayproject as an example of the advan-tages of public-private partner-ships over state-owned companies:“The project by a world-class UScompany will provide the bestengineering solutions for Kenya’sinfrastructure needs at a lowerprice than competitors.” In astatement, he also said that “doing

business with a US company helpscombat corruption through theanti-bribery provisions of theForeign Corrupt Practices Act.”

Just two weeks earlier, PresidentUhuru Kenyatta had launched plansfor the Nairobi City Expressway,to be funded and built by Chinesecompanies. The project ran intoheadwinds over a proposal to hive5,000m2 off Uhuru Park, Nairobi’slargest green space, forcing thegovernment to revise its plans.

Combined, the two expresswayswill make road transport betweenthe country’s two largest citieseasier. But at the heart of both isKenya’s runaway debt, and whetherbuilding the expressways is a gooddecision. The US-backed projectis important to Washington becauseit wants to try to counter China’sdebt-backed development modelin Africa. But the deal has beenunder discussion since 2016, andWashington is certainly movingslower than Beijing typically does.

INFRASTRUCTURE

US-China road rageWhen Washington and Beijing jockey over infrastructure projects in Kenya thereis ideology as well as money at stake, and Nairobi’s debt is a cue for point scoring

SIM

ON

MAIN

A/AFP

Road contractors work at theNgong Road site in Nairobi

The US wants tocounter China’s debt-backed developmentmodel in Africa

Steel Rainwater System

Best alternative compared to PVC

Cost-effectivesolution

Durablesystem

Quickinstallation

Wide rangeof colors

www.metigla.be | [email protected] | 0032 470 77 23 24Become a dealer in your region!

RA INWATER

AFRIKA KOMMT! is a joint initiative for capacity building ofleading German companies. It aims at young highly qualifiedprofessionals from African countries with several years of workingexperience on the job.

During a 12-month stay in Germany, an 8-month internship in oneof the participating companies forms the heart of the programme.The internship gives participants the opportunity to gain first-hand experience of management practices, to participate ineconomic, social and organisational change processes and it willenable them to establish a network between cooperation partnersfrom their home companies and German companies.

QUALIFICATION/LEVEL OF EXPERIENCE2 'I"/&75"3F :&$7&& "I 9I& 9% 3#& %9LL9-"I$ =7&=5M 405"I&556:K"I"537=3"9I@ 405"I&55 EI%97K=3"9I@ 1#&K"537F@ 19K803&7);"&I;& > EI%97K=3"9I (&;#I9L9$F@ 19KK0I";=3"9I@Economics, Humanities, Human Resources, Industrial-,Mechanical- , Process-, Electrical Engineering, Finance,Healthcare, Life Science, Marketing, Medicine, NaturalSciences, Pharmacy, Physics, Product Management, Sales,)9;"=L );"&I;&5@ )088LF 1#="I C=I=$&K&I3

2 B953$7=:0=3& :&$7&& H&?$? C46A "5 =I =:/=I3=$&2 (-9 39 J/& F&=75 9% 7&L&/=I3 -97! &+8&7"&I;&

2 .+;&LL&I3 .I$L"5# L=I$0=$& 5!"LL52 ,7&I;#@ B9730$0&5& =I: G&7K=I 5!"LL5 =7& =I =:/=I3=$&2 EI3&7;0L307=L ;9K8&3&I;"&5@ 98&I 39 I&- &+8&7"&I;&5 =<79=:

and willing to learn German

FELLOWSHIP DETAILS2 *90I:37"8 ="7%=7& 39 =I: %79K G&7K=IF@ 37=/&L =I:

accommodation in Germany2 ,&&5 %97 G&7K=I L=I$0=$& ;9075&52 D"/"I$ =LL9-=I;&2 19/&7=$& 9% #&=L3# "I507=I;&@ =;;":&I3 "I507=I;& =I: L"=<"L"3F

insurance2 EI3&7I=3"9I=L C=I=$&K&I3 (7="I"I$ HEC(A ;9075&52 *&L9;=3"9I %&&

Applications for the AFRIKA KOMMT! programme cycle2020 – 2022 can be submitted until 10 January 2020 throughthe online application form on www.afrika-kommt.de only.Successful candidates will be invited to an assessment centre inAfrica in March 2020.

In cooperation with

AFRIKA KOMMT!An Initiative of German Industry for Future Leaders from Africa

Fellowship Opportunity

Galvanized sheds in kit!*&/*')(- 0'2(!+.',./)"- #/)(+"1"%(!$"

CLEARANCETransport by 40’ OT container to the port of arrival, on request.

*Starting price excluding vat in kit, for Galvastandard range. Market price: average price recorded in theEuropean Union for a similar project. See the conditions on the website. Except errors or omissions,non-contractual pictures.

MORE BUILDINGS ON OUR WEBSITE!

00352 621 355 134 00352 20 20 10 [email protected]

Tel :

STEEL FRAMES + ROOFING SHEETS + NON CONDENSATION DROP + GUTTERS

REF N° ofPieces SLOPE TYPE WIDTHxLENGTH.(m) MARKETPRICE

BE 8 5 Double Slope 12,60 x 24 12 537 €BG 10 7 Double Slope 12,60 x 48 23 800 €BL 8 4 Double Slope 16,60 x 60 41 088 €BP 6 3 Double Slope 20,60 x 48 43 807 €BR 7 5 Double Slope 24,50 x 48 66 675 €BS 5 2 Double Slope 30 x 60 88 209 €

OUR PRICE*HEIGHT 5M HEIGHT 6M

8 765 € 9 594 €16 955 € 18 564 €30 128 € 31 298 €32 078 € 33 150 €47 775 € 51 188 €67 500 € 72 900 €

It’s a good quality.The assembly is very easy!

Ms.Coulibaly, EntrepriseMuzigoAbidjan, IvoryCoast

Saw it on the internet.Easy to assemble, topquality &price!

Mr. Kolla, First AfricanCompanyDouala, Cameroun

~ 1200m²20,99MFCFA

32000€*

CLASSIFIED ADS


KENYA FOCUS /

By MORRIS KIRUGA in Nairobi

The two-year search forSafaricom’s third chief executiveended on 24 October, after thetelco’s board announced PeterNdegwa, the managing director ofDiageo Continental Europe, as thelate Bob Collymore’s successor.Ndegwa will take over from actingCEO Michael Joseph, who alsoserved as the company’s first chiefexecutive, in April 2020.

At the heart of the successiondebate was the issue of nation-ality, as Safaricom’s two CEOssince inception were foreignerswho took up Kenyan citizenship.Ndegwa is a Kenyan citizen bybirth, which settled one issue butraised another.

“It is unfortunate for Kenya thatwe always look at the tribal affilia-tion of somebody hired to leada multinational corporation. Theydebate whether he would be influ-enced politically or not. I think itis very unfortunate that that is thetrademark of Kenyans in general,”

Joseph said in a TV interviewafter the announcement was made.“Ndegwa has the necessary experi-ence of running a large corporate,and he has the right qualifica-tions,” he added.

Running Kenya’s most profitablecompany will be a new challengefor Ndegwa, who has spent thepast 15 years in the alcoholicbeverages industry. In February,Collymore told The AfricaReport that his successor shouldbe “someone who understandsthe financial sector a lot more, ifwe are to occupy the fintech space,and someone who is not goingto be scared of going into othermarkets”. While Ndegwa does nothave such a background, his expe-rience running multinationals willbe important as Safaricom movesinto the next phase of its life.

Consumer-facing changesNdegwa's brief will include revi-talising the Safaricom brand in itshome market as well as leadingits potential entry into Ethiopia.He will also take over a companyfacing stronger competition,as Safaricom’s primary compet-itors, Airtel and Telkom Kenya,

are workingon a mergerthat couldbe approvedbefore the end of 2019.

Safaricom’s diversified portfoliohas moved it further from beingjust a telco, as the share of revenuefrom the M-Pesa mobile-moneyplatform has steadily grown.In its half-year results announcedon 1 November, the company’sprimary growth drivers wereM-Pesa and data.

In the few months he has beenin office, interim CEO Josephhas been working to revamp thecompany and hopes his successorwill see the changes through.A day before the announcement ofthe new CEO, for example, Josephannounced a complete rebrandof Safaricom and made severalconsumer-facing changes.

For its more than 30 millionexisting customers, the biggestchange the company made wasto introduce new voice and datapackages without expiry dates.The expiry of such productshas been a constant sourceof consumer complaints in telcomarkets across the continent.

TELECOM

Safaricomfinds asuccessorA swath of changeshave been underwayat the Kenyan telecomscompany since the deathof its CEO Bob Collymorein July. Now Peter Ndegwais set to take over in Aprilof next year amid acomplete rebrandingand plans for anEthiopia expansion

ALL

RIGHTS

RESERVE

D

15years at

multinationalalcoholicbeverages

company Diageowill help Ndegwa

navigateSafaricom’s future

Ndegwa wastapped aftera two-year

search

DJIBOUTITELECOMAn East Africantelecom hub

There is no doubt about

the importance of digital

technology in theworld to-

day. It is firmly entrenched

in our daily lives and is

the driving force behind

the transformationwe are

witnessing inmanysectors,

fromeducation and health

to industry, finance, and

trade, etc. Digital tech-

nology could be the new

paradigm for our conti-

nent’s innovative growth,

inclusivedevelopment and

sustainable regional inte-

gration. Africa has every

chance of succeeding its

digital transformation.

ADVERTORIAL

©CHEPKO

DANIL/S

TOCK.A

DOBE.COM

The digital economy offers tremendous

opportunities but for our continent to take full

advantage of these, we must invest massively

in telecommunications infrastructure, the

foundation of digital transformation. Consequently,

the telecommunication and ICT sector has always

been a major concern at the highest levels of the

Djibouti State. Significant investments have been

made to upgrade the international and regional

telecommunication infrastructure so that we can

capitalise on our geostrategic position and further

our intention of becoming an international and

regional hub. At the intersection between three

continents (Asia, Africa and Europe) and serving as

a bridge between Africa and the Middle East, the

Republic ofDjibouti, this small countrywith an area of

23,000 square kilometres and a population of under

a million people, is being called upon to underpin

its role as a multi-sector hub in the Horn of Africa.

DJIBOUTI TELECOM is now a global and

integrated operator active in four main

business segments: mobile services, sub-

marine cable capacity sales, Internet ser-

vice provision (ISP) and landline services.

DJIBOUTI TELECOM fully intends being

a major player in its sector in this digital

future and to become the biggest regional

hub of information highways, with fibre

optic cable facilities that play a constantly

growing role in the development of the

digital economy on a global scale. With

this in mind, DJIBOUTI TELECOM has

launched a vast transformation plan

comprising several components: an in-

ternational, regional and national strategy

with two major programmes, “Djibouti

Connecteur & Connecté” (Djibouti,

Connector & Connected) and “Djibouti

Digital” (Digital Djibouti).

This strategy led to its investment in the

AAE-1 and SMW-5 intercontinental cable

projects in 2016. However, an investment

of thismagnitude only becomes profitable

when it responds not only to the Republic

of Djibouti’s needs but also demand

from countries beyond its borders and

throughout the region, in the Horn of

Africa (Ethiopia, Somalia, Eritrea), East

Africa (Kenya, Tanzania), the Great Lakes

countries (Rwanda, Burundi, Democratic

Republic of Congo), and the IndianOcean

countries (Madagascar,Seychelles,Comoros,

Mauritius and even theMascarene Islands).

Djibouti’s ambition to become a regional

telecommunications hub is not new. It has

already deployed the EASSy cable traffic

to the Djibouti landing station which, be-

causeof numerous international submarine

cables, is extremely well connected.

The incumbent’s plans kindle ambitions

well beyond this market and it is seeking

Vision 2035, initiated by His Excellency

Ismael Omar Guelleh, President of the

Republic of Djibouti, aims to transform

the country into a regional

hub in the areas of transport,

logistics, trade, finance,

telecom and ICT.

ADVERTORIAL

©CHRISTO

PHBURGST

EDT/ST

OCK.ADOBE.COM

Cutting an underseacommunication cable.

Installing new terrestrial cable in Djibouti.

©PATRIC

KROBERT

to become known as an international

connectivity operator, a player capable

of connecting various regions around the

world. Djibouti has becomea landing point

for global undersea cables, thusmaking it

“oneof thebestconnectedcountries in the

world in terms of per capita density”. This

increasing scope is due to its geostrategic

position, located in the Horn of Africa, at

the mouth of the Red Sea, in the Strait of

BabEl-Mandeb, anessentialmaritime traffic

and international trade route.

DJIBOUTI TELECOM has strived to

position the country as a telecom hub

for East Africa and to enable operators

in the region to interconnect with other

parts of the world. Offering a wide

variety of services and a multitude of

undersea and terrestrial cables crossing

the country, it is already well-positioned

to make the most of this opportunity.

Consolidating these projects will allow

DJIBOUTI TELECOM to take greater

advantage of Djibouti’s strategic coast-

al position in the Horn of Africa, just

30 km from the Middle East and the

mouth of the Red Sea and close to

the main shipping lanes linking Europe

and Asia. This perfectly positions it as

a gateway to markets in the Middle

East, Asia, and as an ideal entry point

into East Africa.

The country is already recognised as

one of the most advanced international

telecommunications markets in Africa,

with seven existing submarine cables

linking Africa to Asia, the Middle East and

Europe – namely EASSy, EIG, SEACOM,

Sea-Me-We 3, Sea-Me-We 5, AAE-1, and

Aden Djibouti.

This means that the company can pro-

vide a high level of service delivery and

cable latency, plus the ability to offer

high quality connectivity in Africa, the

Middle East, Asia and Europe. Current-

ly, over 90 operators, including more

than 25 East African operators, transit

through the company’s IP/Internet

nodes in Djibouti.

©PATRIC

KROBERT

THE DJIBOUTITELECOM NETWORK

DJIBOUTI TELECOM has also improved

access to neighbouring countries such

as Ethiopia and Somalia by deploying

terrestrial cables linking the country to

Ethiopia and northern Somalia. These

links are redundant and secured by

air optical links via the electricity in-

terconnection with Ethiopia and very

soon by fibre under the rails of the

Djibouti-Addis Ababa railroad. “The

sharing of interconnection infrastructure

between the countries of the region is

essential for regional integration” said

Mohamed Assoweh Bouh.

In line with the government’s vision, in

2015 DJIBOUTI TELECOM initiated a new

regional cable project called DARE-1

(Djibouti Africa Regional Express 1)

with regional operators to meet growing

demand and improve connectivity in

East African countries and the Great

Lakes region. The DARE-1 cable will

connect Djibouti, Mogadishu and Bosaso

in Somalia and Mombasa in Kenya in its

first phase, pending its expansion to

other countries in the region.

DJIBOUTI TELECOM has been able

to strengthen its geostrategic position

through sustained investments, thus

boosting the country’s attractiveness

and competitiveness as a regional

digital platform. The operator has been

heavily involved in the development

of Data Centres, having setting up

the first of these in 2013. This Tier 3

facility, located a few metres from the

undersea cable landing station, houses

the equipment of several global carriers

such as TIS (Telecom Italia Sparkle),

PCCW, TATA, Belgacom, China Tele-

com, China Mobile, and China Unicom,

content providers such as Akamai,

“Our regional development

is based on the infrastructure

we want to build to serve

the region, mainly through

undersea cable connectivity.”

Mohamed Assoweh Bouh,

Managing Director of DJIBOUTI TELECOM

CloudFlare, Google, Facebook, and

China Netcenter and Tier 1 IP transit

providers such as Level 3 and Hurricane

with whom DJIBOUTI TELECOM has

concluded partnership agreements.

This significant major digital player

presence has enabled the national

operator to expand its overall IP ser-

vices offer through IP transit, capacity

sales, and MPLS services, etc., which

explains the scale-up of Djibouti’s

Internet Exchange Point (DJIX) .

operator business model is under

pressure from new digital players and

they are now facing competition from

Internet supercompanies like GAFA.

Aware of the stakes and challenges

that have to be tackled in the digital

arena and the profound global trans-

formation, DJIBOUTI TELECOM is

making all the right moves to trans-

form itself and adapt its business

model and its organisational structure

to the global digital ecosystem.

3 bld Georges Pompidou - BP 2105

Djibouti, Republic of Djibouti

Tel: (253) 21 35 12 87 / 21 32 10 00

Fax : (253) 21 35 57 57

www.djiboutitelecom.dj

ADVERTORIAL

DIFCOM/D

F-PHOTOS:©

DR

UNLESSMENTIO

NED.

©ISSARONOW

/STOCK.A

DOBE.COM

DJIBOUTI TELECOM will provide high quality connectivity in East Africa.

This also urged the operator to commence

studies for a second Tier4 Data Centre.

Djibouti’s economy has performed

remarkably well over the past decade,

posting a growth rate of 7% in 2018.

This growth is mainly driven by infra-

structure modernisation to support

investment policy in strategic sectors

such as transport, logistics and tele-

communications. As an essentially

service-oriented economy, digital

technology represents an opportunity

to support sustainable, inclusive eco-

nomic development and thus contribute

to job creation. However, the telecom


Country Report EditorMarshall Van Valen

Country Report ContributorsFarid Allilat, Rose-Marie Bouboutou, Joseph Burite, Olivier Caslin, Frank Chikowore,Nadoun Coulibaly, Jules Cretois, Frida Dahmani, Aissatou Diallo, Fatoumata Diallo,Georges Dougueli, Vincent Duhem, Eromo Egbejule, Tom Gardner, Nandi Geloo,Jihad Gillon, Romain Gras, Ilya Gridneff, Sankulleh Janko, Frank Jomo, MouradKamel, Morris Kiruga, Jihad Mashamoun, Estelle Maussion, Jeff Mbanga, MarafaeleAntonia Mohloboli, Roger Murray, Francis Okech, Mathieu Olivier, Crystal Orderson,Claire Rainfroy, Benjamin Roger, Marième Soumaré, Justine Spiegel, Patrick KwabenaStephenson, Anna Sylvestre-Treiner, Marshall Van Valen

Data SourcesPopulation (2019) United Nations Population Division. Life expectancy at birth (2018),position on the Human Development Index (2018), adult literacy (2006-2016) – UnitedNations Development Programme. GDP per capita (2019 estimate), inflation (2019estimate), GDP (2017-2020), GDP growth (2017-2020) – IMF World Economic OutlookDatabase. Foreign direct investment (2018, inflows) – United Nations Conferenceon Trade and Development. Last change of leader – The Africa Report research.

231NORTHAFRICA

209WESTAFRICA

195CENTRALAFRICA

175EASTAFRICA

153SOUTHERNAFRICA

234 Algeria156 Angola212 Benin158 Botswana213 BurkinaFaso178 Burundi198 Cameroon214 CaboVerde200 CentralAfrican

Republic201 Chad179 Comoros215 Côted’Ivoire180 Djibouti202 DRC235 Egypt204 Equatorial

Guinea181 Eritrea159 Eswatini182 Ethiopia205 Gabon217 Gambia218 Ghana220 Guinea221 Guinea-Bissau184 Kenya160 Lesotho222 Liberia

237 Libya161 Madagascar162 Malawi223 Mali238 Mauritania164 Mauritius239 Morocco166 Mozambique167 Namibia224 Niger225 Nigeria186 Rwanda206 Rep.ofCongo207 SãoTomé

EPrincipé227 Senegal187 Seychelles228 SierraLeone188 Somalia168 SouthAfrica189 SouthSudan240 Sudan190 Tanzania229 Togo241 Tunisia192 Uganda170 Zambia172 Zimbabwe

CountryprofilesTheyearaheadholdselectionstodecidethefuture leadersoffast-growingTanzania,Côted'IvoireandEthiopia.Meanwhile, thecontinent'sexportersofnaturalresourcesareleftcontemplatinghowtodiversifyaheadofthenextcommoditiesboom

By MARSHALL VAN VALEN


Economically, policy-makers are not sure what is com-ing in the year ahead for Africa: many internal growthfundamentals are strong but the external environmentis uncertain. The IMF predicts that African countries’growth will rise on average by 3.6% in 2020, up from3.2% in 2019. But worries include a rise in protectionismand possible economic slowdowns in China, Europe andthe United States (see pages 150-151)

That headline number hides the divergence betweenAfrica’s natural-resource-dependent economies and itsdiversified ones. The IMF’s October 2019 outlook said:“Growth is projected to remain strong in non-resource-in-tensive countries, averaging about 6%. As a result, 24countries, home to about 500 million people, will seetheir per capita income rise faster than the rest of theworld.” Meanwhile, resource-rich countries are set togrow at just 2.5% in 2020.

The timingof reforms for resource exporters is key,withthe height of the boomoften the best time tomake painfuldecisions. When diamond prices were high, Botswanasavedmoney and pushed formore local processing jobs.And as an extreme example of what can go wrong, theEquatorialGuinean government continued buildingwhiteelephant projects until it could no longer afford to.Unlessthere is a sudden shift in the oil market, it could take adecade or more for the economy to recover.

There are also key developments to watch in 2020 inAfrica’smajor economies, likeNigeria, SouthAfrica andEthiopia. On the reform front, the Nigerian governmentcontinues tokick its problems into the futurewith subsidies.

INTERNATIONAL BOND ISSUANCES IN SELECTEDSUB-SAHARAN AFRICAN COUNTRIES

(global rank, $bn)

GuineaZimbabweTanzaniaEthiopia

DRCChadTogo

MadagascarBurkina Faso

BeninUganda

Guinea-BissauMali

ComorosBurundiRwanda

Sierra LeoneMozambique

NigerSomaliaMalawi

CARGambiaLiberiaSudanNigeria

Rep. of CongoCôte d’Ivoire

GhanaeSwatini

KenyaCameroon

ZambiaLesotho

MauritaniaSenegal

Cabo VerdeSão Tomé e P.Equat. Guinea

MauritiusAngola

South AfricaBotswana

GabonSeychellesNamibia

2012

20

15

10

5

02013 2014 2015 2016 2017 2018 2019

0 4 8 12 16 20

DEVELOPMENT ASSISTANCE(2017, % of gross national income)

Lowincome

Lower-middleincome

Upper-middleand highincome

Angola Benin Cameroon Côte d’Ivoire

ZambiaTanzania

SenegalRwandaNigeriaEthiopia Ghana Kenya Mozambique

COUNTRY PROFILES /


Biggest jump

Biggest fall

DOING BUSINESS 2019-2020(global rank)

AFRICAN COUNTRIESBY HUMAN DEVELOPMENT INDEX

(2017; 1 = highest, 0 = lowest)

Togo Senegal Nigeria Côte d'Ivoire

Lesotho Djibouti Rwanda Sudan

137 97 141 123 146 131 122 110

106 122 99 112 29 38 162 171

+40 +18 +15 +12

-16 -13

-9

-9

0.750 - 0.7990.700 - 0.7490.650 - 0.6990.600 - 0.6490.550 - 0.5990.500 - 0.5490.450 - 0.4990.400 - 0.449<0.399Data unavailable

REAL GDP GROWTH IN AFRICA(2010-2020, %)

10

8

6

4

2

0

-22010-2014

15 16 17 18* 19* 2020*

IndiaChina

AfricaEmerging and developing countries (excluding Africa)

SOURCE:WORLD

BANKDOIN

GBUSIN

ESSREPORT2020;AFD

B;IM

F;UN

DEVE

LOPMENTPROGRAMME;BLO

OMBERG;OECD

While petrol subsidies have fallen out of internationalfavour as ameans to help poorer populations because nottargeted and often costing billions of dollars that couldbe spent on education, health and infrastructure, financeminister ZainabAhmed told reporters in April: “We haveto find a formula that will work for Nigeria. And untilwe do that, we should not be contemplating removingthe subsidy.” Other economic development policies ofthe Muhammadu Buhari government will be put to thetest in 2020 as it seeks to boost local manufacturing andagribusiness (see pages 76-84), despite electricity andpublic-infrastructure problems.

Different strategiesSouth Africa has had no recent major boom times that itcould have used to turn things around: growth rates havebeen low for the past decade and the previous governmentmade some problemsworse. The FeesMust Fall protestshave faded into the background as headlines about statecapture and troubled state-owned companies grab theadministration’s focus. Unemployment hit 29.1% in 2019so the search is on for innovative policy solutions despitethe emptying state coffers (see pages 16-18).

Ethiopia’s trajectory perhaps has themost risks, and ithas been one of the fastest-growing African economiesfor several years now. Prime Minister Abiy Ahmed, thewinner of the Nobel Peace Prize for his initiatives toreduce conflict in East Africa, is moving ahead with hisbreak-neck reforms to end the ruling party’s monopolyon political power and gradually reduce the role of thestate in the country’s fast-growing economy. The strongstate pushed rural health initiatives, set up industrial hubsand financed the construction of technical schools. Buton the downside, for example, the state-owned telecomsmonopoly has laggedbehind its continental peers in termsof technology and mobile-phone penetration.

The extent of the country’s economic and politicalliberalisation will be in the spotlight in May 2020’s leg-islative elections. The opening of its political space isallowing ethnicity to play a bigger role in public debates.

Reforming security services is alsopotentially explosive.Writing an opinion piece for Ethiopia Insight, AhmedMohammed argues: “Divorcing [the regional specialpolice] from party politics is a primary requirement for ademocratic transition. […] The current security structure[…] is themost dangerous threat to the orderly transition.”

The opening up of the economy could also have disad-vantages, so the Addis government is sizing up the hugequeues of potential investors in the finance and telecomssectors, two of the first being reformed.

Across thecontinentAfrica’s leadersarechoosingdifferentstrategies – fromEgypt’s subsidycuts toeSwatini’s splurgingon luxury vehicles – to deal with today’s challenges. Theyear aheadwill showwhich are prepared for tomorrow’s.


Those steering Angola today havea problem: the country needs cash.After failing to diversify during thegood times, they now have decliningoil production and very little elsehappening in the economy. Legionsof poorly run state-owned companiesare slated for privatisation.

So how do they avoid the fate of,say, Russia?A fire sale of state assetsduring the 1990s created a series ofoligarchswhocontinue to runpunitivemonopolies to this day.

Ideally, French economist ThomasPiketty* suggests toTheAfricaReportover a small coffee in a plastic cupat the Paris School of Economics,we would have the time to accurate-ly log everything that is owned bythe state before this process is evenstarted. A transparent register ac-cessible by all parties – includingcivil society – is a good guarantorof equitable transactions.

But Angola needs cash now, notin 24 months. What to do? How doyou raisemoney at the bottomof thebusiness cycle? It is just an extremeversion of the problems facingmanyAfrican administrations: what to dowhen theeconomicweather forcesyouto put out fires rather than plan forthe future. Many African countries,for example, are strugglingwith debtoverhangs. The IMF is concerned,saying 40%ofAfrican countries are“at distressed levels”.

But while they will need to facetheir creditors, their real problemsare structural: young populationsfilled with people who need jobsand want to be able to create busi-nesses. They need a governmentthat is building infrastructure andpromoting industry.

That will require genuine eco-nomic diversification – a structuralchange away from capital-intensivecommodity extraction and towardsthe labour intensive agribusinesses,factories and tourist lodges.And itwillmean investment in education, withthe Mo Ibrahim Foundation sayingthat while under-15s are themajorityin Africa, the state of education andtraining has deteriorated over thepast five years.

There are some good stories outthere: for all the political heat andlight over the next election, Côted’Ivoire has managed to spend on

its priority sectors; it has cooper-ated with Ghana over a potentialcocoa price floor andmade genuineprogress in road infrastructure. Ithas been rewarded with sustainedinterest by multinationals acrossthe construction,manufacturing andlogistics sectors.

But, for many countries, boostingeducation and industry will have towait. For African countries to sur-vive the tough economic conditionspredicted next, theywill need to startfocusing on their income, especiallytax. Nigeriawill bumpVAT from5%to 7.2%. Austerity is starting to bitein Cameroon, Tunisia and Gabon,which may lead to more popularprotests. Various mining taxes arealso heading up, from the DRC toTanzania to Zambia.

The governments in good shape,however, will still be able to borrow.In this newworld of negative interestrates, there is plenty of money thatis searching for yield. The AfricanTrade Insurance Agency (ATI) isbringing in pension funds from theWest and elsewhere who are keento lend to African sovereigns butwho are unable to because of theirfiduciary rules.

And their de-risking product isdoinggreat business, saysATI’s actingCEOJohnLentaigne: “Weclosed$1bnof such deals in 2019, and we havea pipeline for at least that again in2020.”The Japanese insurerDai-ichiLife, for example, made its maideninvestment in Côte d’Ivoire, a €50mloan to finance infrastructure.

But while there is still global li-quidity for African countries to tap,the global environment is far fromsupportive, with the trade tension

Howtokeepyourpowderdry

Africancountriesneed to raisemoneyathome,butalsoabroad


between the US and China a seri-ous headache for everyone. Andwhile China may start buying morecitrus from South Africa than fromCalifornia, a full-blown trade war is“going to be bad forAfrica, whichev-er way you look at it”, according tothe former head of Goldman Sachsin Africa, Colin Coleman. A Chinadownturn, in particular, would hitAfrica hard, withmuch of its exportsnow heading east.

Meanwhile, the US economy, alocomotive in the last five years, islookingatwhatCredit Suisse is callinga “mini-recession”. Certainly, therearewarning signs.Take tech, now theleading global sector for companyvaluations. Some 81%of companiesin theUS that undertook initial publicofferings in 2018 are now postingnegative earnings, according to JayRitter from theUniversity of Florida.That is the highest level since 2000,when the last tech bubble burst.

The world’s largest hedge fund,BridgewaterAssociates,hasbet$1.5bnthat global equitymarketswill fall byMarch 2020. Ray Dalio, the investorbehindBridgewater, has railed against

the latest bubble and out-of-controlbudget deficits. “This set of circum-stances is unsustainable and certainlycan no longer be pushed as it hasbeen pushed since 2008,” Dalio saidin a recent blog post. “That is why Ibelieve that theworld is approachinga big paradigm shift.”

Energymaybeone of the driversof a newparadigm.Coal is becominga harder sell. This tipping point inmentalities will boost those invest-ing in renewable energy. Morocco’snewest technologies on show inits Noor complex are attemptingto crack the hard problems likewhat to do when the sun goes down.The $780m Noor Midelt, built by aFrench-led consortium,will produceenergy at $0.07/kWh.

It will also boost those pushing an‘amphibian’ technology to help in thetransition – gas. It is dirty, but muchless so than coal. Greenfield energyinvestments in liquefied natural gasin Nigeria, Egypt and Mozambiquewill surpass $100bn in 2019.

Smartphone accessmaywell driveanother paradigm shift, boosting

personal and small-business pro-ductivity – or plunging swathes ofpeople into gambling and Bulgarianmafia-linked loan sharking, depend-ing on your level of optimism. Theprice of entry-level smartphones inSouth Africa has decreased bymorethan 70% since 2015, according todata from Google.

The sprint for Africa’s fintechmarkets – with US heavyweightslike Visa and Mastercard facing offwith Chinese telecoms companieslike Transsion (see page 68) – camealive in the last six months of theyear. Companies raised nearly halfa billion dollars,much of it targetingNigeria. But with the governmentof President Muhammadu Buharitrying old-school tactics that createuncertainty, like closing borders (seepage 76), the next global slowdownwill showwho has well-thought-outpolicies and who has saved nothingfor a rainy day.

*For more from Piketty and a wide-ranging investigation into there-invention of African capitalism,don’t miss TAR111.

ILLU

STR

ATION

BYRAFA

ELRICOYFO

RTA

R

Sales House Contact & : [email protected], + 33 1 53 96 60 49

CONNECT WITH AFRICA

And free to air on satellites: ARABSAT BADR-4, ASTRA 1, EUTELSAT HB 13B, EUTELSAT HB 13D

THE ONLY MEDIA PLATFORM AVAILABLE ON THE ENTIRE AFRICAN CONTINENTIN ENGLISH, FRENCH, PORTUGUESE AND ARABIC

CHANNEL #560CHANNEL #414 CHANNEL #560CHANNEL #145CHANNEL #181


WINDHOEK

PRETORIA

CAPE TOWN

GABORONE

MAPUTO

MBABANE

LUSAKA

MASERU

LILONGWE

AntananarivoHARARE

LUANDA

Huambo

Nampula

Port Elizabeth

Durban

Johannesburg

Beira

Bulawayo

Blantyre

Kimberley

DEMOCRATICREPUBLICOF CONGO

TANZANIA

ANGOLA

NAMIBIA

BOTSWANA

ZIMBABWE

ZAMBIAMALAWI

MOZAMBIQUE

MADAGASCAR

ESWATINI

LESOTHOSOUTH AFRICA

CABINDA

AtlanticOcean

Indian Ocean

300 km

15.9% Angola

2.5% Namibia

3.2% Botswana

0.8% eSwatini

0.5% Lesotho

2.2%Madagascar

2.5%Mauritius

2.6%Mozambique

1.3%Malawi

Zambia 4.1%

SouthAfrica62.2%

Zimbabwe 2.2%

TOTAL$577.1bn

2020

2035

20500

5

0 213

293.8

386.6

FromthecopperofZambiatoAngola’soilandNamibia’suranium,manycountries in theregionaredependentontheexportofunprocessedcommodities.Lookingfor lessonsonwhatworks?BotswanaandSouthAfricahavebeensuccessful inattractingvalue-addedprocessing.

Southern Africa

21statesTheTripartiteFree

TradeArea(TFTA)

isanewcontinental

integrationproject

between

membersofthe

SADC,COMESA

andtheEAC,

expectedtobe

operationalby2020.

SOUTHERN AFRICA POPULATION(millions)

Addingvaluetoresources

154 People towatch

156 Angola

158 Botswana

159 eSwatini

160 Lesotho

161 Madagascar

162 Malawi

164 Mauritius

166 Mozambique

167 Namibia

168 SouthAfrica

170 Zambia

172 Zimbabwe

SOUTHERN AFRICA GDP (2019)(% of regional total)

SOURCE:UN

POPULA

TION

DIVISION

SOURCE:IM

F


COUNTRY PROFILES / SOUTHERN AFRICA

SOUTH AFRICA

MkhulekoHlengwaA young gun keeps watch

The young maverick andthe Inkatha Freedom Party’s starparliamentarian is leadingparliament’s Standing Committeeon Public Accounts, the legislativebranch’s watchdog. Upon taking up

the job, at the only committee not chaired by the governingAfrican National Congress, he explained his goals: “Whatwe will undermine is corruption, maladministration, fraudand the total disregard for the rule of law.” He plans tohold President Cyril Ramaphosa, his ministers and headsof government departments to account. Recently, he andthe committee have been lighting fires under South AfricanAirways and the Passenger Rail Agency of South Africa toimprove their management and increase their transparency.

SABCNEWS/YOUTU

BE

ZAMBIA

Kryticous Patrick NshindanoA civil arbiter

As the country prepares for elections in 2021,the new boss of the Electoral Commission ofZambia could do a lot to reduce political tensions.The former director of the Civil Society for PovertyReduction NGO was a bit of a surprise pick byPresident Edgar Lungu, who some civil societygroups and the opposition have accused of usingincreasingly authoritarian tactics to strengthen hisgrip on power. Hakainde Hichilema, the leaderof the United Party for National Development whowas charged with treason due to his protests overthe 2016 vote, has welcomed Nshindano’s appoint-ment. But he will wait to see how the commissionorganises voter registration, which is expectedto include 50%more voters than in the last polls.

peopletowatch

ANGOLA

Vera Esperançados Santos DavesFinancial shooting star

The 35-year-old former banker has sky-rocketed into one of the most importantpositions that could help turn Angola’seconomy around. She parlayed a jobin banking and some TV punditry into aseat on the Capital Markets Commissionand her rise has not stopped. Sheis tasked with turning President JoãoLourenço’s reform promises intoconcrete actions, overseeing a massiveprivatisation programme that she wantsto leverage to strengthen the role of theprivate sector and reduce the influenceof oil on the economy. But her focusis not only on money, as she has joinedthe political bureau of the ruling party.O

RLA

NDOALM

EIDA/G

LOBALIM

AGENS

WIKUSDEWET/A

FP

ZIMBABWE

KudakwasheTagwireiTrader in the crosshairs

Sakunda Holdings CEOKudakwashe Tagwirei’srelationship with the Harareauthorities is on the rocksbut could survive. He has beenone of the closest businessallies of President EmmersonMnangagwa. Through opaquedeals, Sakunda financed thegovernment’s ‘CommandAgriculture’ programme,a key investment at a timewhen investors are dubiousabout the government’s ‘openfor business’ sloganeering. Buta late 2019 intervention by theIMF – which Harare desper-ately wants to get onside topay its arrears and unlock newlending – flagged the govern-ment’s payments to Sakundaas suspect and damagingto government finances.The central bank then frozeSakunda’s accounts, a strongsign that the relationship isgoing through some difficulty.A

LETPRETO

RIU

S/GALL

OIM

AGESVIAGETT

YIM

AGES

SOUTH AFRICA

ShoMadjoziTough like John Cena

Starting out rapping on Instagram and launching her debut albumLimpopo Champions League in 2018, the spritely Sho Madjozi iswinning fans at home in South Africa, in East Africa and in the US.Her hit ‘John Cena’, which talks about the US wrestler, helped toboost her to viral fame. She is proud of her Tsonga – a small SouthAfrican ethnic group – heritage and gives it pride of place in hermusic. Despite increasing xenophobia in South Africa, she rapsin Kiswahili and Tsonga (and South Africans rap along with her).There are rumours that she’s releasing a new album in 2020. TheSouth African rapper has recently won the BET Awards’ Viewers’Choice prize for Best New International Act and the South AfricanMusic Awards’ Female Artist of the Year gong.

MOZAMBIQUE

Manuel ChangMoneyman in the middle

The former finance minister of Mozambique is at the centre of legal wranglingsover the country’s $2bn in secret loans. There are calls from civil society forthose responsible for the mess to be held accountable. Arrested in South Africaon a US warrant in December 2018, Chang is now awaiting a court ruling onwhether he will be sent to the US or Mozambique, where the Maputo governmentsays it wants to put him on trial. Chang’s lawyers want him to return home,where they expect he will be judged more leniently. The secret loansaga has much more road to run, with Lebanese businessmanJean Boustani – who is on trial in New York for hisinvolvement – having accused President Filipe Nyusiof having received kickbacks. Nyusi denies the claims.



NAMIBIA

ZAMBIA

DEMOCRATIC REPUBLICOF CONGO

ANGOLA

LUANDA

Huambo

AtlanticOcean

Lobito

CABINDA

200 Km

Since his election in 2017 and taking over the presidencyof the ruling party in 2018, President João Lourenço hasbeen launching reforms across Angola’s political andeconomic spheres. With new elections on the not toodistant horizon, Lourenço and his allies are running outof time to show the population how things are improvingunder his rule. He has promised to fight corruption andto create an Angolan economic miracle.

Angola, the continent’s second-largest oil producer, hasbeen in a recession since 2016 due tomismanagement andthe huge fall in oil prices in 2014. The lack of growth islimiting the government’s room formanoeuvre. As a sign of his desirefor change, he appointed a 35-year-old woman, Vera Daves de Sousa, tothe key position of financeminister,a first in the country’s history.

Lourenço and his administrationhave launched a series of measuresaimedat improving theeconomy.Theyhave cancelled irregular tenders andcontracts, presented a privatisationprogrammeinvolvingnearly200publiccompanies – including thenationaloilcompanySonangol – and introducedavalue-added tax to boost the nationalbudget.Theprivatisationprogramme,which could take several years, is dueto includediamondcompanyEndiamaand the airline TAAG. The IMF wel-comed these efforts in its June 2019review, following its December 2018agreement to provide a three-year,$3.7bnprogrammeto thegovernment.

Freedom of speechOn the political and social level, Lourenço is also leav-ing his mark. He granted the União Nacional para aIndependência Total de Angola (UNITA) oppositionparty’s long-standing request to recover the remains offormer charismatic leader Jonas Savimbi so that he couldbe buried in his native region, Bié, in central Angola.Under Laurenço theMovimentoPopulardeLibertaçãodeAngola (MPLA) is more accepting of civil society. Morefree speech is allowed, and young people are increasingly

demonstrating. Anti-corruption activist RafaelMarques,a bugbear of the previous regime, received themedal ofmerit for his involvement in “the construction ofAngola”.

But one areawhere Lourenço’s arrival has not changedmuch is in the province of Cabinda, home to a longstand-ing separatistmovement. The Luanda administration hasnot taken any new steps to bring peace to the region andhas continued with its predecessor’s policies of a strongsecurity presence and an iron grip, due to the huge oilfields located there.Human rights groups continue to de-nounce arbitrary detentions and other abuses. To address

discontent in the region, Lourençopromised at ameeting in Cabinda inNovember 2018 to deliver on road,electricity and water infrastructure.

Municipal electionsIn the meantime, the Angolan pres-ident will seek to ensure that he hasa united party behind him.While heseems to havewon the support of theMPLA leadership and its youthorgan-isation, Lourenço cannot control thereactions to his anti-corruption fight.There were several clashes in 2019:Lourenço denounced destabilisationmanoeuvres by the Dos Santos clan,without naming them,whenmembersof the former president’s clique de-plored a “witch hunt”. And things arenot about to get any better (see box).

Many times announced and post-poned by former president JoséEduardo dos Santos, the firstmunici-

pal elections in Angola’s history are scheduled to be heldin 2020, fulfilling one of Lourenço’s election promises.However, deputies in the national assembly are far fromagreeing on how the elections should be organised. TheMPLA advocates a gradual approach, while UNITA fa-vours simultaneous elections in each of the country’s 164municipalities. Thiswill also be one of the first prioritiesof the newUNITA leader, AdalbertoCosta Júnior, electedin November 2019 to replace Isaías Samakuva.

But those moves alone are not enough to producedeep and concrete improvements to people’s lives. The

>Lourençoneeds toconverthispromiseof change intoconcrete results>Theeconomywillbegingrowingagain,butthereisstillmuchworktobedonetoreducethedebtburden

AngolaTimeisoftheessence

> GDP growth (%)

2020*2019*20182017

88.991.5105.9122.1

> GDP ($bn)

-0.1-1.2

1.1

-0.2

> Population: 31.8 million> GDP per capita: $3,037> Life expectancy: 61.8> Adult literacy: 66%> Inflation: 17.2%> Human development index(out of 189 countries): 147

> Foreign direct investment: $-5.7bn> Last change of leader: 2017

*Estim

ationOctob

er2019


majority of the population continues to live on less than$2 per day. Even though the IMF predicts that the countrywill return to growth in 2020, the government will haveto play it tight to meet its commitments to internationalinstitutions without increasing social discontent, whichis already high. In addition to stabilising the currency inorder to contain double-digit inflation, it will continueto liberalise the economy by gradually ending subsidieson fuel and water.

