TAR111

N° 111 • APRIL-MAY-JUNE 2020

www.theafricareport.com

THE AFRICA REPORT

9-10 March 2020

ABIDJAN

Exclusive ranking of the TOP 50 Africans shaking up the status quo

Disruptors INTERVIEW

QUARTERLY EDITION • N° 111 • APRIL - MAY - JUNE 2020

Chimamanda Ngozi Adichie “So many problems trace back to colonial policy” THE SAHEL SQUEEZE Insurgents’ quick march across West Africa Angola’s President João Lourenço is breaking the mould

REBOOTING CAPITALISM From rent seeking to business building

JEUNE AFRIQUE MEDIA GROUP INTERNATIONAL EDITION 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

EDITORIAL

CAPITAL

CONTRADICTIONS

Amid the trade wars, populism and economic nationalism, capitalism is under fire. But which capitalism is that? For the hard-nosed commercial titans of the roaring 2020s, the dictum by Milton Friedman that “there is one and only one social responsibility of business: to use its resources and to engage in activities designed to increase its profits” will remain the lodestar.

There is no question that this is the zeitgeist in Donald Trump’s dealmaking administration, and it is echoed in Brazil and India. Some critics of capitalism find the ‘business of business is business’ approach more honest than a series of corporate social responsibility projects launched by communications companies.

For economist Léonce Ndikumana, who runs a commission on the reform of corporate taxation, the problem of capitalism in Africa is not a laser-like focus on profits but a failure of companies to comply with fair rules on tax and royalties.

Ndikumana and his fellow researcher, James Boyce, calculate that capital flight from 30 African countries between 1970 and 2017 totalled $1.4trn. That is almost three times the stock of debt the countries accumulated and 1.5 times the foreign aid they received.

Those figures suggests that capitalism – or at

least its regulatory institutions – are failing in Africa, at great human cost.

Is the revival of interest in ‘stakeholder capitalism’ – a kind of anti-Friedmanite formula that focuses more on customers, employees, suppliers – relevant to Africa? Given its recent endorsement by the US Business Roundtable, it does reflect local and international pressures on corporate behaviour.

How that plays out on the ground will vary according to the industry and the region.

Employees want more transparency and accountability in corporate finances. Activist groups demand respect for human rights and environmental standards in the supply chain.

For example, conditions in the DRC, which supplies over half the world’s cobalt for electric car batteries, are under intense scrutiny.

Globally, investments motivated by environmental, social and governance concerns are up to $30trn, about a third of the funds under professional management. Pension funds, the biggest clients for asset managers in Africa and elsewhere, are using environmental, social and governance criteria. Analysts say they are producing higher equity returns than the old shareholder capitalist model.

Perhaps the biggest factor driving new thinking on economic systems has been the decline of trust in business and banking.

That, together with deepening inequality in most countries, informs critiques of a rigged economic system, whether in Joburg, London, Nairobi or New York.

The spiralling climate crisis along with the un-costed global effects of robotics and artificial intelligence are undermining faith in established models of trade and market capitalism. At the least, the promoters of new ideas and strategies will have to fight it out in a new global arena. Now social and economic policies will have to start changing as fast as our technologies.

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE E 2020

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#111 / April-May-June 2020

MAKSIM BLINOV/SPUTNIK; PHILL MAGAKOE/AFP; OSTYN AIMZ; MICHELE SPATARI/AFP; REX/SIPA; RAMZI BOUDINA/REUTERS/VINCENT FOURNIER/JA

Porunt quo qui dolor eptusa voluptaEtur

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CHAIRMAN AND FOUNDER BÉCHIR BEN YAHMED PUBLISHER DANIELLE BEN YAHMED publisher@theafricareport.com EXECUTIVE PUBLISHER YVES BIYAH EDITOR IN CHIEF PATRICK SMITH MANAGING EDITOR NICHOLAS NORBROOK editorial@theafricareport.com PRODUCTION EDITOR OHENEBA AMA NTI OSEI To find the full editorial team, all our correspondents, and much more on our new digital platform, please visit: www.theafricareport.com SALES A JUSTE TITRE Tel: +33 (0)9 70 75 81 77 contact-ajt-sifija@ajustetitres.fr

77 US/AFRICA INSIGHT The Trump administration is ramping up its trade and diplomacy on the continent

86 LOGISTICS DOSSIER Will Tanzania learn from Kenya’s and Ethiopia’s troubles in an East African rush to build new railroads?

FEATURES 32 PROFILE / Cyril and the Gang of Four In South Africa, President Cyril Ramaphosa’s reform efforts are being blocked by four ANC stalwarts with their own agenda and political ambitions

94 TOP 50 DISRUPTORS Politicians, athletes, journalists, business barons and techies...

In vastly different ways 50 Africans are transforming the continent by changing the rules of the game, some for better, others for worse.

112 LAGOS STATE FOCUS Nigeria’s economic capital is a megapolis with mega needs.

40 EXPOSÉ / President Lourenço breaks the mould As Angola’s oil-fired economy burns out, President Lourenço leads a drive to claw back more than $100bn stolen over the past two decades

48 DEBATE / Reboot African capitalism?

A sideways look at the continent’s economic options as the private sector gathers in Abidjan for the Africa CEO Forum on March 9-10

60 WIDE ANGLE / The Sahel squeeze As Islamist and other rebels wreak havok in the Sahel, states and their international backers are scrambling to mount their defences

70 CULTURE / Chimamanda Ngozi Adichie The Nigerian author expresses her views on subjects close to her heart: from feminism and identity to colonialism and leadership on the African continent

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THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

122 INSURANCE DOSSIER How to consolidate and regulate the insurance sector?

130 LAST WORD Mobolaji Adeoye of Consonance Investment Managers on investing in creativity

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MNANGAGWA’S FAILURES

I struggle to understand why Zimbabwe is still struggling to improve its hospital services after ousting Robert Mugabe three years ago.

There are shortages of resources in hospitals to protect and promote health delivery services effectively. Doctors are sometimes using bare hands in hospitals, which is unsafe and can spread diseases. Shortages of both doctors and nurses due to economic instability are affecting the smooth operation of public hospitals. There are no ambulances.

Major surgeries are being cancelled due to electricity rationing. Some hospitals are washing linen in a river. President Emmerson Mnangagwa has failed Zimbabweans, the region – which is busy picking up pieces of migrants – and the entire world, which expected him to immediately halt Mugabe’s three decades of economic decay.

Tapiwa Muskwe London, United Kingdom

RAMAPHOSA’S LEADERSHIP TEST

N° 109 • OCTOBER-NOVEMBER-DECEMBER 2019

www.theafricareport.com

AFRICAN BANKS get ready for disruption

SOUTH AFRICA Cyril Ramaphosa’s inner circle MUSEVENI INTERVIEW ‘Uganda needs East Africa for prosperity’ Aliko Dangote

INVESTIGATION The darker side of mobile banking

Pioneering a new Nigeria

ETHIOPIA Abiy tries to keep it together

32-PAGE SPECIAL

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

JEUNE AFRIQUE MEDIA GROUP INTERNATIONAL EDITION

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 • Morocco 45 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

HEALTH AND OTHER RISKS

The online opinion piece on 6 February 2020 by Eric Olander regarding Ethiopian Airlines’ decision to continue flying between Africa and China, despite the Coronavirus, implied that the choice is binary and politically influenced.

With Coronavirus hitting scales unseen since the Ebola pandemic over 2013-2016, the reality,

One of the most profound political changes taking place in South Africa is that those political activists who have risen to leadership roles, including the highest office in the land, belong to the category known as ‘inziles’.

They, as your article said (TAR 109 ‘Team Ramaphosa’), belong to a generation that were shaped and schooled in the UDF. After the economic growth under then president Thabo Mbeki, they had to watch as state capture was allowed to mushroom under President Jacob Zuma. Prosecutions must follow once the Zondo Commission has completed its work. This will be a real test of Ramaphosa’s leadership. I am confident he will show South Africa and the world that he is the real deal.

Aushumato Khoi, Cape Town, South Africa

as many governments and businesses across the world are discovering, is that no response is black and white. Yes, Ethiopian are taking a risk with their brand – and potentially with lives – by continuing to fly to China. On the other hand, the UN and World Health Organisation have repeatedly, as with all pandemics, made it clear that travel restrictions are not recommended.

Indeed, If we look back to Ebola as a striking example, Ethiopian were one of the few airlines that continued to fly to so-called risky destinations, taking “extraordinary precautions” while relying on the governments and airports that it flew to, with international support, to manage the risks. In hindsight, that was the right decision.

Hannah Wanjie Ryder, Beijing, China

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THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

@africaceoforum #ACF2020

8th edition

The foremost international meeting for African CEOs, bankers and investors 9 & 10 March 2020

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COFFEE WITH THE AFRICA REPORT

MOHAMMED

DEWJI

QUESTIONS OF VALUE The Tanzanian billionaire talks to The Africa Report about how his kidnapping has changed him, impact investing and the challenges of manufacturing on the continent

By NICHOLAS NORBROOK We are at an upmarket hotel in central London, a stone’s throw from Hyde Park. Tanzanian businessman Mohammed Dewji is prompt, smiling and wearing his trademark chunky glasses. We grab a table and an (excellent) espresso. No one disagrees about the comfortable global dominance of East African arabica. So far, so normal.

Dewji started life on the kitchen table: his mother caught short, the hospital in the rural area of Singida too far. His early years did not, he says, isolate him from the realities of rural life in Tanzania. After a stay in the US, first with the ambition to be a golf pro, then studying theology, then working on Wall Street, he returned home to join MeTL, the trading company launched by his grandmother and run by his father.

“My dad’s business was doing well, but I didn’t realise that it wasn’t managed very well,” he says, after paying due deference to his family.

This turned him into a micromanager, but was also the making of

10

him. He had to rethink the corporate governance of the entire enterprise!

Initially, he was just aiming at introducing a manufacturing division. But once he began, he realised he needed MeTL’s distribution network. “And then I realised there was inefficiency in that distribution, and reporting was not right, was not timely, so I had to now go back and redraw structures within MeTL.” Pretty soon he was everywhere. “I’ve worked in the port offloading rice vessels. I worked in the warehouses, all over,” recalls Dewji. With the business growing fast, he then created a decentralised structure, giving a lot

‘You don’t have to choose between doing good and doing business’

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

of power to CEOs and CFOs of his group companies, and running board meetings for each every month.

In this ascent, Dewji still found time to be a member of parliament for Singida and to start bankrolling the local football team, Simba SC, all the while slowly building up the business, travelling to South Africa to get access to funds.

By 2017, he was already receiving multiple accolades, having grown the business he inherited into the leading manufacturer in the region. He and his coworkers targeted the customers of the big multinationals – such as Unilever – beating competitors on price and adapting products to local tastes.

Revenue in the tens of millions grew to $1.5bn. So far, so normal, in the ascent of Africa’s youngest billionaire.

Until it all changed. On 11 October 2018, he was kidnapped as he was arriving at a hotel gym. Nine days later, he was released in the early morning, dumped in the middle of Dar es Salaam. And, naturally, the experience changed him. “I had a life-threatening experience, and what happened was that of course I thought a lot after that.

In the past, I was working many, many hours and I blanked out on my children and my family. I’m looking forward to playing a lot of golf with my two boys, playing a bigger part with my daughter who I kind of blanked out on for 12 years of my life. She’s 16 years old. She’s going to go to university in two years.” Beyond the desire to focus on what was truly important to him, he also lost some of his appetite for the game. “I lost that motivation to a certain extent in terms of increasing the business,” says Dewji.

His desire to give back is focused first on his staff. He intends, for example, to sell his Mo-branded products to them at wholesale pricing – a discount of 20% – to allow them to sell them and make a bigger profit. He also wants to act as an angel investor for motorbike taxi drivers, carrying the financing costs of importing a bike,

spreading repayments back over a year and allowing the taxi entrepreneur to ride off into the sunset with a valuable asset. “It doesn’t have to be either/or,” he says. “You don’t have to choose between doing good and doing business.”

But despite his pronouncements, and the impact investing, it doesn’t seem like he is slowing down. Dewji’s conglomerate is opening a detergent factory in Kenya. It is refurbishing a drinks

manufacturing plant in Uganda. He has recently travelled to Madagascar to discuss the opening of a plant with President Andry Rajoelina.

Manufacturing remains a full-­ contact sport on the continent – despite the best efforts of some governments to help local businesses grow. Dewji ascribes the collapse of the textile industries across Africa to under-­reporting at customs to evade tariffs. “You don’t tell me [Tanzanian cotton] goes to China, they spin it and weave it, make clothing and then freight it back, pay 50% [import] tax and can sell it cheaper than me – it’s not possible, right?”

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Dewji sees a clear role for government and would love to see better consultation.

But he argues that the Tanzanian administration is still suspicious of business. “Sometimes there’s this feeling [from ministers] that in Tanzania the entrepreneur will always try to pull his side and always wants to maximise profits.”

‘I have no political ambition, it’s been clear. I stood down from being an MP’

General Park Chung-hee, the South Korean dictator whose ‘developmental state’ model catapulted his country out of poverty, and into the OECD rich club, had his own way of persuading entrepreneurs to move from the ‘easy’ money of trading to investing in manufacturing. Before coming to a mutually beneficial compromise with the country’s ‘chaebol’ conglomerates, Park was famous for throwing leading businesspeople in jail.

Does Dewji think that he himself was being sent a message in his brief kidnapping? President John Magufuli has been notably strong-armed in his approach to businesses both local and foreign. Plenty have wondered about Dewji’s release, and a coherent account of the kidnapping has not been delivered by the Tanzanian authorities.

Dewji dismisses the rumours, saying: “I don’t think it had anything to do with the President because we were in parliament together. I have a lot of respect for him when he was a minister, and I’ve never crossed swords with him in any way.”

After all, Dewji says, he has no political ambitions either and is looking forward to returning to Singida after the 2020 elections are over. “I have no political ambition, it’s been clear. I stood down from being an MP [...] We were having a live Facebook interview and people asked: ‘Do you want to run for president in 2025?’ [...] I’ve never even thought about it or dreamed about it, and I’m not interested.

I’m an entrepreneur.”

N° 111 / APRIL-MAY-JUNE 2020

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OPINION

CREATING THE ECO IS A REAL TEST FOR WEST AFRICAN VISION VINCENT FOURNIER/JA

KA AKO NUBUKPO Ecoonomist and former minister of long-term strategy of Togo

The African franc zone has regained its freedom of speech. Some are just realising that the CFA franc is incompatible with the economic emergence of francophone Africa, and the announcement on 21 December in Abidjan of the imminent end of the CFA franc and its replacement by the eco has certainly loosened up thinking.

Beyond the sniping from various finance ministers in the region, we need a positive regional narrative, carried by political leaders – like the Casablanca group formed around Kwame Nkrumah and Gamal Abdel Nasser in the 1960s.

We have everything needed to head towards federalism. The populations are integrated, the Union Economique et Monétaire Ouest Africaine (UEMOA) countries are already collectively negotiating their external trade at

12

the World Trade Organisation, and the Economic Community of West African States (ECOWAS) militarily intervened in Liberia and Sierra Leone.

Today, Chadian soldiers are fighting against jihadists in Mali. From the moment where you accept to die for a neighbour, you create the groundwork for a real federation.

Why not investigate the idea of a UEMOA confederation, which would happen through the sharing of certain services, including customs? The commission could finance initiatives, such as the right for a student to enrol in any regional university, paying the same amount as nationals.

Today, the budget of the UEMOA community is 0.3% of its GDP, which is a third of that of the European Union (EU). Let us change the charter of the union to allow the commission to raise money on the regional bond market, anchoring this borrowing on the exchange reserves that we hold in the French treasury.

Yet, while it is important to continue putting pressure on the CFA franc, it is also essential to propose the possible

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

outlines of the transition to the eco, whose (re)birth was announced at an ECOWAS summit on 29 June 2019.

In this regard, there are four predominant options to unite the 15 member states invited to the eco banquet.

1. The eco, a simple avatar of the CFA franc, anticipates the expansion of UEMOA to include the ECOWAS economies, which also largely export raw agricultural products. This is the model which seems to have inspired the Abidjan announcement, based on the respect of nominal convergence criteria and a strong affinity for a fixed exchange-rate regime against the euro.

The centralisation of foreign reserves is fundamental here, and it is the main outcome of the history of the CFA franc. It conveys a high level of political solidarity between the UEMOA states. Similarly, the question of the external guarantee, as ensured

by France in the institutional context of the CFA franc, ensures the system’s stability. If we keep the principle of centralising reserves, but refocus their management in another institutional framework, monetary sovereignty would go from France to UEMOA then to ECOWAS. There is also the question of parity: much work was done on the subject a few years ago to propose a flexible or more easily adjusted exchange-rate system, one based on an index calculated from a basket of currencies. The decision made in Abidjan to maintain a fixed exchange rate with the euro as a transitional measure is a real sticking point between the supporters of a flexible currency (many heads of state at the ECOWAS summit) and those of an eco-CFA (Côte d’Ivoire and Senegal).

2. The second option is that of a ‘real’ eco based on real convergence, that of GDP per capita and not on the respect of nominal convergence criteria like the eco-CFA. In this case, ECOWAS economies would be obliged to converge to the top three – Cabo

ADRIA FRUITOS FOR JA

the Nigerian leadership, which was stung by the francophone initiative of an “eco-CFA” .

Verde, Nigeria and Ghana. The eco would have a flexible exchange regime regulated by an inflation-targeting framework. The convergence dynamic would be quite different and UEMOA states would lose their status as ‘good convergence performers’ and therefore driving forces of the eco’s implementation process.

But is Nigeria, the heavyweight of ECOWAS (70% of the GDP and 52% of the population) ready to take on the role of “locomotive” in the eco zone? Why would it agree to be the lender of last resort in ECOWAS, a role that it declined when the West African Monetary Zone (WAMZ) was set up in 2002? Furthermore, why would it abandon its currency now, when tensions within Nigeria are being resolved by money printing?

We have already seen Buhari call for a postponement of the eco.

3. A third option is the eco-naira.

A return to the original philosophy of WAMZ. In April 2000 in Accra, six countries – Gambia, Ghana, Guinea, Liberia, Nigeria, Sierra Leone – announced their intention to create a

The CFA franc is incompatible with the economic emergence of francophone Africa

second monetary zone in West Africa with the eco as currency. The project planned a future merger of this second monetary zone with the UEMOA, so that the borders of the monetary union would be those of ECOWAS. In April 2002, WAMZ was established, and each country committed to maintaining its exchange rate within a 15% fluctuation range in relation to the dollar. But nothing happened until the June 2019 ECOWAS summit announcing the creation of the eco in 2020 and the communiqué of the WAMZ council of ministers of 16 January 2020, accusing the UEMOA of violating the spirit of the eco. All this could lead to the creation of an “eco-naira”, under

4. A fourth option could be a common but non-single eco currency.

While a single currency is necessarily a common currency, the opposite is not always true. The history of the European Payments Union, prior to the European common market, illustrates the capacity for a “lighter” agreement to strengthen the integration process and thus prepare the conditions for more intense integration.

In 1960, Senegalese economist Daniel Cabou, who later became the first secretary general of the Banque Centrale des États de l’Afrique de l’Ouest, suggested borrowing the European model and setting up an “African Payments Union”, an idea that was taken up again nine years later

by Egyptian economist Samir Amin.

How can we reinterpret this model for the eco? By imagining that the countries not yet able to join the single currency could affiliate themselves to it through exchange-rate agreements.

Mechanisms of symmetrical reduction of trade imbalances could help to put surpluses back into circulation within the ECOWAS zone, by encouraging the development of specialisations between economies – the key to increasing intra-zone trade. This is one of the major economic and political goals of the integration process.

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

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THE MIDDLE EAST’S BEST BANK FOR

CORPORATE RESPONSIBILITY

COURTESY ATHI-PATRA RUGA AND WHATIFTHEWORLD

Quarter

The Africa Report’s exclusive guide to the quarter ahead features key events from the worlds of politics, business and culture. Find out more about what to expect in April, May & June. Learn more about Turkey’s stakes in Africa (page 16), gain some perspective on Burundi’s presidential election (page 20 ), and see how Ramaphosa’s detractors can voice a case that he shouldn’t be allowed to serve a full term (page 30).

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

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Q2

/ APRIL

TURKEY/AFRICA

TURKISH AIRLINES DESTINATIONS IN AFRICA

Summitry and taking sides

DESTINATIONS

The Ankara government is taking its African engagement more seriously on all fronts. It is a frontline defender of the beleaguered 1 1 Tripoli government in Libya, and Morocco is organising an Africa summit 3 2 in April and a trade forum in Algeria October in order to grab more influence, as officials from Moscow to London show 4 Cabo greater interest in Verde the continent. The 1 conference follows Senegal 1 1 Burkina previous attempts Faso to build up ties, with a 1 summit in Ankara in 2008 1 Sierra 1 and another in Malabo in 1 Leone

Ghana

1 1 Tunisia

2009

2019

1

1 Total

13

1 4

2

52

Egypt

Libya

Countries 35 1

Niger

1

1 1

Chad

1 Eritrea

Sudan

1 Djibouti 1 3

1

Nigeria

2 Cameroon

Benin

2014. Trade minister Ruhsar Côte d’Ivoire Eq. Guinea 1 Pekcan was looking for Gabon 1 deals in Morocco and Nigeria in January, and Prime Minister Recep Tayyip Erdogan visited Algeria, Gambia and Senegal in the same month. Turkey’s diplomats promise that Africa will be a major focus for the rest of 2020.

1 1

South Sudan

Ethiopia

Uganda 1

1 Congo

1 1

1 Somalia

Kenya

Rwanda 1

1

Seychelles

2

Tanzania

1

TURKEY’S EXPORTS TO AFRICA ($bn) North Africa

1

Zambia

Sub-Saharan Africa

Mauritius

Mozambique 1

1

Madagascar

5

2009

10

11

12

13

14

15

16

SHAMEEL JOOSUB The CEO of South Africa’s Vodacom haas plans to be the first major telecoms p provider to launch 5G services, despite government delays in awarding the new spectrum. p

ROTIMI AMAECHI Nigeria’s transport minister does not like delays, but the Lagos-Ibadan railway project will not be ready by its April 2020 deadline he warned in January, blaming the Chinese constructor for the delays.

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THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

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ALL RIGHTS RESERVED; KALPESH LATHIGRA FOR TAR

0

2 3

South Africa 2018

‘Fuller consideration will show the vast fraud perpetrated on Nigeria, and P&ID’s attempt to use the English courts as a vehicle of that fraud’ NIGERIA’S LAWYERS on a troublesome gas contract with P&ID oil and gas company that could cost the government $9.6bn.

SOURCES: TRT WORLD’ ANDALOU AGENCY;TURKISH STATISTICAL INSTITUTE

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GHANA

OYARIFA MALL

Let’s hang at the mall

OIL

Looking for an uptick in interest

Accra is in the midst of a building boom as headline figures continue to rise and analysts hype the potential of the economy. But is a bubble on the way? As the city expanded northward, the Oyarifa Mall will be the newest addition to the capital’s big shopping centres. However, some retailers are calling into question the speed of the mall-led growth. Tenants at Accra Mall went on a short strike in October 2019 to protest at the high rents charged. Meanwhile, the West Hills Mall lost several South African retailers late last year.

APPOINTMENTS

ANGOLA Oil production has been declining due to the country’s ageing historical fields and the lack of recent investment with oil prices in a trough. From a high of about 2m barrels per day (bpd), production dropped to 1.4m bpd in late 2019. > Under the leadership of reformist President João Lourenço, the government plans to award up to 10 licences in the Benguela and Namibe basins in April 2020. > The government has ambitious plans for bids. Another one for onshore blocks is expected in 2020, with additional bidding rounds every year or two until 2025.

ALISTAIR MOKOENA Mokoena, who arrives from the Ogilvy advertising firm, will become the new head of Google South Africa in April.

LIBERIA Liberia is a frontier exploration territory, with an initial discovery

by African Petroleum in 2012.

‘This hunger crisis is on a scale we’ve not seen before and the evidence shows it’s going to get worse’ LOLA CASTRO The WFP regional director warned that a record 45 million Southern Africans will need food aid.

150

The Malawi-based African Drone and Data Academy, a UNICEF-sponsored partnership between Virginia Tech and Malawi University of Science and Technology, plans to train around 150 young Africans in piloting and building unmanned drones by 2021. It accepted its first cohort in January and will take on a new group of students in April. The next phase includes a master’s degree in drone tech.

PETER NDEGWA The former Diageo Continental Europe boss takes up his post as Safaricom CEO, replacing the late Bob Collymore.

MILES MURPHY Murphy is the new CEO of the South Africa office of advertising and digital marketing firm Wunderman Thompson.

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

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AMY WOLLAND/AS SWEET AS IMAGES; ALL RIGHTS RESERVED; MARTIN VORSTER

> The government is set to announce the launch of a bidding round for nine blocks in the Harper Basin in April to see if there is major investor interest in an area that has yet to prove its commercial viability.

/ APRIL

‘We have developed a schedule that is extremely ambitious, and our hope is to have finished the remaining commercial agreements

by April 2020’

MEMOIR The Pulitzer Prize-nominated fiction writer and creative-writing professor Laila Lalami is making her major non-fiction debut in April with Conditional Citizens, a book about the life of immigrants in the contemporary United States.

With immigration a bugbear for President Donald Trump, her contribution is a timely demonstration of the ambivalent welcome many people receive as non-white immigrants in the ‘melting pot’.

PETER MULIISA The Uganda National Oil Company’s head of legal affairs is optimistic about a resolution of conflicts over a joint venture that have stopped oil developments in their tracks.

16.6%

South African electricity utility Eskom went to court in February to defend its proposal to hike tariffs by 16.6% in April, as 171,000 South Africans voiced their opposition.

Cameroon finally gets the glory of hosting a tournament, a year after its stadiums were not ready for the Africa Nations Cup. The Africa Nations Championship, from 4-25 April, features only those who play on African teams.

‘As the CWU, we find the presentation by the company ridiculous’ AUBREY TSHABALALA The South African Communications Workers Union leader announced mass action over Telkom’s plan to sack 3,000 people.

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ART

Colours of inspiration Ghana’s Gallery 1957 is gearing up for a big West African celebration and exhibition featuring the works of Malian textile artist Abdoulaye Konaté. He is enjoying his time in the spotlight as international interest in African art hits new heights. His artwork was the inaugural exhibit at the new Blain | Southern gallery in New York’s Chelsea neighbourhood last year. Explaining his abstract textile work, he told curator Koyo Kouoh: “For me, these abstract works are like moments of quiet in contrast to the social issues that I also bring up, […] and they also give me time to think about social issues.” Some of his pieces have dealt with themes like the impact of wars across the globe. He takes inspiration for colours from the clothing styles of Mali’s ethnic groups, and the bright reds of his tapestry Touareg Rouge No 1. reference traditional clothing but also the bloody conflict in the northern part of the country.

Konaté’s star is on the rise. One of his tapestries also featured in the popular ‘Prête-moi Ton Rêve’ rotating exhibition that toured the various corners of the continent. He has since been commissioned by the Zeitz Museum of Contemporary Art Africa in Cape Town to create a centrepiece for its atrium.

PETER MALLET/COURTESY THE ARTIST AND BLAIN SOUTHERN

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President Nkurunziza, right, with the CNDD-FDD candidate Ndayishimiye

STRINGER /AFP

Q2

BURUNDI

Nkurunziza bows out Surprising many, Burundi’s President Pierre Nkurunziza announced that he will not run in the May 2020 presidential election, giving the conflict-prone country a chance to turn a page. The governing Conseil National pour la Défense de la Démocratie-Forces de Défense de la Démocratie (CNDD-FDD) has chosen party stalwart General Évariste Ndayishimiye as its candidate. Due to the CNDD-FDD’s control of the security forces and its own militia, the opposition led by former rebel Agathon Rwasa is not expected to make much headway in polls.

Owing his ascent to his closeness to Nkurunziza and his military activities during the civil war, Ndayishimiye has managed to float above the fray and to avoid the personality conflicts and corruption charges that have scuppered many careers. But like with other such managed transitions – recent ones in Angola, Mauritania

The Nigerian transport-focused start-up, which is looking to revolutionise the freight and delivery business, is going on a hiring spree and intends to add 30 employees by May 2020 to bring its total to 50.

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and the Democratic Republic of Congo spring to mind – the population is left wondering how long close ties between leaders and their successors will last.

In public statements, Ndayishimiye seems to take less of a hard line than many of those at the heart of the Nkurunziza universe. That could mean that negotiations with Western donors and the political opposition could be on the cards. But that will only be known if and when Ndayishimiye takes over and enjoys his full powers as president. Having been at the heart of the security apparatus, he knows who are the hardest of the hardliners, the ones who benefit from demonising donors, opposition groups and civil society. With Burundi’s economy in the doldrums and investors avoiding the country because of its instability, the pressure will be on the country’s new leader to find solutions – and fast.

‘The objective [...] is to create, imagine and develop projects together.’

MAMBA SOUARE The makesense West Africa co-founder is excited about city_lab, a project to solve urban problems.

KSh30m The Kenyan government is investing millions of shillings ($300,000) to revive the Muluanda cotton ginnery in the Kenya town of Busia. It was shut during the period of the Nairobi government’s structural adjustment programmes. Several other plants will also get new investment as the government seeks to boost harvests and local processing.

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30,000bpd Capacity of a new modular refinery being set up in Nigeria by Waltersmith Petroman and due to be operational in May

SECURITY Conflict in the Sahel is rising on the international agenda. There are several initiatives to boost national and regional responses to jihadist threats. The EU Training Mission in Mali costs about $22m to train local troops, and its mandate is set to expire in May. France committed to adding 600 troops to its forces in the region and is lobbying other powers to step up.

‘This space is the next step to our support for developers across the continent [...] to continue our journey with the African start-up and developer communities’

BOOKS HBO Max is releasing a television adaption of the 2013 novel Americanah starring Lupita Nyong’o

ART

JULIET EHIMUAN The Nigeria country manager announced the opening of the Google Developers Space in Lagos and its call for applicants to start work.

Destination Dakar The 14th edition of the groundbreaking Dak’Art Biennale will take place this year from 28 May to 28 June in Dakar, Senegal. It is a must-visit of the African art circuit in 2020 to see what directions the contemporary African art scene is exploring. Led by Théodore Monod African Art Museum curator El Hadji Malick Ndiaye, the event has the theme ‘I’Ndaffa/Forger/Out of the Fire’. Ndiaye says that the works presented will highlight the transformative power of fire and the forge. The event will include artwork from rising stars in the art world and special guest exhibitions from Lou Mo, Salma Lahlou and Morad Montazami.

SECURITY As AU chair, South Africa is making peace and security priorities. A ‘Silencing the Guns’ summit in May will take on conflicts:

Libya

The AU is struggling to get its voice heard on the matter due to the involvement of major world powers in the battle between Khalifa Haftar and the Tripoli government.

South Sudan

SYLVAIN CHERKAOUI FOR JA

Sanctions against those working to block peace deals from moving forward have not worked, so Pretoria will be looking for new strategies to get Salva Kiir and Riek Machar to work together.

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The Nigerian payments company has plans for an initial public offering that could take place in May. It could be one of the continent’s first native unicorns, a company valued at more than $1bn.

Q2

/ MAY EXHIBITION

COURTESY ATHI-PATRA RUGA AND WHATIFTHEWORLD

Contemporary circuit

On 6 May, South Africa’s former president Jacob Zuma will be back on trial – after a recess – for the multibillion-dollar arms deal signed in 1999. His rumoured ill health could, however, slow down the case’s progress.

AMISOM The African peacekeeping troops are authorised in Somalia until May 2020 and dropped their numbers to 19,000 in February as part of a handover plan to local forces in 2021. Many analysts argue that the timeline is unrealistic because of the continued strength of the Al-Shabaab Islamist rebel group.

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ETHIOPIA

Environmental upgrade As if pursuing peace initiatives and reforming the country’s economy and politics weren’t demanding enough, Ethiopia’s prime minister Abiy Ahmed has made the environment one of his key priorities. Along with last year’s tree-planting blitz, there has been a major drive to make life in Addis Ababa more pleasant. The Beautifying Sheger campaign started in 2019 and covers a three-year period. China Communications Construction is due to complete a 12km section of improvements out of the 56km targeted by the project. The works will establish green spaces along parts of the capital’s river network.

Future Beautifying Sheger elements include the building of a new park and a centre focused on science and technology. The Chinese cooperation on this important project for Abiy also came with the softening of terms for Addis’ $4bn loan to finance the construction of a railway link to neighbouring Djibouti.

TWITTER PRIME MINISTER

R30bn

Art galleries working with African artists from across the world will get their chance to shine in New York at the 1-54 Contemporary African Art Fair from 8-10 May. Founded by Morocco’s Touria El Glaoui, the fair was in Marrakech in February of this year – showcasing the works of DRC painter Houston Maludi and Morocco’s videographer Mohamed El Baz – and will be in London in October 2020.

Q2

/ JUNE

$3.5bn

State-run Ethiopian Sugar Corporation has struggled to deliver projects on time

Egypt’s goal for rail project investment from June 2020 to June 2022. It has also purchased 100 new engines from a US supplier to be delivered in June to update the rolling stock.

‘Hopefully it will be passed into law

by June.’

TIMIPRE SYLVA

ETHIOPIA

ALFREDO BINI/COSMOS

Nigeria’s minister of state for petroleum says the long-delayed Petroleum Industry Bill could pass in 2020

ART

Marrakech expands its horizons Contemporary art lovers in Marrakech have until 19 July to be dazzled by the artworks of the ‘Have You Seen A Horizon Lately?’ exhibition at the Museum of African Contemporary Art Al Maaden. The museum opened in 2018 and adds to the buzzing art scene in the Moroccan city. Inspired by a Yoko Ono song, the exhibition features artworks like the one below by Japan-born Akira Ikezoe. It also shows works by homegrown talent Amina Benbouchta that question the relationship between people and their environments.

Ethiopia’s state-led economic model produced rapid growth over the past decade, but it has its weaknesses. Poorly run state monopolies can slow the development of entire sectors of the economy, and prime minister Abiy Ahmed has promised to allow for more private competition to boost performance.

Ethiopia’s fast-growing economy and population of about 100 million people make it a major market for investor interest.

All of the privatisations, including railroads and other infrastructure, could help the government to raise $7.5bn. Other successful state-run businesses, like Ethiopian Airlines, are not on the chopping block.

The telecoms sector, controlled by Ethio Telecom, is one of the first targets for liberalisation. The government plans to award two new mobile licences by April, attracting the interest of Safaricom, Vodacom and many of the other big continental players. It is also set to sell a 49% stake in the company. Interim CEO of Safaricom Michael Joseph told reporters: “[Ethiopia is] the biggest prize left in Africa from a telecoms point of view.”

The sugar industry is up next, and some assets of the indebted state-run Ethiopian Sugar Corporation (ESC) could be sold by June. As part of the government’s plans for the country to become a sugar exporter, the ESC will only sell off some of its assets in order to be more profitable and efficient. The ESC has struggled to deliver its expansion projects on time and on budget.

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IMAGE COURTESY OF THE ARTIST AND PROYECTOSULTRAVIOLETAGALLERY

Liberalisation nation

Experience the Progress.

www.liebherr.com info.lex@liebherr.com www.facebook.com/LiebherrConstruction

Q2

/ JUNE KENYA/SOMALIA

Border bothers

SOMALIA Mogadishu Indian Ocean

KENYA

Nairobi

Kenya’s maritime border claim

SOURCE: AFP

Disputed area Somalia’s maritime border claim

400 km

The United Nations International Court of Justice is set to hear the case of the maritime border dispute between Kenya and Somalia. The stakes are high because both countries expect that large oil and gas discoveries will be made in areas off their Indian Ocean coastline which both countries claim. Somalia tried to launch an oil bidding round covering some of those areas last year.

The conflict is even more important because Kenyan troops make up a big contribution to the African forces fighting the Somali Islamist rebels of Al-Shabaab.

RAILWAYS

‘If I were to anticipate the next growth market, it would be Africa.’

HIROYUKI OGAWA The president of Japan’s Komatsu is confident in the construction market and will launch a South Africa plant in June.

EDUARDO SOTERAS/AFP

The construction of Ghana’s Tema-Mpakadan railway line is set for completion in June 2020. It is part of the Ghana-Burkina Faso line that targets boosting regional trade and improving landlocked Burkina Faso’s export options.

ETHIOPIA

Water fight

BOOKS Fresh from the success of her debut novel, the magical realism-infused She Would Be King writer Wayétu Moore takes a personal turn with her memoir due to be released on 2 June.

The upcoming The Dragons, the Giant, the Women tells her story as a refugee from the Liberian civil war.

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About five years behind schedule, the Grand Ethiopian Renaissance Dam should begin producing an initial 720MW in June. The reservoir is gradually filled in the hopes of addressing the concerns of countries downstream on the Nile River, like Egypt and Sudan. The conflict over the waters of the Nile has been mediated by officials from the US and South Africa, but that has not produced a definitive resolution. The signing of a deal that diplomats are on working has been delayed several times, but there are smaller agreements that have been concluded. The governments had suggested that a final deal could be delivered by the end of February.

As The Africa Report went to press, Ethiopia and Egypt were drawing lines in the sand. Ethiopia’s water minister told media: “If there is a single word in the document to be signed that could compromise Ethiopia’s right to use the water, Ethiopia will not sign it.” Cairo fears that during droughts its access to Nile water will be severely limited to keep the dam running.

The new electricity comes at a crucial time for the Addis Ababa government. It has been struggling to provide the power to keep trains running on the Addis-Djibouti rail line.

Q2

‘The current political environment and the changes taking place in Sudan provide a unique opportunity for ending the armed conflict’

AFRICA 2020 France’s President Emmanuel Macron is bringing Africa closer to home through a season of events celebrating the continent, lasting from June until December.

SMAIL CHERGUI

$500m

The African Union peace and security commissioner sees progress in the Darfur peace talks but says that he is not sure that the UN should withdraw its remaining 5,600 peacekeeping troops by the government’s preferred deadline of June 2020.

The Egyptian government plans to issue a round of green bonds

by June to be used to finance projects that will improve the environment.

Red Sea SUDAN

ERITREA

Haramous Bosaso SOUTH SUDAN

ETHIOPIA

SOMALIA Mogadishu SOURCE: SUBCOM

DRC RWANDA BURUNDI

UGANDA

KENYA

Indian Ocean

TANZANIA Mombasa

TELECOMS

Connecting neighbours Internet users in East Africa have something to be happy about. The 4,854km DARE1 submarine cable is set to improve connectivity, linking up Kenya, Somalia, Somaliland and Djibouti. The project is being built by SubCom and backed by Telkom Kenya, Djibouti Telecom and Somtel. It is due to be operational in June, and will be Kenya’s fifth international submarine connection.

The wider DARE project includes planned links with Tanzania and Yemen.

Djibouti Telecom’s Mohamed Assoweh Bouh told reporters the system will be vital for “easing congestion across existing systems, promoting competition and supplying much-needed capacity to a rapidly expanding region.”