Government spending will be re-strained to deal with a mountain ofdebt. Lourenço promised to reducepublic debt, currently at around 90%ofGDP, to60%by the timeof thenextgeneral election in 2022. To achievethis, the government is seeking toincrease its revenue, mainly fromhydrocarbon exports, while reducingits expenses. There is pressure fromLuanda to at least maintain the levelof oil production, which is currentlyabout 1.4m barrels per day. In orderto compensate for the decline in thenumber of fields in operation, thegovernment is encouraging investmentinmarginal fields and exploration in two new areas in thesouth of the country, the Benguela and Namibe basins.The contracts from a current bidding round are due tobe signed in April 2020 and another round for onshoreblocks is then due to be launched before the end of 2020.

Oil explorationWhile Sonangol, Total and Eni have already expressedtheir interest, the signing of concession contracts hasbeen announced for the end of April 2020. A consorti-um bringing together Sonangol and oil majors like Eni,BP, Chevron and Total is also expected to develop gasproduction to supply the Angola LNG plant in Soyo.

Anothermajor project for Lourenço is economicdiversi-

fication. He has made agriculture a priority, launching aplan to support producers, encouragingprivate investmentandworkingondistribution channels.But tobe significant,the increase in production in the first quarter of 2019 – par-ticularly ofmaize, potatoes and chicken –must continueand accelerate in 2020, especially as agricultural importsare currently affected by difficulties in accessing foreignexchange. Climate change is alsomaking production less

predictable, as a drought hit in early2019 and put 2.3 million people intofood insecurity according toUNICEF.

The executive is also focusing onmining, fisheries, industry and ser-vices. To make those sectors grow,the Lourenço administration willaddress tworelatedchallenges: furtherconsolidation of the banking sector,which could lead to the loss of someinstitutions’ licences, andmanagingthe repayment deadlines for Chineseloans contracted by his predecessor.

The government was due to an-nounce the results of an audit of thefinancial sector in late 2019, with

central bank governor José Massano saying that moreconsolidation could be on the horizon for the country’s27 banks. They have until June 2020 to show that theymeet the current capital requirements. The recovery inthe sector continues to be slow, with non-performingloan levels of about 30% towards the end of 2019. Thegovernment hopes that the gradual financial improvementwill allow it to return to international financial marketsin order to raise funds.

On the diplomatic front, Lourenço ismuchmore activethan his predecessor. He has taken steps to improve tieswithFrance and is playing the role ofmediator in conflictsin the region, particularly in the DRC.

GOVERNMENT DEBT(% of GDP)

2015

57.1

75.7

69.3

89

95

89.9

16 17 18 19 2020

40

60

80

100

SOURCE:IM

F

Lourenço vs. Dos SantosRelations between the current and formerAngolan presidents could get worsein 2020. Tensions have been high sincethe transfer of power in September2017, and João Lourenço and JoséEduardo dos Santos are now in conflict.After declaring war on corruption anddismissing two children of the formerpresident – Isabel dos Santos from themanagement of the national oil company,Sonangol, and José Filomeno dos Santosfrom the Angolan sovereign wealth fund

– Lourenço launched an implicit attackon the Dos Santos clan in October.

Talking to the MPLA youth wing,he denounced destabilisation attemptscoming from within the MPLA to preventhim from reforming the country. Whilethe former head of state remains publiclysilent from Barcelona, where he hasbeen living since April, his childrenled the counter-attack.

His eldest daughter, Isabel, is attendinginternational forums and conferences,

deploring the difficulties of the Angolaneconomy. Her half-sister, Tchizé, ismore direct. Sacked from her positionas an MPLA MP because of a longabsence abroad, she denounced the moveas the “coup” of a “political executioner”,describing Lourenço as a “dictator”. Andthings are not about to get any better. JoséFilomeno’s fraud trial, scheduled to beginon 25 September, was briefly postponed.It is now back on track and is a realcasus belli in the eyes of his father.



WAN200 km

The decisive victory by President Mokgweetsi Masisi’sgoverning Botswana Democratic Party (BDP) in the 23October 2019 election means the reforms he began afterreplacing IanKhama as head of state inApril 2018 are setto continue. Despite the rancorous split between MasisiandKhama,whoquit the ruling party inmid-2019 to forma newparty in alliancewith the opposition, the BDP heldon to power with 38 MPs elected out of 57. This was onemore than in the previous election of 2014, with BDPwinning all the seats in the capital,Gaborone, andmany insouthernBotswana, traditionally opposition strongholds.

Having failed tooustMasisi,Khamacould finally exit the political stage,although that is not yet certain. Theopposition alliance, theUmbrella forDemocraticChange(UDC),waspeggedback mainly to east and north-westBotswana. It took 36% of the voteand 15 seats, two fewer than last time,although its share of the votewent up.

A combination ofMasisi’s populistpolicies and divisions within the op-position, someofwhose leaderswereunhappy at teaming upwith Khama,were key factors in the BDP victory.

Ambitious proposalsMasisi’s decision to reverse Khama’sban on hunting elephants, reducethe high levies on consumption ofalcohol and dismissal of the widelyfearedDirectorate of Intelligence andSecurityServiceshead IsaacKgosihadgenerallybeenwelcomedbyBotswana.

Masisi promised salary increases for the army, po-lice and prison workers, amongst others, while an-nouncing ambitious proposals to help diversify thediamond-dependent economy and provide new jobs,for example by making the country a regional centrefor the manufacture of electric vehicles.

Against expectations, Khama’s Botswana PatrioticFront (BPF)won only three seats, all in the region aroundSerowe. He chose not to stand as an MP but had hopedhis defection from the BDP would spark an exodus bysupporters.TheBPF’s future now looks uncertain given its

limited appeal. The UDCmay now fall apart, especiallyas its president, Duma Boko, was defeated in GaboroneBonnington North, while Alliance for Progressives (AP)leader Ndaba Gaolathe lost in Gaborone BonningtonSouth. Opposition disunity looks set to give Masisi aneasy ride, at least to start with.

New collieriesMasisi wants to break Botswana’s overdependence ondiamond mining. In the near term, however, diamondswill continue to be themain driver of economic growth.

Production by Debswana, a 50:50joint venture between the govern-ment and De Beers, rose by 6% to24.1m carats in 2018, but dropped by2% to 17.4m carats in the first ninemonths of 2019. Global demand forrough diamonds remains subdueddue to macroeconomic uncertaintyand challenges in the mid-stream ofthe supply chain.

The government hopes to increaseits share ofBotswana’s diamond reve-nue under a new sales agreementwithDe Beers, the negotiation of whichis likely to be completed in 2020.Gaborone has become the centre forall De Beers’ final sorting operationsfor themines it operates inBotswana,Namibia and South Africa.

After something of a hiatus dur-ing 2017-2018, projects to devel-op Botswana’s large bituminouscoal resources – estimated at 212bn

tonnes – will pick up speed. The objective remains todevelop new collieries for local and regional powersupply and, ultimately, for exports.

Botswana Stock Exchange-listed Minergy Coalannounced in August 2019 that its Masama coal mineexported its first saleable coal to South Africa andNamibia. Masama aims to expand production to100,000tn per month from 2020.

The next mine into production is set to be theMmamaboula open pit colliery – with 90m tonnes ofmineable coal – owned by SouthAfrica’sMaatla Energy.

>Theopposition failed todislodgeMasisi and theBDP in theOctober2019election>Thegovernment’s economicdiversificationdrive is slowtoproduce results

BotswanaMasisibestsKhama

> GDP growth (%)

2020*2019*20182017

19.618.618.617.3

> GDP ($bn)

2.94.4 4.3

3.4

> Population: 2.3 million> GDP per capita: $7,859> Life expectancy: 67.6> Adult literacy: ND> Inflation: 3%> Human development index(out of 189 countries): 101

> Foreign direct investment: $229m> Last change of leader: 2018

*Estim

ationOctob

er2019



MBABANE

SOUTHAFRICA

MOZA

MBIQUE

ESWAT IN I

King Mswati III shows no signs of relaxing his monop-oly control of the country’s politics and the monarchy’soutsized role in the economy, which is going through aperiod of difficulty. The monarchy is resisting changeand compromise for as long as possible without havingto give up some of its power.

The forces of change are trying towhip up enough pop-ular sentiment to alter the balance of power. InNovember2019, thegovernment tookdeliveryofmore than 100 luxuryvehicles for the royal family, leading to an uproar fromstriking civil servants, the pro-democracy activists of thePeople’sUnitedDemocraticMovement– led byMlungisiMakhanya – and thecountry’s unions, which are majormobilisers while many oppositiongroups are outlawed. At around thesame time, studentswere carryingoutprotests about the poor conditions inthe country’s schools.

It is not clear if those groups willbe able to channel that outrage intosomething more transformational.Pro-democracy protesters at an eventin Manzini in May numbered about3,000.The government has defendedthevehiclepurchasesandhas clampeddown on protests via security forces.

Pressure from the streetSo far, none of the countries in theregion have sought to mediate inthe long-running democratisationdebate in eSwatini, and neither havethe Southern African DevelopmentCommunity nor the African Union. eSwatini is Taiwan’slast diplomatic ally in Africa. So it is likely that theChinese government will up the pressure onKingMswatiIII to switch sides soon.

The administration is spending beyond its means, anddebt levels are rising. Since 2016, the government has notadjusted to the drop in revenue from the SouthernAfricanCustoms Union, which is earning less because of movestowards trade liberalisation. The IMFwarns that growthwill continue to slowunless theMbabanegovernment takesaction. It has advised the government to reform troubled

state-run enterprises. There needs to bemore investmentin telecommunications and electricity infrastructure inorder to improve the business climate. But at the sametime, the government has been under pressure from thestreet, with government workers – including nurses andteachers –demanding raises andbetterworking conditions.

New hotels, fewer touristsFinanceministerNealRijkenberg has promised sweepingchanges, but the government has been slow in deliveringthem. The administration has cut expenditure on some

items like first-class travel for gov-ernment ministers. Rijkenberg saysthat his focus will be on improvingthe climate for private businesses inorder togeneratemore taxrevenueandcreatemore jobs.His criticismof thestate’s role in the economy, however,does not seem to have the backingof theKing. Rijkenberg is promotingagriculture and mining as importantsectors for economic diversification.

Tourism is important to the econo-my,and thegovernment is spendingonnewhotels and conference centres. Itreported a 5.1%drop in arrivals to 1.3million in 2018, however,with thebig-gest fall in visitors fromEurope. Thefinanceministry says the governmentshould workwith private companiesto promote the country’s protectedareas as tourism destinations.

The government also wants to cutdown on electricity imports. It is

evaluating bids for projects to generate 40MWfrom solarplants in 2020 and 40MWfrombiomass projects in 2021.Most of eSwatini’s electricity comes from South Africa’spoor-performing public utility Eskom.

The country has high levels of poverty, youth un-employment and HIV/AIDS infections. Agricultureemploys many citizens, but theWorld Food Programmesays that eSwatini’s average yields are lower than peercountries due to droughts and the lack of investmentin the sector. About 15% of the national populationsuffered from food insecurity in 2018.

>The long-termstruggle fordemocratisationhasyet toweakenKingMswati III’s powers>The IMFsays that thegovernment isgoing tohave tocutexpenditure to improve theeconomy

eSwatiniTheKing’scountry

> GDP growth (%)

2020*2019*20182017

4.784.654.714.45

> GDP ($bn)

2.0 2.3

0.51.3

> Population: 1.1 million> GDP per capita: $4,176> Life expectancy: 58.3> Adult literacy: 83.1%> Inflation: 2.8%> Human development index(out of 189 countries): 144


*Estim

ationOctob

er2019



The bad old days of instability are back in Lesotho. Theprime minister Tom Thabane suspended parliament inJune and has refused to reconvene it as he deals withinfighting in his All Basotho Convention (ABC). SouthAfrica’s President Cyril Ramaphosa is the SouthernAfrican Development Community’s (SADC) mediator inLesotho’s long-running crises, and his July deal to getmuch-needed constitutional, security and other reformsmoving had no immediate impact. Meanwhile, the weakpolitical coalitions andmistrust between civilian leadersand the security forces that once led Thabane into exileare again causing instability.

Thabane closed down parliamentafter anABCmember launchedavoteofnoconfidence inhis rule.TheABC’sold national executive committee didnot want to hand over to the new onein February and party cadres openlycomplained about the influence ofThabane’s wife, Maesaiah Thabane,in politics. The ABC has 53 seatsout of 120 in the national assemblyand governs in a coalition with theAlliance of Democrats led by deputyprime minister Monyane Moleleki,the Basotho National Party led byTheseleMaseribaneand theReformedCongress of Lesotho led by KeketsoRantšo. Those parties too have beenweakened by internal squabbling.

Security reformsThabane could call for fresh elections– which opposition parties want – orseek to reopen parliament solely to try to vote throughthe creation of theNational LegislativeReformAuthority,which is due to implement the reforms agreed throughSADCmediation.Another possibility under discussion isa government of national unity with the opposition. Butthere are disagreements about how to reform the securitysector, with some calling for the release of former armycommanderTlali Kamoli fromprison.With tensions highbetween defence minister Tefo Mapesela and LesothoDefence Force commander Lieutenant General MojalefaLetsoela, Kamoli’s release seems unlikely.

TheDemocratic Congress, led byMathibeliMokhothu,and the Movement for Economic Change led by SelibeMochoboroane are the twoopposition partieswhich seemto be gathering support amongst the dysfunction.

Lesotho’s opaquepolitics are spillingover into the econ-omy.Thegovernment’s debt levels are rising steadily. Somenormalcy should return to thewool andmohair industries,whichare responsible forLesotho’s topagricultural export.The government banned the selling of wool and mohairthrough South Africa and gave a monopoly to Chineseinvestor Guohui Shi. Farmers protested, saying that they

were not paid orwere underpaid, cre-ating seriousdisruptions to the sector.Lesotho typically accounts for morethan 15% of global mohair supplies.

Roads, factories and marijuanaThe economy is expected to growweakly in 2019 and 2020 after a con-traction in 2018. Two growth driversare the construction sector and themedical cannabis industry,whichwaslegalised inFebruary2017.CompaniesfromtheUSandCanadaare thebiggestinvestors in theburgeoningmarijuanabusiness.Notableconstructionprojectsinclude theTikoe andBelo industrialestates, the Mpiti-Sehlabathebe andMarakabei-Monontša roads, and thesecondphaseof theLesothoHighlandsWater Project.

With the country dependent onelectricity imports to meet about50% of domestic demand – the rest

comes from theMuela hydropower station – the Lesothoauthorities say they need to invest in transmission linesfor mining and cannabis projects while expandingproduction. They signed a deal for an 80MW solarindependent power project and say that there are plansfor more solar and wind projects.

The government wants to encourage more investmentin mining activities by supporting existing projects andpushing for more exploration. In October, it renewedthe licence for London-listed Gem Diamonds’ flagshipLetseng mine for an additional 10 years.

MASERU

SOUTHAFRICA

SOUTHAFRICA

LESOTHO

30 km

> GDP growth (%)

2020*2019*20182017

2.82.72.72.6

> GDP ($bn)

0.5

2.7

-0.1

2.7



*Estim

ationOctob

er2019

>PremierThabane’sgovernmenthas frozenparliamentoutof fearofavoteofnoconfidence>Themedical cannabis industry isboomingsince its legalisation in2017

LesothoUnstablealliances



Indian Ocean

ANTANANARIVO

MADAGASCAR

COMOROS

MAURITIUSREUNION(France)300 km

Toamasina

After winning the January 2019 presidential electionwith 55.66% of the vote, Andry Rajoelina is expect-ed to continue stabilising the country’s political andeconomic life, which is recovering from the nationalpolitical crisis that started in 2009. He benefits fromthe parliamentary stability that his predecessor, HeryRajaonarimampianina, lacked. Rajoelina’s party wonan absolute majority in the May 2019 legislative elec-tions, when his party took 84 of the 151 seats. The veryhigh abstention rates during the presidentials (less thanone in two voters in the second round) and legislatives(60%) shows theMalagasy people’sdisengagement from their leaders.

Defeated at the presidential polls,formerpresidentMarcRavalomananaintends to continue to play his roleas an oppositionist. With 16 dep-uties (compared with a bloc of 46independents), Ravalomanana’sTiako iMadagasikara is the de fac-to leader of the opposition in thenational assembly.

To the surprise of many,Ravalomanana decided not to runfor the 27 November municipalelections, despite the importanceof the mayor’s seat in the capital,Antananarivo. He says that he wantsto maintain his focus on holding thepresidency to account.

Zero-tolerance policyRajoelina’s campaign promises areexplained in his Initiative EmergenceMadagascar programme. Improving health infrastructureis a major challenge, and a measles outbreak in early2019 killed more than 1,200 people.

He plans to establish a policy of zero tolerance to-wards corruption, to double electricity production andto increase the resources devoted to the security forces.One project that will help to boost electricity levels isthe construction of the Sahofika Dam, which is set toadd 200MW to the national grid by 2024.

Other goals include tackling the impunity of rosewoodtraffickers, resolving the crisis affecting the national

water and electricity company Jirama and reviving apromising but still fragile tourism sector. Internationalhotel brand Radisson has plans to open two hotels andan apartment complex in Antananarivo in 2020. Tourismarrivals hit a peak of nearly 400,000 people in 2008and have yet to recover to that level.

The country has good economicmomentum, boostedby the private sector. At the end of 2019, the currentfinancial agreement between Madagascar and theInternational Monetary Fund (IMF) will come to anend. Rajoelina’s ability to reassure investors will in part

depend on signing up to a new IMFprogramme. The IMF is insisting,however, that the government im-prove local tax collection so that itcan spend more on infrastructureand social programmes.

Port expansion programmeThe government is banking on anuptick inmining activity, asmuch ofthe country’s territory is largely unex-plored for minerals. The Ambatovynickel project, part-owned by Japan’sSumitomoCorporation,hascontinuedto disappoint and the firm recordeda $647m loss in October.

In othermining sectors, Australia’sBlackEarthMineralsplans tocompletethe feasibility study for its Manirygraphite project in 2020, with pro-duction possibly to start in 2021.Meanwhile, Base Resources is set totake its final investment decision on

the Toliara mineral sands project in 2020. To deal withmore trading traffic, the main port at Toamasina is nowundergoing an expansion programme that is due to becompleted by 2026. The goal of the Japan-backed projectis to double the port’s throughput capacity.

Rajoelina met his French counterpart EmmanuelMacron during a visit to Paris at the end of May. Atthe meeting, they agreed to set up a joint commissionto resolve the dispute between the two states over theScattered Islands. Macron and Rajoelina hope to finda solution during the year ahead.

> GDP growth (%)

2020*2019*20182017

13.612.512.011.4

> GDP ($bn)

4.25.1 5.35.2

> Population: 27 million> GDP per capita: $463> Life expectancy: 66.3> Adult literacy: 71.6%> Inflation: 6.7%> Human development index(out of 189 countries): 161


*Estim

ationOctob

er2019

>Thecountry is turningapageon its recentpolitical instability>Electricityprojectsand tourismareexpected to strengthen theeconomy

MadagascarAnewstartforRajoelina



LILONGWE

ZAMBIA

TANZANIA

MOZAMBIQUE

MOZAMBIQUE

LakeMalawi

MALAWI

Blantyre

150 km

ThedisputedMay2019presidential elections are set to casta long shadow.Protests – at times violent – have continuedsince then as the opposition seeks to force the governmenttonegotiate.Theprotestshavebeenstrongest inoppositionstrongholds in the northern and central region ofMalawi.It is not known when the constitutional court will deliverits ruling, but it could be as late as August 2020.

International observers ruled that the polls were freeand fair, so the opposition’s chances of overturning thevote seemslim.Former president BakiliMuluzi and somecivil society groups have sought to play a mediating rolebut have yet been unable to achievecompromise between the two sides.

President PeterMutharika, knownfor his slowdecision-making and hisambition to turnMalawi intoacountrylike Singapore, won re-election in atightly run race. The leader of thegoverning Democratic ProgressiveParty (DPP) secured 38.6% whileLazarus Chakwera of the MalawiCongress Party (MCP) got 35.4% – adifference of about 59,000 votes.SaulosChilima,whowasMutharika’sdeputyandcampaignedonananti-cor-ruptionplatform,won20.2%backing.Chakwera andChilimacontinue to at-tackMutharikaonhisgovernance,andwant Malawi Electoral Commissionboss Jane Ansah to be sacked.

Rallying MPsBecauseof the split vote, theDPP tookjust 65 seats in the 193-seat nationalassembly, followed by theMCPwith 55 and independentswithanother55.Chilima’sUnitedTransformationMovementtook just four seats.That leaves theoppositionwithenoughpower to trouble theDPP’s legislative agenda, if it can rallyenough independent members of parliament. The MCPis planning to boycott parliament until the courts rule onits electoral challenge.

In terms of diplomacy, Malawi’s border dispute withTanzania is one of the country’s top concerns. Despiteyears of discussions about seeking a mediated solution,there does not seem to be a resolution on the horizon.

Mutharika’s agenda for the year ahead is largely focusedon the economy. The country is dependent on rain-fedagriculture, with tobacco the country’s top export andmaize its most important staple crop. Malawi was due toproduce 206.9m kilogrammes in 2019, up from 202m in2018. In terms of agricultural diversification, the govern-ment is pushing for more cotton and legume production.

Cyclone aftermathEducation, infrastructureanddiversificationaresomeof theMutharika government’smain policy priorities. But it has

a three-year International MonetaryFund programme in train due to highpublic debt and deficits, which willconstrain its ability to spend.

Despite thedevastation fromMarch2019’sCyclone Idai,whichmademanypeople dependent on food aid, theeconomy is on a short-term growthspurt.Maizeproductionwaspredictedtohit 3.4mtonnes in2019, representing25.7%year-on-year growth.Rice andcotton predictionswere for growthof19.5% and 35.3%, respectively.

Irrigation isbeing rolledout to fightthe relianceonunpredictable rainpat-terns. Funding from theWorld Bankis supporting theGreenbelt Initiative,whichwill cover4,000haon thebanksof the Shire River.

Improving the power supply,whichis currently based mainly on hydro-electricity, has been a challenge.Malawi has been importing power

fromZambia since late 2018.Construction of the 300MWKam’mwamba coal-fired facility is expected to pick up in2020and finish off in 2021.The country produces 350MWand is seeking to raise its generation capacity to 720MWby 2020 and to 1,000MW by 2023.

Miningprojects are apotential sourceof diversification,but the government says that the post-election troubleshave reduced investor interest. Canadian firmMkango isworking on its feasibility study for the Songwe Hill rareearths project. It is looking for investors for its Thambaniuranium, tantalum and niobium project.

>Thepresident has not reacted swiftly to post-electionprotests>Betteragricultural prospectsarehelping theeconomytogrow

MalawiTroubledtimesahead

> GDP growth (%)

2020*2019*20182017

8.057.526.906.23

> GDP ($bn)

43.1

5.14.5

> Population: 18.6 million> GDP per capita: $370> Life expectancy: 63.7> Adult literacy: 62.1%> Inflation: 8.8%> Human development index(out of 189 countries): 171


*Estim

ationOctob

er2019

Date and signature:

TAR11

0

SEND TO: Webscribe Ltd - Unit 4 College Road Business Park - College Road North -Aston Clinton - HP22 5EZ - Tel: +44 (0) 1442 820580Or: [email protected]

Firstname ................................................ Surname.........................................................

Address ........................................................................................................................................

Zip code .................................................... City.......................................................................

State ............................................................. Country............................................................

Tel. .................................................................. E-mail ..............................................................

� US Dollars � £ Sterling � Euros� Cheque enclosed payable to WEBSCRIBE LTD� Visa �Mastercard � AmexN°ExpiresLast 3 numbers on back � Sendme a receipt

of payment

�Mr �Ms �Mrs

Get the full picture

Want to thrive in Africa? No need to scan the whole internet. Connect to theafricareport.com.We curate the latest news, deliver the essential analysis and reveal the most-likely scenariosfrom our on the ground teams: all in one place.

Subscribe Now !Subscribe now to The Africa Report quarterly magazine, print and digital editions, withdeeper long form content, cutting-edge features and extensive business coverage includingexclusive rankings of Africa’s top 500 companies and top 200 banks as well as detailedpolitical and economic profiles of Africa’s 54 countries.

JEUNE AFRIQUE MEDIA GROUP

Algeria DA610 • Belgium €7.90 • Canada CA$12 • Denmark DK80 • D.R.C. US$10 • Ethiopia Birr200 • France €7.90 • Germany €7.90 • Ghana GH¢3• Morocco DH45 • Netherlands €7.90 • Nigeria NGN2000 • Norway NK95 • Rwanda RWF7,500 • Sierra Leone LE79,000 • South Africa R75SEK100 • Switzerland FS10.90 • Tanzania TZS20,000 • Tunisia DT15 • Uganda UGX40,000 • UK £7.20 • United States US$15.99 • Zambia ZMUS$6.20 • CFA Countries F.CFA3,900 • Euro Zone €7.90


N° 110 • JANUARY-FEBRUARY-MARCH 2020 www.theafricareport.com

AFRICA IN

2020MonYoutConflGrow

Investigations / Opinion / Interviews / Exclusive rankings

SUBSCRIPTIONORDER FORM

PLEASE COMPLETE PAYMENT IN

1 year / 4 issues

Euro

zone

UKonly

Other

countries

� Print €27 £24 $32

� Digital €19 £17 $21

� Print Digital €42 £38 $46

� Yes, I would like to subscribe to The Africa Report



PORT-LOUIS

MAUR IT IUS

IndianOcean

IndianOcean

10 km

With the popular mandate he sought, Prime MinisterPravind Jugnauth and the governing Alliance Morisiencan now continue with their goal of making Mauritiusa high-income country. On 7 November, Jugnauth andhis supporters took 42 out of 70 seats in the nationalassembly, having previously relied on coalition partners.Since Jugnauth succeeded his father, Anerood, as primeminister in January 2017 after the latter resigned, theopposition had been calling for new elections.

TheAllianceNationale, led by former primeministerNavinRamgoolam, andPaulBérenger’sMauritianMilitantMovement conceded defeat. Theirattacks on government corruptiondid not win much popular support.

Jugnauth’s governmentwasboostedby theOctober 2019 inauguration ofthe first section of the tramway linelinking Port-Louis to Rose Hill. Hisgovernment has also introduced aminimumwageand raised thepayoutsfor old-age pensions.

Nonetheless, the new governmentwill be confrontedwith thehigh socialexpectations of Mauritians, with agrowing fringe demanding a betterdistribution of the fruits of economicgrowth. “Despite theeconomicgrowthyour countryhasexperienced in recentdecades, it is youngpeoplewho suffermost, who feel the most unemploy-ment,”PopeFranciswarnedduringhisvisit toMauritius in September. TheJugnauth government has promisedto strengthen the country’s socialwelfare system.

Shades of greyConcerns about the environment are on the rise, withMauritius vulnerable to increasingly destructive tropicalstorms. “A large part of the population and productiveassets are exposed tomultiple risks induced by cyclones,”the World Bank says.

The overall economic situation is welcomed by theWorld Bank’s 2019 Doing Business report, which ranksMauritius as the leading country on the continent for ease

of doing business and 20th in the world. The institutionpraised the country’s business climate for setting up newcompanies, and its tax system.

ButMauritiushasbeencriticised for its roleasa taxhaven.TheEUput it on its ‘grey list’ in 2017, but upgraded it to thewhite list in October 2019 – a move that reduces pressureon the government but was lambasted by transparencycampaigners. In July, its tax systemmade headlines in thepress after the International Consortium of InvestigativeJournalists’ ‘MauritiusLeaks’, showedhowmultinationalsareusingMauritius to reduce their tax bill inAfrican countries

where they operate. Double taxationavoidance agreementswithMauritiusthat deprive African governmentsof much-needed revenue have sincebeendenouncedby several countries,including Senegal. The governmentis now supporting the growth of thefintech ecosystem to diversify thefinancesectorasMauritiancompaniescontinue with their expansions awayfrom the competitive home market.

The Chagos challengeTourism is another important sectorthat is growing. In 2018, the numberof tourist arrivals rose by 4.3% to 1.4million. Much of the growth camefrom Germany and South Africa.

To keep Mauritius on its currentgrowthpath, thegovernment is focus-ingondiversification.The‘blueecono-my’hasgoodpotential.SeychellesandMauritiusalsohaveajointmanagement

area of oil blocks and plan to look for bidders soon.Mauritius became the first African country to sign a free

trade deal with China, in October 2019. The agreementgives Mauritius duty-free access to 8,547 products andcovers more than 40 service sectors.

The new administration will have to manage severaldifficult issues, including the Chagos Archipelago. InMay 2019, the UK suffered a setback at the UN GeneralAssembly, where countries asked it, in a non-bindingresolution, to return this archipelago, home to a British-American base, to Mauritius by the end of the year.

>Legislativeelectionsweredue tobeheld inDecember2019>TheEUremovedMauritius from its ‘grey list’ of taxhavens inOctober

MauritiusPravindwinsbigatthepolls

> GDP growth (%)

2020*2019*20182017

14.814.314.213.2

> GDP ($bn)

3.8 3.7 3.83.6



*Estim

ationOctob

er2019

Backrealfor

It isn’t every day you walk into a flowing,dynamic space where your senses areheightened and enjoyment levels enhanced.The new Le SuffrenHotel &Marina, in theheart of Port Louis, achieves this with arefreshingly unique “city resort” style.Thanks to a total renovation that invites youto meet, eat, play and feel real!Fusing nautical heritage with contemporarydesign, Le Suffren is back – and promises abrand new, immersive experience. Happytimes await in the new rooms, restaurants andbar: Pomme deMât, with live cooking and seafoodspecialties, Sushi Quay, an authentic sushi andoyster bar and the Pink Socks Seafront Bar,with fabulous cocktails and splashes of fun.It’s here, it’s real, it’s the all-new Suffren!

The new Le Suffren Hotel & Marinain Mauritius is now open.

Le Suffren Hotel & Marina, Le Caudan, Port LouisT (230) 202 4900 | E [email protected] | www.lesuffrenhotel.com Le Suffren Hotel & Marina

Bookings on [email protected]



SOUTHAFRICA

eSWAT.

ZIMBABWE

MALAWIZAMBIA

TANZANIA

MADAGASCAR

MAPUTO

IndianOcean

MOZAMB IQUE

Beira

Nampula

300 km

Havingwon re-election inOctober 2019, President FilipeNyusi has a lot to do to turn around an economyweigheddown by $2bn in hidden debt dating back to 2016. It wasan unsurprising victory for the rulingFrentedeLibertaçãode Moçambique (Frelimo), which has been running thecountry since 1975. The party had been weakened byMozambique’s economicwoes andNyusiwas electedwithjust 57% in 2014, but he returned to his party’s historicalscores this time with nearly 73% of the votes.

Nyusi will continue to use the powers of incumbencyand control of state resources to limit the reach of theopposition. The rebel-group-turned-opposition-partyResistênciaNacionaldeMoçambicana (Renamo) criticisedthemanagement of the 2019 electoralprocess. Renamo candidate OssufoMomade received 22% of the voteand rejected the outcome of the 15October election. Suspicions ofmas-sive fraudweighedon the rulingpartythroughout the campaign,whichwasalso marked by violent incidents.

Despiteapeaceagreementsignedon1August 2019 sealing the end of hos-tilities betweenFrelimoandRenamo,the former rebels may still engage inarmed conflict. A Renamo dissidentgroup refuses to recogniseMomade’slegitimacy. It carriedoutseveralattackson the eve of the presidential electionand may continue to cause unrest inthe central part of the country.

Renegotiated loanThe government is still dealing with the impact ofthe $2bn borrowed by state companies under opaquecircumstances. The revelation led to the withdrawal ofIMF and World Bank assistance, pushing the countryinto an unprecedented crisis. The government has sincemanaged to renegotiate the terms of its loan with someof its creditors, but is still in default on part of its debt.

Economic growth slowed from 2017 to 2019, and theIMF is predicting a solid rebound in 2020. The climateplayed a role in the downturn, with the northern part ofthe country battered by two cyclones in early 2019.

The Frelimo administration intends to capitalise onthe discovery between 2010 and 2013 of huge offshoregas reserves in the Cabo Delgado region, located in thenorth-east of the country. These natural gas resourcescould generate $1.5bn in revenue per year by 2023. Thegovernmenthopes that this haspiqued investor interest andplans to launch a new oil and gas bidding round in 2020.

No punishment for big playersMining is in the midst of a downturn. Graphite-focusedSyrah Resources announced late in 2019 that it is re-

ducing the number of its staff andseeking other cost-cuttingmeasuresto cope with a dip in demand. ButNcondeziEnergyand itspartnerChinaMachinery EngineeringCorporationhave big plans for a coal mine andpower project that could produce1,800MW.Donorsare funding thenewelectricity interconnection betweenMozambique and Malawi, whichwill allow the Maputo governmentto export excess supplies.

The fraudulent loans also weighpolitically onNyusi’smandate, as hewaspartof thegovernmentofArmandoGuebuzaat the time.Sofar,noneof themajor players have beenpunished fortheir involvement.At the endof 2019,the trial of the Lebanese businessmanJeanBoustani began.He is accusedbytheUScourtsofbeingoneof theprimemovers behind the financial packagethat allowedMozambique to illegally

borrow $2bn. Will 2020 see the extradition – requestedbyWashington and Maputo – of former finance ministerManuel Chang, now exiled in South Africa?

Security remains a major challenge. For the past twoyears, CaboDelgadohas been shakenby recurrent attacksfroma jihadist insurgency.Theyhave caused the deaths ofseveral hundred people since the end of 2017. The IslamicState rebels claimed responsibility for someof theviolencein 2019. Jihadists have also repeatedly attacked convoysofforeign companies, leadingmultinationals to use privatesecurity companies to protect their employees.

>TheFrelimogovernmentand theRenamoopposition remain inconflict

>Theexploitationofnatural gas reserveswill beamajordriverofgrowth in theyears tocome

MozambiqueNyusi’s laststand

> GDP growth (%)

2020*2019*20182017

16.61514.312.5

> GDP ($bn)

3.7 3.26

1.8


> Foreign direct investment: $2.7bn> Last change of leader: 2015

*Estim

ationOctob

er2019



AtlanticOcean

WINDHOEK

ANGOLA

BOTSWANA

ZAMBIA

SOUTHAFRICA

NAMIB IA

300 km

Walvis Bay

No threats to political stability are in prospect for 2020.President Hage Geingob, 78, and the governing SouthWest African Peoples’ Organisation (SWAPO)won the 27November presidential and national assembly electionsbut by substantially-reduced margins. Voter discontentover the protracted drought, the economy’s weak state,coupledwith resentment at continued corruption and slowland redistribution, led to Namibia’s first independentpresidential candidate, Panduleni Itula, a SWAPOmemberopposed toGeingob,coming insecondwith29%of thevote.Geingob’s plurality fell to 56%, the lowest ever for aSWAPOcandidate. SWAPOalso lostits two-thirds parliamentarymajority,meaning it cannot amend the consti-tution without opposition backing.

SWAPO vice-president and dep-uty prime minister Netumbo Nandi-Ndaitwah remains in pole position tosucceedGeingobasSWAPOpresiden-tial candidate in the2024election.She,rather than thevice-president,NangoloMbumba,wouldlikely takeovershouldGeingob step down before then.

Politically contentious reforms thatwere put on hold, such as cuttingback the civil service and ending sub-sidised loss-making parastatals,maybemore difficult to implement as thegovernment bids to recoverNamibia’sinvestment-grade credit rating.

Land pressureIt will also comeunder growing pres-sure to speed up land redistribution— the government has largely failed to implement reformsagreed at the 2018 land conference — because takingover private farmland without just compensation wouldcontravene the constitution.

Geingob declared a state of emergency in May 2019regarding the drought, with over 700,000 registered forfood aid. He also described the rapid growth of informalsettlements, especially nearWindhoek and other towns,as a humanitarian emergency.

There will be continued pressure on the governmentto roll-out wide-ranging, growth-enhancing measures

to revive the economy and increase job opportunities.Namibia has been advised by the IMF and ratingsagencies to continue fiscal consolidation to reduce thebudget deficit and restrain the upward trend in publicdebt, which is set to exceed 50% of GDP in 2020/2021.Other recommendations include structural reformsand measures to revive foreign direct investment. Thegovernment has confirmed that the final version ofNamibia’s black economic empowerment lawwill excludean original, highly contentious proposal for minimum25% shareholdings in all companies to historically

disadvantaged Namibians (HDNs)or HDN-owned entities.

Chinese monopoly on uraniumThegovernment isplacinga lotof faithinpublic-privatepartnerships tosecureinvestment in priority areas such asinfrastructure. It received new invest-ment pledges of N$20bn (US$1.3bn)fromdonoragenciesandcompaniesata 2019economicgrowthsummit. Theeconomy is due to modestly resumegrowthin2020havingcontractedbyanaverage1.4%during2018and2019dueto a sharp drop in agricultural output,temporaryreductioninroughdiamondproductionandweakconsumerdemand.

Unpredictable rainfall andpersistentlowuraniumprices are themain risksfor resumedgrowth.Uraniumoutputwill increase only incrementally in2020 as the Husab mine has nearlycompleted its rampup to full capacity,

producing some 5,500tn per year. China nowhas a virtualmonopolyonNamibia’s uraniumproductionas in July 2019a second state-owned company, China National NuclearCorp. completed its purchase of a 68.6% shareholdingof Rio Tinto’s Rössing mine. The 50:50 government/DeBeers-owned Namdeb Corp. is expanding its deep-seaminingcapacity tooffset theclosureofmostonshoreminesby 2021.Namdebproduced apost-independence recordof2m carats ofmainly gem-quality stones in 2018, ofwhich70%were recovered offshore, falling to some 1.7m caratsin 2019 due to reduced buying by global cutting centres.

>Theoppositionmadeprogress in theNovember2019elections>Economic reformsareon thehorizon tohelp turnaround theeconomy

NamibiaSWAPOstaysthecourse

> GDP growth (%)

2020*2019*20182017

14.914.314.513.5

> GDP ($bn)

-0.8-0.07

1.5

-0.1



*Estim

ationOctob

er2019



NAMIBIA

BOTSWANA

LESOTHO

eSWAT.

MOZ.

ZIMBABWE

PRETORIA

Cape Town Indian Ocean

Atl.Ocean

Johannesburg

DurbanSOUTHAFR ICA

300 km

With a faltering economy, 2020marks the second year ofCyril Ramaphosa’s presidency. There are high hopes thatthemajor policy interventions he announced at the start ofhis term – like the break-up of electricity provider Eskom(see box), cuts to the civil service,wider economic reformsand the establishment of the National Health Insurance(NHI) system – will finally kick into gear. Ramaphosafaces a tough balancing act to meet the socioeconomicneeds of the vast numbers of unemployedwhile attractinginvestment and cutting the fat from the public sector.

The governing party is being pulled in many direc-tions due to divisions between theRamaphosa allies and the supportersof former president Jacob Zuma.The continued economic and polit-ical differences within the AfricanNational Congress (ANC) have sofar stymied many reforms neededto boost the ailing economy.

SomeANCwatcherssaymeaningfulchangemight not see the light until atleast mid-2020 as the ANCmeets foritsmid-termpolicy conference. Zumaally and ANC secretary-general AceMagashule is a power broker in theparty. Some pro-Zuma cadres wouldlike to get rid of Ramaphosa. Whilethemeeting cannot remove him frompower, it can seriously hamper hisreform agenda. Ramaphosawill relyonhisallies in theprovinces, includingtheEasternCape, Limpopo,Gauteng,Northern Cape and Mpumalanga, toform a solid defensive bloc.

Controversial public protectorThe Judicial Commission of Inquiry into Allegations ofState Capture, which has heard detailed evidence of theextent of corruption and fraud at several state-ownedentities during the Zuma era, is expected to wrap up itsoral evidence by mid-2020. The National ProsecutingAuthority (NPA) under Shamila Batohiwill be under pres-sure to arrest and prosecute those implicated in crimes.

The government is likely to begin the process byremoving public protector Busi Mkhwebane soon.

The controversial Mkhwebane has had a slew of scath-ing court findings against her judgements. Lawmakersrealised in late 2019 that parliament did not have anyrules for the process to remove her from office. She hasindicated that she will take any ruling to court, and aprotracted legal battle would likely follow.

Amending the constitutionPressured by the leftists of Julius Malema’s EconomicFreedom Fighters (EFF), the ANC has been taking stepsto redistribute land in order to support black farmers.

Since theANCannounced its intentionto revise the constitution to providefor the expropriation of landwithoutcompensation, the process has beenboggeddownby theprolonged legisla-tiveprocess.ThenewlyformedAdHocCommittee to Initiate and IntroduceLegislationAmendingSection25of theConstitution is expected to completeitsworkbyApril. But therewill againbe another round of lengthy publicparticipation processes before anylegislation is introduced.

Thegovernment,medical providersand economists are due tomap out aplan for the NHI. The NHI seeks toestablish a central fund that will buyall services from public and privatesector medical players on behalf ofnationals who will receive medicalservices for free. Some actors in theprivate sector andoppositionpoliticalparties donot support theprogramme

given the dire state of the economy. The NHI will takeyears to launch, with a mooted start date of 2026.

The year 2020 will see the main opposition party, theDemocratic Alliance (DA), focusing on the 2021 localgovernment elections, where it hopes it can become themain political party. The DA is in control of Cape Town,JohannesburgandTshwane, andwants to increase its shareof the vote in other provinces.But its recordof governancehas had amixed bag. Due to theDA’s poor showing in the2019 election, national leader Mmusi Maimane resignedand the party undertook a major organisational review.

>Manyvoterswant to see real results fromthe ‘statecapture’ commission>TheANC ispromising to turnaround loss-makingparastatals suchasEskom

South AfricaRamaphosaonthereformtrail

> GDP growth (%)

2020*2019*20182017

369.8358.8368.1349.4

> GDP ($bn)

1.4

0.71

0.6



*Estim

ationOctob

er2019


The EFF will continue to claim to be the voice of themarginalised. The party is now the country’s thirdmajorparty and managed to increase its share of the vote from6% to just over 10% in 2019. But it will have to show thatit can deliver on someof the promises it hasmade to theirsupporters beyond the rhetoric of attacking the ANC.

With an official unemployment rate of 29% – and forthose younger than 35 a staggering 55.2% – Ramaphosasays that the lack of jobs is the biggest risk the countryfaces. So far, the government doesnot haveanybig-bankprogrammes toaddress it. Elsewhere, 2020 will alsosee the further roll-out of the newdis-trict-based coordinationmodelwhichaimstoaddress theservicedeliveryandeconomic development bottlenecksthrough the coordinationof planningacross all spheres of government. Forinstance, in the2020/2021budgetcycle,nationalbudgetsandprogrammeswillbe spatially referenced across the 44districts and all eight metro cities.