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GIANLUIGI GUERCIA/AFP

/ JUNE

SOUTH AFRICA

Squeeze plays Under pressure from a poorly performing economy and a governing party that is not wholly behind his reformist drive, South Africa’s President Cyril Ramaphosa faces a tough mid-2020.

The African National Congress’ (ANC) National General Council (NGC), a mid-point meeting to discuss policy between party congresses, is shaping up to be a bruising one. It is due to be held in June and will give the president’s detractors a chance to make their case that he should not be able to serve out a full term.

Analysts predict that government debt will soon be downgraded by Moody’s so that it will have a junk rating, and team Ramaphosa is struggling to come up with quick and efficient ways to turn around troubled parastatals like Eskom and South African Airways. Proposed job cuts and privatisations are getting the ANC in trouble with its leftist allies in the tripartite alliance, the South African Communist Party and the Congress of South African Trade Unions.

Ructions within the ANC hierarchy are worrying Ramaphosa too. ANC secretary general Ace Magashule, the subject of corruption investigations, is one of Ramaphosa’s biggest threats. He is looking to work with deputy president David Mabuza and ANC treasurer general Paul Mashatile to destabilise the government team. The NGC will offer them the opportunity to lobby for support at the local and regional levels.

Magashule has done his best to play down the public tensions, telling reporters in December 2019: “There has been a lot of speculation, especially in the media, that certain people – Ramaphosa, or the secretary-general – will be removed in next year’s NGC. This won’t be the case; it’s just the wish of the media.”

RAFAEL RICOY FOR TAR

Features

32 PROFILE Cyril and the Gang of Four

40 EXPOSE Laurenço breaks the mould

48 DEBATE Reboot African capitalism?

As if the reawakening the South African economy was not challenging enough, President Cyril Ramaphosa now has a bevy of ANC stalwarts blocking his reforms

The drive to bring back the money looted from Angola by the Dos Santos family is unprecedented in recent history. With the economy currently in freefall, can it succeed?

Which arguments are the most compelling, from the push to create a new wave of entrepreneurs to an environment that doesn’t immediately sink them?

60 WIDE ANGLE The Sahel squeeze As rebels continue their march, who masters the nexus of religion, poverty, state failure and politicisation that could turn Mali or Burkina Faso into the next Afghanistan?

70 CULTURE Chimamanda Ngozi Adichie From Lagos, the award-winning author gives her views about identity, feminism and politics.

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

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FEATURES /

Warning parliament that slow economic growth is killing jobs and building up unsustainable debt, President Cyril Ramaphosa finds his reform efforts are being blocked by four ANC stalwarts with their own agenda and political ambitions

Cyril and the PROFILE

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Gang of Four THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

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BRENTON GEACH/GALLO IMAGES VIA GETTY IMAGES

By PATRICK SMITH in Johannesburg

FEATURES / PROFILE / Cyril and the Gang of Four

WHO ARE THE GANG OF FOUR?

A

As the sun set against the majestic Table Mountain, South Africa’s political and business elite congregated in Cape Town for the opening of parliament on 13 February. The economy is stuttering, in the longest downturn since 1945.

It was President Cyril Ramaphosa’s chance to reset the compass for a government that has increasingly looked like it was losing its way. His speech at parliament’s opening was more confessional than a call to action: “We cannot continue along this path. Nor can we afford to stand still.”

Ramaphosa has been struggling to boost investor confidence as the electricity utility Eskom starts a new season of power cuts, the government bails out more ailing state firms and politicians in the governing African National Congress (ANC) fight over jobs.

Youth disaffection is mounting, driven by joblessness and inequality. Only 20% of new voters bothered to register on the electoral roll before last year’s elections, reported Afrobarometer. Disenchanted by the state of the country, most had little faith that politicians would be able to fix it.

Moeletsi Mbeki, deputy chairman of the South African Institute of International Affairs, says the country should learn from the Arab Spring revolt that swept North Africa in 2011: “Those kind of red flags are starting to appear.

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Lindiwe Sisulu South Africa may be a republic, but Lindiwe Sisulu is ANC royalty – and rarely lets her comrades forget it. The daughter of legendary anti-apartheid activists Albertina and Walter Sisulu, Lindiwe was a student at the exclusive Waterford School in Swaziland and then joined the ANC’s military wing, uMkhonto we Sizwe.

After a master's of philosophy at the UK’s University of York, she worked as an assistant to Jacob Zuma in the ANC’s intelligence organisation. She held several ministerial posts, including defence and foreign affairs, and is currently minister of human settlements.

She ran for the ANC presidency in 2017 and would like to try again. Some analysts say she is the best-placed female potential candidate.

I don’t think we are faced with a crisis yet on the scale of Tunisia […] but we have the dynamics, the potential to move that way.”

Two years ago, Ramaphosa had taken the reins after senior ANC officials pushed Jacob Zuma from power. They called for a new national coalition – beyond partisan interests – to fix the economy after more than a decade of corrosive patronage politics and to take the country forward.

Counter-reformation

An initial wave of support for Ramaphosa has ebbed as the economy has slowed. Attempts to hold corrupt officials to account are also being derailed. Some of that can be put down to the ‘Fightback group’, a loose alliance of ANC politicians who back Zuma and oppose Ramaphosa’s plans for house cleaning.

For now, this group has four of the top six positions in the ANC hierarchy. They control almost half of its national executive committee, a majority of its members of parliament and most of its important committees. They can block new laws and reforms. They have the ability to countermand Ramaphosa’s appointment to the boards of the all-important state-owned enterprises (see table page 37) – once the driving force of South Africa’s economy and now the cause of its debilitating indebtedness.

These are politicians who back Zuma and oppose reform

Ace Magashule

David Mabuza

A veteran activist and grassroots organiser, Mashatile was first president of the Alexandra (township) Youth Congress, also known as ‘the Alex mafia’. After the ANC and South African Communist party were unbanned, Mashatile re-established their networks in Gauteng, the biggest of the country’s nine provinces.

After being elected to the provincial assembly, he was chosen to be its leader. Then, after the incumbent premier, Mbhazima Shilowa, resigned in 2008 in protest at the ANC’s recall of then president Thabo Mbeki, Mashatile took over the province. A year later he was appointed minister of arts and culture, and in 2017 was elected ANC treasurer general, a key position in the party.

As premier of the Free State from 2009-2018, Ace Magashule was a stalwart supporter of then president Jacob Zuma and a close associate of his business backers, the Guptas. Magashule’s son Tshepiso worked for the Guptas. It is that relationship and Magashule’s role in funding the Estina Dairy project in the province that has drawn in the National Prosecuting Authority, which has been analysing files and testimony in the case. Like Mabuza, Magashule denies all wrongdoing and is also a savvy political operator. He also climbed onto the national stage and was elected secretary general of the ANC, although his many foes insist the vote was fixed. One of his main goals is to avoid prosecution.

Rejoicing in his nickname, ‘the cat’ – because of his political survival skills – David Mabuza has been accused of grand corruption, procurement fraud and killing his political opponents. Rarely giving interviews, Mabuza took the trouble to strenuously deny those claims, replayed at length in a coruscating profile in the New York Times. Despite these claims that Mpumalanga Province was one of the worst-run under his premiership, he almost doubled ANC membership there. That won him a place on the national stage and eventually the deputy presidency of the ANC and the country. He switched from the Zuma camp to the Ramaphosa camp in 2018, so is not seen by the President’s closest as a long-term ally.

“It’s time for Ramaphosa to pick up the pace and take bold actions,” says Oyama Mabandla, executive chairman of African Phoenix Investments. “Timidity on reforms will embolden the Fightback.” Mabandla concedes that Ramaphosa has inherited a nightmare economy but he wants a more muscular approach: “He should use the bully pulpit, lay down a common set of goals […], argue that most people got no benefit from populism.”

Across the parliamentary benches, Ramaphosa is hemmed in by his own party, according to William Gumede, a professor at Wits University. “In government, the ANC has seen new power groups grow up based on provinces, cities and local interest groups rather than the old organisational factions,” says Gumede.

That complicates any attempt to push through reforms. “The ANC is now divided into two almost separate and contesting parties – the ANC of Ramaphosa and that of former president Zuma,” says Gumede.

He continues: “Deputy president David Mabuza has been positioning himself as a third interest group – it might sway a decision if there is a stalemate.” It was Mabuza’s backing that ensured Ramaphosa won the leadership elections in 2017, by a slim margin. Somehow the two men have to work together.

Seen as the leader of the ‘Gang of Four’ challenging Ramaphosa (see profiles above), Mabuza has a chequered past as premier of Mpumalanga Province. He has made common cause with Ace Magashule, former premier of the Free State and now ANC secretary general. That gives Magashule powers over the branches and elections in the provinces – control of the party machinery.

Premier league

‘Timidity on reforms will embolden the Fightback’

Working alongside Magashule at the ANC’s Luthuli House headquarters in Johannesburg is Paul Mashatile, the party’s treasurer general and a former premier of Gauteng, the country’s biggest province. These three former provincial bosses typify the new politics in South Africa, particularly within the ANC. With strong networks in their provinces, they have jumped onto the national stage to expand their support. But it is difficult to pin them down on policies or ideas, beyond a populist opposition to cuts in the public sector.

Human settlements minister Lindiwe Sisulu is the fourth and most improbable member of the Gang. Having made a failed bid for the ANC presidency in 2017, she was passed over by Ramaphosa for the deputy presidency. From the fabled Sisulu clan, Lindiwe is a lifelong ANC loyalist and has held several

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

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MIKHAIL JAPARIDZE/TASS VIA GETTY IMAGES; FELIX DLANGAMANDLA/NETWERK24/GALLO IMAGES/GETTY IMAGES; THULANI MBELE/SOWETAN/GALLO IMAGES/GETTY IMAGES; WALDO SWIEGERS/BLOOMBERG VIA GETTY IMAGES

Paul Mashatile

FEATURES / PROFILE / Cyril and the Gang of Four

top ministerial jobs, but she lacked the block support of a province that Mabuza could bring to bear on the leadership election.

The reality is, according to Gumede, that none of the Gang of Four could run a leadership challenge by themselves. “They will work together to push for specific policies – such as nationalisation of the Reserve Bank, or expropriation of land without compensation, or National Health Insurance – pushing Ramaphosa into a corner.”

Leadership struggle ahead?

Another ANC-watcher compared the Gang of Four’s tactics to a real-estate magnate who wants to get tenants out of a building on a valuable piece of land: “He will smash all the windows, turn off the light and water, make life unbearable until all the occupants quit – it’s a waiting game and one that Ramaphosa’s opponents think they can win.”

According to Mmusi Maimane, the former leader of the Democratic Alliance, there is a serious risk that Ramaphosa’s opponents could exploit the bad economic conditions to push him out. “I think the ANC is heading

It’s a waiting game that Ramaphosa’s opponents think they can win

for another leadership struggle, and I would watch Lindiwe Sisulu as a candidate who could come through.”

At the beginning of the year, Ramaphosa came under heavy attack from the Gang of Four, with Mabuza calling for the sacking of state enterprises minister Pravin Gordhan for failing to reform the sector. It was a sharp reminder that Mabuza felt little loyalty to Ramaphosa, whose leadership was the target of the demand.

At a midnight mass in Cape Town, Archbishop Thabo Makgoba called for South Africa to make 2020 “the year of the orange jumpsuit” – meaning that the authorities should speed up the prosecution (and jailing) of those officials colluding with the ‘state capture’ project, which destroyed state companies at an estimated cost of more than R1trn ($66.7bn).

“People are impatient, and that is understandable,” Bridgette Radebe, a mining magnate and Ramaphosa’s sister-in-law, tells The Africa Report, “but the conclusions must come from a judge working through the process.”

Ramaphosa also has to bring the ANC back together, she adds, but dismissed challenges to

MOELETSI MBEKI Depputy chairperson, Souuth African Institute for International Affairs

The 2 February 1990 speech by then president FW de Klerk, with the unbanning of the African National Congress (ANC) and Pan Africanist Congress (PAC), and the release of Nelson Mandela, has been acknowledged

36

as epoch-making in South Africa and the rest of the world, including by the Nobel committee. But can we say today that the constitutional transformation it triggered was a victory for all South Africans?

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

ALL RIGHTS RESERVED

SOUTH AFRICA NEEDS A NEW CHARTER

Among the clear winners were the African nationalists of the ANC. Last October finance minister Tito Mboweni revealed that there are more than 29,000 politicians and public servants who today earn more than R1m ($66,900) a year, and the South African public service is the highest paid in the world.

Another outcome of the 1990s constitutional transformation was the entry of black managers and professionals into South Africa’s private and public sectors, and their numbers are still growing.

On the other hand, South Africa’s social structure today tells us who has not benefited from our constitutional transformation. Half of the economically active population is unemployed, constituting a permanent underclass.

This means no one knows what income this group earns, if any. Who

SOURCE: DEVELOPMENT POLICY RESEARCH UNIT, UNIVERSITY OF CAPE TOWN

STATE-OWNED ENTERPRISES: THE CRISIS AT THE HEART OF SOUTH AFRICA’S ECONOMY Power

Transport and freight

Airline

Telecommunications

Arms manufacturer

Unsustainable debts and in emergency restructuring under new CEO

Reforms and investigations under new CEO

In voluntary business rescue

Planning to cut 3,000 jobs as its market share falls

In restructuring and struggling to pay salaries

Capital spending

Capital spending

$1.43bn

$995.1m

$579.5m

Capital spending

Capital spending

Revenue

Revenue

Revenue

Revenue

Revenue

$4.45bn

Capital spending

$4.4m

$11.8bn

$4.34bn

$2.1bn

$2.7bn

$539.4m

% of govt revenue

% of govt revenue

% of govt revenue

% of govt revenue

% of govt revenue

13.1%

4.8%

2.2%

3.1%

–0.6%

*Capital spending and revenue figures for South Africa’s biggest state-owned enterprises 2016-2017

him with a smile: “The President’s position is like an actor or a singer […] some people will like him and if they don’t like him, let’s hope it will make him try harder to win them over.”

People should look more closely at parliament, adds Radebe, and its failure to hold government and business to account. “For example, the mining charter is very clear on parliament’s responsibilities on […] beneficiation and tax complicity and illicit flows […] but the MPs don’t act. They don’t question the mining companies about compliance.”

is to blame for this dysfunctional economic system that generates poverty and unemployment? Is it 25 years of ANC democratic rule? Is it 46 years of National Party apartheid rule before 1994? Is it a consequence of the 2 February 1990 speech?

The South African economy was recreated by the British colonial government during the last quarter of the 19th century to enable it and the colonial mining companies to exploit the newly discovered mineral wealth.

In negotiations between the Afrikaner elite and the British, and between the Afrikaner elite and African nationalists, all parties agreed not to change the economic system created by the British. What they negotiated was how South Africa’s small elites, now black and white, could benefit most from the status quo.

What needs to be done to bring about a constitutional transformation that benefits all South Africans?

For Martin Kingston, deputy chair of Business Unity South Africa, it is the pace of tough economic reforms that are critical: “We’re worried about the passage of time. We’re in a dynamic set of circumstances where we’re eroding goodwill as a country. Our brand is being damaged by what people see. Our ability to attract investment is being undermined.”

Because of this, argues Kingston, the road to recovery will stretch out much longer “to get to the levels of 4-5% growth, which is what we need. […] That’s not going to happen

‘Half of the economically active people are unemployed’

- Electoral reforms to introduce mixed constituency and proportional representation at national and provincial levels; - An overhaul and redesign of the education, health care, transport and electrical power supply systems; - A halving of the cost of public services, including those of traditional leaders, and the transformation of the public service into one that serves the people, rather than living off the people;

- A renegotiation of economic relations with the SADC and COMESA; - A revision of South Africa’s trade and investment relations with nonAfrican partners; - Restructuring the South African economy to be more investment driven rather than consumption and finance driven, and a phasing out of Black Economic Empowerment programme’s demands on foreign investors; - Devising a business development plan to grow employment and phase out exports of mineral ores, as well as to promote investment in former homelands; and - Rebuilding the South African army by, among other things, reintroducing national military service.

Epoch-making interventions such as De Klerk’s 2 February 1990 speech have both intended and unintended consequences, some of which take decades to unfold

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

37

in the next five years. There are too many constraints that have to be addressed.”

Mabandla argues that Ramaphosa’s strategy of focusing on fixing institutions, rather than fighting fires within the ANC, may work, but only in the short-term. “Much will depend on some quick wins […] like successful prosecutions which will restore people’s confidence.

Cyril was born under a lucky star, so he might just pull it off.”

Tax attack

In early February, chief prosecutor Shamila Batohi announced that criminal charges against Ivan Pillay’s group of top investigators at the South African Revenue Service (SARS) – an affair that became known as the ‘rogue unit’ – had been dropped. The team was known for its daring raids on smuggling and tax-evasion schemes run by politically connected businesspeople, including Zuma’s son Duduzane.

One of Pillay’s colleagues tells The Africa Report it was a hard-fought victory, and that SARS was regaining its effectiveness. The prosecution authority, which has to outsource many of its most politically sensitive investigations, is in a far more parlous state. “The question is not whether Ramaphosa can fix this,” says the investigator, “ it’s whether we, in terms of civil society and mass action, can fix things as we did when we fought apartheid. [...] It’s that kind of struggle now.”

Does he think they will win? He chuckles and quotes Italian Marxist Antonio Gramsci: “The old is dying and the new cannot be born.

So the bigger risk is not victory by the corrupt but a kind of social stagnation that they block the positive changes we try to make and life gets worse even if they can’t return to power.”

RAJESH JANTILAL/AFP

FEATURES / PROFILE / Cyril and the Gang of Four

ZINGISWA LOSI Pressident, Congress of South African Trade Unions

Ramaphosa is trying to find remedies Who’s to blame for South Africa’s political and economic crisis?

We've said to the ANC, you cannot afford divisions. The crisis that we’re faced with in the state-owned entities has been looming for the past 10 years and we’re trying to correct that. That is why we said we don’t want populists in the ANC or anywhere else. Instead, people who had responsibility must tell us how we got here – to provide solutions to the crisis that South Africa is facing. You can’t say President Cyril Ramaphosa has failed when he is trying to find remedies.

What’s your view of private businesses investing in state companies?

We don’t object to private-public partnership. We understand the state now may not be in a position to put the money in. If you want private equity then fine – but ensure that the state becomes the majority shareholder.

How do you deal with the ethics of trade unionists running private companies?

We don’t have an ethics committee in Cosatu, but we’ve said to trade unions they must have internal processes that ensure they have people that will be ears and eyes of workers on the boards of these companies.

We hope that workers have learnt a lesson [from seeing] leaders in certain trade unions that have advanced their own businesses and it has led to a collapse of a trade union movement. If you don’t hold leaders to account, then of course you’re going to have dictators.

What can unions do about xenophobic violence?

People are migrating and coming to South Africa because of [our] progressive legislation that attracts migrant labour. South Africa owes it to its own people to ensure that we have a clean government and a capable state, but also South Africa owes it to the region and to the entire continent to lead by example.

MESSAGE

EXPERT ADVICE

Africa Trade Services Unit (TSU) Email: DIT.Africa@fco.gov.uk

UK efforts to support more business links with Africa post UK-AIS tional Trade (DIT) Africa Network

What are the major outcomes out of the UK Government’s recently held UK-Africa Investment

a specialist in African corporate

Summit?

data management and analytics, to

The UK-Africa Investment Summit

launch the "DIT Africa Investment

in London on 20 January cele-

DealRoom’”.

brated the long-standing business

The DealRoom will bring together,

has partnered with Asoko Insight,

relationships between Africa and

through an online platform, bankable

the UK; and set out the UK’s clear

projects from African companies

intent to strengthen our trade and

looking for investment and UK-based

investment partnerships, based on

investors looking for opportunities to

shared values and mutual interest

invest in Africa.

to deliver more investment, jobs and

You can access the DealRoom plat-

growth for us all.