In 2019, business confidenceslumped to the lowest level sincethe 1980s. South Africa is safe froma credit ratings downgrade by Moody’s for the next fewmonths.Moody’s is the only one of the threemajor ratingagencies that has not assigned the country junk or a lowerstatus, but it has a negative outlook for the country.

New tax lawsIn order to get access to more funding, the governmentis looking for alternative policies. It is looking at waysfor pensions to invest more in government bonds or introubled state-owned enterprises. Last year the ANC’seconomic policy head, Enoch Godongwana, said it was“a better option than approaching the IMF or the WorldBank for a bailout”. To raise more tax revenue, from

March 2020, South Africans living abroad will have topay income tax on amounts over R1m.

All eyeswill be on trade and industryminister EbrahimPatel to seewhetherhewill kickstart apackageofmeasurestosupport themanufacturingsector, includingderegulation,skills development and infrastructure. Different masterplans for different sectors with high potential for growthare set to provide greater clarity for specific interventions.

The next phase of the Automotive Production andDevelopment Programme is kick-ing off, seeing more black-ownedcompanies entering the componentsector. For the 2021-2035 phase, theaim is to see 25% of the two lowertiers to be black owned. CompaniesincludingVolkswagen,Toyota,BMWand Mercedes-Benz have agreed tocreate a R4bn fund to support blackindustrialistswanting toprovidegoodsand services to the industry.

Tech and finance are two crucialsectorswith changes on the horizon.Thebankingsectorhas seen threenewentrants, including billionaire PatriceMotsepe’s TymeBank. However, the

‘Big Five’ will continue to dominate for at least the nextdecade,while operators are patientlywaiting for the gov-ernment to allocate a spectrum suitable for the roll-outof 5G mobile network technology.

Investors are adopting a wait-and-see attitude aboutinvestment in themining sector. Court cases related to theMining Charter, passed in 2018, are ongoing.

Ramaphosa is strengthening South Africa’s ties withChina andhasweakened themwithRussia. In 2020, SouthAfrica assumes the rotational chair of theAfricanUnion,where Ramaphosa is likely to focus on trade and invest-ment. A key item on the agenda is starting operations ofthe African Continental Free Trade Agreement.

2015 2016 2017 2018 2019

MINING OUTPUT

Volume of mining production(year-on-year % change)

30

20

10

0

-10

-20

R500bn

R450bn

R400bn

R350bn

R300bn

R250bn

Total value of mineral sales at current price

SOURCE:STATISTICSSOUTH

AFR

ICA

Power failureWith an estimated debt of more than$30bn, South Africa’s power utilityEskom remains one of the biggest threatsto the economy. The ailing electricityprovider is ‘too big to fail’ yet thereis still no clear plan to show how exactlyit will be saved and restructured. Toughdecisions are expected in 2020. Eskomsupplies 95% of the country’s power andhas a bloated staff of 46,000 workers.The struggling economy needs Eskomto survive. Eskom recorded a loss of

R20bn ($1.3bn) during its last financialyear, and parliamentarians say theyno longer want to write blank cheques.

President Cyril Ramaphosa hasproposed the break-up of the utility, butallies like the Congress of South AfricanTrade Unions hit back and said theywill not accept that workers will be firedor that the company would be privatised.

A key step forward is naming a newchief executive, and one was still dueto be named as The Africa Report went

to press. Freeman Nomvalo was appointedchief restructuring officer in August, butanalysts say the pick was underwhelming.

Eskom will continue to be bogged downby internal African National Congressfactional fighting. Sfiso Buthelezi – an allyof former president Jacob Zuma – is thechairperson of parliament’s appropriationscommittee and is demanding a revisionof all Eskom contracts. If Ramaphosawants the economy to thrive, he will haveseveral battles to win in the year ahead.



ZIMBABWE

MAL

AWI

ANGOLA


TANZANIA

MOZAMBIQUE

NAM.

LUSAKA

ZAMB IANdola

200 km

Rebuffedby the InternationalMonetaryFund (IMF)becauseof its hidden debt levels and with miners worried aboutthe investment climate (see box), Zambia’s presidentEdgarLungubegins the fight forhispolitical survival aheadof thepresidential elections in 2021. He used his influence overthe Constitutional Court to push through a controversialpotential third term in office in December 2018.

His administration is taking amore authoritarian stanceaheadof the next vote.His government is intimidating hisopponents and the police are using archaic laws like thePublic Order Act to stop opposition parties and criticalvoices from organising themselves.

Increasingly, civil society groups,critical of Lungu’s political and eco-nomic failings, are being weakenedby threats of deregistration, arrestsand violence. Lungu and his alliesare also angry about the criticism heattracts on social media.

Hishumdinger,however,hasbeen tohastily amend the constitution beforethe elections nextOctober, to removethe remainingconstraintsonhispowerand guarantee his electoral victory.

ConstitutionalAmendmentBillNo.10, on which Lungu’s future hangs,would strengthen the presidencyeven more. The bill would give thepresident more influence over thejudiciary and the country’smonetarypolicy. The amendment would alsoweaken parliamentary oversight.There is fierce opposition to thebill, and the Patriotic Front (PF)only has 89 out of 156 national assembly seats – shortof the two-thirds majority that it needs.

Making inroadsOpposition leader Hakainde Hichilema of the UnitedParty for National Development (UPND), working withother opposition parties, has doggedlymade inroads intosome constituencies previously seen as PF strongholds.Capitalising on Zambia’s weak economy, Hichilema isportraying himself as sympathetic to people’s suffer-ing as the high cost of living squeezes more families.

The IMF predicts that inflation will hit 10% in 2020.Another formidable opposition has arisen in the formof former PF stalwart and now leader of the NationalDemocratic Congress (NDC) Chishimba Kambwili.Despite the arrest of supporters, Kambwili is relentlessin accusing Lungu of grand corruption.

More importantly, the NDC wrested an importantconstituency from the PF in a parliamentary by-electionin Copperbelt Province. The UPND, with its support inthe west and south, could team up with the NDC, whichhas strongholds in the Copperbelt and north. But Lungu

also faces challenges within the PF.

Overleveraged governmentHailing fromEasternProvince,Lunguis being challenged by the political-ly powerful northern block withinthe PF who feel their region is notgetting its due. Others worry that hehas not been able to defend himselfwell against claims that he has usedhis position to enrich himself andhis family and close allies.

The economy is struggling, withan uncertainmacroeconomicoutlookin 2020 and an overluieveraged gov-ernment struggling to meet its debtobligations. External debt increasedto $10.2bn in June 2019 and domesticdebt increased to K60.3bn ($4.5bn).Complete repayment of a $750meurobond is due in 2022 and another$1.25bn bond will come to maturityin 2024. The government insists that

it will not default on any payments and has rolled outausterity programmes, which have led to downwardrevisions for economic growth.

The 2020 budget will be seriously affected as Zambiatries to meet its debt obligations and pressing needs forelectricity generation and foodandwater security. It raisestaxesand royaltiesonminingcompaniesbasedona slidingscale thatwill increase as the price of copper rises.Mininghouses have called for a cap on royalties.

Analysts say that the government will struggle to bringthebudget deficit towithin 5.5%ofgross domestic product

>President Lungu isusingstrong-armtactics towina third term>Theeconomy is indire straitsbecauseof lowcopperpricesandhugegovernmentdebts

ZambiaCampaigningwithemptycoffers

> GDP growth (%)

2020*2019*20182017

23.323.926.725.8

> GDP ($bn)

3.5 3.6

1.62

> Population: 17.9 million> GDP per capita: $1,307> Life expectancy: 62.3> Adult literacy: 83%> Inflation: 10%> Human development index(out of 189 countries): 144


*Estim

ationOctob

er2019


(GDP). The government’s debt was set to reach 91.6% ofGDP this year, which is unsustainable. The 2020 budgetalso includes around $515m in “exceptional revenue” thatthegovernmenthas refused toprovidedetails about, raisingmany questions about the reliability of its statistics andthe transparency of its management.

Another concern is the contentiousChinese debtwhichthe government estimates to be at about 30% of the totalexternal debtportfolio –butothers suggest it couldbemuchhigher than official figures. Chineselenders are grumbling about the gov-ernment’s difficulties in repaying.

Anti-Chinesesentimentsarerunninghigh among Zambians, and activistsare sounding alarms that the govern-mentmight have to give upkey assetsto theChinese lenders if Lusaka failsto repay its debts.

So far, Lungu’s attempts to turnaroundtheeconomyhavenotbeensuc-cessful.Hehas gone through three fi-nanceministers in threeyears.Noneofthemhas been able to deliver onwhathewants: an IMF bailout, without itsstringent conditions. The IMF scaleddown its presence in Zambia, recalled its representativeandmade it known that a bailout is not anoption followingZambia’s failure to declare its full indebtedness, especiallyits exposure to Chinese loans, and to curtail spending.

Spending splurgeThegovernment’s recent spendingspreehas focused largelyon roads, which it expects to boost economic activity inthe landlocked country. The government commissionedthe Great East Road in Eastern Province in late October.That spendingon infrastructure hasnot boosted economicgrowth or reduced poverty, which has been rising slowlysince 2000, with a brief pause from 2010 to 2015. Lungu

has fallen out with the usually taciturn Bank of Zambiagovernor Denny Kalyalya, who has made it clear that theblame for the state of the economy lies firmly at the feet ofthegovernment,whichhasnot curbedspendingsufficiently.

Zambia is reliant on rainfall formuch of its agricultureand is recovering from a poor 2018/2019 season due toerratic rains and drought. The 2019 maize crop was anestimated 2m tonnes, about 50% less than usual. TheWorld Bank is now backing the expansion of Zambia’s

irrigation systems.The agriculture sector is impor-

tant to the economy, accounting forabout 50% of employment but onlyabout 10% of GDP – showing thelack of investment in processing andvalue-added activities. The govern-ment estimated that some 2.3millionpeople are in need of food securitysupport and that rains would returnto normal for the 2019/2020 season.Large agribusiness firmZambeef hasbucked the agricultural downturn andreported inSeptember that it expectedgoodprofits, inpart fromitssoyabean,wheat and maize projects.

Thegovernment has recently raised interest rates,whichis expected to restrain lending to the private sector. Thegovernment’s arrears to contractors are contributing tonon-performing loans, which remain around the 10%limit that the central bank aims for.

Zambia has been slow to develop solar and other re-newable projects to diversify its energymix. Due to poorrains and a reliance onhydropower, the state power utilityZESCOhas implementeda load-sheddingprogramme thatit expects to last until at least 2020. The 750MW KafueGorge Lower power station is due to begin productionsoon, and inNovember Japan’sUnivergySolar announcedplans for $200m in photovoltaic projects.

ZAMBIA’S EXPORTS

2012 2019.

14 1513 16 17 18

Non-copper ($m, left)Copper ($m, left)Copper prices($ per metric tonne, right)

10,000

8,000

6,000

4,000

2,000

0

14,000

10,000

6,000

2,0000

SOURCE:IM

F

Sinking mining fortunesZambia possesses the world’shighest-grade deposits of copper andis ranked the seventh-largest copperproducer in the world. The sectoraccounts for more than 70% of thecountry’s export earnings and the minesare the largest taxpayers in Zambia.

Amidst price uncertainty, the regulatoryand tax system in the country continuesto change. In the face of opposition fromminers, the government abandoned itsplans to replace the value-added tax with

a non-refundable sales tax. The 2019mining tax reforms significantly increasedthe tax burden on mining companies.Miners say the government is making thesector unsustainable and uncompetitive.

Zambia is heavily reliant on hydro-power for electricity generation, andweak rains mean more problems forthe industry. The Zambia Chamberof Mines predicts that 2019 productionwill drop to 750,000tn from 860,000tnin 2018. To add on to those problems,

the battle between the government andthe Vedanta Resources-owned KonkolaCopper Mines (KCM) has other minersscared about the potential for a wave ofresource nationalism. The administrationargues that KCM breached the termsof its licence. This has sent a chillingwarning to the other big miners likeBarrick Gold, Glencore and First Quantum.Barrick is in the process of selling itsLunwana copper mine, which is attractinga lot of investor interest from China.



Indian

Ocean

HARARE

BOTSWANA

SOUTHAFRICA

MAL

AWI

ZAMBIA

MOZAMB.

Z IMBABWE

Bulawayo

200 km

More than twoyearsafterPresidentEmmersonMnangagwasucceeded Robert Mugabe through a military-assistedtakeover, Zimbabwe’s centre is struggling to hold asMnangagwa battles to revive the country’s flounderingeconomy. Mnangagwa is fighting off threats from theruling ZimbabweAfricanNational Union-Patriotic Front(ZANU-PF) and the armed forces.

He is said to no longer be on good termswith one of hiskey allies, Constantino Chiwenga, the former army chiefwho led the coup againstMugabe.Chiwenga is reportedlypositioning himself to take over from Mnangagwa. ButChiwenga’s current physical ailmentsadd some uncertainty to the mix. Hehas been shuttling between SouthAfrica, India andChina,wherehewastreated for an undisclosed disease.

Mnangagwa has acted swiftly toneutralise any potential threats fromthearmedforces.He redeployedsomemilitary bosses including GeneralAnselemSanyatwe, a former head ofthePresidentialGuardwho led troopsthatopenedfireonprotesters inAugust2018. Sanyatwe is now Zimbabwe’stopdiplomat inTanzania.Chiwenga’slong absence fromwork has also settongues wagging, and some activistsare calling for him to step down fromthe vice-presidency.

Fresh rivalryMugabe, who ruled Zimbabwe for 37years before his forced resignationin November 2017, died of prostatecancer in Singapore on 6 September 2019. His death trig-gered fresh rivalry between a group of ZANU-PF youngTurks calling itself Generation 40 with Mnangagwa’sTeam Lacoste. Most of Mugabe’s allies, like JonathanMoyo, Saviour Kasukuwere and Patrick Zhuwao, remainin exile. Someof the late veteran leader’s lieutenantswhoremained inZimbabweare facing various charges rangingfrom corruption to criminal abuse of office.

Members of the G40maintain that Mnangagwa is notthe legitimate president of Zimbabwe – a view that isshared by themain oppositionMovement forDemocratic

Change party led by Nelson Chamisa, who lost theelections held in 2018. TheMDC, which lost most of therecent by-elections, says it will be organising nationwideprotests againstMnangagwa and his party in 2020. Theyare calling forMnangagwa to step down for failing to runthe country’s affairs properly. The MDC has agreed tothe reunification of its factions, but its real strength willsurely be tested when the party squares up with ZANU-PF in general elections in 2023.

As anger againstMnangagwa’s government is growing,buoyed by the underperformance of the economy, the

Harare administrationhas respondedbysilencingdissentingvoices.Anum-berof citizenshavesincebeenchargedfor undermining the authority of thepresident after voicing their concernsabout Mnangagwa’s administration.

‘The Crocodile’Although Mnangagwa, popularlyknownas ‘theCrocodile’ – anicknamehe picked up during the country’s lib-erationwar of the 1980s – promised araft of political andeconomic reformswhen he assumed the presidency,the country’s economy is shrinking.

Many of Zimbabwe’s citizens arespending more and more money onfood while at the same time fuel,electricity and water are in shortsupply. Due to rampant inflation,a packet of toilet paper now costsmore than half of a primary schoolteacher’smonthly salary.Mnangagwa

says his government will soon be engaging businesswith a view to control prices as the costs of most goodsand services continue to skyrocket.

The government has adopted an economic blueprintcalled theTransitional Stabilisation Programme that runsup to December 2020. It prioritises boosting agriculture,mining and tourism, stabilising themacro-economy andthe financial sector, introducing policy and institutionalreforms, transforming to a private-sector-led economy,addressing infrastructure gaps and launching ‘quick-wins’ to stimulate growth.

>TheoppositionandZANU-PFhavenotagreedona framework forpolitical dialogue> Mnangagwahasbeenunable to turnaround theeconomy,payarrearsorattract investors

ZimbabweNoendinsighttothecrisis

> GDP growth (%)

2020*2019*20182017

12.612.820.921.8

> GDP ($bn)

4.7 3.4 2.7

-7



*Estim

ationOctob

er2019


TheHarare administration says it wants to improve theease-of-doing-business environment by introducing aone-stop investment centre aswell as reforming the publicservice by introducing wage bill containment measuresthat would reduce the annual wage bill by $130m (0.4%ofGDP) in 2020.Thesemeasures include removing ghostworkers from the government payroll.

But Zimbabwe’s exports are not earning enough foreigncurrency tomeet domestic needs. In 2019 the central bankoutlawed theuseofmultiplecurrenciesandadopted theZimbabwedollar.Theauthorities are printing more of thesurrogate currency, commonlyknownas bond notes, in order to fill the gapcreated by the decision to ban the useof theUSdollar andother currencies.A parallel market is now thriving.

Thegovernmenthas since launcheda crackdown. The Reserve Bank ofZimbabwe froze the bank accountsof companies linked to one ofMnangagwa’s close allies and topadvisers, KudakwasheTagwirei, andhis nephew Tarisai Mnangagwa, ac-cusing them of sustaining the blackmarket. Tagwirei, targeted by critics for his business in-terests and close relationship toMnangagwa, financed thegovernment’s CommandAgriculture programme throughhis company Sakunda Holdings.

Mining optimismMnangagwa is scaling up the fight against corruption andhe has given arresting powers to the newZimbabweAnti-Corruption Commission led by former High Court judgeLoice Matanda-Moyo – wife to foreign affairs ministerMajor General Sibusiso Moyo.

The economic troubles also drove gold productionlower in the past two years, but the authorities are now

predicting a production increase for 2019. The miningsector could deliver 50tn of gold, 5,000ct of diamondsand 17,500kg of platinum in 2020, but some economistssay that the poweroutages being experiencedmay scupperthose projections.Mnangagwablames the economic crisison sanctions imposed on him and his inner circle by theWest. He has lobbied the Southern African DevelopmentCommunity to ratchet up international pressure for theunconditional lifting of the restrictive measures.

On the infrastructure front, thegov-ernment says it wants to scale up thedualisationof theBeitbridge-Harare-Chirundu highway in 2020 so that itmeets its completion target of 2022.The busy road connects Zimbabwewith South Africa and Zambia and isexpected to cost $2.7bn.

FinanceministerMthuliNcube saysZimbabwe is planning to start talks inearly 2020 on clearing arrears on itsinternationaldebt, as thecountryseeksto rebuild confidence in the economy.Zimbabwe owes arrears to theWorldBankandAfricanDevelopmentBanktotalingalmost$2bn.Ncubesaysclear-

ing that debtwould be crucial to secure new lines of credit.President Mnangagwa has been globetrotting looking

for foreign direct investment for his country, but his ef-forts have not yielded significant results. Chinese banksrecently backtracked on funding three infrastructureprojects worth $1.3bn after Zimbabwe raided $10m froman escrowaccount set up for the refurbishment ofHarare’sRobert Gabriel Mugabe International Airport.

Investors seem to be taking a careful approach toZimbabwe, with some deals – like the recapitalisation ofthe National Railways of Zimbabwe through a $400minjection from the Diaspora Infrastructure DevelopmentGroup and Transnet of South Africa – falling through.

INFLATION DYNAMICS

250

200

150

100

50

0

100%

80%

60%

40%

20%

0%Mar18

Jul18

Nov18

Mar19

Jul19

Nov19

CPI, Dec 2012=100 (right)Month-on-month change (left)Year-on-year change (left)

SOURCE:IM

F

The talking cureDespite President Emmerson Mnangagwapromising to change Zimbabwe’s politicalculture for the better when he took oathof office, the political situation in thecountry took a turn for the worse in 2019when dozens of rights and oppositionactivists were arrested, allegedlyfor plotting to subvert a constitutionallyelected government. Some pro-democracyactivists were also abducted.

The Movement for Democratic Changeparty was denied its right to petition

the government when it sought to stageprotests in various provinces, withthe state deploying heavily armed policedetails to block demonstrations. Manyactivists have described the abductionsand rights violations as worse than thosecommitted during the Robert Mugabe era.

The EU and the US want Mnangagwato implement key political reforms.European countries like Swedenare calling on the president and his rivalNelson Chamisa to engage in dialogue

before any meaningful re-engage-ment could take place. For his part,Mnangagwa convened a dialogue withfringe political parties and says hisdoors are open to Chamisa, who remainsadamant that any meaningful politicaldialogue should discuss Mnangagwa’slegitimacy and should be facilitatedby a foreign mediator. Chamisa’s partyis pushing for a transitional authoritythat would be tasked with creatinga roadmap for fresh elections.

A home port for investors

At the crossroads of Africa, Asia and the Arab World

An environment conducive to innovationA diversified economyA regional logistics and transport hubInternational standard infrastructure and servicesNew tourism opportunities

©V.FO

URNIER

forJ

.A.-

andDR

The future is on themove


ASMARA

Dar esSalaam

Mombasa

Kisumu

Juba

Mbeya

Dire Dawa

Harar

Berbera

Massawa

Kismayo

Jima

Obbia

Hargeisa

Gondar

Zanzibar

Indian Ocean

Gulf of Aden

RedSea

LakeVictoria

ERITREASUDAN

SOUTH SUDAN

UGANDA

ETHIOPIA

DJIBOUTI

SOMALIA

BURUNDI

RWANDA

TANZANIA

KENYA

ZAMBIA

MOZAMBIQUE

YEMEN

SAUDI ARABIA

AN


DODOMA

NAIROBIKIGALI

KAMPALA

MOGADISHU

ADDIS ABABA

DJIBOUTI

BUJUMBURA

TOTAL$313.2bn

1.1% Burundi 0.4% Comoros1% Djibouti

0.7% Eritrea

29.1% Ethiopia

31.5% KenyaRwanda 3.3%Seychelles 0.5%Somalia 1.6%

South Sudan1.2%

Tanzania 19.9%

Uganda 9.8%

2020

2035

2050

331.6

473.1

628

KenyaandTanzaniahadbeencompetingtobuildChinese-

backedrailwaystoservetheirneighbours.Withthefirst leg

oftheKenyanonestrugglingtobreakeven, financiers in

Beijingwanttoseebetterstudiesbeforecommittingmore

moneytorailwayprojects.

East Africa

0%changeForeigndirect

investmentintoEast

Africawasstagnant

in2018,despite

itbeingthefastest-

growingregion

onthecontinent.

Kenya’sgrewby

27%,whileEthiopia’s

droppedby18%.

Pausingtheregionalrailrace

176 People towatch

178 Burundi

179 Comoros

180 Djibouti

181 Eritrea

182 Ethiopia

184 Kenya

186 Rwanda

187 Seychelles

188 Somalia

189 SouthSudan

190 Tanzania

192 Uganda

EAST AFRICA POPULATION(millions)

EAST AFRICA GDP (2019)(% of regional total)

SOURCE:UN

POPULA

TION

DIVISION

SOURCE:IM

F

176 THEAFRICAREPORT / N° 110

COUNTRY PROFILES / EAST AFRICA

peopletowatchETHIOPIA

BirtukanMideksaPoll supremo

The oppositionist in exile turned electoral commission bossis in the spotlight as Prime Minister Abiy Ahmed preparesfor game-changing elections in May 2020. He has promisedthat they will be free and fair, but some members of the rulingcoalition are not so keen on losing its monopoly on power.The displacement associated with an uptick in ethnic clasheswill also make Birtukan’s logistical task much more difficult,and the success of the polls will be a key measure of Abiy’sreform and liberalisation drive.

SOUTH SUDAN

AnnaNimirianoTelling her story

With its censorship,violence, intimidation andthreats, South Sudan inthe midst of civil conflictis not an easy place tobe a journalist. AnnaNimiriano has defied theodds to become one of theleading women writers in thecountry. She has also defiedthe notorious national securityoperatives who have worked tostifle journalism in the war-torncountry to win multiple interna-tional awards for her work. SouthSudan’s first female editor-in-chieftold reporters about her commit-ment to improving her country:“Sometimes, when you see somuch going wrong, you realisethere is nothing you can dobut write it down.”B

ENNETT

RAGLIN/GETT

YIM

AGESFO

RIW

MF/AFP

KENYA

Michael JosephBusy boss

The year ahead is filled withimportant choices for Kenyan-American executive Michael Josephas he leads two of Kenya’s mostimportant corporations. He is nowmanaging Safaricom, the telecomscompany he transformed from 2000until 2010, until he hands over to anew CEO in April. In the meantime,he is chairman of the board of KenyaAirways, which is due to be taken overby the government. Kenya Airwaysis looking for a new chief executive,too, to pilot its next phase of growth.


ETHIOPIA

JawarMohammedOromo influencer

Activist and media owner JawarMohammed is a key figure in theEthiopian election next year. Howhe influences Oromo politics willhave a huge impact on Prime MinisterAhmed Abiy’s chances of success.Jawar is from the Oromo ethnic group,the same as Abiy and Ethiopia’slargest. The two have fallen out andJawar claimed that the governmenttried to arrest him in October, leadingto an outbreak in violence. WithEthiopia’s model of ethnic federalismunder strain amidst Abiy’s liberalisa-tion programme, the May 2020 pollswill pit parties with an ethnic lensagainst Abiy’s planned new partythat seeks to promote Ethiopian unity.

DAMIEN

GRENON

POURJA

TANZANIA

FatmaKarumeDefender ofthe rule of law

Fatma Karume insiststhat she does notwant to get involvedin politics, but thebattle for controlof Zanzibar and

President John Magufuli’s authoritarian tactics may pushher in that direction. She has been a vocal critic of thelack of checks and balances on the Magufuli government.The High Court controversially temporarily suspended theformer Tanganyika Law Society president from practisingon the mainland in September. In her reply, sheexplained: “Probably, advocacy is no more a place I’msupposed to be. Maybe I’m supposed to be in politics.”She comes from a political family, and her father andgrandfather were both presidents of Zanzibar.

PIXELPHOTO

GRAPHY

MAHEDERHAILESELA

SSIE

TADESE/A

FP

UGANDA

Robert KyagulanyiSsentamuSongs of discontent

The biggest thorn in PresidentYoweri Museveni’s side is this37-year-old singer turned politi-cian, Robert Kyagulanyi Ssentamu(aka Bobi Wine), who wantsto stand up for the poor anddisenfranchised. The 75-year-old leader could run again in2021, and Bobi Wine intends tochallenge him. Wine has beenan effective critic, pointing outthe government’s corruptionand hypocrisy, but setting up apolitical party, forging alliancesand running an effective nationalcampaign are next-level chal-lenges. The year ahead will showif Wine and his allies are up tothe task in the face of the securityforces’ intimidation and brutality.



BUJUMBURA

LakeTanganyika

Lake Kivu

BURUND I

RWANDA

TANZANIA

DRC

100 km

The big question for Burundians in 2020 is whetherPresident Pierre Nkurunziza, in power since 2005, willkeep his promise to step down. He surprised many byannouncing in June 2018 that he would not run for afourth term, after his last presidential run led to a coupattempt and violence. Nkurunziza can in theory continuerunning until 2034 thanks to controversial constitutionalreforms that came into force in May 2018.

Uncertainty looms as presidential, legislative and localelections are now due to be held on 20 May 2020. SinceNkurunziza’s announcement, the rulingCongrèsNationalpour la Défense de la Démocratie-Forces de Défense de la Démocratie(CNDD-FDD) has not named apoten-tial candidate to run for thepresidency.Many in the opposition are scepticalabout whether Nkurunziza will fol-low through, and a group within theCNDD-FDD want him to run again.Because of the uncertainty, no one inthe ruling party has yet ventured toannounce their candidacy.

After a long battle with the author-ities, former rebel leader AgathonRwasa succeeded in registering hisnew political party, the CongrèsNational pour la Liberté (CNL), inFebruary 2019. But that is not a signthat things are getting easier forthe opposition. Rwasa says that hissupporters are subject to increasinglevels of intimidation. The NGOHumanRightsWatch has denouncedattacks by the Imbonerakure, the rul-ing party’s youth wing, on members of the CNL. Manyof Burundi’s opposition leaders are now living in exile.

France weighs inThe socio-economic situationhas continued todeterioratethroughout the crisis,which beganwithNkurunziza’s can-didacy for a third term in 2015.The suppressionofproteststhat accompaniedhis candidacyand thenhis re-election leftat least 1,200people dead and400,000displacedbetweenApril 2015 and May 2017, according to the InternationalCriminal Court, which opened an investigation at the end

of 2017 and continues to investigate. SinceOctober 2019,nearly 200,000Burundian refugees inTanzania have alsobegun to be repatriated: the Dodoma government arguesthat peace has returned, despite the concerns of theUnitedNations High Commissioner for Refugees.

Tensions remain highwith neighbouring Rwanda, andTanzania’s attempts to mediate the conflict yielded fewresults. Now France is taking up an ambiguous role inBurundi, leading to criticism bymembers of civil society.In July 2019, the formerFrenchambassador toBurundi saiddefence cooperation had gradually resumed following the

October 2018 visit to Paris of foreignminister and former Imbonerakureleader Ezéchiel Nibigira.

Health epidemicsThe country is affected by a vastma-laria epidemic. More than 5 millioncaseswere recordedbetween Januaryand June 2019 – an increaseof 97%onthesameperiod in2018, theUNOfficefor theCoordinationofHumanitarianAffairs said. Cholera, too, has re-surged: the authorities recorded 245cases last June,mainly in theprovinceof Bujumbura. The political conflicthas hit the economy hard, with asignificant part of the internationalaid on which Burundi depends stillfrozen due to the crisis.

In the underdeveloped agricul-ture sector, coffee and tea are themain cash crops. The governmentis spending more on input subsidies

in order to increase production. The government set anexport target of 22,000tn in 2019, up from 18,000 in 2018,according to theAgence deRégulation de la Filière Café.

An uptick in mining activity led the sector to be thecountry’s largest source of foreign exchange in the firstquarter of 2019, beating coffee and tea combined. TheRainbow Rare Earths mine at Gakara is responsiblefor much of the recent boost, with other miners sloweddown by the country’s poor energy and transportationinfrastructure.Much of the country’s mining productioncomes from artisanal sources.

>Thecountrycouldput someof its instabilitybehind it if the2020elections turnanewpage>Agricultural production–akeyexport sector – lacks investment

BurundiNkurunziza’s lastchapter?

> GDP growth (%)

2020*2019*20182017

3.73.53.43.3

> GDP ($bn)

0.0010.14

0.50.41



*Estim

ationOctob

er2019



Indian OceanMORONI

Dzaoudzi

NGAZIDJA(GRANDECOMORE)

MWALI(MOHELI)

NDZUANI(ANJOUAN)

MAORE (MAYOTTE)(France)

COMOROSMutsamudu

30 km

So far, President Azali Assoumani has been able to shapethe Comorian landscape to fit his political goals, whichinclude staying in power for long enough to transformthe archipelago. He steamrolled over objections to con-stitutional reforms in July 2018, ended the rotation of thepresidency between the country’s three islands, and wonre-electionwith 60%of the vote in aMarch 2019 electioncalled ahead of schedule. The election was marked bysome violence and many opposition protests. The legalchangesmean that he couldpossibly stay in a strengthenedpresidency until 2029.

Analysts argued that the rotatingpresidency was a key reform thatsupported stability in the coup-pronecountry, but so far Assoumani hasbeen able to outflank his opponentsand deal with protests that aremuchsmaller than in previous periods.Assoumani’s primaryopponents havebeen sidelined by legal problemsstemming from a previous govern-ment’s programme to sell ‘economiccitizenship’ to foreigners.

Former head of state AhmedAbdallah Sambi was not allowed torun in the 2019 polls. The Juwa partyleader is still in detention as partof an investigation into the sellingof Comorian passports that issuedits conclusions in 2018, despite illhealth. Under investigation in thesame case, former vice-presidentMohamed Ali Soilihi of the Unionpour le Développement des Comoresalso did not run. The Supreme Court threw out otheropposition candidacies too.

Opposition boycottThe fourmain opposition parties announced in late 2019that theywould boycott the 2020 legislative vote in protestat what they see as a fraudulent 2019 election. They arecalling for reforms in electoral management and for thediaspora to be allowed to vote.

The opposition has not been able to unite againstAssoumani and they split the protest vote in the 2019

election.With the new constitutionweakening checks onthe presidency, the opposition may find it hard to holdthe government to account. Calls to protest against theelection results did not lead to mass demonstrations.

Money for MayotteDiplomacy is high on Assoumali’s agenda. France andComoros are still in talks about the future of the islandofMayotte, which became a French overseas departmentin 2011. A cooperation agreement would involve the dis-bursement of several hundredmillion euros to be invested

mainly in the islandofAnjouan.Paris’sconcerns are largely about illegal im-migration fromComoros toMayotte.

Such a disbursement would be amajor help, as the government doesnothave the fundsnecessaryfor invest-ment in infrastructure.Electricitypro-duction remainsweak.The economyhas been growing recently, however,thanks in part to the construction ofsomeroadsandhospitals.Thecountrydoesnothaveawell-developedprivatesector and the economic mainstay– agriculture – is largely small-scale.

To attract more tourism, the gov-ernment wants to launch an airlinewith the help of a strategic investor.Arrivalshavebeen risingsteadily froma low base over the past few years,and reached 35,800 in 2018 accordingto theWorld TourismOrganisation.

The Comorian government isconvinced that the waters around

the archipelago are rich in oil and gas. It has struggledto convince oil companies to make the commitment toinvest billions of dollars in drilling programmes. Somecompanies are taking a first step.TullowOil andDiscoverExploration have licences covering 16,000km2 and arelaunching the country’s first 3D seismic testing round.

Diplomatically, theComoros remainsoriented toward theMiddle East andAsia. In late 2019, India’s vice-presidentVenkaiah Naidu signed a series of cooperation deals,including one on security. The United Arab Emirates areproviding aid for electricity and water projects.

>Afterhisdisputed re-election, Assoumani could remain inofficeuntil 2029>AdealwithFrancecouldbringmuch-needed investmentmoney

ComorosAssoumanichangestherulesofthegame

> GDP growth (%)

2020*2019*20182017

1.251.171.181.08

> GDP ($bn)

2.9 2.94.2

1.2

> Population: 85,100> GDP per capita: $1,349> Life expectancy: 63.9> Adult literacy: 49.2%> Inflation: 3.2%> Human development index(out of 189 countries): 165


*Estim

ationOctob

er2019



DJIBOUTI

ERITREA

YEMEN

ETHIOPIA

SOMALIA

DJ IBOUT I

30 km

Gulf ofAden

Prospects for better relations in the Horn of Africa arenow on hold until leaders can move beyond the historicSeptember 2018 handshake between Djibouti’s PresidentIsmail Omar Guelleh and his Eritrean counterpart IsaiasAfwerki. The reconciliationwas part of the peace drive ofAbiyAhmed,Ethiopia’s primeminister, thatwas launchedinApril 2018. Since 2018, neither Eritrea orDjibouti havetaken any steps to normalise relations, which have beenfraught since a border conflict started in 2008. Somesenior officials in Djibouti argue that little improvementshould be expected because Isaias got themost importantthing hewas looking for, the removalof international sanctions.

There is another important on-going conflict that pits the Guellehgovernment against the United ArabEmirates’ DP World. The adminis-tration kicked DP World out of theDoraleh port terminal in 2018, afterhavingawarded ita30-yearconcessionfor the entire Djibouti coast in 2006.The government claims that the dealwas corrupt and against its sovereigninterests. The London arbitrationtribunal has ruled in favour of theport operators several times, sayingthat the concession contract shouldcontinue tobe respected.TheDjiboutiauthorities say that they are happy topay in order to put an end to it.

International linksA standstill has ensued. The gov-ernment has sought to bring in newinvestors at Doraleh, but several shipping companiesdropped their investment plans afterDPWorld threatenedlitigation in 2019. DP World has turned its focus to theregion and seems to be looking to compete with Djiboutiby setting up projects in Berbera in Somaliland as well asin Assab and Massawa in Eritrea.

Djibouti’s international links are key to its positioning,hostingFrench,Chinese, Japanese andUSmilitary bases.Guelleh’s team has not backed down and is rolling outports and other infrastructure to strengthen the country’sposition as a logistics hub for Ethiopia and eventually the

wider East African coast. The construction of a secondindustrial port complex – of the same size as the oneinaugurated in 2018 – has just begun, thanks to a newChinese loan of $600m.

Djibouti’s main financial partner was reassured bythe country’s drastic reduction in its debt level, whichfell to 71% of gross domestic product in mid-2019, afterhaving been estimated at 104% by the InternationalMonetary Fund – figures that the government disputed.Guelleh has regained the certain financial capacity thatwill allow him to accelerate the promised social policies

that helped him to win re-electionin 2016. Housing is one of the firstareas to get attention,with several bigprojects launched in recent months.

High youth unemploymentThe government signed a deal fora 30MW solar park with France’sEngie in May and have several otherrenewableprojectson theagenda.TheGuellehadministrationwants toreduceits dependence on electricity fromEthiopia and strengthen the share ofgreenenergy in its electricity supplies.

Despite the country’s high growthrates, unemployment, particularlyamong young people, has not fallenbelow60%.Guelleh says that hewilladdress this problemby the endof hismandate. So far, all signs are pointingto the long-serving leader’s desire torun again in 2021 despite previouspublic pronouncements about plan-

ning for his succession. He continues to use the powersof incumbency to weaken the opposition, giving it littlechance of shaking up the status quo. His Union pour laMajorité Présidentielle comfortably holdsmore than twothirds of seats in the national assembly.

The opposition has formed a united front, the Unionpour leSalutNational (USN).MohamedDaoudChehem,the USN’s presidential candidate in 2016, says that of therecognised parties only the Union pour la Démocratie etla Justice and the Parti Djiboutien pour leDéveloppementnow work well together.

>TheconflictwithDPWorldover thePortofDoraleh isdraggingon>PresidentGuelleh is set to run for re-electionagain in2021

DjiboutiProblemsandpromises

> GDP growth (%)

2020*2019*20182017

3.423.162.922.76

> GDP ($bn)

55.5

66

> Population: 974,000> GDP per capita: $2,936> Life expectancy: 62.6> Adult literacy: ND> Inflation: 2.2%> Human development index(out of 189 countries): 172


*Estim

ationOctob

er2019


COUNTRY PROFILES / EAST AFRICA Red Sea

ASMARA

ETHIOPIA

SUDAN SAUDIARABIA

YEMEN

DJIBOUTI

ER ITREA

200 kmAssab

With a struggling economy and increasingly restivepopulation, 2020might plausibly see attempts to removePresident Isaias Afwerki and usher in a new regime. Butchances remain slim at best.

Peace in the region remains fragile. The year 2018was Eritrea’s most momentous year since the end of thebloody 1998-2000 war with neighbouring Ethiopia, butthe following year was remarkably uneventful.

The progress which followed the peace deal signed inJuly2018between IsaiasandEthiopia’sprimeministerAbiyAhmed – restored trade and travel links between the coun-tries, aUnitedNations arms embargoonEritrea lifted –was notmaintainedandwas evenpartially reversed.Moststrikingly, thekeydisputed territoriesremain under Ethiopian control. TheUnitedArabEmirates,which is usingits base in Eritrea to help fight in thewar in Yemen, is also supporting theHorn rapprochement.

ThelandborderwithEthiopia,whichwas opened for the first time in twodecades,was summarily closed againat all crossingpoints inearly2019withnoofficial explanation.One theory isthatAsmaraworriesabout the floodofgoodsfromEthiopiaundermininglocalbusinesses,especially theparty-ownedones which dominate the economy.

Turning a blind eyeIsaias may see an open frontier as asecurity risk, given the unresolvedrift betweenhimself and theTigrayanPeople’s Liberation Front, the ruling party in Ethiopia’sTigray region, which borders Eritrea to the south.Nonetheless, Eritreans still continue to enter Ethiopiain large numbers. Border guards reportedly now turn ablind eye to those fleeing, meaning it is safer to do sothan it was in the past, despite the continued restrictionson movement in and out of the country.

There is no indication the governmentwill, in the short-term, address the primary cause of the exodus: indefinitenational service.Despite hints in 2018 that it would returnto its original 18-month limit, nothing has happened yet.

Other expected peace dividends have also yet tomateri-alise, and are unlikely to do so this year. The constitutionof 1997 remainsunimplemented.Far fromrelaxing its grip,the ruling single-party People’s Front forDemocracy andJustice appears to be increasing repression. TheCatholicChurchwas aparticular target during 2019,with its schoolsand hospitals closed, and this may well continue as theinstitution is regarded byAfwerki as a political threat.

In this context, political opposition, while still mostlyclandestine, is set to grow louder.Undergrounddissidentsmadewaves in2019,and thegovernment is likely tocontinue

witharbitraryarrests in response.Theoverseas opposition is more unifiedand getting better organised.

Dwindling remittancesTheeconomyhas beengoing throughsome difficulties and is largely de-pendent on rain-fed agriculture,min-ing and remittances. Talks with theInternational Monetary Fund (IMF)reopened in July 2019. The IMF isoffering technical support to theAsmara government and financialaid is not yet on the table.

MoreEritreans in the diasporamaystop sending remittances, a trendwhichwill hurt theEritrean economy.However it has other lifelines. Thereis a trickleofdevelopment finance, in-cluding fromtheAfricanDevelopmentBank.Andbetter relationswithneigh-bouring countries – notably Sudanand, further afield,Gulf states – have

opened the possibilities for more foreign investment.Thereare currently twooperationalmines, bothChinese-

run and owned, employing 15,330, about 1.1%ofEritrea’slabor force. In late 2018, the Bisha copper and zincmine,thenmajority-ownedby aCanadian firm,was acquired byZijinMining Group. A third Chinesemine, near Asmara,was due to start in early 2018 but has run into fundingdifficulties. It will likely now begin operations in 2020.ThedominanceofChina in the country’smining sector, thekey driver of growth, risksmakingEritrea over-reliant onChinese economicgrowth,which itselfmay slow in 2020.

>Problemswithbordersandcontrolof territory remaindespite therecent thaw in relationswithEthiopia>Mining isamajor sourceofeconomicgrowth,butworries remainaboutdemand fromChina

EritreaTwostepsforward,onestepback

> GDP growth (%)

2020*2019*20182017

2.192.112.01.91

> GDP ($bn)

-9.6

12.13.83.1

> Population: 3.5 million> GDP per capita: $342> Life expectancy: 65.5> Adult literacy: 64.7%> Inflation: -27.6%> Human development index(out of 189 countries): 179


*Estim

ationOctob

er2019



ADDIS ABABA

SOMALIA

SOMALIA

DJIBOUTI

KENYA

SOUTH SUDAN

SUDAN

YEMEN

ETH IOP IA

Gulfof Aden

RedSea

Dire Dawa

300 km

One of the biggest tests of PrimeMinister Abiy Ahmed’sreformand liberalisationdrivewillbe theMay2020nationalelections. Conducting these peacefully as well as fairlywill be a tall order. Preparations by the election board,which only recently had all its seats filled, are lagging.The country has 45,000 polling districts and needs torecruit 250,000 qualified election officials. Developinga biometric voter registration system has been beset bydelays.Anational census,which shouldhave takenplace in2017 butwas postponed again last year, is nowunlikely tohappenbefore elections, though thismay cast doubt on thepoll’s credibility since theconstituencymaphas not beenupdated since 1995.

The electionwill be themost com-petitive since 2005, when the rulingEthiopian People’s RevolutionaryDemocratic Front (see box) failed towin a majority in the capital. But itis unlikely to be entirely free or fair.Opposition groups in both AmharaandOromia complain of harassment,including arbitrary arrests. InTigray,home to the once all-powerfulTigrayPeople’s LiberationFront (TPLF), theopposition is unlikely tomakemanyinroads against such an authoritarianand well-entrenched party.

Deadly violenceAbiy’s government continues to betroubledby instability in several partsof the country, most notably in thesouth and in the northernAmhara re-gion. In June theyoungprimeministerfaced his most serious challenge yet in the form of whathe called an attempted coup in theAmhara state capital ofBahirDar, and the assassination of the federal army chiefat his home in Addis Ababa on the same night.

The following month saw deadly violence in Sidama,where local elites and young protesters demanded theirzone become a self-governing region. This is one of atleast 10 statehood campaigns in themulti-ethnic SouthernNationsNationalities andPeoples’ Region (SNNPR) sinceAbiy took office. In their 20 November referendum theSidama people voted overwhelmingly for autonomy.

In Oromia, the Oromo Liberation Front (OLF) and theOromo Federalist Congress (OFC) have agreed to analliance, and will stand aside for each other in certaindistricts in order to reduce the chances of electoral vio-lence.Amhara is less predictable: the hardline oppositionparty, theNationalMovementofAmhara (NAMA), ismuchmore popular than the ruling party, especially in towns,and is unlikely to strike any pacts with it given that manyof its members were arrested in the aftermath of the Junecoup attempt. If it is able to campaign freely it shouldwinsomeparliamentary seats. Butwhatever the overall result,

andwhatever post-election coalitionformations emerge, Abiy is likelyto remain prime minister, not leastbecause the winner-takes-all votingsystem remains unchanged.

Executive presidencyCalls to radically reform Ethiopia’scontroversial systemofethnic federal-ismwill likely be ignored, especiallyif ethnonationalist opposition partiesmake substantial gains. If the electionis followed by constitutional reform,Abiy’s main concern will be to intro-duce an executive presidency, whichwill be presented as a way of reduc-ing the power of ethnicity in politicswithout tearing up the foundations ofthe federal settlement.Restructuring italong territorial, rather thanethnolin-guistic, lines is an unlikely prospect,as is banningethnicparties altogether.

So ethnic tensionswill persist and,given thenatureof federal arrangements,may lead tomoreviolent conflict. According to revised estimates publishedlast year, nearly 3 million people were forced from theirhomes in 2018, more than anywhere else in the world.The figure was lower the following year, in part becausemuchof the countrywas undermilitary command, and thegovernment claimed to have returned almost all internallydisplaced persons (IDPs) to their areas of origin. But sincemanyof the underlying reasons for violencehavenot beenaddressed, and since most IDPs were sent home beforegenuine reconciliation, serious flare-ups can be expected.

>ReformistpremierAbiyhaspromisedEthiopia’s fairest vote inMay2020>Opening theeconomytomorecompetition is likely tobeslowandgosectorbysector

EthiopiaElectionurgency

> GDP growth (%)

2020*2019*20182017

103.691.180.275.7

> GDP ($bn)

10.17.7 7.17.4

> Population: 112.1 million> GDP per capita: $953> Life expectancy: 65.9> Adult literacy: 39%> Inflation: 14.6%> Human development index(out of 189 countries): 173


*Estim

ationOctob

er2019


While still pacy, economic growthwill not reach the rateof 10% or more witnessed for much of the past decade.Insecurity will continue to be a drag, though reducedborrowing and slower growth in government spendingwill also have an impact. Foreign direct investment,whichthe government hopes will make up for the reduction inpublic spending, is unlikely to exceed the estimated $3bnto $3.5bn received last year (which was itself marginallylower than2018), sincemany investors are inawait-and-seemode until the election dust settles.

In September 2019 the governmentunveiled its “home-grown economicagenda”,a10-yearblueprintwhichaimsto make Ethiopia a middle-incomecountryby2030andwhich is expectedto cost around$10bn.AlthoughAbiyhas said privately that he cannot ac-cept an InternationalMonetary Fundprogramme before the election, the“home-grown” strategy, with its em-phasis on supply-side reforms, bearsmanysimilarities to thesolutionsadvo-catedby theBrettonWoods institutionsandWestern donors. This includes acommitment to fiscal prudence, thesale or part-privatisation of state-owned enterprises andthe removal of barriers to enterprise such as excessiveregulation and poor logistics. It also includes moves toliberalise the exchange rate, but thiswill be donegraduallyso as to avoid triggering social unrest.

Splitting up companiesThemost anticipated liberalising reforms will be in tele-coms, which remain a state monopoly. The governmentwill start by issuing two licences to multinational mobilecompanies next year, whichmay bring in close to $10bn.Vodafone, SouthAfrican operatorMTN,France’sOrangeand Etisalat of the United Arab Emirates are likely to be

among the leading contenders. The governmentwill alsooffer a minority stake in Ethio Telecom, the monopolyoperator due to be split in two, and foreign firms will beinvited to bid. However, this may be a longer way off asitmight take two years just to value the company’s assets.

Other parts of the economywill be slower to shake up.The financial sector, whose regulatory framework hasbeen loosened somewhat over the past year, will not beopened to foreign competition in the foreseeable future.

Many new domestic banks will enterthe market, including the country’sfirst privatehousingbank,encouragedby the fact that the rule forcing allbanks to divert at least 27% of theirloanbook to thegovernmenthasbeenlifted.But ambitiousplans toestablisha stock exchange by the end of 2020will likely not be realised so soon.

Similarly, plans to part-privatiseEthiopian Airlines, the jewel in thecrownofstate-ownedenterprises,maynotmovequicklynextyear, inpartdueto public unease. Selling some of theEthiopian SugarCorporation’s ailingprojects will be tricky as they are not

yet attracting serious investors, and valuations are stillongoing. Foreign logistics firms have so far been slowto jump into joint ventures with local ones following theopening up of the sector last year.

In fact the major economic milestones in 2020 will bemostly familiar ones. At least three new industrial parksare expected to start operations, taking the total to 12. Asecond railway line, from Awash to Kombolcha, is com-plete andwill start as soon as it has power supply.And theGrandEthiopianRenaissanceDam,which is years behindschedule,will start generating electricity for the first time,albeit at a low level. Long-standing tensions with Egyptover this project, however, remain unresolved.

STRUCTURE OF THE ETHIOPIAN ECONOMY

100

80

60

40

20

01990 00 10 20 90 00 10 20

Manufacturing Service Agriculture

GDP share (%)Employment share (%)

Abiy’s Prosperity projectTowards the end of 2019, Prime MinisterAbiy Ahmed succeeded in what manyconsidered an impossible task: mergingthe five parties of the EPRDF into a singlenational party. As The Africa Report wentto press, only the TPLF had failed toapprove the merger.

In so far as the Prosperity Party has anideological blueprint, it is what Abiy calls“Medemer”. Supporters say “Medemer”,which stresses pragmatism, offers a breakfrom the rigid doctrines of previous eras

and can be an antidote to ethnic division.Critics, meanwhile, dismiss it as littlemore than a reheated ‘Third Way’.

The new party also faced resistancefrom Abiy’s own Oromo camp, mostnotably his deputy, Lemma Megersa.At the time of writing it was unclear if hewould join. Many fear a unified party willundermine ethnic self-rule in favour ofmore centralised decision-making. Deadlyprotests in Oromia in late October werein part driven by opposition to the move.

Critics also claim the formation of a newparty accentuates the government’s legit-imacy gap. Jawar Mohammed (see page177) warned of a “constitutional crisis”.

By ditching an ideologically dividedcoalition in favour of something morecoherent, the move may clarify the politicallandscape in the run-up to the election. Itcertainly makes the outcome less predicta-ble. Abiy, for his part, hopes the ProsperityParty will aid his electoral chances byfreeing him from the tarred EPRDF brand.

SOURCE:TWOSSEN,SAY

ELE

ANDWORLD

BANK



IndianOcean

LakeVictoria

UGANDA

TANZANIA

ETHIOPIASOUTH SUDAN

SOMALIA

NAIROBI

KENYA

Mombasa

Kisumu

200 km

Now in the second-half of his final term, President UhuruKenyatta is struggling to steady faltering governmentfinances, fight a war on corruption and smooth over agrowing rebellion within his own ruling party ranks.The succession race is gathering speed ahead of thenext elections in 2022, with deputy president WilliamRuto and former prime minister Raila Odinga seekingto replace Kenyatta (see box).

In 2020, oil companies are expected to sign a fi-nal investment decision on the Turkana oil venture,which made its first exports in August 2019. TullowOil estimates that oil could easilybecome the East African country’ssecond-largest forex earner, aftertourism. But it will be years beforeit reaches commercial viability, acrucial point in a country strugglingto find new sources of revenue.

Workon the821kmLokichar-Lamupipeline is yet to commence, and theearliest possible date for commercialexports is now 2024, from an initialtarget date of 2022. For PresidentKenyatta and the ruling Jubilee gov-ernment, thismeans that theeconomicand political benefits of oil exportswill be enjoyed under a new, andpossibly different, government.

Significant costsThepressure for new revenue streamswill escalate in 2020, especiallyas the government seeks politicalgoodwill from a tax base that hassuffered an increasing burden in the last few years.There are significant costs scheduled for events suchas a referendum, boundary review, debt repaymentsand preparations for the 2022 election. In 2019, the fo-cus somewhat shifted to large companies, such as twobrewing giants which were slapped with large tax billsand their owners charged with tax evasion.

Although all signs are clear that Kenya will continueborrowing heavily to plug its budget deficits, morepublic debt will most likely be hard to sell, as previousinfrastructure projects such as the standard gauge railway

have not had the expected positive results. China’srefusal to fund the third phase of the railway line, con-necting Naivasha and the border town of Malaba, ledthe government to instead outline a plan to upgrade theold metre-gauge railway. The project will be funded bya private backer at a cost of $210m.

Increasing the water supplyOther infrastructure projects that could take off in 2020include the $3bn Nairobi-Mombasa Expressway, whichwill be funded by the US. The project has been delayed

twice due to feasibility and price tagconcerns. Another is the 28km JomoKenyatta InternationalAirport-JamesGichuru Expressway, which is beingfunded by the Chinese governmentandwhose construction commencedin September 2019. Chinese contrac-tors have begunwork on theWesternBypass, the lastofNairobi’s ringroads,in 2019 and the project is scheduledfor completion in nearly three years.

The 11.8km Northern CollectorTunnel Water Project is scheduledfor completion inMarch 2020. Oncecomplete, it will increase the watersupply to the capital city by 140mlitres. The project has been delayedby lawsuits, construction hitches andlabour disputes.

Safaricom, owned in part byVodacom and Kenya’s government,will be a key company to watch in2020. Now under a new CEO after

the death of Bob Collymore, it might experience a short-termdownturn in fortunes under the first transition,whichwould impact on government revenue. Its two nearestcompetitors, Airtel Kenya andTelkomKenya, are also inadvanced stagesof finalising amerger,whichwould createa more formidable competitor for Safaricom.

Safaricom’sactingCEO,Michael Joseph,will behandlingtwo transitions in vastly different companies.At the telco,where he served as chief executive for a decade, findingthe right person to drive the quest for more sources ofrevenuegrowthwill behard, evenas thepreviousattemptat

>PresidentKenyattahasafewyears to leaveabigmarkonthehealthsectorandKenya’s financialhealth>The futuresof influential companiesKenyaAirwaysandSafaricomwill be inplay in2020

KenyaLookingforalegacy

> GDP growth (%)

2020*2019*20182017

109.198.687.978.6

> GDP ($bn)

4.86.3 6.05.5



*Estim

ationOctob

er2019


finding a new leader boiled down to nationality. AtKenyaAirways, where Joseph serves as chair of the board, thecurrentCEOSebastianMikosz is scheduled to resignby theend of 2019,meaning that the struggling airlinewill beginthe year under new leadership. Mikosz’s experience as aturnaround expert did not work out for the airline, whichthegovernment intends tonationaliseprogressively in2020and 2021. Buying out theminority shareholders,whonowinclude a banking consortiumand a strategic partner,willbe anexpensiveundertaking.Turningthe airline aroundwill dig further intoKenya’s public coffers.

For Kenyatta’s government, thechallenges facing these economicpillars will be an added headacheto an ever-growing to-do list. In itssecond-term, the ruling party hasfocusedon cleaning house, aiming toreduce public corruption and publicwastage.Theanti-graftwar has intro-duced new divisions even within theexecutive, as it failed to impress thepublic.HenryRotich, the long-servingtreasury cabinet secretary, lost hisposition in 2019andwas chargedwithseveral corruption-related crimes, in a series of eventsthat beganwith his cabinet colleagues. In 2020,more keyalliesmay find themselves in trouble as well, as Kenyattatries to balance a high-profile fight on corruption with agrowing budget deficit and dwindling public confidence.

Big Four AgendaIn 2020, Kenyatta and his new cabinet secretary for thetreasury Ukur Yattani will most likely attempt, yet again,to convince parliament to get rid of the interest rate capfor lending by the banking sector. The pressure to freeup credit to the private sector is increasing. In May 2019,a Nairobi court ruled that the rate cap is unconstitutional

and gave parliament 12 months to re-examine it. If thedeadline expireswithout legislative action, the capwouldbe repealed in May 2020.

The government allocated KSh450.9bn to Kenyatta’slegacy projects, dubbed the Big Four Agenda, in the2019/20 budget. The biggest chunk of the money goesto the Universal Health Coverage programme, whilethe government introduced a levy in mid-2019 to fundthe affordable housing part of the agenda. The housing

schemewill be a hard sell in 2020, asKenya’s real estatemarket is expectedto continue its most rapid decline inyears, amidst fears of a downturn.

The third pillar of the Big FourAgenda, manufacturing, will mostlikely continue to suffer in 2020. InAugust 2019, a World Bank reporttermed Kenya’s pace of job creationin the sector as ‘mediocre’. PresidentKenyatta’s government is following inthe example of Ethiopia by reform-ing the textile and apparel sector toboost job creation, but has not putin place sufficient incentives forreducing energy and labour costs.

Additionally, efforts by the government to boost theprivate sector by clearing its arrears have not resultedin a positive boost in growth.

Even before the Jubaland region’s elections in August2019,whereKenya’s allyAhmedMadobe retainedhis seat,diplomatic relations betweenKenya andSomalia hadbeenat their lowest in decades. A key point of contention is amaritimeboundary rowandMogadishu’s increasingdesireto have a say in all regions of Somalia, especially in thosewhereKenyahas amilitary presence andpolitical interest.The two countries have been engaged in a diplomatic tit-for-tat in 2019, including changing rules for direct flightsbetween each other and recalling their ambassadors.

Rival referendumsThe government held a census in August2019, with the results expected in early2020, but its short-term benefits willonly be obvious to the political class.Among its immediate uses will be drawingbattle lines for an expected referendum,which could intricately alter the politicalsystem before the 2022 elections.The census reports will also be crucialfor planning the next decade of Kenya’sfuture, which will also be the final yearsof the ambitious Vision 2030.

While the prospect of a referendum hasbeen looming for years, it is now a matterof when, not if. One popular initiative,the Punguza Mizigo Bill, began making itsway through county assemblies – whichneed to approve it with a majority forit to move to parliament – in mid-2019.The campaign intends to reduce thenumber of elected and nominated repre-sentatives, restructure the relationshipbetween the two houses of parliamentand change the presidential term to

a single seven-year period. The campaignhas earned the ire of politicians,including both President Uhuru Kenyattaand his former rival Raila Odinga.

A likely balance could be found inthe Ugatuzi Initiative, a campaign led byserving governors that seeks to get moreresources to the counties. Revenue dis-tribution between the central governmentand the 47 devolved units has alwaysbeen divisive, and in 2019 led to countygovernments nearly shutting down.

TIMELINE OF INSTALLED CAPACITYIN THE VISION 2030 PLAN (GW)

2015 17 19 21 23 25 27 2030

14

12

10

8

6

4

2

0

NuclearNatural GasOilCoalDiesel

GeothermalHydroWindBiomassCSPSolar PV

SOURCE:KENYA

VISION

2030



LakeKivu

KIGALIDEM. REP.OF CONGO

UGANDA

BURUNDI

TANZANIA

RWANDA

50 km

With Paul Kagame’s Rwandan Patriotic Front (RPF) gov-ernmentmaintaining their iron grip at home, diplomacyis a major government focus. Kagame handed over thepresidencyof theAfricanUnion toEgypt inFebruary 2019,and former foreign minister Louise Mushikiwabo tookover the leadership of the Organisation Internationalede laFrancophonie in January 2019. Kigali’s focus is nowcloser to home.

Kagametookuptherotatingpresidencyof theEastAfricanCommunity in February 2019 amidst regional tensions.Rwanda isonbad termswith theneighbouringgovernmentsofUgandaandBurundi, sonewforeignminister Vincent Biruta has plenty ofwork.KagameandUganda’sPresidentYoweriMuseveni spentmonthscriticis-ing each other andworrying publiclyabout attempts at spying. Kigali alsocomplained about what it describedas arbitrary arrests of Rwandans inUgandaandclosed itsborder inMarch.Angola and theDemocratic RepublicofCongo (DRC)mediated andhelpedthe two sides to sign amemorandumofunderstanding inAugust.The com-ing year will show how effective thatunderstanding is. With Burundi, tieswill be complicated by the holding ofhigh-stakes elections in May.

Security cooperationRelations with the DRC have beenimproving since President FélixTshisekedi took office in January2019.Kagamewas persona non gratawhen he tried to lead an AU mediation mission after thedisputedpresidential vote, but he arrived to applause at thefuneral inMayof the lateoppositionistEtienneTshisekedi.

The two countries are now strengthening their securitycooperation. It is not knownhow far the cooperationwillgo, but Kigali seems determined to boost its fight againstrebel groups like theFrontDémocratiquedeLibérationduRwanda and the Rwanda National Congress.

Elsewhere on the diplomatic front, Rwanda will hostthe Commonwealth summit in Kigali in June. In additionto workingmore with the UK, Kigali is improving its ties

to France. Paris has set up a commission to investigateits role in Rwanda during the conflict from 1990-1994. Itis due to release a report in 2021 and an interim note inApril 2020. The Elysée is also promising to increase theresources of the crimes against humanity unit to dealwiththe many genocide-related cases investigated in France.Rwanda continues to advocate greater cooperation amongStates in the hunt for fugitive genocidaires.

Little change is expected of government policy on thedomestic front, discouraging political competition andpromotingdevelopment. Senatorial elections inSeptember

confirmed theRPF’spredominant roleinpoliticswhileKagame’s inner circleshifted when Major General AlbertMurasira replaced defence ministerJames Kabarebe late 2018.

Tourism on the riseSome oppositionists, like VictoireIngabire, continue to call for a relaxa-tionof the rulingparty’sgriponpowerand a fairer playing field. In a seriesof similar crimes, one of her FDU-Inkingi supporters, DusabumuremyiSyldio, was killed in September. Theparty says that thegovernmenthasnotsufficiently investigated such deaths.

GDP growth is continually high,but there are debates about its impactonpoverty.TheUK’sFinancialTimesreported allegedmanipulation of thecountry’s poverty figures.

Tourismison the rise, thanks inpartto advertising in Western countries.

Arrivals rose 8% in 2018 to 1.7 million. The launch of anew airport for the capital in 2020 should help businessand other forms of tourism. Several new hotels will beopened in thenext fewyears, andnational airlineRwandairis set to double the size of its fleet by 2025.

The country has climbed to 29th place on the WorldBank’sDoingBusiness ranking thanks to its pro-businessreforms. The Rwandan Development Bank is supportinglocal companies in export. Mara Phones and cybersecu-rity firmKaspersky are setting up offices, solidifying thegovernment's hopes of making the country a tech hub.

>Thecountry isplayingabalancingactbetweentensionswithUgandaandrapprochementwith theDRC>Thecountry isbecominga techand tourismhub inEastAfrica

RwandaPragmaticdiplomacy

> GDP growth (%)

2020*2019*20182017

1110.29.519.14

> GDP ($bn)

6.1

8.6 8.17.8



*Estim

ationOctob

er2019



Indian Ocean

VICTORIA

SEYCHELLES

LA DIGUEPRASLIN

SILHOUETTE

MAHÉ

MAHÉ

10 km 150 km

10 km

The presidential election, scheduled for the end of 2020,could shake up the archipelago’s political scene. Sinceits crushing defeat in the 2016 legislative elections, thepreviously unstoppable ruling party seems less certain ofa victory. President Danny Faure has already announcedthat he will run for a second term. His campaign willbe based on his government’s spending on key sectorslike health and education and a promised boost to theminimum wage during the election year.

This will be his first campaign for election in a popu-lar vote. Faure gained the presidency after the surpriseresignation of his predecessor, JamesMichel, in 2016, following thehistoricdefeat ofPartiLepep in the legislativeelections.Michel had been re-electedby a short margin just a year before.Lepep has now rebranded itself theUnited Seychelles Party.

The 2016 legislative electionsgave renewed vigour to the opposi-tion, which, for the first time, wona majority in parliament thanks tothe multiparty Linyon DemokratikSeselwa (LDS) coalition. Historicaloppositionist Wavel Ramkalawanwill represent the LDS at the nextpresidential election. Inparticular, theLDSwill campaignagainst corruption.The EUhas placed the Seychelles onits grey list of tax havens since 2017,and the US authorities are said to beinvestigating Seychelles-based com-panies thatmayhave illegally allowedUS citizens to trade cryptocurrencies.In 2019, the IMF’s directors “encouraged the promptformulation of a new offshore financial sector strategy”.

Holiday hotspotOn the economic front, the archipelago is facing a slow-down in growth. The main reason for this is the declinein construction projects related to tourism – the maineconomic sector – due to the government’s moratoriumon new permits for large hotels. AMichel policy, this wasextended by Faure until 2020. Visitor numbers remainstrong. In 2018, 362,000 tourists visited the archipelago

– three times the local population, and an increase of 3%on 2017. Numbers are set to rise further as Air Francerelaunchedwinter flights to the Seychelles inOctober 2019afterAir Seychelles cancelled its Paris route inApril 2018.More cost-cutting for the flag carrier is also expected.

Despite these good results, the Seychelles’ dependenceon this activity and its debt are cause for concern. Todiversify, the authorities have focused on developingthe ‘blue economy’: the development of sustainableaquaculture and promoting the local processing offishery products, which account for the second-largest

economic sector. The governmentsigned a new tuna-fishing deal withthe EU in October 2019. It covers asix-year period and includes a pay-ment of $6m per year.

Climate urgencyAnother point of economic tension isthatwhile there is full employment onthe archipelago – the unemploymentratewas 3.5% in the secondquarter of2019 –many companies in the privatesector are struggling to recruit locally.

But the main concern moving for-ward is climate change and risingwaters,whichdirectly threaten the 115Seychelles islandsand islets. “Weneedcoordinatedanddecisive internationalaction,” Faure pleaded in April 2019in a video message broadcast froma submarine nearly 124m deep inthe Indian Ocean. “This problem ismuch bigger than us, and we cannot

wait for it to be solved by future generations,” he said.The country itself is transitioning to renewable sources

of energy.The 5MWsolar power plant and battery storageunit at Romainville is due to be completed in early 2020 tosupply electricity to households in the capital city,Mahé,on Victoria Island. Infrastructure and climate protectionare two key spending areas in the 2020 national budget.However, spending will be somewhat restricted by thegovernment’s commitment to reduce its debt, which hit arecent high of 72.7% of GDP in 2016. Reduced expendi-tures should take it to amoremanageable 57.7% in 2019.

>The2020presidential electioncouldprove tricky for the rulingand former singleparty>Thearchipelago is facingagrowthslowdownandcalls to reform itsoffshore financecentre

SeychellesPreparingforatoughvote

> GDP growth (%)

2020*2019*20182017

1.671.641.581.50

> GDP ($bn)

4.3 43.33.4

> Population: 98,000> GDP per capita: $17,052> Life expectancy: 73.7> Adult literacy: 94%> Inflation: 2%> Human development index(out of 189 countries): 62


*Estim

ationOctob

er2019



IndianOcean

KENYA

ETHIOPIA

DJIBOUTI

SOMAL IA

200 km

Uncertainty looms about Somalia’s election plans. Thesecurity situation is a big problem for the electoral com-mission’s goal of holding a ‘one-person, one-vote’ poll,the country’s first since 1969. The commission says it isnow launching the voter registration. The vote could takeplace in 2020 or, if delayed, 2021. But new electoral lawsare needed and Al-Shabaab rebels control vast swathesof territory. Lack of progress could lead to a backtrackand return to plans for an indrect election.

Nonetheless, much of the year ahead will see politi-cians building alliances, breaking clan allegiances andbuying votes. The Gulf states havea keen interest in Somalia’s politicsand traditionally inject millions ofdollars into campaigns.

President Mohamed Abdullahi‘Farmaajo’ Mohamed will contestthe elections but Somalia’s bumpypost-civil war trajectory has neverfavoured an incumbent. And whilethe handover of power is usuallypeaceful, the new president oftengoes about establishing an entirelydifferent team, a majority of whomin a government job for a first time.

Farmaajo has a tough year aheadconsideringwidespreaddissatisfactionwithhisperformance.Hecametopow-er in 2016 amid euphoric scenes anda popular hope of sweeping reformsand a tough crackdown on systemiccorruption.Butoverallhisgovernmenthas alienated itself due to a determi-nation to centralise power rather thanworking with the various Federal Member States (FMS).

Familiar candidatesAs per previous votes, the presidential election will seea handful of past and current politicians, many returningfrom the diaspora, spend big to become the leader of theHorn of Africa country, which remains at the bottom ofmostUN rankings for health, economyanddevelopment.Previous presidentsHassanSheikhMohamudandSheikhSharif Ahmed havemade their electoral intentions clear,and they returned to prepare their campaigns in 2019.

Prime minister Hassan Ali Khaire, seen as a counter-balance to the presidency and at times a threat, may runin the presidential election butwill face tough internal andexternal clan politics to gain support.Khaire hasmanageda relatively positive relationship with the internationalcommunity and the rare feat of surviving an entire term.

Generally, Somalia continues to lurch between politicalsecurity and humanitarian crises. Droughts, heavy rainsand floods hurt food production in 2019. In September2019, according to theUN,2.2millionSomalis facedhungerso severe that it threatened their lives or livelihoods. A

similar scenario is expected for 2020amid continueddroughts and fears ofunderfunding for UN agencies.

Peace mission continuesThe Islamist rebels of Al-Shabaabcontinued to pose a potent regionalthreat despite US forces carrying outas many airstrikes in the first sevenmonthsof 2019as it did for theentiretyof 2018, according to theUSmilitary’sAFRICOM command. Despite re-peated claims that theAfricanUnionMission inSomalia (AMISOM)plans toexit in 2020, it seems unlikely.WhileAMISOM head Francisco Madeirapromotes a ‘transition plan’ that seeslocal forces take responsibility for thecountry’s security from internationalforces by 2021, the mission has notreduced significant numbers fromits 22,000- strong force, consideringSomalia’s inability to prevent attacks.

As such, there is limited investment or confidence inan economic recovery. After resolving a dispute withKenya inNovember over theirmaritime borders, Somaliaannounced an oil and gas licensing round in December.

One of the biggest economic inhibitors is Somalia’s$5.1bn of external debt. The lure of debt relief saw con-certed efforts gather momentum, but the World Bankand IMF are still a long way off before allowing anyborrowing. Somalia’s efforts to achieve debt relief couldbe considered the major achievement of the governmentso far and will be a key priority in 2020.

>Thecountry is heading towardselectionsand there isnoclear favourite>Droughtsand thecontinuedstrengthofAl-Shabaab limit thecountry’s economicgrowth

SomaliaBacktotheballotbox

> GDP growth (%)

2020*2019*20182017

5.214.954.724.5

> GDP ($bn)

1.3

2.83.22.9

> Population: 15.4 million> GDP per capita: ND> Life expectancy: ND> Adult literacy: ND> Inflation: ND> Human development index(out of 189 countries): ND


*Estim

ationOctob

er2019



ETHIOPIA

CHAD

CAR

DRC

UG.

KEN.

SUDAN

SOUTHSUDAN

JUBA

200 km

South Sudan, not quite picking itself out of its troubles,is bound to continue uncertainly forward into 2020 withPresident Salva Kiir and his former deputy-turned-rebelleader Riek Machar still at the centre of a politicalcrisis that started six years ago. A peace deal signed inSeptember 2018 lost momentum, but analysts think itwill be helped by the recent revolution in Sudan whichhad acted as a peacemaker between the South Sudanesefactions.

As The Africa Report went to press, the 12 Novemberdeadline to form a new unity government had been ex-tended by 100 days. Both sides haveincentives to drag out the process inorder to seek to press their advan-tages. Riek briefly visited Juba inSeptember but has yet to return towork out the remaining problemsin the peace accord.

Onemajor stickingpoint is the lackof agreement on the number of statesthe country should have, which thegovernment proposes at 32 and theopposition wants at 10 or 21 at themost. Another is the issue of securityarrangements,which includeunifyingrebel and government forces to takechargeof the country’s safetyover theproposed three years of transition.

Aggrieved partiesThe United Nations arms embargois in place until at least May 2020due to the lack of progress on peace.Pockets of insecurity in the southernand northern parts of the country are bound to continue.They are home to holdout rebel groups that declined tobe part of the 2018 peace deal, including those of twomenwhowere very prominently on Kiir’s side during thebigger crisis – his former army chief Paul Malong andformer deputy army chief Thomas Cirillo. They say thepeace deal sidelines community grievances and fails totackle corruption, nepotism and land reform.

Despite the political impasse, the economy is beginningto rebound as a result of diminished fighting. Many ofthe oilfields that were closed when the crisis started in

December 2013 have resumed operation, raising outputfrom 130,000bpd during the war to 180,000bpd in late2019. The government predicts that productionwill reachpre-conflict levels of 350,000bpd by the middle of 2020.President Kiir’s government wants to attract more invest-ment in refining and hydrocarbons transport, and will belaunchinganewbidding round forblocks in theyearahead.

The government is pledging part of the country’s oilproduction to finance a road-buildingprogramme.With anoverall goal of 17,000km, it signed an initial deal costing$700m for the building of 392km of road between Juba

and Rumbek, due to repay ChinaExport-Import Bankwith 30,000bpdfor the project to be carried out byShandong Hi-Speed Co Ltd.

Inflation rate dropsThe government is conducting invest-ment road shows and hosted an oiland gas conference in October,but most investors are waiting tosee if the security and politicalsituations improve.

Inflation is due to remain muchlower than its 2016 highs of 400%and could drop to 25% in 2020. Butthose government projections arebased on the peace deal holding andinvestment flowing into the country.

Prices across the country are stabi-lising as trade routes open up.Withonly about 300,000 refugees havingreturned, the agriculture sector isnowhere near pre-crisis levels. About

2.3 million people, many of them farmers, are still inneighbouring countries.

Persistent food insecurity, which affected about 7million people ormore than half the population in 2019,is bound to continue into the next year.

On the regional integration front, the East AfricanCommunity is set to rule on the fate of South Sudan’sapplication for membership in November 2019. Jubawould like to improve its ties with East Africa and isin the market for oil export options that would reduceits reliance on Sudan.

>The 12Novemberdeadline for the formationofaunitygovernmenthasbeenextended>Oil holdsmuchof thehope foraquickeconomic turnaroundafteryearsof civil conflict

South SudanUncertaintyreigns

> GDP growth (%)

2020*2019*20182017

3.33.64.53.4

> GDP ($bn)

-5.4-1.1

8.27.9



*Estim

ationOctob

er2019



IndianOcean

LakeVictoria

ZAMB.MAL.

DRC

KENYA

MOZAMBIQUE

BURUNDI

RWANDA

UGANDA

Dares Salaam

Arusha

DODOMA

TANZANIA

400 km

Tanzania heads into a general election yearwith the pow-er of incumbency on display. President John Magufuli,having crushed dissent and outmanoeuvered potentialrivals in the governing Chama Cha Mapinduzi (CCM),has all but guaranteed the party’s unanimous supportfor a second term. Barring surprises, key young Turkslike ex-ministers January Makamba and Nape Nnauyewill hold off staging a challenge and bide their time forre-ascendant political careers post-Magufuli. On theother hand, the old guard – led by former foreign affairsminister BernardMembe – will try to revive its influenceso it can help to determine who willrepresent the party next.

Powering Magufuli’s re-electionchances are large infrastructure pro-jects that look to be completed intime for the campaign. Among theseprojects are sections of the standardgauge railway,powerplants, hundredsofkilometresofpavedroadsacross thecountry, airports,marine vessels andexpanded access to drinking water.

Themain opposition party,ChamaCha Demokrasia na Maendeleo(CHADEMA), has been in disar-ray since the departure of EdwardLowassa in 2019 and chairmanFreeman Mbowe’s jailing on a con-tempt charge. Its leaders are bankingon the long-awaited return of TunduLissu –who survived an assassinationattempt – to revive their fortunes intime for elections.

Opposition looks for coalitionCHADEMA also have to contend with the Alliance forChange and Transparency (ACT) of Zitto Kabwe, whichwill continue to attract support. Its membership hasbeen surging since the party’s merger with Zanzibariopposition stalwart Seif Sharif Hamad’s Civic UnitedFront (CUF) faction.

TheCHADEMA leadership, having endured repressionunder much of Magufuli’s rule, is quickly pushing for theformationofawideoppositioncoalition. It ispursuing talksearly to avoid the hasty decisionsmade aheadof previous

elections. But any success will heavily depend on the fi-nancial clout of anyone at the centre of such discussions.

In this general election, it is not on the mainland thatthe biggest drama will likely play out, but in Zanzibar.The Indian Ocean archipelago forms part of the UnitedRepublic ofTanzania. It is governed autonomously underits own presidency, and the past three elections for theoffice have been marred by violence and controversy.The stakes are even higher this time considering thatthe incumbent, Ali Mohamed Shein, is stepping downat the end of his second term in 2020. This leaves the

CCM short of cadres willing to takean office where the likelihood ofelectoral violence is strong.

All eyes on the islandThe Zanzibari transition is shapingup to be bothMagufuli and theCCM’stoughest challenge this election year,and is likely to test the future of theunion.TheCUF’sHamad iswell awareof this. Hewill be looking to exploitanyweakness of theCCM, somethinghe is in a stronger position to do. Hehas limitedMagufuli’s efforts to curbhis political influence in Zanzibar.

FatmaKarume isenjoyinga fast riseas anopposition figure there.A scionof the archipelago’s most prominentpolitical dynasty,Karumehas alreadyhinted at political ambitions sincebeing stripped of her high court ad-vocate’s licence for her critical stanceagainstMagufuli.Analliancebetween

HamadandKarume could beon the cards, a turn of eventsthat may change the course of the island’s history.

Due to Magufuli’s strong-arm tactics and nationalisttendencies, diplomatic confrontations are likely to con-tinue between Tanzania and international institutions,mostly over statistical data and information sharing.Elsewhere, Tanzania’s diplomatic relations remainfriendly, especially within the East African Community(EAC) and Southern African Development Community.Joint infrastructure projects in the former will promoteintegration while ties in the latter will be driven by trade

>Theopposition seemsunlikely toprovidemuchofachallenge forMagufuli and theCCM in2020>Thegovernment’s economicnationalismanduncertaintyworries international investors

TanzaniaAunionunderstress

> GDP growth (%)

2020*2019*20182017

67.262.256.853.2

> GDP ($bn)

6.7 6.95.75.2

> Population: 58 million> GDP per capita: $1,104> Life expectancy: 66.3> Adult literacy: 77.9%> Inflation: 3.6%> Human development index(out of 189 countries): 154


*Estim

ationOctob

er2019


interests.Meanwhile, the distraction caused by electionscould keep much of Tanzania’s attention away from thejihadist threat along its southernborderwithMozambique,even as a strong history of security cooperation betweenthe two countries is maintained.

Owing tohistoricCommunist tiesandChina’sappetite formineral resources,Tanzania is likely tocommence talksona free-trade agreement with the Asian giant, aiming to beonly the second such deal in Africa afterMauritius. But aneconomicpartnershipagreementwithEuropewillremainpendingasdivergingapproaches in the EAC stall the talks.

This will continue to complicaterelations with Kenya, which is stillpushing the bloc to strike a deal. Asa result, a subtle trade war betweenTanzania and Kenya will endure– something the numerous joint com-missionmeetings and heads of statessummits are unlikely to solve due toan absenceof goodwill on both sides.

Such tiffs with Kenya and low vol-umes of trade with Uganda meanTanzania will continue to look evenmore to its southern neighbors forexports, especially agricultural produce. But sufficientrains acrossmuch of East and Southern Africa could seethe market for Tanzanian produce diminish.

Delayed gas projectsAgoodyear for agriculture usuallymeans a goodyear forconsumerprices.ButTanzania is unlikely toenjoy stabilityin thepriceof basic goodsowing tohigh election spendingthatwill likelydriveaspike in inflationwell above the targetof 5%. Meanwhile, efforts aimed at diversifying energysources, including tapping its owncompressednatural gastopowervehicles,will likelypayoff, resulting in increasedusage of natural gas, especially in Dar es Salaam.

Generally, the economywill enjoy strong growth on theback of a steady power supply, high agricultural output,the construction sector riding on public investment andreboundingmining revenue helped by rising gold prices.However, foreign direct investment will be subdued asjittery investorsmaintain await-and-see approach towardsthe Magufuli administration. This may impact negotia-tions between government and oil companies in the hugeliquefied natural gas development project, reducing the

chances of reaching a deal this year.Relations with local investors haveimproved too; Magufuli replacedTanzania Revenue Authority bossCharles Kichere with Edwin Mhedein June 2019 over complaints aboutthe authority’s management.

Newentitiesbettingon thepotentialof fintech to improve financial inclu-sionwill look to enter theTanzanianmarket.However,slowandrigidlicens-ing processes at the country’s centralbankwill frustrate them. Inaddition togoing into fintech,MohammedDewji’sfirm MeTL is betting on the growthof the agricultural sector.

A second Magufuli presidency is likely to adopt anaggressive expansionary fiscal policy to finance largeinfrastructure projects, especially in his home region. Asis tradition, there will be no tax hikes; being an electionyear, debt will be used to finance such projects.

Shrinking levels of transparencymean scrutiny of suchprojectswill beminimal as the governmentmaintains tightcontrol of the traditional media. The government couldlaunch a tax and other tools to gain evenmore control onsocialmedia, amove thatwill sparkbacklashamongurbanelites – but little from the rural folks where CCM enjoysmuch of its support. This year, the rural bloc of votes istheCCM’s to lose; the urbanone, the opposition’s to lose.

GOLD EXPORTS(US$bn)

2015/16

2017/18

2018/19

2019/20

2020/21

2016/17

(estimate)

Projected figuresfor 2017-2021

1.243

1.5181.554 1.601 1.639 1.678

What’s mine is minePresident John Magufuli’s tough stanceon international investors has been onits starkest display in the mining sector.Arguing that the government gets a rawdeal from mining operations, Magufulihas carried out a years-long conflict withthe majority owners of the Acacia goldmine, Barrick Gold. Brandishing threatsof gargantuan tax bills and shutting downoperations, the government settledfor a $300m payment and a biggershareholding in three of Barrick’s mines

in a deal signed in October 2019.The drama sent chills throughout theTanzania-focused investor community.

With the government claiming a bigvictory, it is still looking at how it canget more revenue out of the sector. It haspassed new taxes and regulations for themining industry, which require companiesto give bigger stakes to the governmentand to process more of their ore locally.

It is cracking down on mineralsmuggling and setting up state trading

hubs to buy artisanal production.Tanzania’s official gold exports werevalued at $1.5bn in 2018, and thegovernment estimates that nearly allof the annual small-scale production– estimated at 20tn in 2018 –is smuggled out of the country.

Investment is going ahead in someareas despite the government’s focusedattention on the sector. Australian firmWalkabout Resources is due to launchits Lindi Jumbo graphite project in 2020.

SOURCE:IM

F



LakeVictoria

KAMP


KENYA

TANZANIA

RWANDA

SOUTH SUDAN

100 km

Ugandaheads intowhat is expected tobeaheatedpoliticalcampaign season, with President Yoweri Museveni – inpower for the past 33 years – confronting growing levelsof poverty in 2021. That is being exacerbated by a largeyouth unemployment problem, all of which have beenamplified bymessages from the new opposition stalwartRobert Kyagulanyi Ssentamu, who has yet to build up apolitical machine to take on the long-serving leader.

Museveni will spend much of next year traversing thecountry, seeking a sixth five-year term in office whenelections get underway in early 2021. He is expected touse the campaign trail to diffuse thenew forces of political opposition,which have been energised by theyouthful Kyagulanyi and his PeoplePower pressure group.

Museveni is also likely to fieldquestions about a fragile economy,where poverty levels moved up to21.4% in the financial year 2016/2017– the latest year available – from19.7% in 2012/2013.

Investor fatigueThere areworries that public debt asa share of gross domestic product, at42% – a short distance from the rec-ommended East Africa Communityceiling of 50% – is further hurtingthe economy amid growing investorfatigue over the delays to kickstartthe one industry that could vastlyimprove the situation: oil (see box).Despite the uncertainty about thesector’s future, the government is going ahead with anew oil licensing round and it expects to award five newexploration permits before the end of 2020.

Oneof the strategies thatMuseveni is expected to use tonavigate through these questions will be the introductionof a new cabinet, something that has been in theKampalarumour mill for months. It is typical of Museveni to un-dertake a cabinet reshuffle during an election year to dropthe old guard and whip up support for new governmentofficials. A cabinet could have younger faces to appealto the youth.Oppositionists continue to accuseMuseveni

of preparing a familial succession, with his sonMuhooziKainerugaba eventually replacing him.

Throughout all this, the business community willlikely hold off investment plans ahead of the election’soutcome. One of the areas that investors will be keen tomonitor is the security situation.