On top of the existing £36bn of trade between Africa and the UK; and the £38.7bn of UK investment in Africa, the UK Government announced over £6.5bn of new commercial deals and billions of pounds in additional investment commitments at the Summit. These deals will create and sustain jobs; build essential infrastructure; and support Africa’s

form at: https://asokoinsight.com/ deals/platforms/dit Now that the UK has officially left the European Union, what does the UK’s trading relationship look like with countries in Africa?

The UK officially left the European Union (EU) on 31 January 2020 and we have now entered into a

transition to cleaner growth.

transition period until the end of

The announcement of an Africa "DealRoom" digital platform was made at the Summit. What is the purpose of this platform and how

the UK will continue to apply the

2020. During this transition period,

Emma Wade-Smith OBE, Her Majesty’s Trade Commissioner for Africa at the UK Department for International Trade

bespoke tariff schedule will apply to goods imported into the UK from 1 January 2021, unless a preferential arrangement applies.

Our key priority has been to ensure we have continuity in the trading arrangements in place with our African partners, to minimise any trade disruption for businesses, exporters and consumers during this transition period. We have also been hard at work to replicate the effects of the current EU Economic Partnership Agreements and Association Agreements with African countries. To date, we have transitioned agreements in Africa covering 14 countries. These are the Southern African Customs Union + Mozambique, which frames £9.7bn

EU’s Common External Tariff (CET)

of trade; the Eastern and Southern

to goods imported from outside

Africa countries of Mauritius, Sey-

the EU, except where a Free Trade

chelles, Madagascar and Zimbabwe;

Agreement or trade preference

and Association Agreements with

As part of the UK Government’s

scheme applies. After the transition

Tunisia and Morocco. We continue

efforts to continue to boost trade

period ends, the UK will be free to

to work hard with partner countries

and investment between Africa and

set its own "Most Favoured Nation"

to transition the remainder of these

the UK, the Department for Interna-

(MFN) applied tariff schedule. This

agreements.

does it work?

FEATURES /

EXPOSÉ

Lourenço breaks the 40

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

As Angola’s oil-fired economy burns out, President Lourenço leads a drive to claw back more than $100bn stolen over the past two decades – this means a clash with the Dos Santos clan and tough questions about the country’s direction

By ZOÉ EISENSTEIN and PATRICK SMITH in Lisbon

MAKSIM BLINOV/SPUTNIK/AFF; MGUEL RIOPA/AFP

mould THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

41

FEATURES / EXPOSÉ / Lourenço breaks the mould

J

JOINING THE DOTS

Sunlight streamed through the tiny window of a cell in Luanda’s maximum security jail.

Beneath it lay a corpse covered by a flimsy sheet while a band of men sat playing cards.

“How can you play cards next to a corpse and the smell and everything?” Rafael Marques, one of Angola’s most celebrated journalists, asked his fellow inmates.

“Oh, it’s your first day – on the third day you’ll be here playing cards with us,” one of them shot back. “And will the corpse still be there?” asked Marques. “No, it will be another one. Every day there’s a new corpse. They just stay here until they get buried,” said another inmate. “And on the third day I sat down with them to play cards. The corpse was just there, next to us,” Marques tells The Africa Report in a macabre account of his arrest and detention at Viana jail back in 1999.

Wandering through the cobbled streets of Lisbon, Marques talks to us about Angola’s hunt for its missing billions. Cutting a dapper figure in a pressed pink shirt and navy blazer, Marques said the stakes are stratospheric.

Although the headlines pit President João Lourenço against the clan of former president José Eduardo dos Santos, the battle lines

42

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

Rafael Marques, multi-award-winning journalist, head of anti-corruption website Maka Angola

‘Every day there’s a new corpse. They just stay here until they get buried’ VIANA JAIL INMATE

are much wider, says Marques. For many, the former first family symbolises what went wrong in Angola. Dos Santos spends much of his time at his villa in Barcelona, having medical treatment, whilst his son José Filomeno faces trial in Luanda and his daughter Isabel is the focus of multiple investigations of malfeasance.

Lourenço wants the return of the more than $100bn reckoned to have been plundered between 2002 and 2017 – of which perhaps about 10% can be linked to the former first family.

This is one of the world’s biggest searches for stolen assets – taking in countries including Portugal, Britain, the United Arab Emirates, Russia, China and also Hong Kong. Earlier attempts in Egypt, Indonesia and Nigeria to claw back resources foundered, derailed by compromised officials or tied up in legal procedure. Lourenço wants to break the mould.

The move comes after major adversity for many Angolans, including Marques. Vilified by regime sycophants, he cut a solitary path, one of a few journalists to join the dots between the brutality of the war and wealth accumulation by the elite via procurement scams and the transfer of state assets overseas. Marques had become an irritant to the regime. With countless enemies – of differing allegiances – he was under surveillance by state security. One morning at 5am, armed police banged on his front door, having occupied the surrounding

AMPE ROGERIO/AFP

area. Bundled into an unmarked car, Marques spent weeks in jail until international pressure on the Dos Santos regime got him released.

These days, Marques is invited to meetings with Lourenço. Last year, he was awarded a medal for services to the nation in a ceremony at the presidential palace. Marques rejects claims that Lourenço’s corruption crusade is about vengeance. “It’s not a selective campaign […] they are going after many different officials and business people.”

Some quick successes for Lourenço could ameliorate the crisis he inherited when he took over in 2017. Angola is in financial meltdown, with inflation and unemployment galloping.

A decree passed in 2018 for the voluntary repatriation of assets has yielded a little over $2bn, barely 2% of the target. Angola’s prosecutors are touring Western capitals, setting up exchanges of financial information, urging regulators to freeze assets. Consultancies, law firms and accountants tied up in successive scandals should also help, Marques says: “It’s time the enablers – who have earned rich fees from these frauds – were held to account.”

‘It’s time the enablers were held to account.’

RAFAEL MARQUES

THE MONEY CHASE Angola Twitter went wild – mostly cheering – when the Lourenço government froze the assets of Isabel dos Santos last December. The courts claimed she and her art-dealer husband Sindika Dokolo had caused more than $1bn of losses to the state. Despite a fortune reckoned at around $2.2bn – many say a gross underestimate – she cultivates a homespun image. An associate recalls meeting Isabel, who was sitting by a pool in flip flops and a bathing suit. Yet ‘The Princess’, as she is known, represents the failures of her father’s four-decade rule.

Public debt (depreciation) Public services Defence and security

SOURCE: OGE 2020

Social protection and housing

60.7% 11.2% 7.5% 5.7%

Education

5.3%

Health and environment

5.1%

Economic matters

4.5%

ANGOLA’S 2020 BUDGET EXPENDITURE

Her frequent social media posts – taking on Lourenço and senior Angolan and Portuguese officials – anger many. She dismissed advice from advisers, friends and even her husband to rein it in. “She’s at the top of the pyramid of what was happening in this place. She’s the highest exponent. She’s as good as it got,” says a top official in Luanda. “And she was visible and extravagant – they got reckless towards the end. So it’s only normal that people want to see her blood.”

Angolan officials are battling with Dos Santos across the world. Last June, Angola signed a $4.1m contract with lobbyist Squire Patton Boggs and are calling for sanctions.

Isabel’s business empire spans several continents, but banks such as Citigroup, Deutsche Bank and Santander will no longer work with her. She has been doing the rounds in Lisbon, desperate to find a lawyer there after Spanish firm Uría Menéndez dropped her. “She thought she was above the law and untouchable – she’s now become literally untouchable – none of the serious firms will go near her,” a legal source in Lisbon explains.

In February, her Portuguese bank accounts were frozen. Angola’s attorney general Hélder Pitta Grós said he will issue an international warrant against Dos Santos if she fails to cooperate. The charges would include: “money laundering, influence peddling, harmful management … forgery of documents … and other economic crimes,” he said.

One allegation centres on Dos Santos using her position as chairwoman of Sonangol, Angola’s state oil conglomerate, to make illicit payments via EuroBic bank in Portugal, in which she was the main shareholder, to companies in Dubai controlled by her friends.

Protesting her innocence, Dos Santos plans to sue journalists behind the #LuandaLeaks reports, based on a cache of 750,000 documents hacked from her empire. The government is guilty of a “concentrated and well-coordinated attack ahead of elections,” Dos Santos told reporters. “Stolen documents have been leaked selectively to give a false impression of my business activities … all my commercial transactions have been approved by lawyers, banks, auditors and regulators.”

Yet those auditing firms have launched their own probes. A top executive resigned from PwC over the affair. Numerous senior officials working for her companies have quit.

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

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FEATURES / EXPOSÉ / Lourenço breaks the mould

Legal battles over the Dos Santos fortune could drag on for years. “You would need the host country to prove that funds are abroad and belong to them,” says Kamal Shah, an asset tracing specialist. “Often countries have never faced this situation before […] where there are political families involved. Generally, the targets are a couple of steps ahead of those that are chasing them because they tend to have the best professional advisers.”

The former head of the UK government’s international corruption unit, Jonathan Benton, says tracing the Dos Santos assets would be an enormous task for anyone. “A case like this is not that simple [for the UK] … it may require a team of twelve working full-time to try and gather the necessary evidence. Valuable resources I don’t believe they have at present.”

PORTUGAL CONNECTIONS “I simply tweeted saying getting loans is one way of laundering money,” explains Ana Gomes, a former member of the European Parliament who is taking on the Angolan and Portuguese elites in the media and in the courts. Those tweets prompted Isabel to sue Gomes for damages to her honour and reputation. Formerly Lisbon’s ambassador to London, Gomes is now an energetic campaigner whose tone is far from diplomatic. “I said in court, you can have the reputation of

44

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

Lisbon, capital of Portugal, an investment focus for the Angolan elite

‘We were caught with our pants down’ PORTUGUESE EXECUTIVE

Mother Teresa of Calcutta or the reputation of Al Capone.” It is no secret whom Gomes thinks Isabel resembles.

The Portuguese landed in Angola more than 400 years ago, brutally colonised the country, and stayed until 1975. Like a dysfunctional family, the countries quarrelled, but their elites were drawn together by mutual interests.

A businessman who welcomed us to his Lisbon boardroom dotted with photographs of politicians, traced relations between Lisbon and Luanda. “Efacec was bankrupt, Isabel saved it. It employs 2,700 families – that makes it a huge employer in the north of Portugal,” he says. “Everybody in Portugal wanted to do business with her. And everybody who does business in Angola is responsible for corruption. Angels are in heaven.”

Now the Dos Santos crisis is roiling Portuguese business where, as an executive put it, “we were caught with our pants down.

There is no way we can justify – legally or morally – the role we played.” On 17 January, three days before the publication of #LuandaLeaks, the court rejected Dos Santos’s libel case against Gomes.

The crisis at EuroBic bank in Portugal, in which Dos Santos had a 42.5% stake until February, shows the collaboration between the two countries’ elites. Under Portugal’s former finance minister Fernando Teixeira dos Santos, the state rescued BPN bank, creating Banco BIC – later called EuroBic. It was then sold to Dos Santos for €40m ($43.3m).

guy [Lourenço] like we were submissive to Dos Santos,” an executive explains.

JM F ALMEIDA/GETTY

INTERNATIONAL IMPLICATIONS

“That’s outrageous because the state – Portuguese taxpayers – had put over €5bn in the bank to save it,” said Gomes. “Then – peek-a-boo – he [Teixeira dos Santos] becomes the CEO of her bank.” After complaints from Gomes and others, Portugal’s central bank is currently scrutinising EuroBic’s compliance on anti-money laundering rules.

Lisbon’s ties with Luanda’s elite have been promoted by successive Portuguese leaders.

Former prime minister José Manuel Barroso’s special relationship with Angola dates back to his role in the 1991 Bicesse peace accords.

Critics accuse Barroso, now chairman of Goldman Sachs, of trying to block investigations into top officials and their business partners in Luanda and Lisbon. “You can see the complicity was very political. This isn’t just Isabel dos Santos and her husband – she was acting as a front woman for her father. A lot of people are implicated here,” says Gomes.

It is unclear how seriously Lisbon’s judiciary will take such dossiers given that many Angolan corruption cases implicate senior Portuguese officials. Gomes says parties from across Portugal’s political spectrum – including her own – have been complicit, with the exception of the Bloco de Esquerda.

Much will depend on Angola’s determination to follow the money, but Portugal’s politicians and business people will protect their interests. It is a delicate balance. “Lisbon is using its support for Angola to ingratiate itself […] We are becoming submissive to this

‘Everybody who does business in Angola is responsible for corruption.

Angels are in heaven.’

BUSINESSMAN IN LISBON

Tales of illicit transfers from state companies, inflated procurement contracts and land grabs in the capital are the tip of a gargantuan iceberg, according to commercial lawyers familiar with the biggest transactions in Angola over the past decade. Many more deals will be scrutinised in the coming months, with Portugal’s judicial police planning raids on local companies suspected of malfeasance.

“The $100m transfer – widely reported – is a minor part of what happened during the Sonangol period under Isabel dos Santos,” a business executive tells us.

A key issue will be the scrutiny of oil companies in Angola – how much tax they pay, who negotiates those payments and with what transparency. Many of Angola’s trading partners also have questions to answer. “Portugal wasn’t the country that helped corrupt Angola the most – that prize goes to China,” says a legal source. “And take the UK, it has benefited enormously from the millions syphoned out of Angola. Just look at the multi-million pound properties Isabel owns there.”

Dos Santos’s husband obtained a stake in the jewellery manufacturing company De Grisogono in what was meant to be an equal partnership with Angola’s state diamond firm Sodiam. But it has emerged that Sodiam paid the lion’s share, with Dokolo making a negligible contribution. De Grisogono filed for bankruptcy in January, which may trigger further investigations into its finances.

Questions are being asked about the Dos Santos clan’s 6% indirect stake in Portuguese oil firm Galp. They paid $75m for a stake now worth about €700m with a loan from Sonangol.

Officials at Galp – which is the second-biggest company on the Lisbon stock exchange – say it is a matter for Sonangol to sort out.

Associates of Dos Santos, whose mother Tatiana was born in the Soviet Union, deny reports that she now travels on a Russian passport or has plans to relocate to Moscow. But anti-corruption campaigners are scrutinising business operations by Tatiana and Isabel with Russian companies – even if their inquiries are likely to hit a brick wall in Moscow.

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

45

FOTOLIA

FEATURES / EXPOSÉ / Lourenço breaks the mould

LUANDA LIFE Some Angolans reminisce about “better times” under President Dos Santos, when they were poor but the country was rich. This year, Angola will struggle to get out of recession, according to Alves da Rocha, an economics professor at the Catholic University in Luanda.

“Unemployment and poverty could increase and I fear social turbulence.”

Wealthier Luandans complain that crime is increasing. There are also regular demonstrations, with demands that the “povo” (people) should not bear the brunt of the crisis.

Plans to privatise state assets have been beset by problems over finances, management and valuations. There is big talk of foreign investment, and some bankers are looking again at doing business in Angola. But assessments have not been matched with new money.

“Externally, the perceptions are quite positive. More important for most people is the fight against unemployment – over a third of young people are jobless and 41% of Angolans are considered poor,” adds Da Rocha. “The question remains … if the members of the ruling party will allow [Lourenço] to complete his transparency campaign.”

In local elections this year, the Movimento Popular de Libertação de Angola (MPLA) could lose votes. Lourenço has agreed on reforms with the IMF but has delayed cutting subsidies and social projects for fear of losing popular support.

Adalberto da Costa Júnior, leader of the opposition party União Nacional para a Independência Total de Angola (UNITA), says leaders who profited under Dos Santos should no longer run the show. “The MPLA

46

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

‘Poverty could increase, and I fear social turbulence’ ALVES DA ROCHA, ECONOMIST

institutionalised corruption. The leaders who accumulated these riches were in the politburo yesterday and are in the politburo today.”

Yet Lourenço argues his insider knowledge will help him. “We were all part of the system … it is because I have seen these high levels of corruption and think that situation shouldn't continue … that we are fighting what we have seen for decades," he said in February.

Populist attacks against the elite could hit a reality check. A worried official told us the fate of the Dos Santos clan has become a national obsession. “Nobody talks about anything else.

That’s dangerous. It gives too much room for populists, for empty talk, hate speech even.”

There were cracks in the system that permitted financial leaks on a giant scale, according to an official in Luanda: “We haven’t fixed that yet. This was the system, how things were run. You needed to start a business, you went to Sonangol. You were friendly enough to the regime, you got the contract. This stuff was given away.” Lourenço’s campaign risks polarising society, he warns, “If you’re not careful what you say, you’ll be accused of defending the marimbondos [bloodsuckers]. As a result I think we’re missing an opportunity.”

Angola’s gilded class is nervous, argues a Europe-based academic: “The elite haven’t got any great allegiance to Isabel but see this as a litmus test for what might happen to them.

The pressure could mount for Lourenço to take on other people – there’s a big concern there.”

Beyond the crackdown, a senior official wants to see plans for changing the paradigm. “What are we going to do with this endeavour: you call out a few names, recoup a bit of money, but what do you do next?”

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Reboot

African capitalism?

ALL ILLUSTRATIONS BY RAFAEL RICOY FOR TAR

As the private sector gathers in Abidjan for the Africa CEO Forum on 9-10 March, The Africa Report takes a sideways look at the continent’s economic options: Ctrl+Alt+Del?

By NICHOLAS NORBROOK

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

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T

There is an old computer sitting in the back of the store, that, for the sake of this argument, will stand in for capitalism in a plurality of African countries. (Stay with me!) We bring it to the front desk, blow the dust from the monitor, plug it in and switch it on. There is a heart-stopping moment where nothing happens. But it flickers into life.

Quickly, the problems manifest. The operating system is ancient. The dial-up modem sounds like a strangled sheep.

Those seeking the overthrow of capitalism will tell us to get a new computer, or possibly forgo computers altogether. Or, maybe, just turn it off and on again. Let’s keep all that on the table. But what are our options if we are not ready to go to the barricades?

Ringing the bell for assistance, you see a curtain twitch. A wizened old auntie wanders out and lays in front of you a laminated A4 sheet of paper, slightly stained.

‘Welcome to Capitalism Rebooted!’ it reads.

‘You have three options: focus on capital, focus on the state or focus on entrepreneurs.’

And at the bottom of the sheet, an invitation: ring the bell to summon your three advisers.

Strange old shop, you might think to yourself. Still, in for a penny, in for a pound – you

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ring the bell. Immediately a well-heeled and besuited gentleman – a banker perhaps? – glides out from behind the counter with two glasses and a jug of water…

***

RAINMAKERS: HOW TO SUMMON INVESTMENT FLOWS IN A CAPITAL DROUGHT Capitalism on the continent is suffering a multitude of ills. But access to capital is near the top of the list. This holds true at the country level, right down through companies big and small to the most humble individual seeking financial services. Just 33% of adults in sub-Saharan Africa have a bank account,

held by institutional investors like pension funds, whose fiduciary rules prevent them from investing in jurisdictions that are not ‘investment grade’.

Things may be changing. The AFC is one of several actors in the fast-growing ‘de-risking’ movement. The goal is to bear the risk component that pension funds and others cannot stomach.

Capital for the few

says the World Bank. Can technology and institutional innovation fix it?

Let’s deal with the national level first. African states have a trio of options: tap global capital markets, try to attract foreign direct investment (FDI), or get cheap loans and grants from donors. Africa as a whole averages around $40bn in FDI every year and has borrowed around $6bn a year over the past decade from international capital markets. It is not enough.