Uptick in violent crimeA number of high-profile assassinations in the past twoyears – such as the killing of assistant inspector of policeAndrewFelixKaweesi in 2017 andmember of parliament

Ibrahim Abiriga in 2018 – remainunresolved. While the police saidthat the crime rate in 2018droppedby5.2%, it adds that “therewas, however,an increase in homicide, sex-relatedcrimes, break-ins, robbery, political/media crimes and narcotic cases.” Ifnot checked, crime could scare awaysome tourists – the biggest source offoreign exchange earnings, at $1.4bnin 2018.A local driver andaUS touristwere alsokidnappedand later rescuedfromQueenElizabethNational ParkinApril 2019.Museveni is calling fora strong government response andwants to see the death penalty usedin murder cases.

The opposition camp is expectedto jump on the ruling government’sweaknesses toprove to the voterswhythere is a need for fresh leadership.Who, among the opposition, is ex-pected to be themain challenger is a

questionboth sidesof thepolitical dividewill grapplewith.For the last year and a half, Kyagulanyi, also known

by his musical stage name Bobi Wine, has taken thepolitical scene by storm. Emerging from a ghetto inKampala to become a popular music artist, he brings afresh perspective to the political scene.

However, Kyagulanyi, who has already announced hisintention to run for president in 2021, is not expected tohaveasmooth ride togettinghisnameonto theballotpaper.He has yet tomake it clear if hewill run as an independentor set up his own political party. Hemay also have a hard

>Politiciansaregearingup forwhatwill be toughelections in2021>The launchofoil productionhasagainbeendelayed,with the industry thrown intouncertainty

UgandaMusevenimusclesonwards

> GDP growth (%)

2020*2019*20182017

33.930.628.126.4

> GDP ($bn)

56.1 6.26.1



*Estim

ationOctob

er2019


time managing schisms if he goes the party route and ithas to select leaders to run for parliamentary seats.

And yet, Kyagulanyi’s political ambitions could playinto thehandsof the rulingNationalResistanceMovement(NRM). In 2020, it will weigh whether Kyagulanyi willweaken the opposition by splitting the vote or be a threattoMuseveni’s candidature. For starters, whileMuseveni’smain challengerover the last four elections,KizzaBesigye,enjoys countrywide support, he is likely to witness somebacklash from voters who think it istime for fresh blood.

The NRM is set to point to neweconomicdevelopments in thecountryas a signof thingsworking.Economicgrowth isbeing spurredby the servicessector and a rebound in agriculture.The government-owned UgandaDevelopment Corporation is back-ing a new sugar plantation at Atiak,in the northern part of the country,in partnership with businesswomanAmina Hersi’s Horyal InvestmentHolding Company. The farm, onmore than 24,000ha, is due to beoperational in the first half of 2020.

Demographic challengesThe government sees the dairy industry as a big potentialsource of foreign exchange. It has set a target for thecountry to produce 3.3bn litres of milk in 2020, but it isfar away from such a goal, having harvested just 1.6bnin 2016. Companies like Kenya’s Brookside – owned bythe family of Kenya’s President Uhuru Kenyatta – havebeen upping their processing capacity andworkingwithfarmers to increase yields.

But the International Monetary Fund worries that theKampala government is not doing enough to createmorejobs foroneof the continent’s fastest-growingpopulations.

It estimates that the economy must create more than600,000 new jobs in order for Uganda to address itsdemographic challenges.

The government will remain focused on infrastructuredevelopment suchas roads,whichshouldcontinueenjoyingthe lion’s share of the national budget. To boost tourism,the government relaunchedUgandaAirlines in 2019witha first flight to Nairobi. Analysts warn it will struggle tocompete with Ethiopian Airlines, Kenya Airways and

RwandAir, which all have big headstarts on the Ugandan carrier. It isstarting with a focus on the regionand then is due to launch long-haulflights in late 2020 or 2021.

Among the critical infrastructure tolookout forwill be the comingon-lineof the 600MW Karuma hydropowerdam – the biggest in Uganda. Slatedto be launched either in December2019or in the first quarter of 2020, thedamwill bring thenational electricitycapacity to 1,700MW, helping to ex-pandelectrificationand reduce tariffs.

But with amismatch between gen-eration and transmission, Umeme,

the main power distributor, says Uganda needs to spendat least $120m over the next 10 years in the electricitynetwork to be able to transport power from the dams anddistribute it to consumers.

Tension with Rwanda remains high. Both Rwanda andUganda accuse each other of infiltrating the other’s secu-rity apparatus, which led to the temporary closure of theborder andweakeningof trade between the two countries.

Uganda is going aheadwith plans for its ownChinese-built standard gauge railway to connect with the line onthe Kenyan side that is due to be extended to the Ugandaborder. Chinese lenders have yet to approve the financingfor the Ugandan project.

MUSEVENI’S SHARE OF THE VOTEIN PRESIDENTIAL ELECTIONS

2001 2006 2011 2016

69.33

59.26

68.38

60.62

Oil deadlockUganda’s oil production timelines havebeen pushed further back after a failedbid by France’s Total and China NationalOffshore Oil Corporation to buy a 21.5%stake of UK firm Tullow’s Uganda assets.

Uganda was expected to start oilproduction in 2022, 16 years afterdiscovering commercial quantities.However, an amendment to Uganda’sincome tax law and a tax assess-ment on the $900m deal discouragedthe oil companies from concluding

a transaction that would have seenTullow Oil’s stake reduced to 11%.

The collapse of the deal in August2019 further delays the signingof the final investment decision (FID),which is needed to unlock $3.5bnfor the construction of a 1,445kmheated crude oil pipeline betweenHoima in Uganda’s Western Regionwith the Chongoleani peninsulain Tanzania. Oil production is expectedthree years after signing of the FID.

Uganda has hedged so much debtfor its infrastructure projects on oilthat the delay to start oil productioncould have a substantial impact on thecountry’s economy.

Tullow says it will initiate a newsales process to sell some of its Ugandainterests. It may be a tough sell.

Tanzania, which is to host over1,000km of the 1,445km crudeoil pipeline from Uganda, is expectedto push Uganda to strike a deal.

SOURCE:ELE

CTO

RALCOMMISSION

OFUGANDA

Access to a widercommunityof high-leveldecision-makersand investors in Africa

A dedicated relationshipmanager for personalizedintroductions to targetedcontacts

Regular networkingevents in the mainAfrican economic hubs

www.theafricaceonetwork.commemberservices@theafricaceonetwork.com


Douala

Abeche

Kisangani

Goma

Bukavu

Lubumbashi

Matadi

MbandakaPort-Gentil

Pointe-Noire

N’Djamena

Malabo

Bangui

Kinshasa

Brazzaville

LibrevilleSão Tomé

Yaoundé

NIGERIA

NIGER

ALGERIA

SUDAN

SOUTHSUDAN

ETHIOPIA

BURUNDI

ANGOLA

ZAMBIA

UGANDA

RWANDA

KENYA

TANZANIA

MALAWI

LIBYA

CHAD

GABON

EQUAT. GUINEA

SÃO TOMÉE

PRÍNCIPE

CONGO

CAMEROONCENTRAL

AFRICAN REPUBLIC


300 km

Lake Chad

São Tomé 0.3%

Gabon 11.9%

Congo 8.2%

27.2% Cameroon

1.6% CAR

7.7% Chad

EquatorialGuinea

8.5%

DRC34.5%

TOTAL$142bn

2020

2035

2050

146.7

219.5

305.2

Central Africa

11GWIngaIIITheplannedDRC

damhasthe

biggestpotential

toboosttheCentral

Africanregion's

electricitycapacity,

butitsbackersare

squabblingand

cannotyetagree

onawayforward.

196 People towatch

198 Cameroon

200 CentralAfrican

Republic

201 Chad

202 Democratic

Republic

ofCongo

204 Equatorial

Guinea

205 Gabon

206 Republic

ofCongo

207 SãoTomé

ePrÍncipe

If theDRC’sPresidentFélixTshisekediandRwanda’sPaul

Kagameareabletocontinuebuildingup

trustandworkingtogether in2020itmaypaveawayforwardto

peaceintherestiveregionofeasternDRCandresolvingadecades-oldconflictthathas

causedmassivedisplacement.

Tamingtensions

CENTRAL AFRICA POPULATION(millions)

CENTRAL AFRICA GDP (2019)(% of regional total)

SOURCE:IM

FSOURCE:UN

POPULA

TION

DIVISION


COUNTRY PROFILES / CENTRAL AFRICA

peopletowatchCENTRAL AFRICAN REPUBLIC

Sani YaloAdviser in the shadows

Sani Yalo knows how to stay influential: he has been an adviserto former presidents Ange-Félix Patassé, François Bozizé andMichel Djotodia – and he is a supremely close ally of the currentpresident, Faustin-Archange Touadéra, despite having no officialrole. A supporter of Bangui’s recent alliance with Moscow anda key financier of Touadéra’s 2016 run, Yalo has been rewardedwith a seat on the board of the Bureau d’Affrètement RoutierCentrafricain, which regulates terrestrial freight transport forthe landlocked country. The Equatorial Guinean government hasaccused Yalo of playing a role in a 2017 attempted coup there, butYalo denies any involvement and has had Touadéra’s protectionfrom angry emissaries looking for someone to hold responsible.

MARCOLO

NGARI/AFP

BAUDOUIN

MOUANDA

REPUBLIC OF CONGO

Martin M’beriMister mediator

An ally of President Denis SassouNguesso, Mbéri has the tough jobof convincing the opposition –some of whose members remainin prison on unfair charges –that the government is seriousabout reforms ahead of electionsplanned for 2021. The UnitedNations, represented in CentralAfrica by special envoy FrançoisLouncény Fall, is encouragingthe opposition to give dialoguea chance. Oppositionists wantto see reforms of the electoralcommission, more respectfor freedoms of speech andassociation, and improvements inthe Pool Region – which remainsa fragile area after the 2017 peacedeal between the government andthe rebels of Pasteur Ntumi.

CAMEROON

Gaston Abe AbePrisoner of conscience

Gaston Abe Abe, also known as Valsero, is Cameroon’s mostpolitically engaged rapper. That earned him the right to severalmonths in prison alongside opposition leader Maurice Kamtoin 2019 on trumped-up charges of ‘rebellion’. Speaking forpeers who were born in the 1980s, got university degrees andyet could not find jobs, he made it onto the scene with ‘Ce paystue les jeunes’ (This country kills its young). Having learnedabout politics from radical agronomist Bernard Njonga,Valsero – released from jail in October – is not ready to giveup fighting for what he thinks is right.

DEMOCRATIC REPUBLIC OF CONGO

Vital KamerheIn a negotiating haze

President Félix Tshisekedi’s cabinet directorhas the thankless task of helping two partiesthat do not want to work together to agreeon something. Under a cloud of contro-versy, Tshisekedi won the December2018 president vote and resoundinglylost the legislative one, leaving him torule in a coalition with former presidentJoseph Kabila. Nearly every importantgovernment decision that requires theexecutive and the legislative branchesto agree now involves myriad roundsof horse trading, with Kamerhe at thecentre of them. Less than a year intoTshisekedi’s term, the alliance wasalready fraying as party cadres stokedconfrontations. In 2020, eyes will be onKamhere to see whether he will be ableto bring everyone around the table orfind a political advantage in conflict.

GABON

ThéophileOgandagaA new man at the gate

Ogandaga took up one of the mostpowerful – and precarious – positionsin Libreville in late 2019. The newdirector of President Ali BongoOndimba’s cabinet replaces the risingstar Brice Laccruche Alihanga, wholike Maixent Accrombessi before himbuilt a reputation for being extremelyinfluential and ambitious. With theeconomy weakened by an oildownturn and political infightingstoked by Bongo Ondimba’s illness,the technocrat who recently workedat Olam – the Singaporeanagribusiness with close ties to theLibreville government – is set to takea more low-key approach to being thepresidential gatekeeper. But how longwill he last and what will he achieve?

VINCENTFO

URNIER/JA

JOHN

WESSELS

/AFP

DEMOCRATIC REPUBLIC OF CONGO

Joseph KabilaDown but not out

With his allies in control of the prime minister’s office and the national assembly, former president JosephKabila was preparing his political comeback in late 2019. His supporters in the Parti du Peuple pour laReconstruction et la Démocratie are already campaigning for the 2023 election and belittling President FélixTshisekedi, saying that his key government projects were launched by Kabila when he was in power. So far,Kabila’s strategy to make life difficult for Tshisekedi is working. Tshisekedi promised donors that he wouldsweep away corruption of the bad old days, but he cannot do much without the buy-in of the Kabila clique.



YAOUNDÉ

Douala

Garoua

CONGOGABON

EQU.GUINEA

NIGERIA

CENTRALAFRICANREPUBLIC

CHAD

Gulfof Guinea

CAMEROON

200 km

The government of Cameroon has a major priority for2020: to avoid the secession of the Anglophone regionsof North-West and South-West. The country has been ina state of conflict for the past two years. The fightingbetween separatist rebels and the government’s securityforces has caused more than 2,000 deaths and displacedat least 500,000people. President PaulBiya – 86years oldand in power since 1982 – convoked a national dialogueon theAnglophone issue from30September to 4October.Prime minister Joseph Dion Ngute led the discussions,which resulted in several recommendations. The mostimportant was that the governmentgranta special status to the tworegionsaspart of aprocessdubbed“advanceddecentralisation”.

Theprotests that launched the con-flict related to the regions’ rights toEnglish-speaking legalandeducation-al systems. The situation got worseas the government did not offer anyconcrete compromises and sought toavoid a federal system thatwouldgiveregions a lot of autonomy.Aminorityof the population seemed to supportsecession, with more people askingfor policies to reduce Anglophonemarginalisation. It is not yet clearif the government is committed tomaking decentralisation effectiveand it is unlikely to appease themostradical secessionists.Weeks after thenational conference ended, violencecontinued in North-West and South-WestCameroon. If the idea of decen-tralisation is just talk, the conflict looks set to continue.

Security fears for voteA first test of whether the country is back on the road tostabilitywill be the parliamentary andmunicipal electionsthat are planned for 9 February 2020. But the securitysituation,which is eating upmuch of the national budget,may not allow for the vote to be held in all parts of thecountry. While regional cooperation has weakened theIslamist rebels of Boko Haram somewhat, they are stillable to stage attacks. They have become less frequent.

One of the most recent, in September 2019, killed fivemembers of the military in the region near Lake Chad.

Dueto its repressionof theopposition, theRassemblementDémocratiqueduPeupleCamerounais (RDPC) is expectedto win those elections. However, cracks are beginning toshowas cadres look for someone toblame for thegrindingAnglophone crisis and the recent economic slowdown.

Don’t let friends become enemiesBiyaoften reshuffles thepositionsof his allies so that noneof themcan develop a strong base for the succession race.

Someonewhohashadsome longevityis secretary general of the presidencyFerdinandNgohNgoh,who is a closecollaboratorofBiya’s.He is also closeto first lady Chantal Biya and avoidsanypublic discussions of his politicalambitions.His relationship is said tobe poor with another RDPC baron,financeminister Louis-PaulMotazé,and relationswithin the party are dueto become more combative as therace for the succession heats up inthe months and years ahead.

The ruling party continues to usestate repression to strengthen its role.After the contestation that ensued aspart of the 7October 2018presidentialvote, thegovernment arrestedopposi-tionistMauriceKamtoandsomeofhissupporters from theMouvementpourla Renaissance du Cameroun (MRC).After being charged with “rebellion”and other crimes, theywere released

from detention in October 2019 along with 333 peoplearrested as part of the conflict in theAnglophone regions.International human rights organisations regularly criti-cise theCameroonian government’s human rights abuses.

Cameroon’s oppositionhas beenweakanddivided.Thetraditional leader of theopposition, the SocialDemocraticFront (SDF), did very poorly in the 2018 presidential voteunder its new leader Joshua Osih. Its strongholds are inthe North-West and South-West, where some politicianscalled for voting boycotts to express their dissatisfactionwith Yaoundé. That has left the MRC, weakened by the

>Thegovernment saysdecentralisation is the solution to theAnglophonecrisis>Help fromthe IMFandminingandgasprojectsshould increaseeconomicgrowth

CameroonThesearchforsolutions

> GDP growth (%)

2020*2019*20182017

40.638.638.734.9

> GDP ($bn)

3.54.0 4.13.9



*Estim

ationOctob

er2019


arrests, as one of the strongest opposition forces. It took14.2% of the 2018 vote, compared to the SDF’s 3.4%

On the diplomatic front, France supports the Yaoundéregime. President Emmanuel Macron’s government hasoffered the Yaoundé administration help in creating de-centralisation policies and in financing the rebuilding ofinfrastructuredestroyedby the fighting.On theotherhand,Washingtonwithdrew someof itsmilitary cooperation inFebruary 2019, arguing that the Biya government is notprotecting civilian populations, andalsodecidedtoremoveCameroonfromthe list of countries benefiting fromtheAfricanGrowth andOpportunityAct as of 1 January 2020.

TheGroupement Inter-PatronalduCamerounemployers’ associationsaysthecountry’sbusinessclimate isgettingworse and companyprofits are on thedecline. As a sign of this, e-retailerJumia announced in November thatit is closing down its Cameroon salesoperations after years of generatinglosses. Jumia cited a lack of infra-structureasonereasonfor itsdecision.

Football glory postponedThe government says it will be spending on infrastruc-ture in its 2020 budget and that should boost economicgrowth in the year ahead. Cameroon devoted a lot ofresources to hosting the 2019 Africa Cup of Nationsfootball tournament, which the footballing authoritieswithdrew from the country due to a lack of preparation.The country is now due to host the tournament in 2021.

The IMF, which has been helping the government toimprove its economic management since 2017, predictsthat growth will be modest, due in part to the weakerperformance of the country’s non-oil sectors. Growth ofthe oil sector is set to increase gradually (see box).

The year ahead should provide some clarity aboutwhich company will manage the crucial port of Douala.On 3 November, on the instructions of President Biya,the process of signing the concession contract awardedto the Swiss company TIL was suspended. This is likelyto put an end to the legal proceedings initiated by theFranco-Danish consortiumBolloré-APMTerminals,whichhas been operating the container terminal for the past 15years but was not on the shortlist of pre-qualified oper-

ators. A new call for tenders shouldbe launched shortly.

The launch of operations at thedeepsea port of Kribi, in the south,has raisedhopes that the infrastructurecould be built to support industrial-scaleminingprojects.But evenminersin the northern part of the countryhave eyes on the new port in order toavoid the congestionatDouala. SmallAustralian miner Canyon Resourceshas plans to develop a bauxite minewith550mtonnesofreservesatMinim-Martap. It could begin exports in2024, but that depends onPortugeusecontractorMota-Engil constructing a

130km super higway to link Kribi to the Camrail line atEdéa. Elsewhere, India’s Jindal Steel and Power is nowexploring for iron ore at Ngovayang and hopes that itsprogramme will lead to commercial exploitable finds.

Amajoragricultureproducer, theCameroonDevelopmentCorporation, has beenhurt by the developments inNorth-West and South-West Cameroon.Many of its plantationsare there, and it has sacked about half of its 22,000 em-ployees because of the insecurity.

Electricity production has been on the rise, which willsupport more economic growth in the years to come. InApril 2019, the Memve’ele Dam added 80 of its eventual211MW to the national grid.

Cameroon’s creaking oil sectorThe fire at Cameroon’s Société Nationalede Raffinage (Sonara) refinery in May2019 contributed to the year’s economicdownturn. The fire caused the country’srefining operation to shut down and forcedit to import refined petroleum. This did notdampen the interest of some investors,however. Nigeria’s Sahara Group, foundedby Tope Shonubi and Tonye Cole, wasin talks to buy Total’s shares in Sonara.The firm has been losing money andCameroon’s ministry of finance became

its major shareholder in late 2017 througha process of converting debt into equity.Having declared force majeure, Sonaracould be shut down for at least two years.Many local banks have lent to Sonara,so its closure could have a big impacton the financial sector.

Oil production in Cameroon has beenon a downward trend due to the lackof investment since 2014. To attract moreactivity, in 2019 the Société Nationaledes Hydrocarbures (SNH) began

promoting nine blocks in the Rio delRey and Douala basins.

In 2020, economic growth is expectedto increase slightly, thanks in part tothe ramping up of production at the HilliEpiseyo floating LNG unit off of Kribi.In the first quarter of 2019, the govern-ment received 157.5bn CFA francs fromthe SNH. That was based on the countryproducing 8.1m barrels of crude,representing a 1.5% drop from the sameperiod the previous year.

FERTILISER CONSUMPTION(kilogrammes per hectare of arable land)

2002 04 06 08 10 12 14 16

Cameroon (Left scale)World (Right scale)

14

13

12

11

10

9

8

7

6

140

135

130

125

120

115

110

105SOURCE:WORLD

BANK



CEN

DEMOCRATICREP. OF CONGO

CONGO

SUDAN

CAMEROON

CHAD

SOUTH SUDAN300 km

Central African Republic’s grinding political and secu-rity crisis has no immediate end in sight. In February2019, the government signed a new peace agreement inKhartoum, Sudan, with themain rebel groups. But it hasled to little progress on the ground, with rebel leadersstill controlling 80%of the CAR’s national territory. Actsof violence are sporadic and occur on an almost dailybasis.Meanwhile, rebel leaders NoureddineAdam (FrontPopulaire pour la Renaissance de la Centrafrique), AliDarassa (Unité Pour la Paix en Centrafrique), Mahamatal-Khatim (MouvementPatriotique pour laCentrafrique)andAbassSidiki (Retour,Réclamationet Réhabilitation, 3R) still enjoy defacto immunity. Rebel control of vastswathes of territory is alsohurting thegovernment’s finances, as Bangui isdependent on customs fees and taxes,and armed groups prevent officialsfrom collecting them.

The political class is already think-ing about the next electoral deadline:the presidential election, the firstround of which is scheduled to takeplace at the end of December 2020.PresidentFaustin-ArchangeTouadérais campaigning for his re-electionbut without officially announcingit. The opposition is trying to unitewith the É Zingo Biani platform.Former national assembly presidentKarim Meckassoua, former primeminister Anicet-Georges Dologuéléandoppositionist Jean-SergeBokassaare some of Touadéra’s main chal-lengers. They all ran unsuccessfully in the last electionsand are targeting their criticisms on corruption and thegovernment's management of the security crisis.

Narrow room for manoeuvreFormer President François Bozizé, in exile in Uganda,hopes to return. Sanctioned by the United Nations andsubject to an international arrest warrant, he is thesubject of a travel ban and his assets have been frozen.But the former general is working behind the scenes toobtain permission to return. Despite the sanctions, he

managed to travel to Addis Ababa in 2018 to meet withCongolese Denis Sassou Nguesso, an influential figurein the Central African crisis.

In this context, Touadéra’s room formanoeuvre is nar-row. Since his election at the beginning of 2016, he hastried to multiply the number of diplomatic and securitypartners. At the end of 2017, he turned to Russia, to therelative detriment of France.Moscow,which today is oneofTouadéra’smain supporters, provides its ally inCentralAfricawith security help and arms,while safeguarding itseconomic interests, particularly in themining sector. But

Paris has not yet said its last word.It has hardened its diplomatic tone,complaining to Touadéra and someof his counterparts – notably Chad’sIdriss Déby Itno – about the renewedRussian influence.

More aid and adviceTheBangui governmenthasbeenableto finance its budget thanks to the sup-portof internationaldonors, ledby theEuropeanUnion.The country is com-ing to the end of its IMF programmeand is in talks for three years ofmoreaid and advice. Insecurity remains amajor challenge for businesses, butthemining, forestry and constructionsectors have been growing.However,the country remains extremely poorand those levels of growth are notenough to make a strong impact onpoverty and development.

Russia, taking up the presidencyof the Kimberley Process diamond governance in-stitution, is lobbying for the CAR to have its partialdiamond export ban removed. Exports are currentlyallowed mostly from western regions of the country,and Russian company Lobaye Invest is now exploringfor diamond deposits. Russian officials claim thatthe ban on exports from the north and east, which arecontrolled by rebel groups, hurt poor Central Africans.There is a lot of smuggling, and in 2018, the countryofficially exported just 13,571 carats, as compared with365,000 before the war in 2012.

>Successivepeacedealshavenotachieved theirgoals

>Russia is acrucial ally for theBanguigovernment, providingsecurityhelpanddiplomatic cover

Central African RepublicRebelgridlock

> GDP growth (%)

2020*2019*20182017

2.492.322.282.07

> GDP ($bn)

4.53.8

4.94.4

> Population: 4.7 million> GDP per capita: $447> Life expectancy: 52.9> Adult literacy: 36.8%> Inflation: 3%> Human development index(out of 189 countries): 188


*Estim

ationOctob

er2019



N'DJAMENA

NIGERIA

SUDAN

SOUTHSUDANCENTRAL

AFRICAN REPUBLICCAM.

LIBYA

NIGER

CHAD

400 km

Moundou

Lake Chad

Despitemany threats to Chad’s stability, President IdrissDéby Itno seems to be holding down the fort. StrongmanDéby closely watched the unrest in Sudan and the over-throw of President Omar al-Bashir on 11 April 2019.He also strengthened the presence of Chadian troopsin the south in order to monitor the border with theCentral African Republic, where he has lost influencedue to growing Russian presence. On the western front,N’Djamena continues its armed struggle against BokoHaram alongside Nigerien, Nigerian and Cameroonianforces. Chad also supports strongman Khalifa Haftar inLibya, as theN’Djamena governmentfaces rebel movements in the north.

To take on external threats, DébycountsonFrance’sunwaveringsupport.Frenchforcesbombarded thepositionsof the Libyan-basedUniondesForcesdelaRésistance rebelsat thebeginningof 2019. The central government, de-stabilisedbyinter-communityconflictsin the eastern andnorthernprovinces,is alsodealingwith internal threats. InAugust, the violence of these clashesprompted thegovernment to establisha state of emergency in Sila,Ouaddaïand Tibesti. Parliament extended ituntil the end of the year.

Narrowing political spaceRe-elected inApril 2016,Débywill be-ginhis 30thyear inoffice inDecember2020. At the end of June 2019, hecarried out a ministerial reshuffleand strengthened his security team,appointing Mahamat Abali Salah as defence minister.Since the establishment of a fourth republic in 2018,oppositionists have denounced restrictions on politicalactivity. The government banned demonstrations againstausterity and shut down access to social-media networksformore than a year. The security sector eats up about athird of the national budget, and the government has beencutting spending to other areas due to austeritymeasures.

Parliamentary elections, which have been postponedsince 2015, could take place in 2020. The government hasjustified these years of delay on security and financial

grounds. The opposition is now calling for the vote tobe delayed – after the government tried to rush it throughbefore the end of 2019 – in order to implement reformsand better electoral management.

Succès Masra, leader of Les Transformateurs, whoresigned fromhis position as an economist at theAfricanDevelopment Bank to enter politics, is calling formassiveprotests and an inclusive national dialogue about thecountry’s problems.Masra is getting some support fromtraditional opposition leaders including Saleh Kebzabo,Mahamat Ahmat Alhabo and Joseph Dadnadji.

Austerity hits studentsHeavily dependent on oil revenue,Chad isnowgradually recoveringfromthesharpdrop inoilpricesand thedebtcontracted in 2014 through the Swisstrading giant Glencore. Having beenrescheduled, that debt will be fullyrepaid in 2026, according to the IMFforecasts. The government’s recentausteritymeasures have included thesacking of civil servants and the sus-pension of scholarships for students.

Oil prices have rebounded some-what from their recent lows, and newfields are coming onstream. Thecountry produced 42.2m barrels in2018, and the government predictsthat production will rise to 45.2m in2019 thanks to the launch of ChinaNational Petroleum Corporation’sDaniela field.The government’s inter-est in economic diversification had

not yielded results, and oil accounts for nearly 90% ofChad’s exports. Poor transport, electricity and telecomsinfrastructure are obstacles to doing business in Chad.

The sale of a 60% stake in state-owned CotonTchadSociétéNouvelle in early 2018 to Singapore’s Olam gavea boost to the cotton sector. Production had sputtered tojust 17,000tn in 2016/2017, hurting the economy of south-ern Chad. Olam has started repaying some of the state’sdebts to producers in exchange for tax credits. This hasinjectedmuch-needed funds into the sector. The country’sgoal is to produce 180,000tn for the 2019/2020 season.

>Security challengescome fromSudaneseunrest, attacksbyBokoHaramandrebels in thenorth>Thoughsuffering fromhighdebt levels, theeconomy isgradually recovering

ChadStabilityatrisk

> GDP growth (%)

2020*2019*20182017

11.9311.0211.0510.07

> GDP ($bn)

-2.3

2.45.4

2.2

> Population: 15.9 million> GDP per capita: $861> Life expectancy: 53.2> Adult literacy: 22.3%> Inflation: 3%> Human development index(out of 189 countries): 186


*Estim

ationOctob

er2019



ZAMBIA

ANGOLA

CONGOGABONUGANDA

TANZANIA

BURUNDIRWANDA

CAM.

CAR SOUTHSUDAN

KINSHASAAtlanticOcean

Lubumbashi

Goma

Kisangani


400 km

President Félix Tshisekedi’s cohabitation with formerpresident JosephKabila could be uncomfortable in 2020.OppositionistMartin Fayulu, whomaintains that he wontheDecember 2018presidential election, claims thatKabilaandTshisekedi reached abackroomquidproquo inwhichTshisekedi could becomepresident andKabila could havea strong role in government and protect the interests hedevelopedwhile in power.Tshisekedicould try to build up his popularityin order to build a counterbalance toKabila’s legislative power anddeliveron the type of governance changesthat he campaigned on.

Tshisekedi is the leaderofCappourle Changement, a coalition formedwithVital Kamerhe,whohas becomehis influential cabinet director. Itcontrols just 47 out of 500 seats inthe national assembly,whileKabila’sFront Commun pour le Congo (FCC)has anoverwhelmingmajority inbothhousesof the legislature.Kabila’s andTshisekedi’s camps finally agreed ona government in 2019 aftermonths offraught negotiations. FCC memberSylvestre Ilunga Ilunkamba was ap-pointed to lead the first governmentoftheTshisekedi era as primeminister.

Old regime baronsSohas there really been a breakwith the past?Tshisekedisucceeded ingetting the strategic interiorministry andalsothe budgetministry.Butmanymembersof the governmentare fromKabila’s camp.A large numberof theold regime’sbarons were removed after intense talks, but Kabila stillhas control over key ministries such as justice, defenceand finance. Political tensions could flare becauseKabilahas promised to soonmake his return to the front lines ofpolitics after taking a step back at the beginning of 2019.

Tshisekedi and Kabila could spar over several keyissues: new appointments to the judiciary, the selection

of newmembers to the CommissionElectoraleNationaleIndépendante and debates about mooted constitutionalreforms.Tshisekediwill alsohave todealwith the tensionsin his own entourage,where the powerwielded by cabinetdirector Kamerhe is causing tensions.

On the other side of the political aisle, the opposition,working together in the Lamuka coalition, is struggling

to get back into battle mode.

Reformist ambitionsFayulu’s camp insists he won at theballot box and refuses to recogniseTshisekedi.Opposing thesehardlinersis themoremoderatecamprepresentedby former Katanga governor MoïseKatumbi. After falling out with theKabila government and facinga seriesof trumped-up legal cases, he returnedto theDRC inMay after receiving hispassport twomonths earlier followinga decision supported by Tshisekedi.Katumbi is calling for a republicanopposition and intends for his campto participate in state institutions.

Between these two antagonisticpositions, Jean-PierreBemba, anotherLamuka leader, is stayingdiscreet andacts as a mediator. But tensions aremounting. Katumbi plans to trans-form his platform Ensemble pour le

Changement into a political party. Activists are askingtwo questions about the future: How long can Lamukaremain united? Will personal ambitions prevail overgroup dynamics? The coming year could lead to shiftsin the opposition landscape.

Even facing a disunited opposition, Tshisekedi’s re-formist ambitions – marked by the number of promiseshemade during his election campaign – will be put to thetest. President Tshisekedi will need a stronger economyto advance his reforms, including his key promise of freeeducation. Tshisekedi’s critics say that he has failed to

>Thepresident is having troubledealingwith the influenceofhispredecessor>Adownturn inminingactivity is causingworries for theKinshasagovernment

DemocraticRepublic of CongoTshisekedi’sbalancingact

> GDP growth (%)

2020*2019*20182017

51.548.947.037.6

> GDP ($bn)

3.7

5.8

3.84.2

> Population: 86.8 million> GDP per capita: $500> Life expectancy: 60> Adult literacy: 77%> Inflation: 5.5%> Human development index(out of 189 countries): 176


*Estim

ationOctob

er2019


deliver on pledges to improve people’s daily lives – about60% of the population lives below the poverty line – andinstead has launched a bloated and expensive govern-ment. Kinshasa now has the largest administration sinceindependence,with 67ministers. The operating expensesof the new team are estimated by the Observatoire de laDépense Publique at $737m per year. The budget for thecoming year, which was being discussed as The AfricaReport went to press, was due to be approved before 15Decemberandwasestimatedat$10bnafter the initial budget seemed toosmall to make much impact.

The DRC’s economic situation,which recorded a slight recovery inthe last two years of the Kabila era,remains very unstable.With the sharpdrop in cobalt prices and a slowdownin the wider mining sector, moreeconomic actors are calling for thediversificationof theCongolese econ-omy. Agriculture and agro-industryhave a lot of potential, but theKabilagovernment’s plans for large-scalefarms showed some of the problemswith that growth model.

The authorities passed a newmining code in 2018 thatwas supposed to raisemore revenue through higher taxesand royalties. So far it has yet to deliver that boost. It couldhelp the private sector, if the government follows throughonenforcing local content and sub-contracting regulations.

Weak infrastructureAfter the price of cobalt fell 40% in 2019, Glencore an-nounced inAugust that itwas temporarily closing theDRC’sMutandamine. But Swiss commodities trader Trafigurais not as pessimistic about the sector and announceda $450m investment in cobalt processing in October.Signalling other problems, Canadian miner Banro shut

down some of its goldmines in eastern DRC for securityreasons in September, declaring force majeure.

Chinesemining companies havebeen takingonabiggerrole in the DRC. But they are not all full-steam ahead. InAugust, Huayou backed out of its plans to buy a stake inCanada’s DRC-focused cobalt miner Lucky Resources.

AnotherTshisekedipromise is to fight against corruptionand to improve governance, which could help to reassureforeign investors. The DRC ranks 184th out of 190 coun-

tries in theWorld Bank’s 2019 reportfocusedon theeaseofdoingbusiness.

The country has weak infra-structure, and its Chinese-backedmines-for-infrastructure deal hasnot been producing the results thatwere initially announced.Miners andother companies are seeking moreelectricity production, with minersalone saying that they need at leastan additional 700MW. Many damsand other projects have been moot-ed, but they face problems raisingfinancing and other delays.

One infrastructure project movingahead is a long talked about bridge to

link Kinshasa with its neighbouring capital, Brazzaville,by a bridge over the Congo River. In May, the AfricanDevelopment Bank came up with $210m in finance toget things moving.

Tshisekedi is now trying towinover thediasporaand thedonor community. He is travelling frequently, attractingsome criticism from civil society organisations. In addi-tion to his numerous trips to the region’s neighbours (seebox), Tshisekedi has made trips to Belgium and Francefor exchangeswith theEuropeanUnion andmeetingswiththe diaspora andwith company executives.He alsomadeseveral trips to theUS tomeetwith the IMFandothers, allinanattempt to reassureKinshasa’s internationalpartners.

Peace in the east?One of DRC President Félix Tshisekedi’smain goals is to bring peace to theeastern region of the country, hometo successive rebellions and localand foreign armed groups for more than25 years. There are many challenges.The region hosts nearly 130 armedgroups. The Ebola epidemic has compli-cated the government’s security initia-tives since August 2018, with more than3,000 cases and 2,000 deaths. Andfinally, the demobilisation, disarmament

and reintegration programme hasreached its full capacity but not yetachieved what it was set up to do.

Tshisekedi is increasing the numberof his trips to eastern neighboursRwanda, Uganda and Burundi to discussthe problem of peace in the east. Withhis Angolan counterpart João Lourenço,he was involved in a mediation effortbetween Rwanda’s President PaulKagame and Uganda’s Yoweri Museveni,who had maintained tense relations for

several months amid accusationsof support to armed rebel groups.

Kinshasa is counting on the UnitedNations (UN) mission in the country,MONUSCO, to support efforts for militarycollaboration between the DRC andits neighbours. Relations with MONUSCOhave improved under Tshisekedi, asKabila had asked the force to leave thecountry by 2020. The UN has been cuttingMONUSCO’s budget, and the operationis currently undergoing a strategic review.

INFLATION RATES(year-on-year growth rates in percent)

80

60

40

20

0Mar.

2016Sep.2016

Mar.2017

Sep.2017

Mar.2018

Sep.2018

BanqueCentraledu Congo

InstitutNational dela Statistique

SOURCE:IN

TERNAT

IONALMONETA

RYFU

ND



AtlanticOcean

CAMEROON

GABON

MALABO

BIOKO

Bata

EQUATORIAL GUINEA

50 km

> GDP growth (%)

2020*2019*20182017

11.612.113.712.2

> GDP ($bn)

-4.7-5.7

-4.9-4.6

> Population: 1.4 million> GDP per capita: $8,927> Life expectancy: 57.9> Adult literacy: ND> Inflation: 1%> Human development index(out of 189 countries): 141


*Estim

ationOctob

er2019

Rule by theObiang family in Equatorial Guinea is punc-tuated by the boom and bust cycle that the oil sector hasbrought since the discovery of the country’s first barrels inthe 1990s. President TeodoroObiangNguemaMbasogo,77, celebrated 40 years in power in 2019 and shows nofirm signs yet of how he will hand over to his preferredsuccessor, his vice-president and son Teodorín NguemaObiangMangue. The next presidential elections shouldtake place in 2023. With major infrastructure projectsstopped in their tracks by the latest rout in oil prices,the government is now back to working with the IMF toboost transparencyand cutwaste untilthe price of oil rises again and swellsthe government’s coffers.

With theObiang clan in control ofthe government, Teodorín is takingincreasing command of the securitysector. That puts him in a strategicposition to deal with any threats tohimsucceedinghis father, either fromwithin the security forces or fromwithin his own family. Teodorín issaid not to be on very good termswith his half-brother GabrielMbegaObiang Lima,who is the oilminister.The government has used a supposedDecember 2017 coup plot to crackdown further, limiting access to socialmedia and the internet.

Officially recognised oppositionparties are struggling to competewith the ruling PartidoDemocráticodeGuineaEcuatorial. TheoppositionConvergencia para la DemocraciaSocial, led by Andrés Esono Ondo, has no seats in thenational assembly and complains of frequent intimidationfrom the security forces.

Honey, I shrunk the economyTeodorín continues to be the subject of negative interna-tional legal andmedia attentionbecauseof his extravagantlifestyle. The Swiss authorities dropped an investigationinto him for money laundering in early 2019, but theyseized and auctioned off some of his cars in September– raising $29m, most of which will go to development

projects in Equatorial Guinea. The Equatorial Guineanruling party decries these moves as unfair interventionin the country’s sovereign affairs.

The government’smismanagement of its oil revenue ishaving long-term consequences. During the good times,it spent on prestige projects, like the construction of theCiudad de la Paz on the mainland – designed to replaceMalabo as the country’s capital. Because of the lack ofgovernment savings, the IMF forecasts that the economywill shrink every year until at least 2024. The IMF agreedto a three-year programme in October 2019. It wants to

see the government produce betterstatistics and improve governance.

Diversification, but how?Another key themeof the IMFdeal iseconomic diversification, which thegovernment has been talking aboutfor years. Due to the small size of theEquatorial Guineanmarket and bar-riers to doing businesswith thewiderCentral Africa region, internationalinvestors have shown little interestoutside of the oil and gas sectors.Agriculture and tourismare touted ashaving potential, but the governmentis wary of making it too easy forinternational visitors to spend timein the country. Claims that it wantsto build a wall on the border withCameroon began circulating in 2019.

Oil production has been decliningdue to lower returns from ageingfields.Averageproductionwasaround

120,000 barrels per day in 2019. The government predictsthis will rise to 145,000 in 2020 due to new fields discov-ered by US firmsNoble Energy and Kosmos Energy thatcan be linked to other oil infrastructure already in place.Lima says the government is going to be tougher on com-panies that do not meet their investment requirements.

As The Africa Report went to press, a new licensingroundwas under way for 27 blocks, with contracts due tobe announced in early 2020. There have not been any bignew investments since the collapseofOphirEnergy’s plansfor the floatingLNGplatformatFortuna in January 2019.

>Theslow-motion succession seemsoncourse forTeodorín tobepresidentoneday>Thedownturnhasbeensostrong that it haspushed thecountry into thearmsof the IMF

Equatorial GuineaAnoilymess



AtlanticOcean

LIBREVILLE

CONGO

EQUATORIALGUINEA

CAMEROON

Port-GentilFranceville

GABON

100 km

President Ali BongoOndimbawasweakened by a strokein October 2018. Since then Libreville-watchers havebeen asking about his political longevity and unity inthe presidential camp. A failed coup attempt in January2019 highlighted the uncertainty.

The largely oil-dependent economy has been buffetedby a cycle of boomand bust, and the government is on anIMF programme to streamline spending, reform publicfinances and raisemore local revenue.The next presiden-tial race is not until 2023, so the administration has sometime to turn things around before facing a popular vote.

Many eyes in Libreville are on thepalace intrigues ofwho is in andwhois out from the inner circles of power.Cabinet director Brice LaccrucheAlihanga was in the ascendant formuchof 2019, sidelininghis rivals andrepresenting Bongo across the coun-try. Like cabinet directors before him,Alihanga got a reputation for beingvery powerful andwas then sidelinedhimself inOctober 2019,whenhewasnamed minister for human capitaland sustainable development. Bongoopted for a technocrat to run thepresidential engine room,ThéophileOgandaga, who previously workedat Singaporean agribusiness Olam.

Powerful baronsAliBongoOndimbahas increasedhisstays abroad, particularly in London,and focused on his convalescence.The leader followed the advice ofhis doctors, limiting his periods of work to the strictminimum and appearing in public only occasionally,mainly to calm the tensions arising from his absence.

The rulingPartiDémocratiqueGabonais (PDG) is tryingto show a united front while the opposition is struggling.Although–barringunforeseenevents – thenextpresidentialelectionwill not take place until 2023,Gabonese politicallife revolves essentially around the internal quarrels ofthe PDG, some of whose barons, removed from the gov-ernment, continue their careers in the national assembly.The institution could prove to be rebellious.

Jean Ping, who after the hotly contested 2016 electionstill claims to be the president-elect, rarely breaks fromhis silence, apart from a few symbolic speeches. Asfor the other heavyweights of the opposition, such asAlexandreBarro-Chambrier (Rassemblementpour laPatrieetModernité), GuyNzouba-Ndama (PartiDémocratiqueGabonais) and ZacharieMyboto (UnionNationale, UN),they have had little influence on political debates after thebitter defeats in the October 2018 legislative elections.

A newgeneration of oppositionists is preparing to takeover. The UN is expected to hold a congress in the first

half of 2020, at whichMyboto is ex-pected to hand over to a new leader.c

Oil exploration dealOnly theAppelàagir collective, ledbylawyer Anges Kevin Nzigou and UNcadre JeanGaspard NtoutoumeAyi,have been effective in criticising thepresidential camp.Throughout 2019,they demanded – without success –a medical examination for BongoOndimba, who they say is unable tocarry out his duties.

Nevertheless, thegovernmenthopesto take advantageof this relative calmtocontinue itseconomic reformeffortsas its IMF support comes to an end in2020.Unemployment remains a con-cern, as does weakening purchasingpower, someagre growth is expectedto continue. Electricity and transportinfrastructure are two priority areasfor government spending amidst the

leaner times. But local businesses are suffering due tothe state’s slowness in payingwhat it owes to contractors.

The government is trying to make the mining and oilsectors more attractive to international investors, andLibreville launched newmining andoil codes in 2019.Thegovernment is running a bidding round for 35 offshore oilblocks and has signed its first new oil exploration dealin five years: two licences were picked up by Malaysia’sPetronas. Oil minister Noël Mboumba hopes that pro-duction will rise from about 200,000 barrels per daycurrently to about 300,000 by 2021.

>Thereare significant shifts inPresidentBongoOndimba’s innercircle

>Thegovernmenthopesminingandoilwill provide increased revenue

GabonBongoandthegreatupheaval

> GDP growth (%)

2020*2019*20182017

17.616.816.814.9

> GDP ($bn)

0.4 0.8

3.42.9

> Population: 2.2 million> GDP per capita: $8,112> Life expectancy: 66.5> Adult literacy: 82.3%> Inflation: 3%> Human development index(out of 189 countries): 110


*Estim

ationOctob

er2019



AtlanticOcean

REPUOF

DEMOCRATICREP. OF CONGO

CAMEROON

CAR

GABON

CABINDA (Angola)

Pointe-Noire

TheRepublic ofCongogovernment enters 2020on firmerfinancial footingafter facingadiredownturn.The country,whose public finances have been severely shaken by thefall in oil prices, was finally able to sign a loan agreementwith the International Monetary Fund (IMF) on 11 July.After twoyearsof toughnegotiationsand revelationsaboutmajor hiddendebtwithChina andoil tradersGlencore andTrafigura (more than$1.7bn), theBrettonWoods Institutiongranted Congo $448.6m over three years.

Chinaalsoagreedon29April to restructure itsCongolesedebt, estimatedat$3.2bn,orabout35%ofBrazzaville’s totaldebt, allowing financial assistance tobe released.Following the IMF’sdeci-sion, thecountryalso receivedsupportfrom the African Development Bank($440m), the World Bank ($280m)and France ($150m).

Public spending is an importantdriver of economic growth inCongo.The authorities managed during thelean years to cover the salaries of themassive civil service but are manymonths behind in the payment ofpensions and student grants. Thegovernment has amassed significantdebt to the country’s business opera-tors, estimated at $2.9bn.

Lack of transparencyDespite the loweroil prices, the sectoroffers some promise. On 10 August,Congolese companies SARPD-Oiland PEPA announced the discoveryof the onshore oil field called Deltade la Cuvette. The promoters say this area in the northernpart of the country has an estimated production capacityof nearly 1m barrels per day, three times current nationalproduction, although analysts consider this potential tobe overhyped. Other projects are coming on-stream toreplace maturing fields, and the authorities predictedproduction would rise from 330,000 barrels per day in2018 to 380,000 at the end of 2019.

The mismanagement and lack of transparency inthe oil sector are in the headlines. Commodity traderGunvor was found guilty in Switzerland of paying

bribes in Congo, and the chief executive of Italy’s Eniand his Congolese wife are under investigation in Italyfor conflicts of interest in oil-related deals.

The IMF has a list of 48measures that the governmentmust implement by the end ofMarch 2020. They includeconsolidating public finances, mobilising tax resourcesand controlling spending in order to reduce the country’sdebt to 70% of gross domestic product in three years,from 120% today. Despite the 5% growth expected bythe authorities in 2019, the 2020 budget will still be re-strained. Nevertheless, the government intends to give

it a strong social dimension.The political class is focused

on the 2021 presidential election.Tensionsare stirring in the rulingPartiCongolaisduTravail (PCT), which isgetting prepared for the campaign.

Opponents in prisonSome voices are calling for reformswhile many others prefer the statusquo.On the other side of the politicalarena, some of the numerous oppo-sition parties are divided between‘official’ and ‘radical’ wings. Theopposition appearsweaker than everand is not able toprofit from the splitswithin the PCT.

During the visit of PresidentDenis Sassou Nguesso to Paris on 5September, France’s foreign affairsminister Jean-Yves Le Drian askedhim “firmly” to release opponentsheld in detention, first and foremost

General Jean-MarieMichelMokoko,whoofficially camethird in the 2016 presidential election. The opposition iscalling for an inclusive national political dialogue, whichthe ruling party has so far refused.

In the restive Pool region, fighting has stopped andthe government is due to carry out a disarmament, de-mobilisation and reintegration programme for formercombatants. Community consultations have identifiedthe lack of employment as one of the main drivers of theconflict. But so far, thegovernment hasnot beendeliveringthe finance necessary to support the former fighters.

>Withhelp fromChinaand the IMF, Brazzaville nowseesabetter financial future>Theopposition remainsweakanddividedaheadofpresidential elections in2021

Republic of CongoBackfromtheeconomicbrink

> GDP growth (%)

2020*2019*20182017

11.511.511.68.93

> GDP ($bn)

-1.7

1.5 2.73.9



*Estim

ationOctob

er2019



AtlanticOcean

SÃO TOMÉ

PRINCIPE

SÃO TOMÉ

SÃO TOMÉE PRÍNCIPE

5 km

Social democratic primeminister Jorge Bom Jesus headsinto 2020 facing the expectations of São Tomé’s impov-erished population and having to deal with the economicproblems left by his predecessor. Bom Jesus has a veryslim parliamentary majority, so he will have to work tokeep his coalition partners onside.

The governing Movimento de Libertação de São Tomée Príncipe–Partido Social Democrata won just 23 seatsin the October 2018 legislative elections, compared tothe centre-rightAcçãoDemocrática Independente (ADI)’s25 seats. Bom Jesus was able to get five other membersof parliament on his side in order toform a government. He is the headof government andEvaristoCarvalhoof the ADI is the largely ceremonialpresident. While their cohabitationis not always cordial, Bom Jesus isat an advantage because the ADI istearing itself apart.

After his failure to form a govern-ing coalition, former primeministerPatriceTrovoada left the country andsuspended his functions in the ADI.His party, already divided, chose anew leader in the form of AgostinhoFernandes inMay 2019. The electionwascontestedbyseveralpartyofficialswho remained loyal toTrovoada.Asasign of the deep divisions undermin-ing the ADI, Trovoada’s supportersre-elected him in his absence to headthe group at the end of September.The ADI now, therefore, has twoantagonistic presidents.

Drastic measuresThe current government accuses the former primemin-ister of hiding a relatively huge public debt, estimated atmore than $70m. The IMF, which had already expressedconcern about the country’s over-indebtedness, said inAugust that unbudgeted expenditures under the previousadministration had led to overspending equivalent to5% of GDP in 2018.

PrimeMinister Bom Jesus plans to take drastic meas-ures to get out of this troubling financial situation. To

consolidate its finances, the government has committedto improving its tax revenue by introducing a new value-added tax, which could come into force in 2020. In theshort term, the economy is set to record only moderatelevels of growth. The government and the IMF signed anew programme in October worth $18.2m that includesplans to cut spending and improve the managementof the energy sector. The government subsidises theloss-making utility Empresa de Água e Electricidade(EMAE), which relies on thermal power plants, and theIMF is pushing for a big focus on green energy.

Switch to ChinaThe government also has to dealwiththe high expectations of the elector-ate, who are calling for significantimprovements, particularly in health,education and sanitation. A third ofSão Toméans live on less than $1.90a day, according to recent WorldBank estimates. Bom Jesus regularlyreminds his team that he will nothesitate to overhaul his governmentif they do not prove effective.

Several São Toméan governmentshave had big hopes for oil discover-ies that never panned out. After thedisappointing exploration activity inthe joint zonemanaged by SãoToméandNigeria, the optimismhas turnedto the waters of the country’s exclu-sive economic zone. In November,supermajor Shell signed a farm-indeal for Blocks 6 and 11.

Therewas similar posturing about SãoTomé’s switch-ing of diplomatic recognition in favour of China. Byabandoning Taiwan, the government hoped to get majorChinese financing for amultipurpose port at FernãoDias.The government said in early 2019 that talks were veryadvanced, but asTheAfricaReportwent to press no dealshadbeen signed.Chinesebacking for ahousingproject andthe modernisation of the international airport, however,are moving ahead. Another infrastructure project goingahead is the$21m rehabilitationof the capital city’s coastalroad, financed by the World Bank and other donors.

>Thegoverningcoalition restsonslim foundationsandcouldcollapse ifMPschangesides>Thereare fewprospects forabiggrowthspurt, andeducationandhealtharepressingneeds

São Tomé e PríncipeBomJesus’sbalancingact

> GDP growth (%)

2020*2019*20182017

0.460.430.420.37

> GDP ($bn)

3.8

2.6

3.5

2.7

> Population: 215,000> GDP per capita: $1,933> Life expectancy: 66.8> Adult literacy: 90.1%> Inflation: 8.8%> Human development index(out of 189 countries): 143


*Estim

ationOctob

er2019


2020

2035

2050

397.2

574.6

787.5

BAMAKO

DAKAR

BANJUL

PRAIA

CONAKRY

FREETOWN

MONROVIA YAMOUSSOUKRO ACCRA

LOMÉPORTO-NOVO

NIAMEY

OUAGADOUGOU

ABUJA

BISSAU

Zinder

PortHarcourt

Maiduguri

Mopti

Timbuktu

Gao

Abidjan

ALGERIA

LIBYA

MAURITANIA

CAMEROON

SENEGAL

MALI

BURKINA FASOGUINEA

GUINEA-BISSAU

LIBERIA

SIERRALEONE

GAMBIA

CABO VERDE

CÔTED'IVOIRE

GHANA

TOGO

BENIN

NIGER

NIGERIA

Atlantic Ocean

300 km

Benin 2.2%Burkina Faso 2.2% 0.3% Cabo Verde

6.6% Côte d’Ivoire

0.3% Gambia

10% Ghana

2% Guinea

0.2% Guinea B.0.5% Liberia

2.6% Mali

1.4% NigerNigeria 66.7%

Senegal 3.6%

Sierra Leone 0.6%Togo 0.8%

TOTAL$669.6bn

Somanychallengesareinthewayofgreaterpoliticalandeconomiccooperation inWestAfrica:fromtheNigeria/Beninborderclosuredisputetotheterroristthreat inBurkinaFasoandtheMaliangovernment’s inabilitytostopspirallingethnicviolence.

West Africa

2020targetECOWAShas

committedto

launchingtheEco

regionalcurrency,

some20years

afterinitialplansfor

itwereannounced.

Analystspredict

itwillagain

bepostponed.

Integrationofnations

210 People towatch

212 Benin

213 BurkinaFaso

214 CaboVerde

215 Côted’Ivoire

217 Gambia

218 Ghana

220 Guinea

221 Guinea-Bissau

222 Liberia

223 Mali

224 Niger

225 Nigeria

227 Senegal

228 SierraLeone

229 Togo

WEST AFRICA POPULATION(millions)

WEST AFRICA GDP (2019)(% of regional total)

SOURCE:UN

POPULA

TION

DIVISION

SOURCE:IM

F

COUNTRY PROFILES / WEST AFRICA

A.RYU

MIN

/TASS/ABACAPRESS.COM

LUKEMAC

GREG

OR

/BLO

OMBER

GVIAGET

TYIM

AGES

peopletowatchNIGERIA

Zainab AhmedMaking money work

As policy-makers grapplefor influence over Nigeria’seconomic future, financeminister Zainab Ahmed wasnot only reappointed butalso picked up the budgetand planning portfolios whenPresident Muhammadu Buharicombined two ministries,making her this government’s‘super-minister’. The Buhariadministration is tasked withboosting national productionand preparing the country tobetter deal with oil downturnsby generating more revenuefrom other sources. Whileseeing how the governmentcan coordinate fiscal andmonetary policies, Zainab– an accountant byprofession – has also beeninvolved in plans to introducenew taxes and to expand thetax base by making sure morecompanies and workers paytheir fair share. None of thatwill be an easy ask.

LIBERIA

Jewel Howard TaylorA problematic partner

The fortunes of the vice-president and formerwife of warlord Charles Taylor are declining,especially with President GeorgeWeah’s surprise

September 2019 announcement of his backing for a truth and reconcilia-tion commission and a war and economic crimes court. Many members ofHoward Taylor’s National Patriotic Party (NPP), which was the ruling partyfor much of the civil war, will be targeted. She helpedWeah to victory in the2017 presidential election through the support of the NPP, but the party hascriticised people aroundWeah and she has been in trouble with the courtsfor administrative overreach. Monrovia’s rumour mill said Weah suspectedher of involvement in June 2019’s ‘Save the State’ protests, which accusedhim of corruption and neglecting the poor people who voted for him.

NIGERIA

Akinwumi AdesinaAnother high-five?

On the back of a record increasein the African DevelopmentBank’s capital base approved inOctober – rising 125% to $208bn –Akinwumi Adesina is in a strongposition to win a second termas Bank president in 2020. Nigeria’sformer agriculture minister hasbeen seeking to shake up the bank’soperations since he was electedin 2015 and has been focusing itsoperations on the ‘High 5 Agenda’,which is centred on electrifica-tion, agriculture, industrialisation,regional integration and socialdevelopment. Non-African share-holders were the biggest obstacleto raising the capital, so Adesina willbe campaigning as a leader whofights for the continent’s interests.


ISSAM

ZELJI/TR

UTH

BIRDMEDIASFO

RJA

GULS

HAN

KHAN/AFP

CÔTE D’IVOIRE

Guillaume SoroRebel-rouser

Former national assembly president and ForcesNouvelles rebel leader Guillaume Soro has

broken off with his former allies in governmentand is making a solo run for the presidency in

2020. With years of conflict not farfrom people’s minds, Soro told The Africa

Report in November: “My country Côte d’Ivoireis in danger of burning again” due to the

machinations of President Alassane Ouattara’sRassemblement des Houphouëtistes pour la

Démocratie et la Paix to remain in power. Withnone of the major parties likely to

win a majority of the vote in the first round,the ability to make an alliance should be key indetermining who gets to run the country for the

next five years. But one potential spoileris the fact that Soro is wanted on an interna-

tional arrest warrant for his role in a coupattempt in neighbouring Burkina Faso in 2015.

GHANA

Ken Ofori-AttaA bird in the hand…

As the country prepares forelections in 2020, finance ministerKen Ofori-Atta will face unprece-dented demands for spending.Will he hold the taps tight or splashout the cash to help President NanaAkufo Addo win re-election?The Accra government onlyrecently ended its IMF programme,which helped it to overcome theproblems caused by the previousround of loose spending, andnow has years of oil- and gold-backed growth on the horizon.In the meantime, Ofori-Atta is stillworking on revenue-raising plans,which include a minerals fundIPO, but not much has been heardabout the planned $50bn issue of‘century bonds’ discussed in 2018.

NIGERIA

Yemi AladeSteely songstress

One of Nigeria’s top female singers is goingfrom strength to strength, powered by her

music video game and focus on fans onthe continent. Her single ‘Johnny’ is the

most-watched Nigerian music videoon Youtube and she became the firstfemale African music star to get onemillion subscribers there. After herparticipation in Beyoncé’s Lion Kingalbum (see page 88), Alade releasedher bop-filled Woman of Steel albumin October 2019. She told reporters:“The Nigerian industry is literallyon steroids […] You need to sleepwith your eyes open so you cancatch the next wave.”



PORTONOVO

NIGERIAGHANA

BURKINAFASO

TOGO

Gulf of Guinea

BEN IN

150 km

Parakou

Cotonou

Theyear ahead is set to be oneof recovery after the turbu-lenceof2019.Organisedwithoutanyoppositionpartiesableto participate, theApril legislative electionsweremarkedby violence that left several people dead and plunged thecountry into anunprecedented crisis.Oppositionists decrywhat they call President Patrice Talon’s creeping author-itarianism. He convoked a national political dialogue on10 October, but it did little to calm political tensions andmany parties were not involved. Local and municipalelections planned for March 2020 will again test Benin’sdemocratic credentials.Without any seats in parliament,the opposition now do not have anyseats on the body that oversees theelectoral register, which they say isopen to manipulation.

Onlya fewweeksafter theelections,two French tourists were kidnappedin Pendjari Park in the north of thecountry.French special forces rescuedthem on 10 May. This event under-mined the core of the Programmed’actions du Gouvernement (PAG,launched in 2016), of which tourismis one of the driving forces. A thirdsnag occurred on 20 August, whenNigeria decided to close its land bor-der with Benin, which derives 20%of its gross domestic product fromtrade with its neighbour. Nigeria’sPresident Muhammadu Buhari istrying to boost rice production andfight against smuggling.

These jolts have not affected theauthorities’ confidence. The 2020budget is on the rise – 2trn CFA francs, compared with1.9trn in 2019 – as is the growth outlook.

Major projects delayedIn 2019, growth in the commodities sector, drivenmainlyby cotton, reached nearly 6%. The 2018/2019 seasonproduced a record of 678,000tn. The construction sec-tor (25%) and water and power sectors (8%) are due toproduce strong results. The 120MW Maria-Gléta powerplant is soon due to come onstream. In July, France’sTotal signed a deal with the Beninese power utility to

construct a re-gasification plant for liquefied natural gasimports that should be operational by 2021.

Twoyears before the next presidential elections, sched-uled for 2021, in which it is still unclear whether Talonwill participate, the authorities are pushing to acceleratethe implementation of the PAG.Priority reforms on land,small andmedium-sized enterprises and infrastructure areexpected, as well as the creation of the Caisse desDépôtset Consignations investment vehicle.

Not all PAG projects are progressing as quickly asexpected. Several major projects, such as the new air-

port and the extension of the port ofCotonou, have been delayed, oftendue to lengthy feasibility studies ordifficulties inmobilising thenecessaryprivate funds. Their construction isexpected to start by the end of 2020.

Challenge to diversify economyClarity on another major infrastruc-ture project is expected in 2020. Adisputed contract to build a rail-way between Benin and Niger pitsBolloré Group against Africarail.An arbitration decision is due to behanded down next year. A regionalproject that is moving more rap-idly is China National PetroleumCorporation’s nearly 2,000km ofpipeline to link Niger’s oil fields atAgadem to Benin’s Seme port.

Another challenge for the author-ities is to further diversify the econ-omy in order to reduce the country’s

dependence onNigeria. It is on the government’s agenda,but it still needs to be put into practice.

Finally,Benin’s relativeeconomichealthwill alsodependonthe improvementof thepoliticalandsocial climate,whichhas been largely affected by Talon’s poor governance. Alarge part of the opposition has chosen to go into exile toescape investigations deemed to be politicallymotivated.One of its main figures, former president Thomas BoniYayi, left the country for treatment after being held underhouse arrest for several weeks. Although veryweakened,the opposition has not yet said its last word.

>Thegovernment’s optimisticgrowthprojectionsmaybecomplicatedbyNigeriaclosing itsborder>TheoppositioncomplainsTalon isusingpowersof incumbency tomakepolitical competition less fair

BeninLeavingtheturbulencezone

> GDP growth (%)

2020*2019*20182017

15.414.314.212.6

> GDP ($bn)

5.66.6 6.76.5

> Population: 11.8 million> GDP per capita: $1,216> Life expectancy: 61.2> Adult literacy: 32.9%> Inflation: -0.3%> Human development index(out of 189 countries): 163


*Estim

ationOctob

er2019



BENINGHANA

CÔTED'IVOIRE

TOGO

MALI

NIGER

OUAGADOUGOU

BURK INA FASOBobo-Dioulasso

100 km

Roch Marc Christian Kaboré, elected in October 2015after a period of political transition, promised to promotenational reconciliation and an economic recovery. Butthe priorities of its five-year term changedwhen BurkinaFaso, until then perceived as an island of stability in theSahel, was hit by terrorist attacks.

The January 2016 attack, which targeted places fre-quented by expatriates in Ouagadougou, marked animportant turning point. Attacks have since increasedto the point that the state’s authority has been eroded innorthern and eastern areas of the country.The governmentlaunched one of its biggest andmostdeadly offensives in August 2019.

Inter-communal violence has alsobeen spreading. Since 2015, morethan 600 people have died in attacksand 500,000 have been displaced.This security crisis is taking placeagainst a regional backdrop whereterrorism is affecting several coun-tries. With Kaboré at the head ofthe G5 Sahel force (which includesBurkina Faso, Mali, Mauritania,Niger and Chad) in 2019, the group-ing has been seeking more donorfinance. The decision by the headsof state of the Economic Communityof West African States (ECOWAS),taken at the Ouagadougou summitin September 2019, to contribute tothewar effort both financially and inmilitary terms should help frontlinecountries likeMali andBurkinaFaso.

In politics, 2020 will be markedby presidential and legislative elections in October. Butobservers are already concerned that they may not beable to take place throughout the country.

New constitutionAnother major expected event is the new constitution,which should limit the number of presidential termsto two – whether or not they succeed each other – aswell as rebalance powers within the government andrepeal the death penalty. The review of the electoralcode and the implementation of provisions to allow

members of the diaspora to vote for the first time willalso occupy the public debate.

Once taboo, the question of Blaise Compaoré’s returnfrom exile in Côte d’Ivoire, where has been since hisoverthrow in October 2014, is now being raised beyondhis supporters’ circles. His political party Congrès pourla Démocratie et le Progrès argues that it has a strongchance to return to power, due to the disenchantmentunder Kaboré. He will also face a challenge at the ballotbox from opposition leader Zéphirin Diabré.

To breathe new life into his five-year term before thenext election, Kaboré appointed anew government in January 2019. Atits head is the economist ChristopheJosephMarieDabiré.Kaboréhas alsomademajorchanges in thesecurityap-paratus andhas entrusted the defenceministry tooneofhis relatives,ChérifSy.Thestateofemergency,declared inDecember 2018 in several provinces,remains in force until January 2020and could be extended again.

Free health careDespite a difficult political and secu-rity context, Kaboré will be able tocampaignon theprogressmade in thefield of health – in particular the freehealth care for pregnant women andchildren under five years of age – andinfrastructure.According to theWorldBank, Burkina Faso’s medium-termoutlook looks strong, supported byservices and themining sector, aswell

as exports like cotton. But insecurity is hurting miningactivity too.Anattackon a convoy forCanada’s Semafo inOctober killed nearly 40people and led firms to dial backactivity and increase spending on security. The think tankInternational Crisis Group warns that jihadists and otherarmed groups are using gold to finance their activities.

Elsewhere, Bobo-Dioulasso will be home to a new30MW solar power plant to be completed by France’sAfrica Ren in 2020. And in September, the World Bankand Ouagadougou signed a $200m financing deal tostrengthen agricultural production.

>Presidential and legislativeelectionswill takeplace inOctober>ECOWASheadsof statepromise tohelp thecountry fightagainst terrorism

Burkina FasoTearingattheseams

> GDP growth (%)

2020*2019*20182017

15.814.514.112.3

> GDP ($bn)

6.3 6.85.95.9



*Estim

ationOctob

er2019



PRAÏA

AtlanticOcean

CABO VERDE

W I N D WA R D I S L E S

LEEW

ARDISLES

50 km

With just over a year to go before legislative electionsscheduled for 2021, the government of Prime MinisterUlisses Correia e Silva is taking stock. The formermayorof Praia won themost recent vote almost four years ago,inMarch 2016, under the colours of theMovimento paraa Democracia (MpD), a liberal party.

In the same year, President Jorge Carlos Fonseca,supported by the MpD, was re-elected for a secondand final term. While it is certain Fonseca will stepdown from his largely ceremonial position due to theconstitution’s term limits, the MpD and Correia e Silvawill seek a new parliamentary ma-jority, competing against the PartidoAfricano da Independência de CaboVerde (PAICV). In order to preparefor this electoral contest, the MpDwill hold a congress in February2020, at which Correia e Silva willseek to be reappointed as head ofthe liberal formation with no otherstrong contenders in the race.

To convince voters again, theMpDis relying on the economic growthfigures. Over the past two years,GDPgrowth picked up again. But thenational debt remains sky-high; itwasdue to drop slightly to 119% of GDPin 2019 and is restraining governmentspending on some priority sectors.

Attractive destinationTourism, which accounts for almosta quarter of GDP, is in good health.More visitors are taking in the ar-chipelago’s beautiful landscapes: arrivals increasedby 7% in the second quarter of 2019. Among the maincountries of origin are the UK, Portugal and France.The government has exempted EU and UK citizensfrom visa requirements and introduced an airport taxof €31 ($34) in its place.

To spur more growth, the authorities are counting onan expansion of air connections and also intend tomakeeach of the archipelago’s 10 islands attractive tourismdestinations. The goal is to attract 1 million touristswithin two years, compared with some 700,000 in 2017.

The government is also rolling out plans for the SãoVicente Special Maritime Economy Zone. It is count-ing on finance from the China Development Bank todevelop the project.

To give other parts of the economy a chance to grow,theMpD is focusing on strengthening the private sectorand reducing debt. One of last year’smajor issueswas therestructuring of the national airline TACV,whose annuallosses were unsustainable. In March 2019, LoftleidirIcelandic, a subsidiary of the Icelandair group, signeda contract with Praia to acquire 51% of TACV’s capital.

The privatisation of loss-makingwater and electricity utility Electrais planned for 2020.

Vulnerable to climate changeBut not all sectors are doing as well.Agriculture, which employs near-ly 15% of the population, remainsdeeply affected by the 2017 drought.More broadly, the archipelago isextremely vulnerable to the impactsof climate change.AquasunEnergiae Água announced plans for a $25magriculture project in September thatwill include a solar power plant andwater desalination plant.

Another point of concern is thepoverty rate, which Praia has beenunable to reduce.The authorities alsohave to deal with the strong demandfor improvedmaritime transport linksbetween the islands, the difficultyCape Verdeans face in finding jobs

and shortcomings of the health system.The opposition PAICV says that it is best placed to

deal with the country’s social problems. It will hold acongress at the beginning of 2020 to prepare for the2020 municipal elections, the date of which has not yetbeen set. These will provide a test prior to the legislativeand presidential elections inMarch-April 2021.Will thePAICV leader, Janira Hopffer Almada – the first womanto head a political party in Cabo Verde – be the party’scandidate once again?AsTheAfricaReportwent to press,she had not yet announced her intentions.

>Political partiesaregearingup forelections in2021>Thegovernment isprivatising loss-makingparastatals toaddress its high levelsofdebt

Cabo VerdeFiringupthetourismengines

> GDP growth (%)

2020*2019*20182017

2.12.01.91.7

> GDP ($bn)

3.75.0 4.94.9

> Population: 0.6 million> GDP per capita: $3,598> Life expectancy: 73> Adult literacy: 86.8%> Inflation: 1.2%> Human development index(out of 189 countries): 125


*Estim

ationOctob

er2019



R

Bou k

Gulf of Guinea

E '

200 km

The elections planned for October 2020 are likely to bethe most fraught since the disputed polls of 2010. Thatvote resulted in a post-election crisis that killed 3,000 andanalysts are asking if such tensions could be repeated.

The same threemen from 2010want to hold the fate ofthe country in their hands. President Alassane Ouattara,Henri Konan Bédié and Laurent Gbagbo are makingand remaking their alliances. Since the death of FélixHouphouët-Boigny in 1993, they have been presidents ofthe republic - except for a brief interlude between 1999and 2000. At 78, 85 and 74 years of age, respectively,none of them have ruled out beinga candidate. As he completes hissecond term, Alassane Ouattara iscreating uncertainty. After the con-stitutional amendment adopted in2016 that limits a president to twoterms, he asserts that he has the rightto stand for re-election.

Whether Ouattara is himself acandidate or another from his partyis chosen, the representative of theRassemblement desHouphouëtistespour laDémocratie et laPaix (RHDP)will be able to campaign on a strongeconomic record. Since 2011, growthhas averagedmore than 8%per year.The International Monetary Fundhas welcomed its "resilient econ-omy despite a worsening regionaleconomic environment."

Building frenzyMany big projects are going ahead.On the infrastructure front a lot of attention is focusedon Abidjan. In October, the government awarded ChinaRailway International Group the contract to expandAbidjan’s international airport, giving it the capacity tohandle 5million passengers per year. It is also a sign of adiversification of economic partners, with French firmstypically winning major contracts.

Thegovernment andFrench construction firmBouyguesagreed on the financing details for the building of theeconomic capital’s first metro line, which will linknorthern and southern parts of the city. It is expected

to launch operations in 2022. A fourth Abidjan bridge,to link the business and administrative neighbourhoodof Plateau to the residential area of Yopougon, is dueto be completed by August 2020.

A building boom is underway, and the government isbankrolling the constructionof 60,000newhousingunits.The country’s cement producers have an annual produc-tion of about 6m tonnes andwelcomed a new competitor,Turkey’s Limak Africa, in September 2019. It launched anew 1m tonne unit in the PK24 industrial zone of Abidjanthat it plans to hike up to 4m in the years to come.Works

to expand and modernise the portof Abidjan are ongoing, with trafficrising there each year.

Gold in declineTodiversify the economy away fromagriculture, the government wantsto see more activity in mining andmanufacturing.More andmore cocoa(see box) and cashews are being pro-cessed locally. The boom in cashewactivity was set to deflate slightly in2019, with an estimated harvest of730,000tn,down4%on2018. In2018,just 70,000tn was processed in Côted’Ivoire. Working with Singapore’sOlam and other companies, the gov-ernment has set amedium-term goaltoboost localprocessing to 107,000tn.

The gold sector, however, is in de-cline. In 2018, national productiondropped by 3.6%, reaching 24.5tn.But Canadian miner Endeavour and

others have expansion plans, and the government predictsthat production will rebound in 2020 to 30tn.

Despite the generally good economic performance, theIvorian authorities know that they still have to meet thechallenge of spreading the benefits of growth. With theprotestmovements by soldiers in 2017 and recurrent strikesby civil servants, social discontent is high. According totheUnitedNationsDevelopment Programme, nearly halfof Ivorians – 46% – still live below the poverty line.

The government has launched a vast social programmefor the poor and middle classes. Health, education and

>Ouattara, BédiéandGbagbocould return to thepolls again innextyear’spresidentials>Thepost-conflict economicboom isdeliveringgrowth that, so far, hashad little impactonpoverty

Côte d’IvoireBaronsattheballotboxin2020

> GDP growth (%)

2020*2019*20182017

48.344.443.038.1

> GDP ($bn)

7.77.4 7.27.5



*Estim

ationOctob

er2019



housing are the areas it is targeting to concretely improvethe living conditions of Ivorians. It has so far selected 12projects and spent 727.5bnCFA francs. The government isseekinghelp fromdonors for a ‘Marshall Plan’ forAbobo,an impoverished northern neighbourhood of Abidjan.

PrimeministerAmadouGonCoulibaly,whooften pre-fers to stay out of the spotlight, is in charge of the overallprogramme. This close and loyal Ouattara collaboratorsince the 1990s appears to be his preferred for the up-coming presidential election, shouldOuattara not run himself. However,this technocrat faces tensions withinthe governing party and questionsabout his popularity.His allies arenotvisibly concerned and are confidentthat they can rely on the efficiencyand organisation of the RHDP.

Out for revengeAn ally of Ouattara’s since 2005,Bédié has broken his alliance andplans to run for the presidency again.In mid-2018, the president of theParti Démocratique de Côte d’Ivoire(PDCI) refused to participate in thecreation of a unified RHDP party. Two decades afterbeing driven from the presidential palace by themilitary,he is looking for his revenge.

To achieve this goal, the "Sphinx of Daoukro" began arapprochement with his long-time rival Gbagbo in July2019. Although they remain ideologically far apart, thetwomen have agreed to fight side by side in their battlesfor the presidential elections. Joint meetings betweentheir two parties, the PDCI and the Front PopulaireIvoirien (FPI), were held to demand a new electoral ad-ministration and a reform of the independent electoralcommission. This key election body, although reformed,is still not a consensual body.

Althoughhe retainsa strongsymbolic influence,Gbagbostill cannot directly influence Ivorianpolitics.His acquittalon 15 January 2019 by the International Criminal Court(ICC) came as a surprise and seemed like it could lead tohis rehabilitation. He had been prosecuted formore thanseven years for war crimes and crimes against humanity.Nevertheless, the decision of Fatou Bensouda, the ICCprosecutor, to appeal forced him to remain in Brussels,where he has resided since his release. It seems unlikely

that the appeal procedures will becompleted beforeOctober 2020, andtherefore it is unlikely that the formersocialistpresidentwillbeable to returntoCôted’Ivoirebefore thepresidentialelection. If he is back in time, can herun for office? If not, will he call fora boycott of the election, support acandidateor call on supporters tovotefor a candidate of a friendly party?

Within this ‘anyone but Ouattara’branch of the opposition, anotherpolitician is trying tomake hismark.A former president of the nationalassembly and former close associateof Ouattara, Guillaume Soro broke

with the Ivorian president in order to be a candidate inOctober 2020. He has set up many support groups and isseeking to create his own political party.

While the governing party asserts that it is not afraid ofthis former partner, the former rebel leader continues tothreaten todestabilise the country.Weapons caches are stillpresent, manymunitions are in circulation and the army,which distinguished itself in 2017 by mutinies, is poorlycontrolled by the government. The security situation hasdeteriorated in some parts of the country due to violentinter-community conflicts. There are also worries aboutthe spreading influence of jihadist groups, with rebelsmaintaining a stronghold in northern Burkina Faso.

Côte d’Ivoire / Barons at the ballot box in 2020

COCOA AND CASHEW NUT PRODUCTION(year-on-year percent change)

70

40

10

-20

-50

2014 2015 2016 2017 2018 2019

Cocoa

Cashew nut

SOURCE:IN

TERNAT

IONALMONETA

RYFU

ND

Chocolate does not always bring cheerA strategic question on the eveof a presidential election in Côte d’Ivoireis the purchase price of cocoa fromfarmers. The world’s largest producerhas 120,000 certified farms, butit is estimated that there are actually800,000 and that nearly a thirdof the population depends directlyor indirectly on the sector. In October2019, the government announced a 10%increase for the 2019-2020 campaignto 825 CFA francs ($1.40). It is a long

way from the 1,000 CFA francs setin 2015, just before Alassane Ouattara’selection for a second term and the1,100 that the Ivorian president wascalling for at the start of the year.

The year 2017 was an annushorribilis. The collapse of world cocoaprices and the failure of several buyersto pay plunged the sector into crisis.Côte d’Ivoire has decided to take morecontrol and strengthen cooperationwith Ghana. In 2019 the two countries,

which account for about 60% of worldproduction, launched an unprecedentedbattle with other market players. In Junethey issued an ultimatum, demandinga floor price of $2,600 per tonne frombuyers or risk suspending sales of the2020-2021 harvest. That did not workout. Nevertheless, after tough negotia-tions, they obtained a surcharge of $400per tonne. Côte d’Ivoire also plans tostabilise its production at 2m tonnes in2020, down from 2.2m tonnes in 2018.



SENEGAL

SENEGAL

BANJUL

AtlanticOcean GAMBIA

50 km

Mired by political infighting, Gambia’s post-Jammehtransition continues to be slow in delivering tangible ben-efits to the population. The year aheadwill test PresidentAdama Barrow’s political nous, as he fights off formerallieswhoare disappointed that he has jettisoned adeal tostep down inDecember 2019 after a three-year transitionalperiod. The government is reforming troubled state-runcompanies and is in talks with creditors on deals for debtrelief,whichwould give somebreathing roomfromheavydebt repayments that are a hangover from the regime ofdictator Yahya Jammeh.

The seven political parties inCoalition2016,whichbroughtBarrowinto power, are in disarray. Barrowlost the support of his biggest ally, theUnitedDemocraticParty (UDP) in2019.Despite its majority in parliament,Barrow sacked all the UDP’s cabinetministers and party leader OusainouDarboe, who was his vice-president.Barrow says that he will not respecta 2016 deal that he would step downinDecember 2019, hold newelectionsand not run again until 2024. Thisspurred the formation of the ‘ThreeYears Jotna’ (Three Years Are Up)movement,whichplans to launchma-jor street protests on 19December, thedate when Barrowwas due to resign.

Potential allianceBarrow maintains some coalitionallies ahead of elections planned for2021: National Reconciliation Partyleader Hamat Bah; the Gambia Moral Congress’s MaiAhmad Fatty; and Henry Gomez, head of the GambiaParty for Democracy and Progress. Analysts have notruled out a potential alliance between Barrow and theformer ruling Alliance for Patriotic Reorientation andConstruction for 2021.

Barrow’s supporters argue that he needs to stay inpower in order to complete the post-Jammeh transition.The Janneh Commission into Jammeh’s corruption onlycompleted its report inSeptember, and thegovernment hasa lot of work to do to try and reclaim looted funds. The

ConstitutionalReviewCommissionhas yet to complete itsworkandpublishadraft fundamental law.Anti-corruption,truth and reconciliation, and human rights commissionshave also been slow to get off the ground.

The economy has been growing strongly in thepost-Jammeh era. Gambia has a programme with theInternationalMonetaryFund,which classifies the countryas being in debt distress. Debt levels were due to be about82% of gross domestic product at the end of 2019. Talksare underway with Gambia’s external creditors for a debtrelief programme. The government’s current borrowing

is focused on priority sectors likeelectricity, education and agriculture.A 20MW solar power plant, batterysystemanddistributionprojectworth$156mwas launched inMarch 2019 tohelpmeet the country’s power deficit.

A new venueThere is hope thatGambia’s offshorewaterswill beas richas thoseofneigh-bouring Senegal in terms of oil andgas reserves.Therehavenot beenanymajorGambia discoveries so far, butMalaysia’s Petronas and Australia’sFAR are set to conduct more seismicsurveys and drill a well in 2020 inBlocks A2 and A5.

The main government projectfor 2020 is the completion of theInternational ConferenceCentre, thevenue for the 2022 Organisation ofIslamic Cooperation meeting, andthe construction of roads from the

conference centre to Banjul International Airport.Meanwhile, tourism and agriculture continue to play

a crucial role in the country’s economic growth. Touristnumbers have been on the rise but are expected to takea knock due to the collapse of British tourism operatorThomasCook in late 2019. In agriculture, the governmentis looking for ways to add value to the country’s exportsof cashews, groundnuts and sesame.

So that Gambia can play a bigger role in the regionaltranshipmentmarket, plans are underway to expand anddecongest the port of Banjul.

>With fewerallies, PresidentBarrow is likely tohave tougher timesasheheads to thepolls in2021

>Theeconomyhasbeengrowingstronglyduetopublic investmentandgrowthintourismandagriculture

GambiaChoppytransition

> GDP growth (%)

2020*2019*20182017

1.921.771.621.49

> GDP ($bn)

4.86.5 6.46.5



*Estim

ationOctob

er2019



Gulf of Guinea

ACCRACÔTE

D'IVOIRE

BURKINA FASO

TOGO

GHANA150 km

Takoradi

Kumasi

Tamale

Ghana begins 2020 on sounder economic footing, havingjust completed its International Monetary Fund (IMF)programme, and is heading for elections in December.The New Patriotic Party (NPP) and its leader, PresidentNanaAkufo-Addo,will be seeking re-election against theopposition National Democratic Congress (NDC) and itsflagbearer and former president JohnDramaniMahama.Having governed from 2016 under an ambitious plan ofindustrialisation and amantra of shifting the levers of theGhanaian economy, the economy is one of Akufo-Addoand the NPP’s strongest arguments for re-election.

But the lackof progress on securityand fighting corruption could hurtthem. The failed and opaque priva-tisation of the Electricity Companyof Ghana, which was backed by theUS government, highlights some ofthe country’s governance problems.

The NDC will have a challengingtask of winning convincingly in thenew regions, which were created af-ter a referendum in 2018. The NPPgovernmentwill be launching formalregional government structures therein 2020, which could help it to winmore support. Akufo-Addo won the2016 election bymore than 1mvotes.

Nepotism accusationsThe longest-serving financeministerin Ghana’s history, Kwesi Botchweyhas been tipped as the favouritevice-presidential candidate for theNDC. Botchwey has a great deal ofexperience from the structural-adjustment-programmedays, stabilising the economy and supporting the growthof small-scale businesses. Botchwey could help boostturnout for the NDC. But a group of party cadres has op-posed Mahama’s attempt at a comeback. If he loses, theparty may quickly look for a new flagbearer.

One big issue in the campaign is nepotism. The NDCsays that Akufo-Addo has put too many of his relativesand kinsmen into positions of authority. For example,GabbyAsareOtchere-Darko,who isAkufo-Addo’s cousin,does not have any official portfolio in government, but

is considered quite powerful. Otchere-Darko’s wifeNanaAdjoa Hackman serves, for example, as a boardmemberof the Ghana National Petroleum Corporation.

As security risks remain heightened across the region,especially cases of terrorism in Burkina Faso, Ghana’smain security threats are now domestic.

‘Vigilante groups’In preparing for the elections,members of the oppositionand somecivic actors arenot confident of thegovernment’scommitment to safeguarding security.

Political party ‘vigilante groups’could emerge in different forms inthe run-up to the 2020 elections. Thecommission tasked to investigate theviolence thatmarred theAyawasoWestWuogon by-election recommendedamongother things, “additional rigor-ous training in crowd control, arrestsand perimeter security for electoralexercises for anyallied security issuesthatmayemerge.”Elsewhere, theNDCis calling into doubt the neutrality ofthe electoral commission for the up-coming2020elections, so it is focusingmore on investing in its own abilityto monitor the vote at local pollingstations across the country.

TheNPPisseeking toconsolidate itsdeliveryofmacroeconomicgrowthandstability, to strengthen its free seniorhigh school educationprogramme, todeepen financial sector reforms andto support industrialisation through

its One District, One Factory Programme (1D1F). Theeconomy is set to record strong growth due to the oil andgas sector, stability in power supply, the completion ofsome of the factories under the 1D1F industrialisationdrive and a recovery in the agricultural sector. Inflationhas continued to be lower than double-digits since 2018.