The continent’s infrastructure requirements alone are more than $120bn a year, according to the African Development Bank.

It is not as if the capital is not out there in the world. “When you look at the eurozone, there is roughly $16trn parked in negative yields,” says Sanjeev Gupta of the Africa Finance Corporation (AFC). This money is

The failure to bank smaller African companies is stalling job creation

At the company and individual levels, capital is also not getting to where it would help most. Most African banks are sitting on a large cushion of cash and are unable to deploy it effectively, beyond a coterie of ‘obvious’ blue-chip clients. A study by PV Nketcha Nana and Lucie Samson in 2014 showed that banks in Africa were six times more liquid than banks in OECD countries.

Political leaders across the continent are aware of the problem but have not found effective solutions. Kenyan lawmakers, for example, put a cap on interest rates and hurt lending. This failure to bank African corporations, especially smaller companies, is problematic because it is the small and medium-sized companies that create a lot of employment. It also illustrates a major failing of the operating system currently running Africa’s economies: capital is directed to the few and generates little in the way of jobs.

Some banks are up for the challenge.

Standard Bank, Africa’s largest, has spent a decade building up its retail business, according to its Africa head, Sola David-Borha.

And its breakthrough insight has been to map the ecosystem of smaller businesses that plug into large corporates. “We had been banking a Ghanaian mining company for years at a corporate level. But when we shifted focus to actually looking at their value chain, we realised that there was significant business opportunity with their suppliers.”

But beyond these banking pioneers, the real movers and shakers in the capital equation have been financial technology (fintech) firms that are turning the sector upside down and creating welcome competition. Often using mobile phone data for credit scoring, they are able to predict potential defaulters faster and earlier.

They have attracted huge interest from venture-capital firms that see the potential

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in delivering financial services to the ‘bottom of the pyramid’. In 2019, fintech companies aimed at Africa raised more than $650m.

They brought with it a few sharks too.

Kenyans in particular, with their head start in mobile money, are well aware of the dangers of easy and usurious mobile loans.

It is not just socialist US presidential candidate Bernie Sanders who is critical of capitalism’s excess. There are increasingly critics of the ‘more capital is better’ school of thought – and their common refrain is: ‘Who benefits?’

This is fundamentally a political question – and echoes the call by the chair of a group of influential corporate giants, called the Business Roundtable, for a new vision of capitalism that takes into account stakeholders beyond a company’s shareholders. “The American Dream is alive, but fraying,” said JPMorgan Chase boss Jamie Dimon.

That suggests a dawning realisation – selfinterested or not – among some big businesses that there is a political dimension to the economy that can be ignored for a while but which will eventually snap back. In the US and the UK, that takes the form of stagnating middle-class incomes and growing inequality.

For Thomas Piketty, author of Capital in the Twenty-First Century, the root of this is the Thatcher/Reagan era of the 1980s, and its variant in Africa: structural adjustment programmes (i.e. IMF and World Bank loans conditional on implementing certain policies).

These killed the ability of the state to finance itself and provide the vital services – health, education, law and order – that buffer inequality.

The state as overseer

Bolstering state capacity is needed. Taking the example of the coming privatisation programme in Angola, Piketty tells The Africa Report it needs “a very strict mapping and registration of private property throughout its territory. For, without knowing who owns the means of production, from the small business to the largest factory, how can one control income tax and profit declarations?”

Kako Nubukpo, a former minister of the economy in Togo, argues that FDI can skew the development priorities of a country. For example, if investment is piling into the oil sector, who benefits? As a sector that is capital-intensive, not labour-intensive, it is not

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delivering jobs. “FDI is sustaining the rentier economy: large investments are going into oil, diamonds, and more generally into raw materials. We have to get out of this logic.”

***

Back in the computer repair shop, the wellheeled banker has disappeared, leaving you with a glass of water that is half-full – or is it half-empty? You see a leaflet on a nearby chair entitled: ‘Everything you Wanted to Know about the Developmental State but were Too Afraid to Ask’. You pick it up as a new adviser bustles in from behind the curtain, perhaps less welldressed, but looking incredibly enthusiastic, wearing spectacles and carrying a long stick.

Which is most probably a walking aid. But it looks like it would be handy in a fight.

***

BOFFINS AND BUREAUCRATS: NATIONAL CHAMPIONS TO THE RESCUE? Lack of capital is by no means the whole picture.

And it is not just about buffering inequality: the state is essential to help businesses grow.

State institutions can do things like nudge companies into higher-value activities and new sectors. In Rwanda, post-1994 genocide, no one had the muscle to take on the investment risks needed to open up new sectors. As a result, the government used Crystal Ventures, the investment group linked to the ruling Rwandan Patriotic Front, to kickstart industry.

Speaking to The Africa Report in a window­ less room inside the defence ministry in Kigali, Rwanda’s President Paul Kagame was robust in his defence of the use of state power to drive national economic interests. He explained how the state co-invested with telecoms company MTN when it arrived in 1998 but eventually sold off its stake and invested it in the Serena Hotel to stimulate tourism “And when the hotel is up and running and it gets somebody interested, we sell it to them and move on.

It’s a deliberate thing. It’s not happening by accident, but it is really private-sector driven.”

Much of the critique centres on the pace of the eventual withdrawal of the state. Will those infant industries ever be allowed to play with the bigger kids on the international markets or is this the path to Venezuela-style

There is a political dimension to the economy that will eventually snap back

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FEATURES / DEBATE / Reboot African capitalism?

meltdown? But many other examples beyond Rwanda buttress the argument in support of a strong state role, including the recent emergence of Asian economies from Japan through South Korea and China.

For example, if Huawei is now the global leader in 5G and Samsung in smartphones it is because of a potent blend of state subsidy and market forces. Iginio Gagliardone, an associate professor at Wits University, points to the selective opening and closing of China’s telecoms sector in driving the development of Huawei and ZTE. Economists like Ha-Joon Chan argue that this is the rule, not the exception. And there are echoes on the continent: Nigeria’s local content act of 2010 in the energy sector is widely credited with forcing much greater

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Asian-style economic nationalism does not just mean the ‘easy’ bits

engineering and other work to be done in Nigeria, as well as boosting Nigerian companies in upstream oil and gas. LADOL, an industrial zone in Lagos built to service the deep-sea oil sector, even punched its way into the Total supply chain, partnering with Samsung Heavy Industries to deliver part of the $16bn Egina offshore platform.

Over in Morocco, after the success of the industrial policy around the auto sector cluster in Tangiers with Renault as anchor client, a new auto maker has been wooed: Peugeot.

“Only now we have brought local content requirements to 60%”, says industry minister Moulay Hafid Elalamy, “which means that, for the first time, the engine block is being manufactured in Morocco.”

The “old taboo debate around state versus market” – which became so bitter when mixed up in the Cold War – is being replaced by a new pragmatism, argues Rémy Rioux, head of France’s AFD aid agency.

This heavy hand of the state can be quite effective: it is hard to argue with South Korea’s trajectory from poorer than Ghana in the 1950s to an OECD country by the end of the century.

But it can quite quickly come a cropper, too.

You do not have to go too far to find opponents to the idea of giving African states a leading role in business. Bright Simons, a businessman and director of the Ghanaian think tank IMANI, talks about a key problem in many African countries: “The system is fundamentally rigged to the benefit of a particular type of elite. And that type of elite invariably is in politics and invariably has cronies all over who are placeholders for their economic interests.”

And many African states tempted by economic nationalism in the Asian style are interested in the ‘easy’ things rather than the hard yards. For example, Nigeria’s President Muhammadu Buhari has shut the border with Benin in a bid to protect rice farmers from competition. But, after investigating rice farming in Nigeria, Reuters journalist Libby George wrote: ‘… there is little hope of improvement without significant investment in irrigation, mechanisation, roads and storage.”

***

The state enthusiast sweeps out, knocking over your glass of water on the way. Hope you weren’t thirsty. You hear your third and final adviser before you see her. In bustles a

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Since its inception in 2007, the

FEATURES / DEBATE / Reboot African capitalism?

young woman juggling several mobile phones, yammering away in several languages. “Haven’t got long!” she says. “Hope you haven’t been listening to that guy...,” looking at the debris of your drink and rolling her eyes. “Here’s what I need...”

***

THE WEALTH CREATORS: SEARCHING FOR THEIR GOLDILOCKS Of course, while criticising the role of the state is proper, throwing it out with the bathwater – as was done during the structural adjustment period – is just as misguided. Handing the wheel to the private sector entirely is not a recipe for success either. It was the father of economic theory, Adam Smith, who warned that business tends to monopoly.

To reboot capitalism at the company level requires what MIT economist Daron Acemoğlu likens to a ‘Goldilocks’ dose of state intervention (neither too hard not too soft but ‘just right’). Too little regulation and monopolies emerge, throttling consumers and smaller businesses and leading to a sluggish economy.

Too imposing a state, and you see businesses throttled from the other side.

Contemplating the high price of cement in Nigeria, financial analyst Feyi Fawehinmi explained China’s own version of the Goldilocks solution: ‘In Nigeria, the same government that protects businesses from outsiders protects them from insiders as well. But in China, though cement companies were protected from the outside, internally there were about 2,000 companies, and there was brutal competition,’ wrote Fawehinmi in TAR106.

Other ‘amphibian’ blends of market and state are being trialled in Africa, too. Special economic zones in particular have worked in Asia, and are now taking off across the continent, and not just in the Ethiopian textile sector. Stephen Jennings, the CEO of property developer Rendeavor, is fixing a host of problems such as land titling for investors who otherwise wouldn’t come to the continent – an echo of our risk-bearing solutions of earlier.

Beyond amphibian solutions, a quick way to improve may be just to listen better to the private sector. Responding to the concerns of its players, unsurprisingly, goes a long

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JOBS, MONEY AND MANUFACTURING BREAKDOWN

18m

According to the Mo Ibrahim Foundation, Africa needs to create a vast amount of jobs per year in order to provide work for the growing number of young people.

11%

According to the Overseas Development Institute, the share of manufacturing in Africa’s GDP fell from 19% in 1975 to 11% in 2014.

10.9%

The share, in GDP terms, of credit to the domestic private sector in Nigeria in 2018. The world average that year was 129.7%.

198

UNESCO data says that Africa has much lower numbers of researchers – scientists, engineers, etc. – per million people than its global peers. Finland has 7,707, while China has 1,071 and Brazil has 694.

A quick way to improve may be just to listen better to the private sector

way to rebooting capitalism. Infrastructure bottlenecks – lack of energy, lack of power, lack of logistics – regularly top concerns of private-sector organisations in Africa.

The actions of government in providing a predictable framework for business to operate in are regularly cited as a deciding factor.

“Burdening an SME with the same tax liabilities as large corporations will only cripple their potential,” argues, for example, Tony Elumelu, chairman of Nigeria’s United Bank for Africa and a supporter of entrepreneurship.

And the government is not just a drag; it can often feel like a hostile force. Even before the Lagos State government banned okada motorbike taxis (see page 118), entrepreneurs have bemoaned the operating conditions in Nigeria’s economic capital. Affiong Williams is the CEO of Reel Fruit, selling dried fruit and nuts to (mostly) urban consumers across the country. Her experience running a business is not exceptional: “We drive lorries across Lagos, which get stopped and asked for bribes by three different police forces.”

Another key challenge facing entrepreneurs is human capital. Catastrophic

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state failure in education means there are on average just 30 engineers per million people in sub-Saharan Africa, according to the African Capacity Building Foundation.

The result is a damaging talent shortage.

There are also plenty of things that entrepreneurs could do better themselves.

Williams argues that so many of the people running businesses in Nigeria are failing because of the lack of proper structures within companies – what others might call corporate governance.

***

With a final flourish your last adviser is gone. You are, of course, not going to be railroaded by any one of them but harvest the best of their advice. Getting the right balance of state and market, for example, requires a solid institutional framework. To what extent has the colonial era messed with that? Should we be looking to fix the politics first, before even touching the economics?

You may have a bee in your bonnet about monopolies – but, as Gupta of the AFC says, “Who else has the heft to grow in these very difficult markets?” The history of Japan’s zaibatsu and South Korea’s chaebols suggests that a – brief – period of monopolies may actually be beneficial.

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You may even be swayed by Nobel Prizewinning economist Esther Duflo’s suggestion that, rather than seek any magic bullet in accelerating growth, instead you should seek to improve the life of the poor. That may seem idealistic until you consider that when you turn the poor into the middle class, you create a consumer class that provides a home advantage for your entrepreneurs.

With middle classes also comes a solid foundation for your democracy. Given the hammering of the middle classes in recent decades in the UK and the US and subsequent political self-harm, it appears this is a lesson we humans are destined forever to relearn.

For Ghana’s Simons, one thing African governments, companies and societies must urgently improve is that same capacity to learn. He sees in the collapse of the university system on the continent, and more broadly an exodus of the best minds, an absence of the policy conversations that need to happen if African countries are going to do more than copy-paste development solutions from other parts of the world.

As you exit the shop, computer under your arm, the auntie gives you a wave. You wonder where you left your thinking cap and look for the nearest coffee shop – you never did get that drink of water.

Is seeking growth by improving the life of the poor really so idealistic?

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The Sahel WIDE ANGLE

squeeze As Islamist and other rebels wreak havoc in the Sahel, states and their international backers are scrambling to mount their defences. The Africa Report looks into the nexus of religion, poverty, state failure and politicisation that could turn Mali or Burkina Faso into the next Somalia or Afghanistan

By WILL BROWN in Mopti

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JANE HAHN/REDUX-REA

Children in a displaced persons’ camp in central Mali, September 2019 THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

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S

Soumare lies prone on the bed murmuring softly. Above his mosquito net flies flit around, anxious to get at his open wounds.

A strong young man, Soumare is the pride of his family. Until last week the 26 year old worked the fields around his village in central Mali, as his community has done for generations before him.

All that came to an end. An improvised explosive device (IED) ripped half of his face off, blinding him. As doctors slowly ease him upright, he groans and shakes in agony, barely able to mutter his name or age.

All around him in Mopti city’s central hospital dozens of men, women and children nurse horrific burns, knife cuts and gunshot wounds. Such horrors have become all too familiar in stretches of the Sahel.

A dizzying array of jihadist groups, ethnic militias and armed groups are launching almost daily attacks in Mali, Burkina Faso and Niger. Last year, more than 4,000 people were killed and close to a million people were forced to flee their homes.

Slowly, Mali and Burkina Faso are cracking under the pressure, retreating ever closer towards their capitals. Now, across swathes of those two countries, the state exists in name alone, and masked men with guns and machetes have the final say. There is a very

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real risk that the insecurity could spread out across Western Africa.

The crisis can be traced back to Libya’s civil war. In 2012, ethnic Tuareg rebels and jihadists armed themselves with weapons from Colonel Muammar Gaddafi’s looted arsenals and swept out of the desert into northern Mali.

Years of neoliberal reforms and centralised control from the government in the southern capital of Bamako had left many northerners impoverished and angry. The weak Malian forces fell before the militants. In a matter of weeks, they had conquered an area the size of Britain.

In early 2013, thousands of French troops and Chadian commandos intervened and drove the militants back into the desert. France stationed 4,500 troops across the region on its counter-jihadist mission, Operation Barkhane; the United Nations set up MINUSMA, a 15,000man peacekeeping mission in Mali.

But the international troops have not been able to stop the jihadists regrouping and rearming. More weapons have flooded in from Libya and the Gulf of Guinea’s ports, and the insecurity has slowly spread southwards out of Mali’s remote north into the country’s central regions and across porous borders.

Burkina Faso’s dictator, Blaise Compaoré, managed to keep the insecurity at bay with his murderous presidential guard and his intelligence services led by spymaster Gilbert Diendéré. But when Compaoré was ousted by a popular uprising in October 2014, things started to fall apart. By late 2015, the government disbanded Compaoré’s intelligence networks. The jihadists saw an opportunity to exploit the cracks in the nascent democracy.

Gulf states’ soft power

In January 2016, jihadists took more than 150 people hostage in the plush Splendid hotel in Ouagadougou and emptied magazine after magazine into a nearby cafe, killing 30 people.

The speed of Burkina Faso’s decline since then has been alarming. There have been hundreds of attacks. In 2019, there were more than 2,000 reported fatalities – seven times more than in 2018 – according to the Armed Conflict Location and Event Data Project.

There are few set battle lines in the Sahel, which makes the situation extraordinarily complicated. But one common factor is that Gulf states have poured large amounts of

There are few set battle lines in the Sahel, complicating the situation

the Malian army lost more than 100 men in a string of ambushes. In December and January, rebels killed 160 soldiers from the Nigerien army in two attacks in the west of the country.

Over the past year, the insecurity has slowly spread out of Burkina Faso’s north and eastern regions across the entire country. The country shares close cultural ties with four Gulf of Guinea countries. The International Crisis Group (ICG) has warned that the jihadists could use the ‘Burkinabe door’ to exploit contentious elections next year in Côte d’Ivoire, Guinea and Togo.

Conflict gold

A French soldier in Mali’s Gourma region in March, 2019, eight months before 13 soldiers were killed, dealing a blow to Operation Barkhane.

DAPHNÈ BENOIT/AFP

money into West Africa to export an extreme Wahabi interpretation of Islam, financing mosques, schools and development projects.

Many rebel groups have allied with international Islamist forces.

The local situation is made more complex because fighters can flit in and out of communities and across borders with ease. Often, they change their allegiances depending on the practical circumstances (see opinion). Many fighters are looking for a steady income, as jobs in the region are few and climate change is shifting agricultural and other patterns.

It is impossible to estimate accurately the number of militants. Rather than trying to dominate territory and fight pitched battles in the same way Islamic State did in the Middle East, the Sahelian jihadists are highly mobile and prefer to ambush local forces and communities before melting back into the scrubland.

The strategy is paying off. The tri-border region (see map) between Mali, Burkina Faso and Niger has turned into a slaughterhouse for local soldiers. From October to November,

Like any army, the jihadists have to pay their soldiers. Many wild claims have been made saying the terrorists are now directly involved in the billion-dollar cocaine trafficking routes that criss-cross the Sahara.

The Global Initiative Against Transnational Organized Crime, a collection of international experts based in Geneva, says it has been unable to prove that Al Qaeda are involved in the cocaine trade, but that it cannot be ruled out because the trade is so secretive and lucrative.

However, there is strong evidence that the jihadists have tapped into the Sahel’s gold mining boom. Artisanal miners in Mali, Burkina Faso and Niger dig up an estimated 40-95tn of gold, worth about $1.9bn-$4.5bn, annually.

The gold is trafficked out of regional airports or through Togo and onto hubs like Dubai. Scores of the small-scale excavations are in areas controlled by jihadis. According to researchers at the ICG, many gold diggers are forced to give ‘zakat’ tribute money to the fighters or pay them for protection.

Worse still, military sources say the mines are also providing an ample supply of explosives to jihadi bomb factories. Across the tri-border region, the armed groups are increasingly turning to IEDs to control territory.

However, the jihadists are only one part of the Sahelian puzzle. As the forces of law and order have gradually retreated out of central Mali and rural Burkina Faso, two key things have happened: first, the Islamists have concentrated their recruitment efforts on the Fulani, an ethnicity of herders spread out across the region; secondly, hundreds of self-defence militias have sprung up in rural areas.

Sometimes these militias are simply bands of young men who protect their villages against

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cattle thieves. But often the groups are heavily armed and based along ethnic lines. Many of these groups have ended up targeting the Fulani, whom they accuse of aiding the Islamists.

Over the past few years, Malian and Burkinabe political elites have turned a blind eye to the militiamen’s abuses. This has led to catastrophic bouts of ethnic cleansing.

Massacre in Ogossagou

The situation is worst in central Mali. There, ethnic Dogon and Bambara have organised into heavily armed militias, sometimes known as Dozo hunters. Human Rights Watch (HRW) gathered evidence showing how the Malian army allowed these militias to set up checkpoints and repeatedly failed to intervene to protect Fulani villages from attacks.

After scores of small pogroms, Dogon militiamen hacked and burned more than 170 Fulani men, women and children in the village of Ogossagou in March 2019. A tit-for-tat cycle of ethnic attacks has continued, leaving hundreds dead. “The practice of sub-contracting defence and security responsibilities to abusive militias has fed a vicious cycle of violence

Militiamen have set up a separate state system in central Mali

and deepened ethnic tensions,” says Corinne Dufka, HRW’s West Africa director.

Protests over the massacre pushed Malian prime minister Soumeylou Boubèye Maïga to resign in April 2019. Since then, the government has convicted tens of militiamen and banned Dan Na Ambassagou, the most powerful Dogon group. However, humanitarians working across central Mali say that they still have to pass through dozens of militia checkpoints to get through to those in need.

According to a Malian intelligence officer who has infiltrated a powerful ethnic Dogon militia operating around the town of Djenné in central Mali, the militiamen have effectively set up a separate state system in the region, dealing out justice, collecting taxes and even investing in farming equipment for villagers.

“You can drive right across [the] Djenné region and not see one Fulani. If the Dogons see one, they’ll kill him where he stands. They’ve all fled,” says the officer. Ethnic Fulani refugees say that members of the Malian army also come to attack them. “It doesn’t matter who it is,” says Ali Aley Burri, from Djiwagou village in central Mali, “they’re all killing us.”

and international players – but they tend to be more collaborative with civilian groups and are potentially more open to dialogue.

NIAGALÉ BAGAYOKO Chair, African Security Sector Network

The Sahel’s security situation has a patchwork of actors. Jihadis are organised into two main groupings. One, known as Nusrat al-Islam, is affiliated to Al Qaeda. It is made up of a federation of outfits

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including Iyad Ag Ghali’s Ansar Dine, Al Qaeda in the Islamic Maghreb, Al-Mourabitoun and the Amadou Koufa-headed Katibat Macina. Their targets are often representatives of the state – soldiers, security forces

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

ALL RIGHTS RESERVED

THE SAHEL REQUIRES A COMPLEX RESPONSE

The other grouping, affiliated to Islamic State and known as Islamic State in West Africa Province, has two main elements, one based around Lake Chad that includes splinter groups from Boko Haram. The other is Abu Walid al-Sahrawi’s Islamic State in the Greater Sahara, which has moved down from the Gao area of Mali into the so-called Three Borders region located between Mali, Burkina Faso and Niger. These latter groups more often attack civilians in a brutal fashion.

But beyond jihadi groups there are often rebel groups with more political, social or territorial claims, particularly those who signed the 2015 peace agreement in Mali. There are

TUNISIA

MOROCCO

Sirte

SAHEL THREATS AND EUROPEAN RESPONSES

Islamic State’

Fezzan

LIBYA

ALGERIA WESTERN SAHARA

Taoudenni

Atar

Madama Tessalit

MALI MAURITANIA

Kidal

Nouakchott G5 Headquarters

GAMBIA GUINEA-BISSAU

Ménaka Ansongo Tillaberi Niamey

Mopti

Bamako GUINEA

EUTM Mali Ouagadougou EUCAP Mali

Faya-Largeau

Agadez

Gao

Djenné

NIGER

Arlit

Timbuktu G5

SENEGAL Dakar

G5

EUCAP Diffa Maiduguri

EUCAP Niger

SOURCE: MINISTRY OF EUROPE AND FOREIGN AFFAIRS

COTE D’IVOIRE

LIBERIA

TOGO

Niger

FMM Chad lake Abéché N’Djamena BARKHANE Headquarters

GHANA

Group affiliated to Islamic State Retreat of Islamic State fighters

also civilian self-defence groups and community-based militias formed to protect villages from attacks.

Finally, criminal networks often help jihadis and rebel groups finance themselves through gold, drugs and people smuggling.

This complexity means that any intervention in the Sahel must take account of all of these moving parts.

And it should not be just a militaryled response but should also help to rebuild the state, particularly in peripheral and remote areas. Above all, interventions should focus on protecting civilians.

The military, for example, is useless at dealing with criminal networks. These fast-moving networks require an on-the-ground police force, and, importantly, a functioning justice system that prosecutes and sanctions those breaking the law (including when military forces target

MINUSMA Barkhane

GABON

CONGO FMM

French air force base European Union Mission

G5

German contingent

G5

civilians). This will allow citizens to see justice restored: the lack of a justice system is an important recruiting argument for jihadi and rebel groups alike.

Likewise, the interventions of ‘self-defence groups’ may actually involve very brutal civilians and their community-based affiliation can led to massive killings, as shown in 2019 by the horrific attacks in the Fulani village of Ogossagou and the Dogon village of Sobane in central

‘There is a real distrust of foreign intervention. It must be Africanised’

Oug

Regional response

International arrangement

Group affiliated to AQIM (Al Qaeda in the Islamic Maghreb)

SOUTH SUDAN

CENTRAL AFRICAN REPUBLIC

CAMEROON

Terrorist threat

Darfur

NIGERIA

Abidjan

Independent group

SUDAN CHAD

BENIN SIERRA LEONE

EGYPT

G5 countries MultinationalRépublique Joint Task Force démocratique against Boko Haram du Congo G5 Force in the Lipkato-Gourma (being launched) G5 Joint Border Forces (draft)

Mali. Reprisals against communities seen as close to jihadi groups, such as the Fulanis, are also a serious cause for concern.

There is a growing danger that these civil defence groups are being co-opted by political authorities.

Burkina Faso has just passed a law allowing these groups – such as the Koglweogo and the Dozos – to enlist in the new Volontaires pour la Défense de la Patrie civilian guard under the supervision of the ministry of defence. With elections in late 2020, and some of these groups sympathetic to political leaders, the danger of creating a new conflict within a conflict is real.

Finally, there is a real distrust of foreign intervention. There must be an attempt to Africanise it. Beyond the current G5 grouping, bringing in the African Union or the Economic Community of West African States could achieve this.

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Rwanda Burundi

FEATURES / WIDE ANGLE / The Sahel squeeze

MARCO LONGARI/AFP

In Mali central Dogon region as many as 70,000 people have fled their homes, targeted by violent militia

Burkina Faso is facing a similar crisis.

As state forces have retreated in the face of an onslaught of attacks, young men across vast rural stretches of the country have joined local militias known as ‘Koglweogo’, meaning ’Guardians of the Bush’.

Training vigilantes

Far worse could be in store. In January the Burkinabé parliament voted unanimously to start funding and training local vigilantes. The move is almost certain to inflame tensions further and could drive more communities into the hands of the jihadists. “This will only lead to more bloodshed,” says Gilles Yabi, director of WATHI, a think tank based in Dakar.

Sahelian governments have a long way to go to rebuild trust between communities, and with their citizens. “[Mali and Burkina Faso] should deploy civilian administrators to restore some government services and counter insurgent narratives that the government favours one community over another. [And] they should curb abuses by their security forces,” argues Judd Devermont, Africa director of the Washington-based think tank CSIS. With the failure of Mali’s 2015 peace deal, governments in the region are also debating whether negotiations are a possible means of resolving the crises. Some groups are more open to talks than others (see opinion), but many regional governments and their international partners are loathe to negotiate with terrorist groups.

Until Mali and Burkina Faso reestablish some form of control over the hinterlands and diffuse communal tensions, the chaos will continue to spread. In Mopti central

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hospital, recent arrival Salif Dijbo, a 29-yearold farmer from Bandiagara region, recounts how he came within inches of death.

“We heard a nearby village was attacked so we ran to help survivors. On our way back, men dressed in black attacked us,” he says. He was shot in the arm, but he managed to get away. Four of his friends and family members weren’t so lucky. “I don’t know who they are.

I don’t understand why they’re killing us,” he says staring down at his shattered arm.

“I would do anything to stop the fighting.”

Funding vigilantes in Burkina Faso will only lead to more bloodshed

Stuck in the quicksand It is now abundantly clear that local forces do not have the means to stop the insecurity spreading. But international forces have lost their lustre.

Much hope was placed on the creation of the G5 Sahel Joint Force – a 5,000-strong army from Mauritania, Mali, Burkina Faso, Niger and Chad.

The G5 Sahel has a unique ability to chase militants 50km across borders.

However, so far the force is struggling to get the funding it needs, and its actions are mainly confined to expensive conference rooms.

Few who know the field have any doubt what would happen if international forces upped and left. “If France and the UN leave, Mali will become the second Somalia,” says Zahabi Ould Sidi Mohamed, head of Mali’s disarmament, demobilisation and reintegration scheme.

France is in a particularly difficult situation. The death of 13 French soldiers in a helicopter collision in northern Mali in November 2019 raised huge questions about what the country is achieving. It is fighting in Mali and recently opened up a new front in northern Burkina Faso around the tri-border area. It is also maintaining a security presence across the region and propping up its key ally, Chad’s President Idriss Déby.

In both Mali and Burkina Faso, Operation Barkhane is deeply unpopular.

Anti-French conspiracy theories have gone mainstream and there are regular protests against the presence of foreign troops. Many cannot understand how the European power, with all its military technology, has not been able to stop gangs of jihadists armed with Kalashnikovs on motorbikes.

Country’s own electricity production capacity increased from 0 to 180 MW, especially through the construction of the dual fuel thermal power plant in Maria-Gléta.

ADVERTORIAL

© MARTINE ET STEPHANE - FOTOLIA

BENIN MODERNISES ITS ENERGY SECTOR AND ROLLS OUT THE RED CARPET FOR PRIVATE INVESTORS

© RODRIGUE AKO

Benin has made remarkable progress in electrical energy over the past four years. The most recent is the adoption of the law on the

Dona Jean-Claude Houssou, Minister of Energy.

Electricity Code in the Republic of Benin on 4 February, 2020. This Code provides incentives, responsibility and transparency.

T

his Code is intended to foster the emergence of a competitive and jobrich economy and the development of research and innovation in the energy field. It creates attractive conditions for investors because it promotes transparency and an increased role for the Electricity Regulatory Authority (ARE) which will look after the interests of consumers as well as the sector’s viability and balance for a prosperous economy in Benin.

Better still, it facilitates project development through improved planning and simplified procurement procedures. It also provides for tax breaks and the setting-up of a fund to support, among other things, the development of certain projects.

Furthermore, the Code genuinely takes the private sector into account, recognising it as a fully-fledged player in the electricity sub-sector.

Private investment is therefore encouraged. This is a tangible step forward because the previous Code dating from 2007 did not offer this access to private investors.

ADVERTORIAL

In concrete terms, the Code provides a complete framework for projects, integrating the technical, financial, fiscal and legal aspects.

For example, the fuel exemption allows for lower production costs and therefore a more competitive price for electricity, as well as numerous measures in favour of renewable energy for a responsible energy mix. In addition, the Code makes it possible to invest transparently, safely and serenely in Benin, from generation, through transmission, to distribution in the same way as the incumbent operator, SBEE.

An outstanding leap However, this battle was not a straightforward one, as successive governments in Benin in the past have failed to keep the sector alive. While they weren’t lacking in ambition, the strategies and vision were more than likely not sound.

Consequently, since 2016, President Patrice Talon and his Government have made the energy sector a major focus of their development strategy. The Government’s 2016-

To achieve this, bold steps have been taken to curb the unbridled load shedding inherited by the government in 2016, and since then, efforts have been directed towards self-reliance. Many investments have been made or are under way in the sector.

multipurpose hydroelectric schemes on the Ouémé River (Dogo-Bis, Bétérou and Vossa sites) for a total capacity of about 200 MW - the continued implementation of projects to build 80 MW photovoltaic solar power plants for connection to the conventional power grid.

A modern outlook Determined to win the challenge over the long term, the government of Benin recently signed a framework agreement with Total

Togo-Ghana southern backbone interconnection line, carried out studies for the reinforcement of the 330 kV Sakété-Ikédja interconnection line and launched the construction of the 330 kV northern Nigeria-NigerBenin/Togo-Burkina backbone interconnection line.

This demonstrates the increasingly modern and dynamic nature of the sector. There is therefore room for serious private projects to which the Beninese Government will pay special attention.

These investments significantly increased the country’s own electricity production capacity from 0 to 180 MW, through the construction of the 127 MW dual fuel thermal power plant in Maria-Gléta, and the rehabilitation of the SBEE power plants for an available capacity of 30 MW and the CEB gas turbine in Maria-Gléta for 23 MW. To consolidate its achievements, the country is currently carrying out a project for the construction, in BOOT mode by an Independent Power Producer (IPP), of a 120 MW thermal power plant, for which the implementation procedure is under way. Negotiations are in the final stages for another BOOT project for the construction of a 25 MW thermal power plant.

Various other projects are also being carried out, such as: - the start of the Nangbeto hydroelectric power station rehabilitation works (65 MW on the Mono River) by CEB - the implementing of preparatory operations for the construction of

The 127 MW dual fuel thermal power plant in Maria-Gléta.

for the construction of a floating storage regasification unit (FSRU) and a gas supply contract with the aim of guaranteeing gas supplies to thermal power plants.

Simultaneously, they completed the construction of the 161 kV Onigbolo-Parakou and ParakouBembêrêkê-Kandi-Malanville interconnection lines, continued the construction of the 330 kV Benin-

Ministry of Energy Avenue Jean-Paul II 04 BP 1412 Cotonou, Bénin Tel: (+229) 63 12 69 69 (+229) 97 72 66 75

DIFCOM/ DF - PHOTOS: © PRESIDENCY OF BENIN EXCEPT MENTION.

2021 “Benin Revealed” Action Programme has made it a top priority in terms of modernising and strengthening production at a competitive cost, to meet the expectations of Beninese people in both urban and rural areas.

FEATURES /

Chimamanda

Ngozi Adichie CULTURE

‘In West Africa we lack the spirit of rising up and saying no’ The award-winning Nigerian author expresses her views on subjects close to her heart, from feminism and identity to colonialism and leadership on the African continent

Interview by CLARISSE JUOMPAN-YAKAM in Lagos for Jeune Afrique

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THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

ANDREW ESIEBO FOR JA

Interview with Chimamanda Ngozi Adichie in Lagos, in December 2019

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FEATURES / CULTURE / Chimamanda Ngozi Adichie

C

Chimamanda Ngozi Adichie is the most famous African woman alive today. Not arguably, not maybe: the 42-year-old Nigerian is nothing short of a phenomenon. A modern post-colonial writer and an international icon of feminism, she has been translated into 30 languages, had two of her novels adapted for the screen, and is in constant demand for lectures, interviews, panel debates, even sharing the stage with her African-American counterpart in fame, Michelle Obama...

“I think of myself first as a writer, that’s really what I am,” she is constantly reminding people.

And yet neither does she hold back from airing her opinions on anything from Trump (worse than she could ever have imagined!) to African leaders (their incompetence makes her sick!).

When Beyoncé set extracts from Adichie’s TED talk on feminism to music she was initially taken aback by the public response, but today accepts the popular side of her image as just another way to get a message across.

Living between the affluent neighbourhoods of Lagos and those of Washington DC, Adichie slips effortlessly between the two cultures.

She may have had a privileged upbringing, but she doesn’t lack humility and intimates that she will be travelling on to her village: “I am going to be a very happy village girl.

It’s home, it has many problems but it’s home.

There is a saying I like: your mother is your mother even if one of her legs is broken.”

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‘Feminism’s not very “African”?

Neither is flying, or the latest mobile phones’

You live part of the time in the US and are widely known internationally. Do you see yourself as an ambassador for Nigeria?

No. I am an ambassador for myself. I don’t represent Nigeria; there are things about Nigeria I don’t like, but at the same time I am very very proud of my Nigerian identity. I was born and raised in Nigeria, which I didn’t leave until I was 19. I’m proud to be Nigerian, I’m proud to be African, I’m proud to be Igbo. I would not be who I am today if I wasn’t all of those things. So, it’s very important to me.

You also hate to be told that you have a hybrid identity…

Yes, it’s like when people say “Afropolitan”.

I reject it because it’s something applied to Africans in a way that doesn’t apply to other people. So a German might move to England or move to the US but we don’t spend our time asking: “Well, are you still German?” There are people who’ve said to me they wish I didn’t live half of the year abroad because I am no longer authentic as an African! And yet they, Europeans, get to go wherever they want and remain authentically what they are.

And why do you think it’s different for Africans?

It has to do with the history of our continent and the way that our stories have been told.

There is a sense in which even we as Africans

Adichie has spoken out about the Anglophone crisis in Cameroon

‘Pop culture may not be

my thing, but it has undeniable power’: Rihanna wears Adichie’s words on a Dior T-shirt

saying it? The same people who have the latest cellphones, drive cars and fly. If we’re really going to argue about what is “African” none of those things are either! We can’t choose to live in the modern world then insist that we hold on to something that’s regressive because it benefits us. Men across this continent want to marry women who bring in an income but at the same time they want this woman to do all of the domestic work. We are placing the burden of double work on women and justifying it by saying it’s culture. Maybe it’s culture, but if it’s culture we need to change it.

Since you published your essay We Should All Be Feminists in 2014 everyone wants to talk about your feminism. Are you fed up with that?

I sometimes feel that people who know me only as a feminist don’t really know me fully.

I think of myself first as a writer, that’s really what I am. I’ve been a feminist since even before I knew what the word meant: as a little girl I was always asking questions: “Why can’t I do that?” “Because you’re a girl.” […] But I started talking about it because my literature gave me a platform.

After my TED talk I was surprised to get a standing ovation and then to hear that so many people had started to watch it. I wanted to start a conversation and it became much bigger than I thought it would be; which made me very happy because it’s important to talk about what women and girls go through everywhere in the world. But now people think I have all the answers to gender problems. I haven’t – but I want to try to make a change.

How can we change mentalities?

The expectation of gender roles can be very bad for men: we’re raising men to be emotionally repressed, we tell them you can’t show emotions, you can’t cry if you’re hurt, always be strong. Men don’t have an emotional outlet, so it comes out in violence because they want to show they are strong. In Lagos I have so many friends who tell me they don’t have any money, they can’t admit it, so they pretend. Some go and borrow money, they get into all kinds of shady deals because they have to live up to an expectation of the man.

What if we lived in a society where a man could just say: “Look, I’m having a bit of a difficult time,” and he and his partner could hold hands together and try and manage, as we say in this country. But it doesn’t happen because we’ve told men you have to provide, you have to be strong.

What’s your response to those who say feminism is nothing to do with Africans?

I disagree completely! Yes, I hear that people often say “Feminism is not African”. But who’s

FACE TO FACE/VISUAL PRESS AGENCY

GILES CLARKE/UNOCHA VIA GETTY IMAGES

don’t think that we’re really part of the same world. It’s as if we’re not seated at the table but in the corner, so the rules are different for us.

The #MeToo movement didn’t really succeed in Africa. Why? Is it because we have our own courtship rituals?

Look, I think there are two separate things.

There is courtship, romance, love. Then there is assault, intimidation. People know the difference, even men know. When you walk into a man’s office for an interview and he’s immediately reaching out to grab your breast, that’s not seduction; that’s assault. The idea that a woman is just a body, not a person – I don’t believe that is in any way cultural.