Even thoughGhanacompleted its IMFprogramme, thereis still more work to be done to improve the economy.The international financial institution says that theAccragovernment needs to be sure to stick to its election-yearbudget, raise more domestic revenue and strengthen the

> Ina repeatof the2016vote, Akufo-AddoandMahamawill faceoff inDecember2020>Theoil,miningandconstruction sectorsareall growingata fastpace

GhanaPreppingforthepolls

> GDP growth (%)

2020*2019*20182017

69.767.065.558.9

> GDP ($bn)

8.16.2 5.6

7.4

> Population: 30.4 million> GDP per capita: $2,223> Life expectancy: 63> Adult literacy: 71.5%> Inflation: 9.3%> Human development index(out of 189 countries): 140

> Foreign direct investment: $3bn> Last change of leader: 2017

*Estim

ationOctob

er2019


management of the energy sector. The IMF argues thatGhana’s public debt is still too high and is likely to be 63%of gross domestic product at the end of 2019.

The financeministry is looking for more ways for thegovernment to raisemoney for infrastructure and socialspending. It isworkingonplans to create a special purposevehicle that manages government revenue from miningconcessions. Details of the project had not yet beenmadepublic as The Africa Report went to press. Ghana is oneof Africa’s top gold producers, andAnglogoldAshanti’s flagshipObuasimine was due to restart productionin late 2019 or early 2020 after anextended period of closure due toinsecurity. The government awardedthe company a $259m tax break dealin 2018 as part of the negotiations torelaunch operations.

Oil is another keydriver ofGhana’seconomicgrowth.Norway-basedAkerEnergyisexpected tosubmit its revisedprogramme of development for thePecan field,whichholds an estimated550m barrels of oil. The project hasalready been delayed and is unlikelyto begin production before 2022. Civic actorswill closelymonitor this development given the associated proposedrevisions to the petroleum laws of the country which areset to take effect in the last quarter of 2019.

Rehabilitating plantationsIn terms of industrial development, trade minister AlanKyerematen is optimistic about vehicle assembly dealssignedwithToyota,Nissan,Volkswagenand theheavy-dutyvehicle manufacturer Sinotruk.

As for cash crops and agriculture, collaborations withCôte d’Ivoire on charging a premium of about $400 pertonneofcocoa for the2020productionseasonmaygenerate

somegains in the short term for farmers andplayers alongthe value chain. COCOBOD, the regulator of the industry,has secured $1.3bn in financing for the 2020/2021 cropseason, where nearly 900,000tn is set to be produced.The government’s seven-year $600mCocoaProductivityEnhancementProgramme is set to rehabilitate plantations,expand irrigation and improve local processing capacity.

Confidence in the financial sector (see box) is expectedto further improve as the final set of reforms are imple-

mented, suits against the central banktake their full course in the courts andcreditprovisions tokeysectorsexpand.Profits of the banks are projected toincrease,according to financeministerKenOfori-Atta, as deposits and loanscontinue to grow in 2020.

Thegovernment is spendingonnewinfrastructure.TheTamale interchangeandPokuaseACPjunction interchangeare twomajor roadprojectswhichwillbecompleted toease the flowof trafficand support adjoiningdevelopments.They are part of a controversial $2bnbauxite deal with Chinese companySinohydro which plans to develop a

bauxite mine at Atewa, though environmentalists warnthat its operations will pollute vast water supplies.

The Eastern Railway, which will drastically reducecommute time between Accra and Kumasi, is likely to bebuilt in 2020. The government also says that the Tema-Mpakadan railway line will be complete in 2020. TheNPP is campaigning on the government’s Infrastructurefor Poverty Eradication Programme, which allocates$1m to each constituency.

Akufo-Addo considers hosting theAfricanContinentalFreeTradeArea secretariat asoneofhiskeyachievements.ThegovernmentofGhanahas committed$10mto its fund-ing, and the secretariat is due to be operational in 2020.

EXPORT VOLUMES FOR KEY COMMODITIES

250

200

150

100

50

0Q1

2015Q3 Q1

2016Q3 Q1

2017Q3

Crude oil volume (million barrels)Cocoa products volumeGold volume

Q3 Q12018 S

OURCE:GHANAGOVE

RNMENTANDIM

F

Politics and banking sector reformsThe cleaning up and reform of Ghana’sbanking sector appears far from over.Since the 2015/2016 banking crisis,when several banks were severely under-capitalised and suffering from high levelsof non-performing loans, the governmenthas spent nearly $2bn to save the institu-tions and protect depositors.

The Bank of Ghana withdrew somebanking licences and merged five smallbanks into the Consolidated Bank Ghana.GCB Bank took over two rivals, and

another one was downgraded to a savingsand loans institution. Amid questionsabout the role of shareholders anddirectors, receivers launched lawsuitsto reclaim liabilities due and to retrieveabout $2bn in loans and advances from31,000 customers of these banks.

Kwabena Duffuor, a former governorof the central bank and finance minister,was the majority shareholder of thenow defunct uniBank and is being suedtogether with other directors for a little

over $1bn. Meanwhile, Papa KwesiNduom – a former energy minister –is battling the central bank in the courtsabout the fate of GN Bank. He blames itsdowngrading on the government’s unpaiddebts to contractors that are its clients.

The managers of the troubled banksaccuse the government of playingpolitics and targeting oppositionmembers. The courts will have a finalsay on this, and many of the casesare expected to go beyond 2020.



AtlanticOcean

CONAKRY

CÔTED'IVOIRELIBERIA

SIERRALEONE

GUINEA-BISSAU

SENEGAL MALI

GU INEA

200 km

Kankan

PresidentAlphaCondé isdue toholdelections inDecember2020 and step down after the end of his second term,but instead is holding popular consultations with a viewto amending the constitution to remain in power. Thisled to large protests in October and the police killingcivilians who had taken to the streets in opposition toCondé. Condé’s supporters say the country needs morestability after long periods of instability and he shouldbe allowed to complete projects he has started.

The majority of the opposition – led by Cellou DaleinDiallo of the Union des Forces Démocratiques de Guinée– is working together through theFront National pour la Défense de laConstitution (FNDC).ThemembersoftheFNDCdonot trust thegovernmentto organise fair votes and have longaccused the laconicCondéofwantingto stay in power. He only revealedhis intentions on 5 September 2019rushing ahead with legislative elec-tions, askingprimeminister IbrahimaKassory Fofana to launch popularconsultations on changing the consti-tution.The proposed changes,whichare likely to target the two-term limitamong other measures, are set to bethe subject of a national referendumin 2020. The FNDC has boycottedparliament and is relying on streetprotests to pressure Condé.

Asylum seekersThe country has been in a politicaldeadlock about the holding of leg-islative elections. The current parliament’s term expiredon 12 January 2019, and elections were set to take placeon 28 December but were again postponed, due to workneeded to improve the electoral rolls, without a new dateannounced. The opposition has criticised the attempts tohold elections and says that the Commission ElectoraleNationale Indépendante is biased in favour of Condé.

The economy continues to growon the back ofminingand construction activity, but this is not leading to changesin poverty levels. According to France’s border police,Guineans constituted the second-largest shareof registered

asylumseekers in 2018.With8,433 individuals, the countryrankedbehindAfghanistan.Of these people, 5,227minorswere awaiting protection in France. This ismainly due tothe lack of prospects for young Guineans suffering fromhigh unemployment and a failing education system. In2019, just 24.4% of candidates passed the baccalaureateexam, marking a historical failure rate.

New rail lines to mining areasMining is the sector that attracts themost investment,withbauxite the most important mineral. Guinea Aluminium

Corporationexported its first shipmentofbauxite fromitsmine innorth-west-ern Guinea in August. It aims to pro-duce at a rate of 12m tonnes per year.Building infrastructure for the industryand the general population is a chal-lenge. New rail lines tomining areashave been launched in recent years,but – for example – the governmentand Russian mining firm Rusal havebeen in conflict about whether it ispossible to run passenger trains onthe Conakry-Fria line.

Interest in Guinea’s promisingiron ore mines is also picking up.In 2019, Indian company Ashapuratook over the Yomboyéli iron mineand its 3m tonnes of reserves, shutdown since 2015 due to a downturnin iron ore prices.

With the help of France’s formerpresident Nicolas Sarkozy, the gov-ernment foundasolution to the thorny

Mount Simandou case, which pitted the Guinean stateagainst Israeli businessmanBenySteinmetz.The govern-ment organised a late 2019 bidding round for Simandou’sBlocks 1 and 2,where activities had been frozen for about10years.TheSingaporean-GuineanSociétéMinièredeBokéwon the rights to the 369km2 concession.Blackout-proneÉlectricitédeGuinée ended its four-yearmanagement con-tractwithFrance'sVeolia inOctober and is now looking forapath to sustainability. French construction firmEiffage isworking on a 40MWdam in Pita, westernGuinea, whichwill add to the capacity of the national grid.

> IfCondé tries to run for thepresidencyagain therecouldbemajor streetprotests

>Theminingsector isbooming,butnot leading tomajoreconomic improvements forGuineans

GuineaHoldingontopower

> GDP growth (%)

2020*2019*20182017

14.313.312.010.3

> GDP ($bn)

10.0

5.7 5.95.8



*Estim

ationOctob

er2019



AtlanticOcean

SENEGAL

GUINEA

BISSAU

GU INEA -B ISSAU

50 km

Will the November-December 2019 presidential electionsolveGuinea-Bissau’s political instability? Putting an endto coups and conflict, outgoing President JoséMárioVaz– whose rule was plaguedwith political stalemates – wasthe first elected president to have completed his termsince the first multiparty elections in 1994.

The second round is due to take place on 29December,and the two candidates have sworn to get the countryback on track after years of infighting in the ruling party.Former primeminister Domingos Simões Pereira of thePartido Africano para a Independência da Guiné e CaboVerde (PAIGC), which has amajorityin the national assembly, won 40.1%of the vote on 24November.He facesanother former head of government,Umaro Sissoco Embaló. Embaló,who was prime minister from 2016to 2018, is the candidate of MademG-15, aparty formed in2018byPAIGCdissidents which qualified for thesecond roundwith 27.7%of the vote.

TheEconomicCommunity ofWestAfricanStates (ECOWAS) ismediatingGuinea-Bissau’s crisis and hopes thata newgovernmentwill bring stability.ECOWAS said that it did not witnessany irregularities during the firstround of the vote. Vaz claimed theruling party stuffed ballot boxes, andhe rejected the results.

Schools closedVaz’s successor will facemany chal-lenges and the immense expectationsof thepopulation.With aweakeconomy largelydependenton agriculture, nearly 70% of the country’s populationlive on less than $2 per day. Cashews are the main cashcrop, and the authorities say the country exported nearly150,000tn in 2018.

The government has been unable to provide somebasic public services in recent years, and schools wereclosed for several months in 2019 following a teachers’strike over mounting payment arrears. However, thanksto the performance of the agriculture sector, stronggrowth is expected in 2019.

The InternationalMonetary Fund (IMF) is advising theBissau government on improving economic governanceand better managing the country’s tax revenue. Theadministration is currently spending much more thanit is taking in, and the donor community is wary of thecountry’s poor management and political crises.

Power purchase dealThe IMF came out strongly against an attempted govern-ment bank bailout in 2015. That has soured relations, butone of the banks is now being recapitalised and the local

financial sector is getting stronger.The new government is expected tolaunchnegotiations foranewextendedcredit facility.

Sorting the government-run waterand electricity utility,Electricidade eAguas daGuine-Bissau (EAGB), is apriority because it continues tomakelosses. The lack of infrastructure isalso holding back business activity.EAGB signed an expensive six-yearpower purchase deal with Turkey’sKarpowership in 2019 to increasethe amount of electricity supplied tothe national grid. The government issoon expected to award a contract tobuild up to 20MW of photovoltaicpower plants at Gardete, financed bytheWestAfricanDevelopment Bank.

Drug trafficking,managementof theoftenundisciplinedsecurity forcesandendemic corruption are some of theother issues that the newgovernment

will beworking to address.There ismountingpressure forchanges to the constitution too, with several presidentialcandidates calling for amendments that clarify the rela-tionships and roles of the president and prime minister.

TowinoverGuinea-Bissau’s donors, the administrationwill have to commit to reorganising the armed forces.Successive governments havepromised todo soand failedto follow through. The last coup, in 2012, took place be-tween two rounds of a presidential election.This time, thesoldiers – ledby chief of staff of thedefence forcesGeneralBiaguê Na Ntam – promised to stay in their barracks.

>The lateDecembervotewill give thecountryanewchance for stability

> Lacking investment, theeconomyremainsdependentoncashews

Guinea-BissauTurningapage

> GDP growth (%)

2020*2019*20182017

1.501.391.421.35

> GDP ($bn)

5.9

3.84.94.6



*Estim

ationOctob

er2019



AtlanticOcean

CÔTED'IVOIRE

GUINEASIERRALEONE

MONROVIA

L IBER IA

100 km

Buchanan

Apoorly performing economy and allegations of corrup-tion andmismanagement, which have dogged PresidentGeorge Weah’s wobbly regime since early 2019, willcontinue to shape events in 2020. Though accused ofostentatious corruption by the opposition and the vocalmedia, Weah will likely maintain his popularity amongthe vast majority of the urban youth and poor, who con-tinue to rally round him as one of their own thanks toWeah’s carefully choreographed populism.

There are signs, however, that the sustained criticismsof the president and the out-of-control inflation may betaking a toll onWeah’s Congress forDemocratic Change, if not on thestanding of the president on the crit-ical Monrovia streets. A rather loosecoalition knownas theCollaborationofPoliticalParties, ledbyBenoniUreyof theAll LiberiaParty, is channellingopposition toWeah.

InanunexpectedmoveinSeptember,Weahwrote a letter to the legislatureendorsing civil society activists’ callto set up awar crimes court to addressatrocities committedduring the coun-try’s civil war of the 1990s and early2000s. This was a key recommenda-tion of the Truth and ReconciliationCommission’s report in 2009,but untilWeah’s letter therewasno real supportfor it among the elite, in large partbecause many of them participatedin oneway or another.Weah did not,and someof his critics charge that heis determined both to embarrass hisvice-president, Jewel Taylor, withwhomhe currently hasa fractious relationship, and to deflect attention.

Question of dual nationalityInternational support, uncertain to date, will be criticalfor the court to be set up. If it takes shape, the court coulddominate political life for years. As the former wife ofa convicted war criminal, Taylor – like many of the keyfigures – will be politically, if not legally, vulnerable.

Anothermajor issue for the year ahead is a referendumon term limits and dual nationality. The constitution does

not allow for dual nationality, but many members of theelite also have US citizenship. The vote will also decideif presidential terms should be reduced from six to fiveyears, with a two-term limit.

Inflation, currently at around 28%, will remain highinto 2020 because of the lacklustre economic growth,despite a boost in iron oremining following the openingof a newmining site by ArcelorMittal, coupled with sig-nificant foreign investment in gold production.However,the country’s iconic rubber sector, a bellwether of itseconomic and political health, laid off hundreds of its

local employees amidst sharp falls inprices and will continue to contract.

‘Payroll harmonisation’Thedraftbudget for2020optimistical-ly forecasts domestic revenue rising.But agriculture andother non-miningsectors contractedby 1.3%since 2018.Much of the government’s projectedbudget –which gives perhaps the bestindication of Liberia’s governancetrend – is dedicated to paying stateemployees. The figure for 2020 is$297m, significantly lower than2019’s$330m. The savings are from majorcuts in salaries formid- to senior-levelcivil servants, which finance and de-velopment minister Samuel Tweaheuphemistically described as ‘payrollharmonisation’. The gesture, as wasexpected, outraged the educated eliteand thrilled the urban poor.

Despite serious concerns aboutcorruption and mismanagement – a letter signed byambassadors of nine countries raised issues about themisappropriation of donor funds early this year – theWorld Bank inMarch announced its portfolio for Liberiaas worth close to $1bn, spread across 19 active projectsincluding infrastructure, human capital, urban growth,and natural resource management.

The government is launching a national tourism boardand is looking to simplify visaprocedures toboost tourismnumbers. A first big-name hotel brand, Sheraton, is dueto open in 2020 in Monrovia’s central business district.

>Criticsarecalling for thegovernment todomoreaboutcorruptionandwasteful spending>Miningpromisesaneconomic lift as thegovernment looks toboost tourism

LiberiaWeah’spopulismwinspopularity

> GDP growth (%)

2020*2019*20182017

3.233.223.243.28

> GDP ($bn)

2.41.2 1.5

0.4

> Population: 4.9 million> GDP per capita: $703> Life expectancy: 63> Adult literacy: 42.9%> Inflation: 22.2%> Human development index(out of 189 countries): 181


*Estim

ationOctob

er2019



AtlanticOcean

BAMAKO

BENINGHANA

GUINEA

SENEGAL

MAURITANIA

ALGERIA

NIGER

BURKINAFASO

MAL I

Ségou

Gao

300 km

ThegovernmentofPresident IbrahimBoubacarKeïta (IBK)is scrambling to find solutions to the spiral of violence thathas gripped the central region of Mali. For years it hasbeen unable to retake the north fromTuareg and jihadistforces, with instability spreading south.

The country experienced one of its worst massacresin the central region village of Ogossagou on 23 Marchwhen men dressed as Dogon hunters slaughtered morethan 160 Fulani people – including the elderly, womenand children – before burning the village to the ground. Inthe followingweeks, Fulanimen attacked several Dogonvillages, killing nearly 100 people.The authorities are overwhelmedandsimilar attacks took place after that.

The impact of the violence is alsobeing felt in Bamako. After a roundof protests about the government’sinaction, IBK sacked prime ministerSoumeylou Boubèye Maïga in April2019.His replacement is 40-year-oldtechnocratBoubouCissé, a former fi-nanceminister.Toshowitswillingnessto compromise, the IBK governmentextendedolivebranches tosomemem-bers of the opposition. Harsh criticTiébilé Dramé, for example, took upthe post of foreign affairs minister.

Extended mandate for MPsIBKalso launchedanational dialogueto address the ongoing political andsecurity crises in June, but it is notproducing the results he had hopedfor. In mid-September, the Front deSauvegardedelaDémocratie, themainoppositioncoalitionled by Soumaïla Cissé, suspended its participation. TheCoordinationdesMouvementsde l’Azawad,which includesformer rebel groups from the north, also announced itswithdrawal because of IBK’s comments about potentiallyreviewing the 2015 Algiers peace agreement.

Four years after the signingof this agreement, the peaceprocess is progressing at a glacial pace. The governmenthas not been able to hold legislative elections becauseof the insecurity and the current parliament’s mandatehas been extended until May 2020.

The city of Kidal, a stronghold of the former Tuaregrebellion that is still outside the control of the adminis-tration, is at the centre of many tensions, including somefrom beyond Mali’s borders. The jihadist groups, on theother hand, are far fromhaving been annihilated, as someFrench officials claimed. Active in the north and centre,they are attacking against the defence and security forces.The lack of security and state presence in the north isleading to high levels of smuggling activity too.

Behind the scenes, some are seeking to launch formalnegotiationswithMalian jihadist leaders such asAmadou

Koufaand IyadAgGhaly.Manyarguethat talks are the only way out of thecrisis. As for the regional G5 Sahelforce, which is supposed to help se-cure the country, policymakers areincreasingly calling its effectivenessintoquestion.European countries aresending special forcesunits to supportthe Malian army in 2020.

New mining codeTheeconomy is growing, as the coun-try’smajoreconomiccentreshavebeenlargely untouched by the fighting.Dominated by agriculture, miningand services, the Malian economydepends on two major subsectors:gold and cotton.

At the end of August, the govern-ment adopted a new mining code totakegreater advantageofgoldminingactivity.Goldproduction is set todrop3%thisyear to59tndue to lowerhauls

from a few mines after last year’s launch of new minesfrom B2Gold and Hummingbird Resources.

Mali is the continent’s leading cottonproducer andplanstoproduce 1mtonnes in the 2019/2020season.Governmentsubsidies for inputs is helping cereal production,with theagricultureministry predicting a harvest of 11m tonnes in2019/2020, compared with 10.5m in the previous season.

With the help of the Islamic Development Bank, thegovernment is piloting a programme of mining solarpower plants with storage capacity in order to expandelectrification to more rural areas.

>Moreviolencehasmade theprospectofpeace less likely>Theeconomy is recordingstronggrowthdespite the instability

MaliIBKandthepowerof inertia

> GDP growth (%)

2020*2019*20182017

1917.617.115.3

> GDP ($bn)

5.44.6 55



*Estim

ationOctob

er2019



NIGERIA

MALI

CHAD

ALGERIA

LIBYA

BURKINAFASOBENIN

NIAMEY

NIGER

Zinder

Agadez

300 km

In a year's time, Nigeriens will see who will be in thebest position to take over from President MahamadouIssoufou. Whoever succeeds him will have a lot to do.Faced with the Malian, Nigerian and Libyan securitycrises, the Nigerien government is spending 15%-20%of its budget on defence. There are regular attacks onmilitary and civilian sites in south-eastern Niger.

The election campaign will soon be in full swing, andthings are already in motion. On 21 September 2019, thepresident reshuffled his team. Issoufou Katambé wentto defence, Foumakoye Gado was promoted to ministerof state and, above all, MassaoudouHassoumi returned to the post ofminister of state in the presidency.

With his three heavyweights fromthe governing Parti Nigérien pour laDémocratieetleSocialisme (PNDS)–thelast ofwhomsuffered a seven-monthdismissal from office in January –Issoufou closed ranks by building acohesive government in preparationfor the presidential elections, the firstround of which is due to take placein December 2020. After promotinginteriorministerMohamedBazoumasapresidential candidate for thePNDS,Issoufou spent months ensuring thatBazoum'scampaignwasontrack.Evenwithout a broad electoral base – hecomes from a very small Arab tribe –Bazoum is counting on the power ofthe PNDS, which he co-founded andhas chaired since 2011.

Usual suspectsOn 7 August 2019, they walked side by side in Tahoua onindependence day, their intentions clear. Bazoum is theman Issoufou had chosen to run for the election at the endof his second and last term. With a programme focusedon infrastructure, education and health, the interiorminister is likely to compete with the usual suspects inthe election: Seini Oumarou of the Mouvement Nationalpour la Société de Développement, Mahamane Ousmaneof the Rassemblement Démocratique et Républicain andIbrahimYacouba of theMouvementPatriotiqueNigérien.

There are uncertainties aboutwhat roleHamaAmadouof Moden Fa Lumana will play. The second-place fin-isher in the 2016 election was sentenced to one year inprison for human trafficking. He returned from exile inNovember andwas arrested.Theopposition is boycottingtheCommissionÉlectoraleNationaleIndépendante – citingits bias in favour of the governing party – and opposed tothe new electoral code passed in 2019.

Issoufou responds to opposition criticism that hehas neglected spending on anti-corruption campaigns,health, education and other priorities by pointing to a

new hospital being built in Tahoua,the 130MWKandadji Dam and highrates of economic growth.

Oil at centre of spending plansThe economy is growing stronglydue to new construction projectsand activity in the extractives sector.European donors are financing theconstruction of the 20MW Malbazasolarpowerplantdue tobeoperationalin 2021. Businessman Ibrahim IddiAngo launched the country's leadingMalbaza Cement Company with acapacity to produce 650,000tn perannum, in December 2018.

Elsewhere goldmining, especiallyby artisanalminers in northernNiger,is alsoon the rise.Theuraniumsectorremains troubled, with the Cominakminedue to closedown soon.TheLesNigériens Nourrissent les Nigériensprogramme is expanding irrigation

and supporting smallholders to improve the country'sfood security. The government wants to broaden thattax base and diversify its investors, targetingTurkey andChina in particular.Oil is at the centre of the government'sspending plans. A new $2bn oil pipeline will be built byChinese companies to export Niger's oil via Benin. ChinaNational Petroleum Corporation plans to add new pro-duction to its fields at Agadem.Anothermajor field to bedeveloped was discovered byAlgeria's Sonatrach atKafrain late 2018.Niamey aims to increase oil production from20,000 barrels per day to 500,000 by 2030.

> InteriorministerBazoum is inpoleposition to takeover fromPresident Issoufou>AChinese-backedoil pipeline toBeninwill help tounlock thesector

NigerSeekingsecurity

> GDP growth (%)

2020*2019*20182017

10.39.49.28.1

> GDP ($bn)

4.86.4 6.56.2



*Estim

ationOctob

er2019



Gulfof Guinea

ABUJABENIN

CAMEROON

NIGER CHAD

NIGER IA

300 km

Port Harcourt

Lagos

Kano

Havingwon reelection in the February 2019 polls – whicha tribunal and the supreme court confirmed in late 2019after the opposition claimed the vote was not free andfair – President Muhammadu Buhari has less than fouryears to make a lasting mark. He campaigned on aplatform of fighting corruption, improving security,diversifying the oil-dependent economy and increas-ing national production of goods – from rice to refinedpetroleum products.

The oppositionPeople’sDemocratic Party (PDP) is nowdebatingwhether tokeep failedpresidential candidateAtikuAbubakar as its strongest candidateorgive others a try. Abubakar acceptedthe rulings on his election loss andhas promised to keep challenging thegovernment through its democraticinstitutions, despite claiming that thecourts are not independent.

Theeconomyisamajor focusof theBuharigovernment, thecurrentconflictwithBenina case inpoint.Nigeriahassigned to join theAfricanContinentalFree Trade Agreement but closed itsborderswithBenin to ban smuggling,which undermines the government’seconomic goals. Benin’s economy isreliant on transshipment trade to sup-plyNigeria’s hugemarket. TheAbujagovernment complains, however, thatBenin facilitates smuggling. Buhariwants Nigeria to be self-sufficient inrice production, difficult if cheaperAsianrice is foundon the localmarket.

Alliances and ambitionsVice-president YemiOsinbajo, who has presidential am-bitions of his own, has typically played a strong role ineconomic policy formation. But nowhe is being sidelinedby Buhari’s inner circle – particularly Abba Kyari, chiefof staff – and central bank governor Godwin Emefielehas been more in the spotlight. In September, Buharicreated a star-studded economic advisory council ofeconomists, some of them critics of his administration’spolicies. The free market suggests countering Buhari’sstatist inclinations may be difficult.

Speculation about who could replace Buhari in a hard-fought race leading up to the 2023 elections is underway.APCgrandeeBolaTinubu, former Lagos State governor,rates his chances. KayodeFayemi, governor of Ekiti Stateand formerminister underBuhari could alsobea contend-er. Relatively young at 54, he has a strong support baseas a former civil society leader. Nasir El-Rufai, the feistygovernor ofKaduna, is also angling for the governingAllProgressives Congress (APC) nomination.

Alliances and ambitions are also bubbling underwaterin the opposition camp. Aminu Tambuwal, young gov-

ernor of the north-western state ofSokotowho lost the PDP flag bearerrace by a hair’s breadth, will likelytry again. Hemay have to slug it outwith Rivers State governor NyesomWike, who supported Tambuwal’spresidential ambition, and formerAnambragovernorPeterObi, runningmate to Atiku in the 2019 polls.

Security threatsIn 2020, governorship elections aredue to take place in Anambra (AllProgressives Grand Alliance), Edo(APC) and Ondo (APC) states. Theparties will be looking to swing thefirst two states given the battles therebetween the incumbent governors andtheir sidelined godfathers. The poorperformance of the governor in thethirdoffers thepossibilityof a changein governing party.

Nigeria has a series of unresolvedsecurity threats.Herder-farmer conflicts in theMiddleBeltappear tohavequietened abit, but kidnappings, especiallyin the north-west and south-west are increasingly prom-inent. Opposition members have made multiple calls forBuhari to dismiss his service chiefs whose tenures he hasextended repeatedly despite exceedingofficial retirementage. Any change to the status quo in 2020 is unlikely.

Governors in thenorth-west are leadingdialogue effortsto address armed banditry, cattle rustling and kidnappingin rural communities. Meanwhile, intermittent attacksfrombothBokoHaramand the Islamic State’sWestAfrica

>Buhariwas re-elected inFebruaryand thepolitical classalreadyhas its eyeson2023

>Oil still hasabig impacton theeconomy,whichhasbeenslowto recover fromthe recession

NigeriaTheball is inBuhari’scourt

> GDP growth (%)

2020*2019*20182017

494.8446.5398.1376.3

> GDP ($bn)

0.81.9

2.52.2

> Population: 201 million> GDP per capita: $2,222> Life expectancy: 53.9> Adult literacy: 51.1%> Inflation: 11.3%> Human development index(out of 189 countries): 157


*Estim

ationOctob

er2019



Province continue to punctuate the government’s repeatedclaims of having ‘technically defeated’ the insurgents.

With theUSgovernment focusedon counteringChina inAfrica,Nigeria is countingonWashingtonquickly signingadeal to supplyNigerian armed forceswithTucanoaircraft.Previous administrations had worried about the humanrights record of Nigeria’s army, but not Donald Trump’s.

The year 2020will see the expiration of the twomajoreconomic development plans that served as planningfoundations for the past two decadesafter Nigeria’s return to democracyin 1999.Many of the targets set havenot been met. Buhari's governmentis nowworking on new goal-settingprogrammes.

Nationwide motorway tollsTheNigerian economyhas been slowin recovering from its 2016 recession.Itsbanksare inbetterhealthafter largeexposure to the oil industry. But overthe past few years, the governmenthas collected less tax revenue than itpredicted. It has also been borrowingto finance budget deficits. The 2020national budget is a record$34bn,with increased spendingon infrastructure projects like roadways and railways.

The federal government now spendsmore than half itsrevenue servicingdebt obligations.The IMF is arguing forfuel subsidy cuts to reduce spending, but theadministrationin Abuja is not at all keen on such a move.

Other reforms, however, are on the agenda. Accordingtoworks and housingminister, Babatunde Fashola, tollson motorways are planned nationwide. From January,the value-added tax rate will also rise from 5% to 7.5%.

Industrialist AlikoDangote is betting big onNigeria butalso diversifying the geographyof his activities.His hugeLekki-based refinery could finally begin operations late

in 2020, though theremay be construction delays.With acapacity to refine 650,000 barrels of oil per day, supplycontracts andother key decisions have yet to be drawnup.

The Dangote Group has plans to increase its cementcapacity inAfrica by 29% to 62m tonnes. The continent’srichest man says he will begin investing 60%of his com-pany’s profits in places like the US and the UK. DangoteCement could also conduct its initial public offering ofstock on the London Stock Exchange in 2020.

In telecoms, South AfricanmobilecompanyMTN’s local listing in 2019was a big step towards improving itsrelationship with the Abuja govern-ment. It is now preparing to go intomobile money in a big way.

Electricity provisioning remainsweak as the government has been un-able to solve problems that emergedwith its major privatisation drive.Distribution companies are still notbeing paid regularly by the govern-ment and power producers wanthigher tariffs to ensure the recoup-ing of their generation costs. Moreinvestment is needed to upgrade

and expand the transmission system. The governmentsigned a deal with Germany’s Siemens in July 2019 toimprove Nigeria’s national grid.

Management of the oil sector being uncertain, witha reform bill under discussion for about 10 years, somecompanies have been waiting for more clarity before an-nouncing new investments. The government predicts thattherewill be fewdisruptionscausedbyNigerDeltamilitantsin 2020 and that national oil productionwill average about2.2m barrels per day. Local company Seplat, confident inits growth, is buying its peer Eland, suggesting that therecould bemore developments and consolidation amongstindigenous oil and gas operators in the year ahead.

Nigeria / The ball is in Buhari’s court

PRIVATE SECTOR CREDIT(Percent)

50

40

30

20

10

0

-10

2018M11

2017M8

2016M5

2015M2

2013M11

2013M1 S

OURCE:IN

TERNAT

IONALMONETA

RYFU

ND

The trains don’t run on timeMost of Nigeria’s cities lack an efficientmass transit system and the country’sexisting intercity rail infrastructureis a relic from before independencein 1960. But some projects are slowlymoving ahead. The Kaduna-Abujarailway and Abuja city metro wereinitiated under previous administra-tions and completed under PresidentMuhammadu Buhari. Big infrastructureprojects in Nigeria are often overbudget and behind schedule.

The 156km Lagos-Ibadan rail lineto connect the ports in the commercialcapital to West Africa’s largest city andother markets is being built by the ChinaCivil Engineering Construction Companyto the tune of $1.58bn, and is due tobe completed in early 2020. The long-planned Lagos metro intracity Blue railline, being built by France’s Alstom, maynot open until 2023. It will run east-west, and the Lagos State governmentof Babajide Sanwo-Olu is now planning

the $2bn and 31km north-south RedLine. Lagos has yet to source the fundingand award the contract for that project.

The Warri-Itakpe-Ajaokuta passengerand freight rail line, which covers327km, is also heading for completionin 2020, more than three decadesafter construction first began. It couldfurther be extended to connect severaltowns and villages with the Kaduna-Abuja line, expected to reduce traveltime between south and north.


COUNTRY PROFILES / WEST AFRICAAtlanticOcean

GUINEA-BISSAU GUINEA

MALI

MAURITANIA

GAMBIA

DAKAR

SENEGALThiès

Saint-Louis

100 km

Re-electedwithmore than 58%of votes in the first roundon 24 February 2019, President Macky Sall is followingthrough on many of the projects started during his firstterm. In 2020, he is launching the second phase of thePlanSénégalEmergent – thenational development strategyleading up to the year 2035. The country obtained some$14bn in funding pledges at the end of 2018 to acceleratethe PSE, which Sall hopes will transform the economy.

With a comfortablemajority in the national assembly,Sall decided toabolish thepostofprimeminister, ameasurethat took effect on 14May 2019 through a constitutionalamendment. The opposition harshlycriticised this institutional change,saying he is acting like a monarch.Sall said the move was necessary tostreamline the administration andspeed up reforms.

Often weakened by infighting,the opposition struggles to worktogether and hone its attack on thegovernment.With local elections onthe horizon, President Sall is seekingto ease tensions.He granted a pardonto former mayor of Dakar KhalifaSall on 29 September 2019. Thiscould also shake up the opposition.Socialist leader Khalifa Sall is one ofPresident Sall’smajor opponents. Hewas sentenced to five years in prisonin 2018 for embezzlement of publicfunds, leading the courts to reject hisrun for the presidency in 2019.

National dialogueOpposition figureKarimWade, expected to lead thePartiDémocratique Sénégalais (PDS) following his father,AbdoulayeWade, was also prevented from participatingin the 2019 elections. He was elected in August onto thePDS’s governing bodies, a choice that some barons didnot appreciate. Because of his legal woes, he has beenexiled inQatar since 2016. There are doubts about if andwhen he could return to Senegal.

The next elections are for local government, and couldallow the opposition to get into better shape. Initiallyscheduled for 2019, they are now expected by early 2021.

The government invited the oppositionwith great fanfareto participate in a national dialogue to set the conditionsfor the vote, but most oppositionists reacted tentatively.

Peace in Casamance a major goalSome issueswere already on the agenda during the presi-dential election, such as the number of sponsors requiredto become a candidate and the fee to run for office. Thenext competition between the governing party and theopposition will be the legislative vote in 2022.

President Sall says that peace in the regionofCasamanceis a major goal of his second term.That could prove difficult due tothe fracturing of theMouvement desForcesDémocratiquesdelaCasamancerebel group but the rapprochementwith Gambia has easeed tensionssomewhat.

Amajor oil scandal in 2019 showedtheneed formoreoversight and trans-parency. Suspectedofhaving receivedbribes as part of oil block deals withRomanian-Australian businessmanFrankTimis, the president’s brother,Aliou Sall, was forced to resign fromhis position as generalmanager of theCaisse des Dépôts et Consignations.Those events generated a wave ofdemonstrations that tarnishedMackySall’s record. According to IMFforecasts, commercial hydrocarbonproduction is expected in 2022 andinvestments will boost growth.

The economy is producing stronggrowth due to increased public spending on infrastructureand activity in the agriculture and fishing sectors. Biginfrastructure projects going ahead include a rehabil-itation programme for the country’s airports and thebuilding of the new city of Diamniadio. Lagging farbehindmany of itsWest African peers, the port of Dakaris now undergoing upgrading works that will help thelocal market and neighbouring landlocked countrieslike Mali. French company Free’s joining of the tele-coms market is a sign of growing investor interest anda challenge for Orange, the dominant player.

> Infrastructureprojectsarekey to thegovernment’splans tomakeSenegal anemergingeconomy>Theprospectsofoil productionhavealreadybroughthopeanddisappointment

SenegalStartingSall’ssecondterm

> GDP growth (%)

2020*2019*20182017

25.723.923.420.9

> GDP ($bn)

7.16.6 6.7

6



*Estim

ationOctob

er2019



AtlanticOcean

FREETOWN

LIBERIA

GUINEA

SIERRA LEONE

100 km

Makeni

Kenema

With inflation at 15.8% and a growth rate stalling largelyon account of inactive iron ore projects, President JuliusMaadaBio appears to be a chastened leader in his secondyear in office. He is reticent about an ambitious projectto build a bridge to Lungi airport, which is promoted byhis chiefminister David J. Francis and due to cost $2.1bn.Bio’s team has also not made clear whether it will goahead with a Chinese-backed expansion of the port atFreetown. Sierra Leone is on an International MonetaryFund programme, which has seen it cut spending andincrease government revenue.

Focus on Bio’s top priority pro-grammeof free andquality educationwill likely remain steady through2020, but the government may havecause to evaluate it in view of thedismal performance of students inthe West African Senior SecondaryCertificateExamination. In 2019,95%of students failed to make the gradeto be accepted for university. Theresults worry the government, whichmust nowconsiderwhether to roll outthe programme more methodicallythrough an initial emphasis on theprimary level and teacher training.That may not provide the big bangBio’s team had been hoping for.

Massive graftReconciliation seems to be the pri-ority between the current and formergoverning parties. In 2019, Bio setup a commission of inquiry to in-vestigate top opposition All People’s Congress (APC)officials, including its chairman and former presidentErnest Bai Koroma. But though the ponderous work ofthe commission unearthed evidence of massive graft,it has not publicly interviewed or subpoenaed any ofthe APC’s leaders. Instead, in September, shortly afterhis cabinet agreed on the outlines of a new govern-ment Independent Commission for Peace and NationalCohesion, Bio invited Koroma and his senior officialsto a well-publicised meeting at State House that Biodescribed as a peace and reconciliation gesture.

Bio enters this phase of his presidencymore politicallyassured than before. A high court ruling in several pe-tition cases in late May nullified the election of 10 APCmembers of parliament (MPs), giving nine of the seats toBio’s Sierra Leone People’s Party (SLPP) and subjectingthe 10th to a rerun. The SLPP won the by-election, ef-fectively making it the newmajority in parliament. TheSLPP now has 58 MPs while the APC has 57.

Therearerisksof isolatedelectoralviolence.Aby-electionin anAPC-controlled constituency in Freetown inAugustwas stopped after violence erupted in a number of voting

areas.More than20APCactivistswerearrested, including a formerminister.

Cancelled licencesThe economy remains the govern-ment’s most vulnerable point. Theleone continues to fall against thedollar, the result of a dramatic drop inexports due to the suspension of ironore production. In early August, thegovernment cancelled licences of theiron ore-producing companies at theTonkolili and Marampa mines aftera lengthy review. In fact, the largerTonkolilimines,ownedbyShandong,had been placed into receivershipearlier this year, and long ceasedproduction. The company has nev-ertheless sued in a Freetown court tochallenge itsban.TheMarampamines,a subsidiary ofGeraldGroup, ceasedproduction and shipments in July.

TheWorldBank in July announcedit is investing $60m in the titanium miner Sierra Rutile.The company has been a focus of investigation by thecommission of inquiry concerning how the former gov-ernment sold it to an Australian company.

To boost food production, the agriculture ministry isbacking an ambitious programme to add 170,000ha forrice cultivation over the next three years.

Announcements about new deals for oil blocks arealso expected soon, after the government launched abidding round for all of the country’s remaining offshoreareas in May 2019.

>Many large infrastructureprojectsareonholdas thegovernment re-examines itspriorities>Therearehopes that investment inoil explorationwill reducedependenceonminingandagriculture

Sierra LeoneBacktoschool

> GDP growth (%)

2020*2019*20182017

4.44.24.03.7

> GDP ($bn)

3.7 3.4

4.64.9



*Estim

ationOctob

er2019



LOMÉ

NIGERIA

BENIN

GHANA

TOGO

Gulf of Guinea

LakeVolta

Sokodé

200 km

Calm has returned to the Togolese political scene afterthe street protests of previous years. The protesters werecalling for constitutional reforms thatwouldmakepoliticalcompetition fairer andpossibly lead to theendof the familydynasty that has ruled the country fordecades.Thecountrygot a new constitution inMay 2019 that now includes termlimits. It will allowPresident FaureGnassingbé, in powersince 2005, to run again in 2020 and 2025. Strengthenedby the powers of incumbency, he is expected to win thevote in February 2020 as he campaigns on the economicresults his government has produced.

Before itweakenedconsiderably, theC14oppositioncoalitionhadbeenableto get somebut not all of its proposedreformsapproved.Theoppositionhasbeen hurt by infighting. It boycottedthe 2018 legislative elections but didnot arrive at a common position onthe municipal vote in July, the firstsuch polls in 32 years. Gnassingbé’sUnion pour la République took morethanhalfof the seats up forgrabs.Thetwomost influential oppositionists re-main Jean-PierreFabreof theAllianceNationalepour leChangement (ANC)andexiledPartiNationalPanafricain(PNP) leader Tikpi Atchadam, andthey have both quit the C14. The op-position looks unlikely to settle ona single joint candidate for the 2020presidential election.

Borrowing for infrastructureSome C14 supporters and the clergyhave called for the 2020 elections to be suspended, buttheir demands have not gained traction. They say theconstitutional court and electoral commission must bereformed. So far, the government is not offering to talkabout such changes, and the ANC and PNP have largelybeen disengaged from those opposition efforts.

Thegovernment’s cooperationwith the IMFisproducingresults in the shapeof stronggrowth rates.The authoritieshad been worried about rising levels of debt followingmassive investments in infrastructure, accelerating theimplementation of the Plan National de Développement,

at an estimated cost of 4.6trnCFA francs ($7.8bn). Its threepriorities are making Togo a logistics and business hub,supporting agribusiness, manufacturing and processing,and social development.To spread the benefits of growth,the government is devotingmore of the national budget tosocial spending,whichaccounted forabout 15%of the2019exercise. To implement his economic plans, Gnassingbécounts on allies like financeminister SaniYaya anddigitaleconomyministerCinaLawson.Others key in the admin-istration include interiorministerPayadowaBoukpessi andadministrative reformminister Gilbert Bawara.

Dangote brings value-addedThe government is raising moneythrough privatisations. In November2019, it sold a 51% stake in telecomsoperator Togocom to Madagascar’sAxian and US-based private-equityfirmEmergingCapitalPartners.Theysay theywill invest 160bnCFA francsto improve and expand the network.Theyalsoplan to launch5Goperationsby 2021. Stakes in two public banks,BTCI andUTB, arenext to goon sale.

Regional economic ties are expand-ing too. Nigerian billionaire AlikoDangote announced in Novemberthat hewould launch constructionof acement factory and fertiliser process-ing operations inTogo in 2020.Togoexportsmost of its phosphates in rawform, so theDangote installationwillbe amuch needed step towardsmoremanufacturingvalue-added.Majorel,a

jointventurebetweenGermany’sBertelsmannandMorocco’sSaham, opened up a first call centre in Lomé to deal withcustomer service for companies in francophonemarkets.The November visit to Togo of Chinese billionaire JackMa also highlighted some prospects in the tech space.

A new mining project is moving ahead, too. BritishfirmKeras Resources plans to develop the Nayegaman-ganesemine in northernTogo and optimistically expectsto launch production in 2020. It is a relatively smallmine, which is set to produce 250,000tn of manganeseper year for about 11 years.

>Againsta fracturedopposition,Gnassingbé isexpected towin the2020presidential vote>Privatisationsandnewfactoriesare signsofanuptick in investor interest

TogoTermlimitschangethegame

> GDP growth (%)

2020*2019*20182017

5.95.55.34.8

> GDP ($bn)

4.44.9 5.35.1



*Estim

ationOctob

er2019

Its unknown lands,

... Its history that dates to the beginning of time, to realize today...

... And then dream, travel and meet

Its values and its heros...

57 bis, rue d’Auteuil, 75016 Paris, FrancePhone: +33 (0) 1 40 71 71 90 - Commercial service: [email protected]

www.leseditionsdujaguar.com

AdmireAfrica


MAUR ITAN IA

MOROCCOALGER IA

L IBYAEGYPT

TUN IS IA

SENEGAL

MALINIGER

CENTRAL AFRICANREPUBLIC

SOUTH SUDAN

ETHIOPIA

CHAD

SUDAN

Khartoum

Nouakchott

Rabat

Algiers Tunis

Tripoli

Cairo

Casablanca

Tindouf

Tangier

Fes

Béchar

Nouadhibou

OranConstantine

Benghazi

Aswan

AlexandriaMarrakech

AtlanticOcean

Mediterranean Sea

ERITREA

400 km

24.5% Algeria

43% Egypt

Sudan 4.4%

Libya 4.7%Mauritania 0.8%

Morocco 16.9%

Tunisia 5.5%

TOTAL$702.4bn

2020

2035

2050

250.9

315.8

380.6

NorthAfricaisshowingthemanywaysthatrevolutionaryfervourcango:fromthestrongmanbacktothestrongmaninEgypt; todemocraticprogress inTunisia;bloodyyearsofconflictinLibya;andatug-of-warbetweenthestreetandtheregimeinAlgeria.

North Africa

7%riseForeigndirect

investmentto

theNorthAfrica

regionin2018

recordedabig

uptick.Egypt’shaul

droppedby8%

to$6.8bnand

Morocco’sjumped

by36%to$3.6bn.

NORTH AFRICA POPULATION(millions)

NORTH AFRICA GDP (2019)(% of regional total)

Revolutionaryaftermaths

232 People towatch

234 Algeria

235 Egypt

237 Libya

238 Mauritania

239 Morocco

240 Sudan

241 Tunisia

SOURCE:UN

POPULA

TION

DIVISION

SOURCE:IN

TERNAT

IONALMONETA

RYFU

ND


COUNTRY PROFILES / NORTH AFRICA

ROBBIE

STE

PHENSON/JMP/REX/SIPA

peopletowatch

YASSIN

EGAIDI/A

NADOLU

AGENCY/AFP

ALGERIA

RiyadMahrezA fox in the city

The Manchester Cityfootball ace and Algeriancaptain put in a starperformance when theFennecs won the 2019Africa Cup of Nationstournament. And he

still has his eye on the Champions League prizenow that he ended his somewhat unhappy stintat Leicester. He moved to Man City in 2008 forwhat was then a club record of £60m. The midfielderis regaining his old confidence, and no doubt hasmany more great games in him as he looks to tophis 2016 African Player of the Year and ProfessionalFootballers’ Association Player of the Year awards.

SUDAN

Osama Daoud AbdellatifMoney and mediation

The chairman of the DAL Group conglomerateis one of the country’s richest men. He is using thatposition to help the transition that started with thedeposing of then-president Omar al-Bachir in April2019. Abdellatif was a part of the mediating team thatconvinced the Transitional Military Council to acceptthe demands of the Forces of Freedom and Changecivilian opposition coalition, which is now runningthe transitional government that hopes to organiseelections. With tough reforms on the horizon, thenew government will be looking to Abdellatif to usehis international networks to help keep the economyafloat. But some in the opposition warn that Khartoumshould be wary of working with businessmenwho have their own economic interests to protect.

TUNISIA

Noureddine TaboubiWorkers’ ally

The secretary general of the UnionGénéraleTunisienne duTravail (UGTT) will play a critical rolein negotiations to turn around the economy in 2020under newly elected President Kaïs Saïed. The UGTTcontinues to weigh in on important political debates,and its role after the downfall of Zine el AbidineBen Ali in 2011 earned it a Nobel Peace Prize as partof the quartet of groups that helped the country avoida catastrophe. Taboubi is fighting against corrup-tion and to protect workers’ interests while Tunis isworking with the International Monetary Fund to cutthe deficit. Massive strikes could be on the cards if theUGTT feels that the little guy ends up having to makemajor sacrifices to help to turn the economy around.

SAMUELARANDA/THENEW

YORKTIMES-REDUX-REA

DIRKWAEM/BELG

A

ALGERIA

Ahmed Gaïd SalahSoldier pulling the strings

The leader of Algerian con-servative forces has his careeron the line with the electionsplanned for 12 December.The Hirak movement of streetprotesters that sprung upin opposition to then-presidentAbdelaziz Bouteflika’splanned run for a fifth termhas opposed Gaïd Salah’smoves to rush through toelections with as little reformas possible. Five candidateshave thrown their hat intothe ring but face pressure fromthe street, where peopleare calling for a change in thesystem – from top to bottom– that the Algerian securityservices are defending. The79-year-old general also lacksreassurance that a newlyelected president would wanthim in charge of the army,so the months ahead will showif he can keep the revolutionto only superficial changesand hold on to his power.

EGYPT

Mohamed AliAn actor for action

With President Abdel Fattah al-Sisi’s iron rule largely unchallengedby an opposition crushed and divided by the ruling party, Spain-basedactor and construction contractor Mohamed Ali emerged in 2019to rally people out to protest corruption and the government’s spendingon huge projects that are not improving the livelihood of the people.In response, Sisi defended his building of presidential palaces amidstan economic crisis and his government arrested more than 2,000 people.The year ahead will show if Ali and others can use the momentum toturn up pressure on the Cairo administration to listen more and respondmore to the voices of the people.

MOROCCO

Mostafa TerrabMake it grow

Next year will be a big one for the boss of Moroccan fertiliser producerOCP, celebrating its 100-year anniversary in August while planninga major African expansion with projects in Ethiopia and Ghana,amongst others. Word is that he is being considered to lead a govern-ment commission due to come up with the country's new develop-ment model. On the agribusiness front, he took up the leadershipof the International Fertiliser Association in mid-2019, becomingthe first African to hold that position. He is also overseeing$1.5bn in planned investments in Nigeria, which will help OCPto overcome the threat to its business caused by the MuhammaduBuhari government's ban on imports of NPK fertilisers.



ALGIERS

MALI

MAURIT.

LIBYA

MOROCCO

SPAIN

TUN.

NIGER

MediterraneanSea

ALGER IA400 km

OranConstantine

As The Africa Report went to press, Algeria’s period ofuncertainty was not subsiding. The country was throwninto a tug-of-war after the revolution of 22 February 2019succeeded in ousting long-serving president AbdelazizBouteflika. General Ahmed Gaïd Salah, who pushedBouteflika out, represents the country’s conservativeforces.Hewanted to hold elections as quickly as possiblewith as few reforms as possible. Amassed against himaremillionsof people protesting in the streets for deep changethatwill wipe away all the traces of theBouteflika period.

After a first attempt to hold elections failed inOctober,a new presidential vote was due tobe held on 12 December 2019. It isnot clear how many people will turnout to vote and how much popularlegitimacy the new government willhave. The presidential candidateswith the biggest followings includeformer prime minister AbdelmadjidTebboune and former primeministerAli Benflis. All of the five candidateswere inaBouteflikagovernmentorhispolitical party, theFrontdeLibérationNationale (FLN). Most oppositionparties plan to boycott the vote, andprotesters are likely to try to blockpeople from voting.

Deep freezeWhoever wins the election will facehuge challenges because of the vastnumber of peoplewho are calling fora new constitution and fundamentalchanges to the way Algeria is run.The new government will have to come up with a planto rebuild the nation and convince opponents on allsides to get behind its project. A long period of politicaltension is expected.

This is playing out against the backdrop of a nearlyunprecedented economic crisis. The economic reper-cussions of the 2019 revolution will be felt for years.It has weakened the powerful business class and led toa deep freeze in public and private investments. GaïdSalah launched an anti-corruption campaign targetingregime barons in 2019 – including presidential brother

SaïdBouteflika andFLNMPBahaEddineTliba – to showthat hewas listening to the calls of the people in the streetfor change. The climate of permanent revolutionmakesit difficult to see beyond the short term.

Construction companies are sacking workers at fullthrottle, and unemployment is expected to rise signif-icantly over the next 12 months. Algeria’s almost totaldependence on oil, which represents 96% of its exports,is an aggravating factor in this situation.

The previous government was trying to spend its wayout of the recent downturn caused by a major drop in oil

prices.According to expert estimates,theauthoritiesneedthepriceofabarrelof crude oil to be $116 to balance thenational budget. However, oil pricesarestagnatingataround$60perbarrel.

Oil CEO sackedThe government’s financial difficul-ties will worsen in themedium term,especially since its foreign-exchangereserves aredwindling.Theydroppedfrom$194bn at the beginningof 2014to $56bn at the end of 2019. At thisrate, those reserves will disappearbefore the end of the newly electedpresident’s five-year term.ThatwouldcreateadesperatesituationforAlgiers,which would then be forced to resortto borrowing from international in-stitutions like the IMF.

Reforms that a new governmentcould overturn are moving aheadnonetheless. The national assembly

passeda lawtomake theoil sectormoreattractive to foreigninvestors in November, a move opposed by many streetprotesters. Investors have not shownmuch of an interestin Algeria’s oil sector since about 2008. The new oil lawwas accompanied by the unexpected sacking of the bossof state oil companySonatrach,which bringswith itmoredoubts about the futuremanagement of the crucial sector.

The business community has expressed the hope thatthe revolutionwill bring other economic changes, like therevitalisation of the banking sector. It is currently domi-natedby six inefficient state-owned financial institutions.

>Manyprotesters reject the ideaofapresidential electionwithoutdeepreforms>Algeria’spolitical instabilityandextremedependenceonoil arehurting theeconomy

AlgeriaAneweradawns

> GDP growth (%)

2020*2019*20182017

178.6172.7173.7167.3

> GDP ($bn)

1.3 1.4

2.42.5

> Population: 43.1 million> GDP per capita: $3,980> Life expectancy: 76.3> Adult literacy: 75%> Inflation: 2%> Human development index(out of 189 countries): 85


*Estim

ationOctob

er2019



Red Sea

Mediterranean Sea

SUDAN

SAUDIARABIA

ISRAEL

LIBYA

CAIRO

EGYPT

AlexandriaPort Saïd

300 km

Undeterred by the anti-corruption and anti-austerityprotests that brokeout inSeptember 2019,PresidentAbdelFattah al-Sisi is focusing on megaprojects and subsidycuts backed by the International Monetary Fund (IMF) toattract investors and win international financial support.Havingbacked constitutional changes in 2019 andwith themilitary firmly behindhim, he can run for another term in2024andpotentially serveuntil 2030.Those constitutionalamendmentswere supported bynearly 90%of voters, butturnoutwas low,at 44.3%.Amidst thewar inSinai, thegov-ernment is crackingdownon independent voices, protests,non-governmental organisations andthe political opposition. It has beenusing a rolling state of emergency todoso since 2017and therearenosignsyet that it will be removed in 2020.

Protests eruptedall over thecountryin September 2019, resulting in the ar-rests of at least 3,000citizens. It couldbe the start of a new uprising againstsoaring prices and political violence.Sofar, thedemonstrationsdonot seemto be spurring a wider movement.MohamedAli,acontractorwhofled toSpainandwhoworkedwiththeEgyptianarmyfor15years,wasthemainagitatorof these protests.Heposteddozensofvideos,accusing theregimeofwastingfortunesonlargeconstructionprojects,includingpresidentialpalacesandvillasfor his entourage. Sisi’s responsewas:“I’mbuildinganewcountry [...]All thisis notmine, it’s Egypt’s.”

Legislative elections in 2020One in three Egyptians lives below the poverty line. Tocushion people from the removal of fuel and electricitysubsidies, the government has rolled out a programmeofcash transfers to some of the poorest households.

Thegovernment hasweakened theMuslimBrotherhoodand said it has been involved in the protests. The partyhas been hurt by repressive tactics and attempts to fomentdivisions between reformist and hardline groups.

Egypt’s only elections in 2020 will be legislative ones.The 2019 constitutional referendumalsomadeparliament

a bicameral body,meaning that the Shura council –whichis equivalent to the senate – will be restored after beingabolished by the 2014 constitution. Parliamentarian andShura electionswill beheld fromApril toMay2020andarepredicted to deliver strongmajorities for Sisi supporters.

Sisi is leading the African Union for a one-year termthat ends in February 2020. His focus is on terrorism andsecurity, particularly for the Sinai peninsula, the Libyancivilwar, theDemocraticRepublic ofCongo, Somalia andSouth Sudan. Meanwhile, Egypt remains a major playeron regional issues. Cairo is supported by allies such as

the United Arab Emirates and SaudiArabia, which injected large sumsinto the Egyptian economy. Sisi isstanding by Libyan military leaderKhalifa Haftar in the civil war there.

The flow of the NileEgypt’s main diplomatic priority in2020 will be dealing with the con-struction of the Grand EthiopianRenaissance Dam. After talks withtheEthiopianauthorities led toastale-mate,Egypt’s primeministerMostafaMadbouly said that his country wasdetermined topreserve its rights in thewatersof theNile.Egypt fears the$4bnhydropower damwill restrict the flowof theNile, the economic lifebloodofthe country, uponwhich Egypt reliesfor up to 90% of its fresh water.

Cairo has called for internationalmediation and wants the US to finda solution to the debate about how to

manage theproject and its impact onwater levels.Ethiopiawill begin generating small amounts of electricity from itin 2020 and the project should be operational by 2022, sothe pressure for a resolution is mounting.

Furtherafield, theEuropeanUnion ispromotingdialoguewith the Cairo government about migration. The Sisi ad-ministrationhas crackeddownon trafficking, andBrusselswould like other countries in the region to follow suit.

Inorder toget the supportof the IMF, theSisi governmenthasbeendismantlingparts of thewelfare state set upunderformer president Gamal Nasser. The deal signed in 2016

>Austeritymeasureswhich led toahike inpricescontinue toweighheavilyoncitizens>The regimecontinues to repress socialmovementsandopposition figures

EgyptSisiseemsunstoppable

> GDP growth (%)

2020*2019*20182017

353302.2249.5236.5

> GDP ($bn)

4

5.35.8

5.5



*Estim

ationOctob

er2019



included a $12bn loan in exchange for reforms includinga deep cut in subsidies, the creation of a value-added tax,a steep devaluation of the pound and the introduction ofnew taxes. Sisi has been sure not to hurt the military’soutsized role in the national economy.

TheCairogovernment received the final $2bn tranche in2019andanother IMFdeal isalreadyundernegotiation.Thegovernment hopes to sign it by March 2020 and continuewith cuts to the public servicewage bill. Economic growthis running high, and the governmenthasbrought its spendingunder control– producing budget surpluses insteadofdeficits.The IMF is recommendingthat the government do much moreabout improving the business climateandstrengthening theprivate sector inorder tocreate the700,000 jobsayearthat theEgyptianpopulation requires.A round of delayed privatisations isstill due to be completed.

While the reforms are poweringeconomicgrowth, theyhavealsoraiseddomestic prices. Inflation remainedin the low double digits in 2019, andthe IMF predicts that it could be insingle digits by 2021 at the earliest.

Focus on renewablesThe government is relying on megaprojects like the newSuez Canal and the new capital city to create jobs andboost the economy. So far, they have not created a seachange at the grassroots level. Activity is building up inthe Suez Canal Economic Zone, and operations at theRussian industrial zone are due to launch there in 2020.

Another huge projectmoving ahead in 2020 is the giantZohr field, an offshore natural gas deposit discovered byItaly’s Eni in 2015.The field is estimated to contain 850bncubic feet of gas, which could save the country billions

of dollars in natural gas imports each year and also turnthe country into a gas exporter. The results of a licensinground for oil and gas exploration in the Red Sea shouldbe revealed in the year ahead.

Rolling out energy infrastructure is high on the govern-ment’s list of priorities. The government goal is for 20%of the country’s electricity to come from renewables by2020. The $4bn 1.8GW Benban solar project is a step inthat direction,with constructiondue tobe completedby the

endof 2019or early 2020.Elsewhere,German-Spanish jointventureSiemensGamesa is due to complete a 250MWwind farm at West Bakr in 2021.

Tourism, another key componentof theEgyptian economy, is growingfrom its precipitous drop in 2010,when nearly 15 million tourists wentto Egypt. About 9 million touristsvisited the country in 2018,withmoreexpected in 2019.Flights from theUKare due to recommence in 2020 afterthe banon flights to Sharmel-Sheikh– the take-offpoint foraRussianplanethatwas blown up in 2015 –was liftedin2019.TheGrandEgyptianMuseum,

built at an estimated cost of $1bn over a period of morethan a decade, is due for its inauguration in 2020.

Egypt’s security remains a threat to the tourism industry.The war in Sinai, which began in 2013, had killed morethan 120 citizens and soldiers as of October 2019. Theconflict sometimes expands beyond Sinai and reachesCairo and other cities. Therewas a tourist bus attack nearGiza on 19May thatwounded 17 people. The governmentis fighting the forces of Hassm,which is identified by theTerrorismResearch andAnalysisConsortiumas a jihadistandmilitary wing of theMuslim Brotherhood, as well asAnsar Bait al-Maqdis, an organisation that is allied to theIslamic State rebels in Syria.

EGYPTIAN EXCHANGE EGX 30 PRICE INDEX

2015 2016 2017 2018 2019

18,000

16,000

14,000

12,000

10,000

8,000

6,000SOURCE:BLO

OMBERG

Strong-arming and the lawAfter having reached the presidencythrough the use of arms, Abdel Fattahal-Sisi is maintaining his tight grip onpower through force as well. The govern-ment's most recent campaign of arrests,which put a halt to the September proteststhat broke out in numerous cities aroundthe country calling for al-Sisi to stepdown, led to more than 4,000 Egyptiansbeing thrown in prisons in less thantwo weeks. Many were not even involvedin the protests: some police officials

randomly interrogated people in thestreets and confiscated their cell phones.If they shared political content on socialmedia, they were immediately arrested.

Egypt's human rights record will be inthe spotlight in 2020. The United NationsHuman Rights Council launched itsuniversal periodic review of the countryin mid-November 2019. Sisi's policy is touse security as a shield to defend the gov-ernment against criticism. The oppositionhas been unable to organise wide-scale

activities, Cairo has limited the roomfor manoeuvre for non-governmentalorganisations and donors do not havemuch leverage over Sisi's administration.

The uprising of 25 January 2011 wasa cry out by the people for better lives andmore freedom. But it was also an expres-sion of anger against the lack of dignityand the constant brutality used by forcesto shut down opposition. Will Sisi learnfrom the mistakes of his predecessoror repeat them in the years ahead?

Egypt / Sisi seems unstoppable


COUNTRY PROFILES / NORTH AFRICAMediterranean

SeaTRIPOLI

SUDAN

ALGERIA

TUNISIA

EGYPT

CHADNIGER

L IBYA

Benghazi

300 km

The resumption of hostilities in Libya in April 2019 hasplunged the country into anewwaveof civil conflict.Whilean agreement betweenPrimeMinister Fayez al-Sarraj andKhalifa Haftar seemed to have been reached at the AbuDhabi summit in February, Haftar launched the LibyanNational Army (LNA) on Tripoli, sidelining the politicalprocess pushed by UN envoy Ghassan Salamé.

While the military authorities in the east promised arapid takeover of Tripoli, the LNA was blocked at thecity’s gates more than six months after the offensive todislodge the Tripolitanmilitias loyal to the GovernmentofNational Accord (GNA).However,with the exception of part of thecoast, the LNA largely succeeded inextending its control to themajorityof Libyan territory.

The militias in the west, initiallyunited by the threatHaftar posed, arenow in conflict, particularly betweenfighters in Tripoli and the forces inMisrata. The latter are better armedand trained. They are defending thecapital, and it is a Misrati, interiorminister Fathi Bashagha, who hastaken charge of the GNA securityinstitutions.Haftar’s forces launchedmajor bombing raids on Misrata inNovember 2019.

Theatre of war for dronesWhile no side seems to be able toeke out a victory, Misrata and theLNA, which have been open to thepossibility of talks, may be temptedto find common ground. But that sort of rapprochementwould be difficult without the backing of the main in-ternational supporters of both parties. The United ArabEmirates continues to provide assistance and advice tothe LNA; Turkey plays the same role for the Tripolitanforces. The support of these two states is reflected on theground in the world’s largest theatre of war for drones,according to UN secretary general AntónioGuterres. Hestill thinks that Salaméwill be able to guide Libya towardsthe elections. A difficult goal to achieve, and one that willonly be possible after local and international negotiations

that promise to be tough. Salamé’s current strategy is topush for a ceasefire, followed by talks among the externalactors involved, and finally a national dialogue in Libyathat includes all of the major players in the conflict. Sofar, no side seems interested in suing for peace due tothe stalemate on the ground.

But the shifting political context in the Arab worldcould change the situation.Weakened by its confrontationwith Iran, Saudi Arabia – another Haftar supporter – isreviewing its security strategy and could be more opento a dialogue on Libya. The UAE is also dialling back

its engagement in conflicts in theArabworld. Regional actors are alsoinvolved, with reports of fightersfrom Chad and Sudan working forthe different sides and sometimeslooking after their own interests.

The conflict has created a majorhumanitarian crisis. The recent fight-ing displaced 300,000 people and880,000peoplewere estimated to bein need of humanitarian assistance.

Future integrityThe conflict is obviously not good forbusiness, and Libya’s reconstructionwill have towait until it ends. Fighterswant to control the country’s oil, andproduction fluctuates significantlydueto the instability. Average productionhit 1.3m barrels per day in October2019, up from 1m in October 2018.The Sarraj government is spendingabout $1bn tomaintain those levels of

production for the year ahead. Tens of billions of dollarsare estimated to be required in order to bring productionback up to pre-conflict levels.

Political divisions are also playing out in the oil fields.The National Oil Company (NOC) denounced attemptsto divide its subsidiary Brega Petroleum MarketingCompany between east and west so that the Cyrenaicauthorities could have a say in the export of crude oil.Mustafa Sanalla, the NOC boss, warns that, if it wereto lose its export monopoly, “Libya’s future integritywould be seriously threatened”.

>TheLNAhas succeeded inextending its control tomuchof Libya's territory>Theshiftingpolitical context in theArabworldcouldchange theLibyansituation

LibyaStalematebetweenSarrajandHaftar

> GDP growth (%)

2020*2019*20182017

343340.930.5

> GDP ($bn)

6417.8 -0.03-19

> Population: 6.8 million> GDP per capita: $5,019> Life expectancy: 72.1> Adult literacy: ND> Inflation: 4.2%> Human development index(out of 189 countries): 108

> Foreign direct investment: ND> Last change of leader: 2016

*Estim

ationOctob

er2019


COUNTRY PROFILES / NORTH AFRICAAtlanticOcean

SENEGAL

MALI

MOROCCO

ALGERIA

NOUAKCHOTTMAUR ITAN IA

300 km

Nouadhibou

In 2019, for the first time in their country’s history,Mauritanians watched an elected president hand over toanelectedpresident.On23June,MohamedOuldGhazouaniwas declared the winner of the presidential race with52.01% of the vote. The announcement of Ghazouani’scandidacy inMarch cut short claims that his predecessorand close friend Mohamed Ould Abdel Aziz would runfor a third term, which the constitution prohibited – andopened the way for change.

Ghazouani, a retired general, cautiously took up hisnew place away from the military barracks. This formerchief of defence staff and defenceminister had previously dealt onlywith security issues, so people areeager to see what he will do on theissues he campaigned on: education,the economy and social justice.

He wants to improve relations be-tweenpoliticalpartiesandhas reachedout to the opposition, whose leaderschallenged the fairnessofhis election.He has yet to outline how he will ad-dress theopposition’smanycomplaintsabout Mauritania’s governance.

Anti-slavery activist Biram DahObeidi,who came second in the elec-tion, has established himself as thenew leaderof theopposition.He takesover fromthemoderate Islamistsof theTawassulparty.Abeidsaysheiswillingto negotiatewith the government if itwill legalisebannedoppositionpartiesand level the playing field.

Friendship in the balanceThe polls were a wipeout for other opposition leaderssuch as Mohamed Ould Maouloud and Ahmed OuldDaddah,who received only 2.5%of the vote.Meanwhile,Messaoud Ould Boulkheir switched sides and is nowworking with the government.

Analysts are watching to see if Ghazouani asserts hisown authority through a breakwith his friend and formerpresidentAbdelAziz.The twomen are very close and thisrelationship ismost likely to continue, barring surprises.Abdel Aziz himself has not revealed his ambitions, only

saying that he will remain close to power. Ghazouaniwants to maintain the previous government’s stronganti-terrorism policies, which have kept the country freeof terrorist attacks for the past 10 years.

Mauritania’s economic indicators are strong, despitesuccessivegovernmentshaving failed todeliveronpromisesof diversification. Ironore is oneof the country’s top trad-itional exports, and the gold sector based around Tasiasthas been booming since 2016. Canadian miner Kinrosshas plans to expand its mine there and is in talks with thegovernment about it. Recently, agriculture, construction

and telecoms have been performingwell. The country is considering thelaunch of a national stock exchangeat some point in 2020.

Huge gas findOil and gas are expected to broadenthe country’s economic base some-what, but keep it tethered to naturalresources.US-basedKosmosEnergyannouncedahugegas findat itsOrca-1 well in October, saying it expectsto be able to deliver 50trn cubic feetof gas from the field – that is biggerthan the major Zohr gas field dis-covered in Egypt. Another block,the Grand-Tortue field, is locatedoffshore Mauritania and Senegal. Itis being developed by a consortiumledbyBPand is not expected tobeginproduction for several years.

President Ghazouani will have totackle the abyss caused by the enor-

mous debts of the national mining company, the SociétéNationale Industrielle etMinière (SNIM).The governmenthas been implementing reforms and cutting its spendingsince the downturn in iron ore prices in 2014. But that didnot stop debt levels from hitting 80% of gross domesticproduct in 2018. SNIM has not successfully managedthe boom and bust of the iron ore sector andmademanyopaque investments in recent years. On 5 September,Ghazounani began by appointing former financeministerMoctarOuldDjay as head of SNIM in the hope of turninga new page for the majority state-owned firm.

>Thenewpresident represents continuitybut is reachingout to theopposition>The ironore sector is hurting, butgoldandgasoffergrowthopportunities

MauritaniaMilitarymaintainsoutsizedinfluence

> GDP growth (%)

2020*2019*20182017

5.915.655.234.92

> GDP ($bn)

3 3.5

5.86.6



*Estim

ationOctob

er2019



AtlanticOcean

RabatCasablanca

MALI

MAURITANIA

CANARYISLES(Spain)

ALGERIA

SPAINPORTUGAL

MOROCCO

400 km

Marrakech

Morocco’smonarchyandmanageddemocracyareworkingon addressing inequalities and finding new developmentmodels for the years ahead. The government is due toestablish a commission “focused on meeting citizens’needs” in 2020 that could lead to a wave of large-scalereforms. The popular Hirak protests in the Rif and the2011 social movements are a reminder of the inequalitiesthat the Moroccan system has fostered.

Legislative elections are planned for 2021. The currentgovernment is led by the Islamists of thePartide laJusticeet duDévéloppement and Prime Minister Saad Eddine ElOthmani. But it is growing weakerafter seven years in power, now gov-erningwith awide coalition and rivenwith infighting.NizarBaraka and theopposition party Istiqlal are gearingup for the campaign by calling for adeeper democratisation.

The government is launching newprogrammes to strengthen the ruralmiddle class. Itwill bebuilt up throughthe transition to private ownership ofcollective irrigated land. The start ofsuchoperations in tworegions,HaouzandGharb,was announcedwith greatfanfare in June 2019.

Peugeot boost for jobsVocational training is tobe thepriorityof the government planning docu-ment that will replace the IndustrialAcceleration Plan, which expires in2020. As part of that plan, the auto-motive industry has made a majorqualitative leap forward. In June 2019, theFrench companyPeugeotopenedanewsite inKenitra, creating 19,000directjobs.Morocco has become the continent’s leadingmanu-facturer and this sector is the country’s largest exporter.

Tomake the economymore attractive to investors, theIMFwantsMorocco to liberalise its exchange rateandallowthe dirham to float. Abdellatif Jouahri, the governor ofBank Al-Maghrib, is opposed to any brusque moves andis instead taking small and slow steps in that direction.

But the workforce remains engaged in simple tasks.Increasing employment as well as added value requires

intense training efforts. The numbers are worrying: sixmillion Moroccans aged 15 to 24 are outside the schoolsystem and have no employment. The government alsopromises to create a single database for social pro-grammes, which will help the administration be moreeffective in targeting assistance.

The end of 2019 was marked by the arrest and incar-ceration, then release by royal pardon, of a young jour-nalist, Hajar Raïssouni, for having had an abortion. Thecase will have a direct impact on the important issue ofcriminal policy reform.The draft lawwas created in 2015

but deputies have not yet submitted itto a vote. Civil society is putting thepressure on by calling for change.

Reaching out to West AfricaIn the years ahead, Rabatwill launchnew lobbying efforts in Africa.Moroccan bosses and senior offi-cials see the continent’s markets asan important growthdriver to supportthe economy. For example, MarocTelecom is nowpresent in 10Africancountries, andmost recently launchedits activities in Chad in March 2019.

Infrastructure investments areunder way, particularly in Tangierand Casablanca. The latter is set tobecome a regional financial hub andits new districts and business centresshould expand in 2020. Rabat plansto spend about $8bn on projects tolink the country to the West Africansub-region. One goal is to connect

themarkets of Abidjan andDakar toTangierMed,whichhas become the largest port in theMediterranean after theopening of its second platform in June 2019.

Some major problems are struggling to get on to thenational agenda: at the end of 2019, the Economic, Socialand Environmental Council sounded an alarm bell onceagain about the overexploitation of water resources.

In terms of diplomacy, there is little change in sight forWestern Sahara.ThePolisarioFront leaders are lobbyingtheUN for the promised referendumon independence andawait the appointment of a new special envoy.

>Rabat is focusingonvocational trainingand thedevelopmentofa ruralmiddleclass>Political partiesarebeginning toprepare for legislativeelections in2021

MoroccoTheking’sthething

> GDP growth (%)

2020*2019*20182017

124.5119118.5109.7

> GDP ($bn)

4.22.9

3.62.6



*Estim

ationOctob

er2019



Red Sea

ETHIOPIA

EGYPT

CHAD

CAR SOUTHSUDAN

ERITREA

SAUDIARABIA

KHARTOUM

SUDAN

Port-Sudan

LIBYA400 km

PrimeMinisterAbdallaHamdok’s transitional governmententers 2020with a long list ofmajor challengeson the roadto holding democratic elections in 2022. The period sincethe downfall of authoritarian leader Omar al-Bashir hasbeen tense, withmilitary leadersworried that theywouldlose their influence and privilege under the new civilianteam. The governing Forces of Freedom and Changeopposition coalition, a driving force in the protests thatbrought downBashir, has a vast agenda including endingthe country’s civil conflicts, stablising the ailing economy,reforming the constitution and establishing a fair andindependent judiciary.

TheHamdokadministration is seek-ing an end to the armed struggle inDarfur. It has provided some conces-sions for talks to startwith rebel leaderAbdelWahid al-Nour. One of Nour’smajor demands is the dissolutionof the Rapid Support Forces, led byLieutenantGeneralMohamedHamdanDagalo “Hemedti”, who sits on thegovernment’s sovereignty council.The military worries that its budget–which isahugeportionof thenationalbudget –will be cut if the governmentis able to bring peace to the country.

US terrorism listThere has been progress in talkswithAbdel Azziz Al-Hilu, leader of theSudan People’s LiberationArmy thatis based in theNubaMountains.Alsoon the security front, the governmenthasnegotiated thegradualwithdrawalof Sudanese troops from the Saudi-backed fighting inYemen. The new government also wants to improve tieswith South Sudan, with a new oil transit deal and discus-sions about the control ofAbyei on the cards once there isa newgovernment in Juba.TheKhartoumgovernment hasstopped providing support to rebel leader Riek Machar,who is due to become South Sudan’s vice-president in atransitional government.

The US government has not said when it could removeSudan from its list of states that sponsor terrorism. BothLieutenantGeneral Abdel FattahAl-Burhan andHemedti

are accused of committing crimes in Darfur. Hemedtibenefits from an immunity deal that was put in place toavoidpotential disruptions to thegovernment’s transitionalplan.There are tensions between the twomilitary leaders,withBurhan ratinghis chances for a run for thepresidency.

Reliant on donationsThe government’s finances are in a mess after years ofmismanagement.The InternationalMonetaryFund (IMF)is predicting that the economywill shrink or slowly growuntil at least 2024,with inflation in the high double digits.

The new administration cannotgain access to credit or loans fromthe IMF and World Bank because ofKhartoum’s arrears.Hamdok and thefinance minister Ibrahim Al-Badawiare, however, not keen on the struc-tural adjustment policies that the IMFprefers.Thegovernment’s total debt isestimated at $62bn, and internation-al debt relief is on the agenda. Thegovernment hopes to see progress onthat front in 2020. In the meantime,the government is largely reliant ondonations from friendly countries tofund its national budget for 2020. Ithas plans to reform fuel and breadsubsidies in the year ahead.

Hamdok and Badawi are focusingon the agriculture sector. They wantthe Saudi Arabian government todevelop 1m acres of land in easternSudanasagreed inadealwithBashir’sgovernment in 2015. Likewise, the

government will seek to ensure that the Gulf countriesfollow through with promised investments of $8bn.

With much of Sudan’s oil going to South Sudan whenit seceded in 2011, gold mining remains a crucial sourceof foreign exchange. The country produced 93tn in 2018,down from 107tn in 2017, and officialsworry thatmuch ofSudan’s production is from artisanal sources and eventu-ally smuggled outside of the country.Many internationalinvestors arewaiting it out until the local business climateimproves. An economic boost will come from Egypt in2020, as Sudan begins to import 300MW of electricity.

>Thegovernmenthasmanyobstacles toovercome inorder toholdelections in2022>The IMF ispredictingyearsofeconomicproblemsdue toSudan’s lowrevenueandhighdebt

SudanTransitionaltriumphsandtroubles

> GDP growth (%)

2020*2019*20182017

33.630.834.245.9

> GDP ($bn)

1.6

-2.2 -1.5-2.6



*Estim

ationOctob

er2019



MediterraneanSeaALGERIA

LIBYA

TUNIS

TUN IS IA

Sfax

Sousse

150 km

> GDP growth (%)

2020*2019*20182017

39.6138.73

39.8939.81

> GDP ($bn)

1.8

2.4 2.4

1.5

> Population: 11.7 million> GDP per capita: $3,287> Life expectancy: 75.9> Adult literacy: 79> Inflation: 6.6%> Human development index(out of 189 countries): 95


*Estim

ationOctob

er2019

After a turbulent 2019, which was mostly focused onlegislative and presidential elections after the death ofPresident Béji Caïd Essebsi, Tunisia has experienced atotal upheaval of its political scene. Independent can-didate and law professor Kaïs Saïed swept to victory inthe October presidential election, and the Islamist partyEnnahda, led by Rached Ghannouchi, became the larg-est force in the fractured national assembly. Saïed won72% of the vote, with a big share of the youth vote. Hiscampaign focused on issues like education and fightingcorruption, but he has yet to lay out his governmentprogramme –which he says hewantsto develop in consultation with thepeople of Tunisia.

Forming a new government andnaming a new prime minister re-mained big challenges as TheAfricaReportwent to press. Ennahda tookjust 52 out of 217 national assem-bly seats. Qalb Tounes, the partyof imprisoned media chief NabilKaroui, is the second-largest partyin parliament, with 38. It support-ed Ghannouchi’s successful runfor the speaker of parliament butthe two have not agreed to form agovernment. Ghannounchi previ-ously said that he would not workwith the “corrupt” Karoui. Many ofTunisia’s traditional political partiesrefused to work with the Islamistsand pointed to Ennahda’s and QalbTounes’s cooperation as an echo ofthe unstable troika government ofopposed parties in 2011. The previous administrationwas hamstrung by political infighting, and this one isstarting off on a weaker foot.

Rebooting a stagnant economyThe economy remains amajor challenge for the eventualnew government. In the absence of structural reforms,which were due to be implemented after the revolutionof 2011, Tunisia’s economy has been stagnant. Thereare some signs of progress, however. The country’sremoval in October 2019 from the Financial Action

Task Force’s blacklist of countries with high exposureto money laundering and terrorist financing gives thegovernment a boost. The slide in the value of the dinarhalted in 2019 due to a record year for cereal and oliveproduction, but economic growth remains meagre. Thegovernment is battling to cut the big civil service wageand reduce mounting debt, which is due to peak at 89%of GDP in 2020. The country will reach the end of itscurrent IMF programme in 2020, and the internationalfinancial institution has regularly voiced its complaintsabout the slowness and incompleteness of reforms.

Tourists returnThe fragmented new national as-sembly is yet to agree on nationalpriorities to support the economy.Ennahda supports the ideaof a liberaleconomy based upon private-sectoractivity. But the presidency prefersa government-led strategy and islooking to turn around state-runcompanies, especially those in thephosphate sector, which has failed toreturn to 2010 levels of production. Inthe year ahead, the government willalso be studying how to improve itssystem of subsidies for staple goodsand energy, which are sapping thenational budget.

There are some promising areaswithin theTunisian economy. In 2018,a record 8.3 million tourists visitedthe country, generating $1.4bn inrevenue. The growth trend was also

set to continue into 2019 as fears of terrorist attacks fadefrom travellers’minds.However, the authorities continueto worry about reintegrating returned Tunisian fightersfrom conflicts in the Middle East.

Also, the start-up of the Nawara 2 gas field shouldcover 10% of national demand and make it possible tocut down on imports from Algeria, reducing the pres-sure on energy costs. But the emergence of nationalistpoliticians is also likely to affect relations with the EU,while discussions on the Deep and Comprehensive FreeTrade Agreement have been suspended.

>Thenewpresidentand thedividednational assemblyhaveyet to findaway towork together>Structural economic reformsareneededasdebt levels increase

TunisiaSaïedtriestoturnthingsaround


LAST WORD

It has been almost two years since formerpresident Jacob Zuma vacated office kickingand screaming, in the metaphorical sense,but trouble continues to stalk South Africa’sstate-owned enterprises (SOEs). In fact,things have been getting progressivelyworse.Government guarantees and bailouts are stillthe norm for SOEs.

South Africa has more than 200 SOEs inall three spheres of government, accordingto data from the University of the WesternCape’s Dullah Omar Institute. These rangefrommunicipal water boards and provincialgambling boards to the likes ofEskom,Deneland South African Airways (SAA).

So – if you fix the SOEs, you fix the econ-omy, and President Cyril Ramaphosa’s ‘newdawn’ could be visible. The capture of SOEsunder the Zuma administrationwas facilitat-ed through the appointment of pliableministers and boards. This wasespecially apparent atDenel, SAA,Eskom and Transnet.

When the new administrationappointed new boards to the afore-mentioned SOEs and others, therewashope that things would turn around.

Not so. Instead, Denel, SAA and Eskomwere all handedmultibillion-rand finan-cial lifelines during finance minister

FIX THE SOEs,FIX SOUTHAFRICA

TitoMboweni’smedium-term budget policystatement.Contrast thiswith the government’scall for fiscal discipline because SouthAfricais running huge deficits and has developedan over-reliance on borrowing.

It is for those reasons, among others, thatthe initial ‘Ramaphoria’ has given way toheightened scrutiny about the quality of theboards and executive teams appointed in theaftermath of Zuma’s departure.

Anoverridingsentiment starting to gaintraction is that,much like the boards appoint-ed during Zuma’s time, the boards underthe current administration lack an essentialingredient to run SOEs: technical expertise.

South Africa cannot afford this situation.The bulk of the government’s contingentliabilities consist of SOE debt. SOEs arenot making money; they are bleeding it.Something has to give.

In early November, the office of the audi-tor general released its audits of SOEs. Theoutcomeswere described as the “worst ever”,and auditor general KimiMakwetu called forgreater accountability.

Denelmade the cut for theworst-performingSOEs. SAA did not make the list, but onlybecause it has not filed its financial statementsfor two consecutive financial years, and so noaudit was even possible. One wonders whathorrors lurk in SAA’s numbers.

All this gives rise to a growing realisationthat the current institutional architecture – thelegal framework, howappointments aremadeandwho accounts to whom –might lie at theheart of the dysfunction.

It is not all gloomy. The Companies andIntellectual Property Commission’s (CIPC’s)case against former SAA chairwoman andZuma deployee DuduMyeni is progressing,and should serve as a warning shot of what’sto come for errant SOEdirectors.Regulatorssay she misled the finance minister overthe SAA’s botchedAirbus deal.

XOLISA PHILLIPSouth Africa correspondent, The Africa Report

RIKOBES

T/STOCK

.ADOBE.C

OM

everywhere you go

TBW

A\H

UN

T\LA

SCA

RIS

9232

73

Together, we createemployment.Across the continent, over 5 million Africans have a jobselling MTN airtime and MoMo services.When you can reach out to the most isolated people amongst you, and connect them fromvillage to village, from nation to nation, and from there to the world, you go. When you can usetechnology to teach, where books can’t reach, we all go. When 30 million people who could neverbank before, now have a bank in their pocket, they go.

Every day, MTN is inspired by the unstoppable spirit of the people we serve.

That’s why,

We’re good together.

2020-01-01 the africa report

Documents