At the moment I am very interested in precolonial African history, and if you read up on it you’ll see that although the men were in charge women enjoyed more respect. In Igbo culture, for example, a woman would have to give her consent, even with marriage: when people came to marry her, her father or uncle

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FEATURES / CULTURE / Chimamanda Ngozi Adichie

I’m sorry, I don’t. How can you have somebody who has been in power pretty much my whole life?

would ask her: “Do you want this?” And if she said “No,” that was the end of it.

I don’t agree that Africa is different because we do things differently; it’s because we don’t have laws that protect women in this continent.

So men know that they can get away with a lot.

They do it because there are no consequences.

What’s your response to critics who say Rihanna wearing a ‘We Should All Be Feminists’ T-shirt and Beyoncé using your words makes feminism look superficial?

What would they prefer? Beyoncé listened to my TED talk and wanted to use a bit of it in her song and I said “Yes” because Beyoncé is a huge global phenomenon, especially for young people. I knew if she used my words in her song it would mean many young people get introduced to feminism – young people who don’t read, people who would never listen to the TED talk, but they listen to Beyoncé.

So suddenly they start talking about feminism, young girls start thinking: “Oh, so that’s the word I can use to describe these issues that I’ve had.” Young boys are thinking: “Oh, that’s actually not a good thing for me to do” when they do ABC to women. Pop culture is not really my thing, but at the same time, I have a lot of respect for pop culture because I know the power that it has to reach young people.

So, I have zero regrets about Beyoncé, and about Rihanna wearing the T-shirt that Dior made using my words.

In 2018 you published a column in the New York Times about the Anglophone crisis in Cameroon. Do you see parallels with Nigeria and Biafra – the subject of your novel Half of a Yellow Sun? I have a dear friend who is from there and I’ve been really close to the Anglophone crisis because of him and his family. I’m there when there’s a blackout in the Anglophone region and he can’t reach them on Whatsapp, or when he’s organising with his friends to send things back. So I had a kind of intimate experience with this particular African disaster which gave me the confidence to write about it – it really broke my heart. It’s not really that I thought it was like Biafra, but with so many of these problems you trace it back and realise that it originates in colonial policy. And then you have leaders who… I don’t understand why Paul Biya is still the president of Cameroon,

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‘A cool new company opening its doors is not enough to say Africa is emerging’

‘In conversation’ with Michelle Obama at the Royal Festival Hall, London, during the latter’s 2018 book tour

Are you annoyed that France isn’t doing anything?

Yup… I am very annoyed by it. What is happening in Cameroon, it’s not as if the French government doesn’t know about it, but the French government also has a long history of propping up dictators in Francophone Africa.

Nobody wants to talk about that. And so, instead, we say that there’s corruption in Africa.

Yes, there’s corruption in Africa, and I don’t mean to say that the leaders are not responsible; Paul Biya is responsible for Cameroon, but it’s possible for Paul Biya to be there because he’s been propped up by the French government.

And it’s not only in Cameroon, it’s happened in all of francophone West Africa. I don’t want to excuse the British but in anglophone Africa the influence and meddling is not as

direct and so there’s a sense that we are a bit more in charge of our destiny.

Is pan-Africanism the answer?

Yes, but I don’t know if it’s doable. I think we don’t talk enough to one another and we’re always looking outwards. Again I think leadership is the problem because you have all these men with their own egos […]. I don’t think it will be a utopia, but a more united Africa, an Africa that treads more with one another. Part of the problem is that the rest of the world sees Africa as something to use, and, sadly, Africans agree.

So you think that Africa has not completely shaken off colonialism?

Of course we haven’t, it’s part of our history.

The things that are happening all over Africa are not surprising, this is what happens when you create countries randomly, based on what is convenient for you.

When we start to have good and accountable leadership in Africa, we will start to deal with the legacy of colonialism. It’s going to take a long time. But you have to remember colonialism was a dictatorship – there was nothing to learn from. Nigeria is an example, of course – I don’t think we’ve had fundamentally good leadership since we became independent. But you see my problem is: why are Cameroonian citizens accepting this? There is something we lack in this part of Africa, which is that spirit of rising up and saying no.

Aren’t major world powers already betting on the emergence of the continent?

We’re quick to celebrate Africans who’ve studied at Harvard Business School then return home to launch a start-up in Accra or Lagos.

That’s fine, but it’s not going to change the future of our continent. A cool new company opening its doors is not enough to say Africa is emerging while at the same time 10 million people are trying to set up small businesses but have no access to credit and lack the necessary infrastructure and basic health care.

In your novel Americanah you talk a lot about inequality in the US. Is this what America is all about for you?

America is a mix of things. I went there thinking it was this perfect place because I’d watched films and when I got there the reality was different. There’s a lot of poverty, a lot of racism, and I discovered a new identity as a black person. It took me making the choice to go and educate myself about what AfricanAmericans have gone through for me to identify as black. So now I’m very politically black in America in a way that I wasn’t before, because I had to learn it.

BEN STANSALL/AFP

Chimamanda Ngozi Adichie’s books: Purple Hibiscus, 2003; Half of a Yellow Sun, 2006; The Thing Around Your Neck, 2009; Americanah (not pictured), 2013; We Should All Be Feminists, 2014.

Today, the US is courting you. Why do you refuse to become an American?

For a long time I didn’t want to become a US citizen because I believed that part of the experience of being Nigerian is experiencing the humiliations of travelling on a Nigerian passport. But I changed my mind about US citizenship after my father was kidnapped in 2015 and it was the American embassy in Lagos and not the Nigerian government who helped my family, and even sent a therapist to my father after he was released. I now plan to become an American citizen at some point, but I guess I’m still delaying it.

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INSIGHT /

TOM BRENNER/NYT-REDUX-REA

US President Trump and Nigerian President Buhari held a joint press conference in April 2018

US/ AFRICA

Team Trump steps on the gas

Amidst cosy talk about giving small industries in the American Midwest a helping hand to find their African opportunities, the Trump administration is ramping up its trade and diplomacy on the continent with its eyes firmly fixed on China as a strategic threat THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

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US/AFRICA INSIGHT / Team Trump steps on the gas

Twitter chief executive officer Jack Dorsey was clearly taken with his tour of several African countries, high-fiving entrepreneurs from Accra to Addis Ababa. ‘Africa will define the future (especially the bitcoin one!). Not sure where yet, but I’ll be living here for 3-6 months mid 2020,’ Dorsey tweeted.

He is late to the party. Facebook chief executive Mark Zuckerberg jogged through Lagos back in 2016.

And many US companies have been present in Africa for far longer: General Electric for more than a century; Coca-Cola since 1928; Johnson & Johnson since 1932.

Another wave of large US corporations has spotted the opportunity since 2000, as the African macroeconomic picture improved, driven by better governance, commodity demand from China and debt restructuring. An order in 2011 from Mozambique for 10 of Caterpillar’s top-end $6m mining trucks boosted optimism; five years later Caterpillar announced a $1bn expansion plan on the continent.

Dredging company DSC Dredge was mulling over opening an office in Lagos in 2010. Fast forward a decade, and they are one of the largest operators in the Nigerian market, having commissioned the largest dredge in the country in Ikorodu in 2017.

Cummins, an Indiana-based manufacturer, has a similar story.

In the 2000s, the engine builder sold just $240m of its products in Africa, as part of its $13.2bn in global sales. But it decided to expand to Africa in 2010, having

$9.2bn

US trade deficit with sub-Saharan Africa in 2018, made up of $15.8bn of exports and $25.1bn of imports

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seen Chinese competitors gain a foothold. With a joint venture in partnership with local company AG Leventis, it has today become one of the largest importers of diesel generators into Nigeria, with 10 sales outlets across the country.

It has not all been plain sailing.

The simplistic ‘Africa rising’ narrative, so strong a decade ago, stalled with the collapse of commodity markets. Sunny predictions about the legions of middle-class consumers of the future also clouded over.

Behind the bluster

US supermarket chain Walmart announced with great fanfare the acquisition of South Africa’s Massmart – owner of the Builders Warehouse, Makro, Game, Jumbo Cash & Carry and Dion Wired brands – in 2010. But Massmart disappointed: the investment lost 80% of its dollar value. The US retailer in 2019 dispatched a ‘fixer’, Mitch Slape, who sits on the Walmart board, to help to turn things around.

Speaking at the US-Africa Leadership Forum, US commerce secretary Wilbur Ross said that US agencies were trying to boost US-Africa trade, “particularly since US exports into Africa have decreased by 32% from their high in 2014”. Ross pointed out that “many small and medium-sized companies are unaware of the US government’s export, investment and risk-mitigation tools.”

Despite the ambient noise about “shithole countries” and visa restrictions, there has been a small revolution in US governmental support for companies wanting to invest in Africa. The 2018 BUILD (Better Utilizing Investments to Leverage Development) Act created the International Development Finance Corporation (DFC), a merger of two previous bodies that benefits from a doubled

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

US FDI IN AFRICA: $50.3bn $10,424 million

Mauritius S. Africa

$7,334m $5,774m

Nigeria Ghana

$1,698m

Tanzania

$1,383m

Other

$23,672m

Caterpillar mining trucks used for phosphate mining in Togo

SOURCE: CONGRESSIONAL RESEARCH SERVICES

By NICHOLAS NORBROOK

Exports:

US TRADE WITH AFRICA (in $bn) Services

Goods

Imports:

Services

Goods

$30bn $20bn $10bn $0bn 2014

2015

2016

2017

2018

Orienting small businesses

FRANÇOIS GUENET / DIVERGENCE

$40bn

SOURCE: US BUREAU OF ECONOMIC ANALYSIS

$50bn

investment cap of $60bn. It finally started work under chief executive Adam Boehler on 2 January after Congress approved funding.

Republicans in Congress also allowed the US Export-Import Bank (Exim Bank) to restart its operations in 2019. Recovering from a half decade of stasis, the Bank recently agreed, for example, to give medium- and long-term guarantees or loans of up to $4bn to help US exporters to Angola.

The ‘Prosper Africa’ initiative, US President Donald Trump’s Africa policy, announced in late 2018, seeks to bring under one umbrella the work of more than 15 US government agencies that work on African trade, finance and policy. For US undersecretary of state for Africa Tibor Nagy (see interview page 83) this is a key part of the process of getting the “small and medium-sized companies from Kansas City or Oklahoma City interested in Africa. They need a single point in the US government for them to go to, to say: ‘How can I connect with the embassy in Lomé to tell me about opportunities in Togo or to tell me about the business environment?’”

It seems to be working. Yvonne Ike, the head of sub-Saharan Africa (except for South Africa) at Bank of America, notes a marked uptick in the number of inquiries from US companies about doing business in Africa. “We are planning to do an investor engagement in the US in the first half of 2020 to help address this increasing interest and the knowledge gaps on Africa that exist, particularly with US investors,” Ike says.

Others are more sceptical.

Blogging for the Brookings Institution, non-resident fellow Witney Schneidman writes: ‘For the larger American business community, Prosper Africa is

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

79

US/AFRICA INSIGHT / Team Trump steps on the gas

essentially a static web page hosted on the Commerce Department website. Senior-level engagement in Africa by the Trump administration […] has been virtually nonexistent.’

Schneidman points out that the new immigration bans on Nigeria, Tanzania, Sudan and Eritrea will only increase the perception of risk for American investors.

He also mentioned that members of Trump’s cabinet had been conspicuously absent from the continent. Two days later the White House announced that Secretary of State Mike Pompeo would be visiting Senegal, Angola and Ethiopia from 15-19 February.

Geopolitical tool

Trade does not exist in a vacuum, and when President Trump’s then national security adviser John Bolton introduced the Prosper Africa initiative it was in a speech larded with references to China.

Bolton didn’t mince his words, saying: “China uses bribes, opaque agreements and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands.”

Since then the competition to grab some of China’s market share has hotted up, with Russia and the UK hosting African leaders for investment summits.

Eric Olander, managing editor of reporting initiative The China Africa Project, says: “Insiders in DC joke that just a few years ago if a government agency wanted to get a project funded all they had to do was put ‘ISIS’ or ‘Al-Qaeda’ in the title […] Now, they say all you have to do is put ‘China’ at the top of the brief and you’ll get all the money you need for your programme.”

Aside from the magnanimous mission to rescue Africans from China’s unscrupulous ways the US makes no secret that it considers China in Africa a security risk – particularly regarding Huawei’s 5G technology. The DFC “coordinates

80

458

deals raised $726m of venture capital for investment in Africa in 2018, according to WeeTracker

very heavily” with the National Security Council, Boehler told the Financial Times, and wants to offer an alternative to Huawei: “It doesn’t have to be a US-based company.

But we do care quite a bit about that data being secure,” Boehler said.

Beyond the security agenda, the potential to export technology has galvanised interest from US companies. The venture-capital community has been taking Africa very seriously. In 2018, some $726m was invested in 458 deals according to WeeTracker. Much of it is US money; and much of it is in fintech. Most of it is in Nigeria, South Africa and Kenya.

For veteran venture-capital investor Steven Grin at Lateral Capital, which specialises in small and medium-sized businesses, there are similarities between where Africa is today and where

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

South-East Asia was in 2013. He explains that the main difference between the two is that in SouthEast Asia venture capital has been driven by “consumer-led plays, versus more enterprise-led plays in Africa. And our focus is on enterprises, given that consumer growth is still fairly nascent.”

The traditional pillar of US engagement in Africa – energy – is a mixed picture. In recent years some of the biggest US oil and gas companies have exited the continent, especially Nigeria’s onshore. New players have taken their place, however, and others are active elsewhere. Anadarko and its partners’ $25bn commitment to Mozambique natural gas sector last year will be the biggest single investment in the continent – ever.

While technology and energy investment continue their rise, there is also a push to look for new opportunities. The Corporate Council on Africa, a trade body that brings together large US investors, is taking its summit to Morocco in June 2020. It is the first time the meeting will be held in North Africa.

Bechtel’s lessons learned US engineering and construction company Bechtel launched a regional headquarters in Kenya in 2017, but the future of the Nairobi-Mombasa expressway, which Bechtel was set to build, has been called into doubt. Kenya wanted a publicprivate partnership (PPP) with Bechtel raising the cash, whereas Bechtel thought the Kenyan government should borrow the money, which it could repay through revenue from tolls. “We were adamant that this was the best deal for Kenya, and we didn’t want to get involved in a public-private partnership,” says Bechtel president for Africa Jim Dutton. “So in an agreement with our CEO Brendan Bechtel and the government of Kenya last July, we agreed to put the expressway on hold.”

What the episode has highlighted was the need to respond to Chinese firms that arrive with a package deal. “Unlike some of our big competitors, we can’t actually come with the money,” says Dutton. “But if you want to build an expensive piece of infrastructure in Africa, you have to provide the engineering expertise, construction expertise and the financial expertise.”

The US government’s recent doubling the budget of its development finance body (see article), will help here, says Dutton. But Bechtel also works with the Chinese regularly, including on stadiums in Gabon, for whom it drew up a $25bn master plan. In the meantime, Bechtel is looking at other road projects in northern Kenya.

US/AFRICA INSIGHT /

Business is high on Washington’s agenda. Here are some key actors keen to strike up deals between US firms and African operators and policy-makers MELISSA GOLDEN/REDUX-REA

Adam Boehler Money man

ALL RIGHTS RESERVED

Businessman Adam Boehler was appointed the first CEO of the US International Development Finance Corporation (IDFC) in 2019. The IDFC’s goal is to advance US foreign policy by countering the growing influence China and Russia are gaining through project finance in developing countries.

Together, the IDFC and AfDB aim to invest $2bn and mobilise another $3bn from the private sector in Africa.

James Quincey Sugar-sweet deals

James Quincey has been the CEO of Coca-Cola since 2017 and became chairman of the board in 2019. After his visit to Africa last year, when he met with many top business people, including Aliko Dangote, he said: “Having operated in Africa for over 90 years as a local business in every country, we believe Africa is a region that will increasingly influence the growth trajectory of our global businesses in just a few years.”

Darren Woods

Florizelle Liser

Under Darren Woods’ leadership since 2017, ExxonMobil is said to be planning to sell up to $25bn of oil and gas fields in Europe, Asia and Africa in its biggest asset sales for decades, seeking to free up cash to focus on a handful of mega-projects. This doesn’t mean, however, that ExxonMobil is leaving Africa completely.

Florizelle Liser is the third CEO of the Corporate Council on Africa – the first woman to take on this role. The CCA is the leading US business association focused on connecting business interests in Africa, putting member firms in touch with government and business leaders.

This year, CCA will host the 13th US-Africa Business Summit in Marrakech, health and ICT a focus under Liser’s leadership.

Continental connector

Kimberly Reed Export-minded

Attorney by trade, Kimberly Reed is the first woman chairman and president of the ExportImport Bank of the United States (EXIM), a position she has held since 2019. EXIM is an independent federal agency that facilitates the export of US goods and services. Under her leadership, EXIM is backing major gas projects in Mozambique, which is EXIM’s largest deal ever.

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INTERVIEW

Tibor Nagy VINCENT FOURNIER/JA

‘For the US, there is a global power competition’ The US assistant secretary of state for Africa talks to The Africa Report about China, global competition and the drive to get more US companies active on the continent

Africa, to bring the various US government agencies that have something to do with Africa, thanks to technology, under the digital umbrella.

By NICHOLAS NORBROOK

How does that help US companies connect to opportunities on the ground?

The other side of Prosper Africa is every single one of our embassies. We have formed deal teams, which means every single person in the embassy from the first tour officer to the ambassador is going to give a priority to increasing trade and investment, which means helping the companies that are looking for deals. It also means engaging with the host government.

TAR: How does the administration want to encourage the US private sector to engage in Africa?

TIBOR NAGY: They’re looking throughout the world for opportunities. So how do they end up in Africa? That’s where African leadership has a responsibility of putting in place the type of environment which is welcoming to businesses that believe in a fair process, that believe in the sanctity of contracts, that don’t believe in paying people off to get the job.

But then these companies of ours create employment. They’re very responsible. They take care of the environment. They don’t smuggle out ivory. They follow the rules.

How will you convince small and medium-sized businesses in places like Kansas City to actually get involved with the continent?

And not only Kansas City [...]

I totally agree with you. I’m Hungarian, but my US home is west Texas. And I always use that as an

example with folks: I would like to get the west Texas companies, Kansas companies, the small and medium-sized enterprises [active in Africa] because at the end of the day, they’re the ones that create the most business. And this is where the next initiative comes in, which we call Prosper Africa.

For decades, those of us who took the continent seriously would go visit ministers of finance. I remember in a couple of countries, I would do that and say: ‘You need to introduce a guichet unique [one-stop shop].’

Well, the sad truth is that the US government never had a guichet unique for us businesspeople wanting to go to Africa. You will get small companies from Kansas City or Oklahoma City to be interested in Africa if there’s a single point with the US government for them to go to to see it’s okay. ‘How can I connect with the embassy in Lomé, to tell me about opportunities in Togo or to tell me about the business environment?’ That’s the whole concept behind Prosper

Some African leaders say that while there is Prosper Africa, the security or competition prism comes first for Washington.

For the US, there is a global power competition. And there are many facets. It’s a very complicated relationship with China. On the other hand, our leadership has made some very frank and direct speeches regarding the various facets of the global power competition, and that is being played out everywhere – most especially in places like Africa.

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

83

MESSAGE

EXPERT ADVICE

U.S. African Development Foundation (USADF) 1400 Street NW, Suite 1000 Washington, DC 20005 Email: info@usadf.gov

The U.S.African Development Foundation’s community - led development model Creating pathways to prosperity for underserved communities in Africa

W

hen the United States African Development Founda-

tion (USADF) was established by the U.S. Congress in 1980, it set out to create a different development model that focused on underserved and marginalized populations,was locally-driven, and would move African grassroots communities out of poverty and onto pathways to prosperity.

Starting operations in 1984, when the early chapters of Africa’s growth story were first being written, USADF decided to do development differently to make inclusive growth part of that story. With a bottom-up approach and focus on African-owned and led grassroots small- and medium-sized enterprises, agribusinesses, and entrepreneurs, USADF meets communities on the ground to understand their needs and puts them in the driver’s seat of their development.

USADF provides seed capital of up to $250,000 and technical support to African enterprises and entrepreneurs that are addressing some of Africa’s biggest challenges around food insecurity, insufficient energy access, and unemployment. Over the last five years (2015-2019), throughout Africa but with a focus on the Great Lakes, Horn, and Sahel regions, USADF directly invested more than $114 million dollars in over 1,000 African-owned and operated entities and impacted over four million lives.

USADF intervenes in the first phase of development and, through its participatory process and network of local

implementing partners, takes projects from start up to scale up, pulling the solutions out of the community so grantees design the solutions, deliver the intervention and own the results.

USADF investees are attractive to other funders that can continue to scale them,with a pipeline to follow-on funding that leads to trade and investment, in line with the African Growth and Opportunity Act (AGOA).

Central to the success of the USADF development model and mandate is its focus on African institution building. USADF’s 100% African local implementing partners work with every entrepreneur, cooperative and smallholder farmer USADF funds.

These local implementing partners are trained and empowered to provide technical and financial management, business advisory, capacity building, and other assistance. USADF promotes the development of these African institutions so they can grow, man-

Jack Leslie,

C.D. Glin,

Chairman, USADF

President and CEO, USADF

age broader portfolios, and become implementers for other locally-driven development efforts.

USADF believes greater and broader development success in Africa requires innovative partnerships and synergistic approaches. The Foundation expands and extends its development impact and leverages U.S. taxpayer dollars by partnering with African governments, other U.S. government agencies, and private corporations and

foundations. Over the past five years, USADF received over $12 million in matching funds from African national and sub-national governments. Currently, USADF has active co-funding partnerships with eight African governments that have pledged $40 million in funds for the next five years, which USADF will match. USADF considers this a clear sign that African governments value USADF’s development model, expertise, and dedication to African institution building.

As a U.S. Congressionally-funded Foundation, USADF aligns its work with U.S.government priorities in Africa.

USADF’s focus on fragile states and emphasis on improving livelihoods, increasing incomes, creating jobs, and fostering self-reliance contribute to lasting peace, security and economic stability in Africa. USADF will be a key implementer of the Global Fragility Act

for U.S. companies, particularly those providing off-grid energy inputs and technology to African energy enterprises. USADF’s investments in African solutions today result in stronger trading partners for the United States tomorrow.

USADF’s work with grassroots agricultural organizations and smallholder farmers to promote economic growth

of 2019, which will entail the first-ever U.S. government strategy to tackle violence and instability around the world.

USADF is also an integral component of the whole-of-U.S.government Women’s Global Development and Prosperity (WGDP) initiative. Under W-GDP, USADF will provide up to $10 million in catalytic funding and technical support to approximately 1,000 African graduates of the Department of State’s Academy for Women Entrepreneurs.

advances the objectives of the U.S. government’s Feed the Future (FtF) initiative and has improved the food security of 3 million people in Africa. USADF has been instrumental in moving African communities and organizations from food aid dependency to self-sufficiency, investing $61 million over the past five years in 573 enterprises in 20 countries, including in refugee settlement areas, to develop key crops such as cashews, coffee, maize, rice, shea, and soybeans.

The Foundation is also an active member of the U.S. government’s Prosper Africa initiative that will increase twoway trade and investment between Africa and the United States. Several USADF investments generate business

By funding African renewable energy entrepreneurs working on off-grid solar, wind, hydro, and biomass solutions in their communities, USADF contributes to the U.S. government’s Power Africa initiative to end energy poverty.

Over the past five years, USADF has launched several renewable energy funding programs – including the Women in Off-Grid Energy, the Smart Communities Coalition Off-Grid Energy (focused on refugee settlements), and the Sahel-Horn Off-Grid Energy challenges – and invested over $9 million in 90 off-grid energy enterprises. General Electric provided nearly $1 million to assist USADF in expanding energy connectivity to rural communities in nine African countries.

Under its entrepreneurship portfolio, focused on youth and women, USADF has invested $7.4 million in job training and job placement for over 7,000 Somali youth and women, helping to increase incomes from $50 to $300 a month. USADF is expanding this model to the Democratic Republic of Congo, Nigeria, South Sudan, and Uganda. In support of the U.S. government’s Young African Leaders Initiative (YALI), USADF, in partnership and collaboration with Citi Group and Citi Foundation, has also provided $4.7 million in financial and technical support to 225 youthled entrepreneurial ventures in 35 African countries.

USADF puts people and their needs, challenges and desires at the forefront of its strategic approach and development model, with the firm conviction that peace, security and stability lead to better trade and investment opportunities that benefit both the United States and Africa. USADF is open for business and welcomes opportunities to expand its partnerships with African governments, the U.S. interagency, and private corporations and foundations to impact even larger number of Africans with solutions to their communities’ most pressing challenges.

LOGISTICS DOSSIER

Competition on the

rails

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THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

Train arrives at Mai Mahiu station in Kenya, 2019.

East African countries have rushed to build new railroads and faced many problems.

Tanzania is now building its own. Will it learn from Kenya’s and Ethiopia’s troubles?

ZHANG YU/XINHUA/MAXPPP

By MORRIS KIRUGA in Nairobi and Dar es Salaam If you have been to Dar es Salaam lately, you must have noticed the striking pillars under construction that will carry Tanzania’s new railway over the 154-year-old coastal city. The former capital of East Africa’s most populous country is the launch point of a 1,457km railway line that will, if everything goes according to plan, connect Rwanda, Burundi and the Democratic Republic of Congo to the coast line.

Tanzania entered this side of the logistics infrastructure race a bit later than her neighbours, Kenya and Ethiopia. Both Nairobi and Addis Abbaba are now connected to coastlines by Chinese-built standard gauge railways (SGRs).

While plans for new railway infrastructure in the region go back decades, Dodoma chose to pause and watch her neighbours, as a Kenyan financial journalist wrote in The Standard: “The way a secondborn child would do, lurking in the shadows and learning from the mistakes of his elder brother, then retreating to plot how to do a better job when his turn came.”

Kenya’s President Uhuru Kenyatta commissioned the country’s SGR passenger services in mid-2017, followed by its cargo services six months later. The first phase connected the coastal city of

Mombasa with the capital, Nairobi, and ran along the older, Britishbuilt railway. The second phase, dubbed “Phase 2A” and launched in late 2019, connects Nairobi to Suswa, an uninhabited expanse of land in the country’s Great Rift Valley. It cost KSh150bn ($1.5bn) and was funded by China, which withheld funding for the rest of the line earlier this year.

Ethiopia had commissioned its 756km railway, which ends in neighbouring Djibouti, in October 2016. These projects were part of a regional master plan, signed in 2008, to build new railways and logistics infrastructure within the next decade.

Different angle

From the onset, Tanzania, which has always gone it alone in the region – by not, for example, signing the region’s railway master plan in 2008 – chose to work on its rail project from a different angle.

Unlike Kenya and Ethiopia, both of which ended up heavily indebted to China for their new railway lines, Tanzania sourced part of its railway financing from the Export Credit Bank of Turkey and Standard Chartered Bank. It also contracted non-Chinese companies: the first two phases are being built by Yapi Merkezi of Turkey and Mota-Engil Africa of Portugal. If it secures financing for the three remaining phases: Makutupora-Tabora

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87

LOGISTICS DOSSIER / Competition on the rails

(294km), Tabora-Isaka (133km) and Isaka-Mwanza (248km), Tanzania will float separate tenders.

The result, according to Luis Francheschi, dean of Strathmore Law School in Kenya, and other researchers, is a cheaper project that will leave Tanzania far less indebted than her regional counterparts. “Kenya’s and Ethiopia’s SGR projects impacted significantly the amount of their debt to China and generally their ratio of debt relative to GDP,” researchers wrote in the Daily Nation in December 2019, “As of 2017, Ethiopia and Kenya ranked the second and third highest Chinese debtors on the continent respectively. Their debt relative to GDP has also risen exponentially compared to Tanzania’s.”

Further complicating matters is the fact that, despite accumulating debt and government focus over the past decade, Kenya and Ethiopia’s SGR’s have not delivered what they promised. One reason was the choices both countries made on the route, financing, and repayment of the loans they took to build the railway. For example, the Kenyan and Ethiopian SGRs force

$1.5bn

Value of the loan signed by Tanzania with Standard Chartered Bank for the SGR’s construction in February

passengers and freighters to seek last-mile connections, because the start and end stations were built away from urban centres. The plan in both countries failed for many reasons, chief among them being an economic downturn in both Kenya and Ethiopia after a long period of spectacular growth. Without requisite additional economic incentives to use the new line, for example, the Kenyatta administration has struggled to balance between debt repayments and missed revenue targets. Before and since the launch of the first phase in the lead up to the 2017 general elections, questions have lingered over the entire project’s cost, viability and economic impact.

In Ethiopia, the political upheaval that escalated around the same time the new railway became operational meant it was not the main focus of

New rails, old problems Tanzania’s new railway line will face the same challenges as those in other countries of the region, chief among them, a logistics sector under pressure. In January 2020, for example, the Board of TAZARA, the body that runs the rail partnership between Tanzania and Zambia, reported a slump in performance on the old line.

TAZARA’s managing director Bruno Ching'andu explained the main problem being the “unreliability and availability of locomotives and wagons”, but also noted hurdles in accessing other markets. He said the drop was also a result of new customs clearance procedures in the Democratic Republic of Congo, which became operational after the new government, under President Félix Tshisekedi, came to power.

While Tanzania is still investing in its old rail network – it plans to buy several locomotives and lease others – the new line will have to compete with the old one for cargo traffic. Even though they do not cover the same route, freighters could find ways to take advantage of the new line’s promise of speed and efficiency, especially as it opens up new business opportunities. As part of Tanzania’s larger plans, it is reviewing the law that marries it to Zambia in order to allow private investments.

These could see the rail network extended from Dar es Salaam to South Africa, serving the Southern Africa Development Community. The most likely financier is Beijing, which built the existing Dar to Kapiri-Mposhi line in 1976.

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THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

the ruling party. But unlike Kenya which has road access to the sea, Africa's second most populous country is landlocked, and worked faster to provide the link roads and other infrastructure needed to make the railway work.

During the second Belt and Road Forum for International Cooperation (BRF) in April 2019, Beijing cancelled all accumulated interest rate repayments owed by Addis Ababa up to 2018.

At the same time, it declined to sign funding for the $3.6bn third segment of Kenya’s SGR, which would have brought the line closer to Uganda. In 2018, China had asked Kenya and Uganda to do a commercial viability study of the entire project, after it became clear that the first phase had not met expectations and was making a loss of $7.4m a month during its first year of operations.

Cheaper alternative

The absence of a funding deal means that Uganda will wait even longer to build its railway. In October 2018, the landlocked East African country suspended its plans to extend the SGR from Malaba, located on its eastern border with Kenya, to Kampala. Now starved of the capital to complete the railway line, both Kenya and Uganda are seeking funding to revamp their old metre-gauge railways as a short-term solution. If the new plan works, cargo will have to be transported from Mombasa to Suswa on the new railway, by road to a new inland port in Naivasha, and then onwards on the old railway to the border with Uganda.

But that plan might also be hard to achieve. After Nairobi decided to go for the cheaper alternative, its first choice of contractor quoted a price triple the government’s original estimate of Shs.21 billion.

By February 2020, The Daily Nation reported, the new inland

port that was launched in December 2019 remained idle.

One saving grace might be the African Union’s decision in January this year to adopt another of the region’s major plans, the Lamu Port-South Sudan-EthiopiaTransport (LAPSSET) Corridor project, as a regional project.

While the project is separate from the SGR, it could make Kenya a more attractive route to and for Uganda, and other landlocked Great Lakes countries.

Another lesson Tanzania will learn from Kenya is how not to try and make its new railway profitable. The Dar es Salaam equivalent in Kenya, the coastal city of Mombasa, has been the hardest

hit by Kenyatta's administration's attempts to improve the railways’ revenues. It, for example, issued a short-lived directive to have all inbound cargo hauled by the SGR, cutting off primary business for road freighters and others.

Tanzania has also learnt from the financing mistakes of its regional peers. It is, for example, working with the Africa Trade Insurance Agency (ATI) on a plan that would see the insurer provide a ‘credit wrap’ for sovereign bonds and other international financing structures.

ATI, already involved in the SGR project and other sectors, has helped Dodoma attract more than $2bn, but said in early February that it wants to do much more.

SOUTH SUDAN

Isiolo - Moyale 460km-$1.6bn

Kisumu - Malaba 107km - $1.7bn

Juba Nakadok

Moyale

Naivasha - Kisumu 262km - $3.7bn

UGANDA

Kampala - Mpondwe 430km

Kampala

Bihanga-Mirama Hills 205km Kigali-Mirama Hills $1.2bn

ETHIOPIA

Isiolo-Nakadok 720km-$3.9bn

EAST AFRICAN RAIL LINKS Malaba - Kampala 273km-$2.3bn

According to the project manager, Machibya Masanja, the first phase of the new line was 72% finished by early February 2020 and would be completed by April.

The initial plan was to cross into the new decade with the first phase complete, but heavy rains, which caused flooding throughout East Africa, disrupted construction of vital sections in Morogoro. Heavy rainfall is expected again in March and April, and may affect plans to begin formal testing in May. When it does become operational, it will be the third such project in East Africa. It will also be the cheapest so far, and carry the hope of the region that it will fare better than its peers.

Entebbe

Kigali RWANDA

DEMOCRATIC REPUBLIC OF THE CONGO

Bukoba

Malaba

SOMALIA

Isiolo Kisumu Naivasha Nairobi

Mwanza

Tabora

Lamu

Isaka - Mwanza 248km Mombasa

Tabora-Isaka 133km

Morogoro - Dodoma 336km - $1.9bn

Dodoma

Dodoma - Tabora 294km

NETWORKS

Nairobi - Naivasha 120km - $1.5bn Nairobi - Mombasa 472km - $3.3bn

Musoma

BURUNDI Isaka

Kigali - Isaka 571km - $2.5bn

Lamu-Isiolo 537km - $1.5bn

KENYA

TANZANIA

Dar es Salaam Morogoro

Dar es Salaam - Morogoro 205km - $1.2bn

LINE STATUS

Lamu Port-South Sudan-Ethiopia Transport Corridor (LAPSSET)

Complete

Northern Corridor

Under construction

Central Corridor

Planned

Maritime transshipment

Concept

Existing metre-gauge rail network

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89

Ghana plans to expand its railway network to more than 4,000km by 2048

GHANA

Transnet helps launch a revival It’s all happening in Ghana’s Western Region. Multinationals are setting up shop in the picturesque seaside town of Takoradi, lured by rich oil and gas deposits

By XOLISA PHILLIP in Johannesburg In addition to oil and gas, Ghana’s Takoradi is home to several major mining operations. Looked at from an industrial and infrastructure development perspective, the Western Region is abuzz and booming, according to Wilson Mogoba, a programme director at South African logistics company Transnet.

Mogoba is driving Transnet’s joint initiative with Ghana Railway to breath new life into a 66km stretch of railway line in the Western region between Takoradi and Tarkwa. In mid-2019, the Ghanaian cabinet gave the go-ahead for the development

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of a petroleum hub in the Western Region. This lines up with Ghana’s six-phase Railway Master Plan designed to revitalise the country’s existing railway network of under 1,000km and expanding it to more than 4,000km by 2048.

Initial estimates place the investment value of Ghana’s rail revival scheme at $21bn.

Enter Transnet, the South African government-owned diversified

Initial estimates place the investment value of Ghana’s rail revival scheme at $21bn

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

logistics company. Transnet has freight rail, ports, port terminals, pipelines and engineering operating divisions. It is the continent’s biggest rail and port operator.

In a bid to diversify its revenue base, Transnet conducted a global scan on areas of potential interest about four years ago. “We would achieve that, in part, by expanding our geographic footprint. Ghana came up in the top 18 countries.

Since then, we have been looking at Ghana in earnest,” says Mogoba.

“More than 60 years ago, [Ghana] had a railway network of close to 1,000km. Today, we step into an area where only 66km of that network exists. The attendant industries that would typically

XIAO YIJIU/XINHUA-REA

LOGISTICS DOSSIER

MESSAGE

CÔTE D’IVOIRE EMBASSY IN WASHINGTON USA

EXPERT ADVICE

Email : info@ambacidc.org. www.ambaciusa.org

Flourishing bilateral cooperation Energy, agribusiness, healthcare,

to Côte d’Ivoire in July 2018 the US Un-

drinking water, education... these are

dersecretary of Commerce,Gilbert Kaplan,

all sectors that testify to the dynamic

signed an agreement for improving the

cooperation between Côte d’Ivoire and

competitiveness of customs services and

the United States of America.

a grant protocol for financing feasibility

This flourishing cooperation is multi-

studies in the energy sector.

faceted. One of the latest major actions

At the end of 2018, Côte d’Ivoire’s Minister

His Excellency Mamadou Haïdara,

Ambassador Extraordinary and Plenipotentiary of the Republic of Côte d’Ivoire to the United States of America

to date is the convening of the AGOA

of Foreign Affairs, Marcel Amon-Tanoh,

Lastly, in January 2020, my meeting

(African Growth and Opportunity Act)

and the US Secretary of Commerce,

with Kimberly A. Reed, Chairman and

summit in August 2019. Added to this is

Wilbur Ross, signed a memorandum of

President of the Export-Import Bank of

the signing of several memorandums of

understanding in Washington regarding

the United States (EXIM), focused on

understanding,amounting to 2,724 billion

the implementation of various projects

the conditions for the establishment of a

CFA francs earmarked for the implemen-

(agriculture, industry, transport and

partnership for the import of USA-made

tation of various projects. During his visit

energy).

goods and services to Côte d’Ivoire.

Understand Africa’s Tomorrow, today N° 111 • APRIL-MAY-JUNE 2020

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LOGISTICS DOSSIER

A small piece

Transnet has bigger ambitions.

“The agreement puts us in a position to start reviving the Western line. We are looking at [it] in the context of an even bigger

TRANSIT TRADE WITH BURKINA FASO, NIGER & MALI (tonnes) Transit import total

998,542

Transit export total

Change total

966,969

-3.2%

87,034

62.8%

945,095

879,935

-6.9%

2017

2018

53,447

SOURCE: GHANA SHIPPERS’ AUTHORITY

have existed to support the railway have all but disappeared in Ghana,” Mogoba adds. “[The Western line] holds tremendous potential for the transportation of freight, mostly serving the mining [and] agricultural sector[s]. It has a link all the way to Kumasi,” he says.

The line between Takoradi and Tarkwa is not long, but it serves a manganese mine. In 2019, the mine exported about 5m tonnes of manganese ore through Takoradi.

The railway only moved around 560,000tn. This is “a serious indictment on the state of [Ghana’s] rail infrastructure,” according to Mogoba. “Now, road transportation is not cheap. It’s not friendly to the roads. It causes traffic congestion and a whole host of [other] challenges,” explains Mogoba.

Crucially, Ghana Railway, the operating entity, is not doing well.

“Through us injecting our technical and operational expertise, we see a transformation in [Ghana] Railway.

That [could] lead to a company that becomes a net positive contributor to Ghana’s economy.”

execution of the Railway Master Plan – that is why it is exciting for us. The agreement is a small piece of the Western line. The bigger prospects are the entire Western line and broader railway development in the country,” says Mogoba.

The deal is the culmination of years of discussions between Transnet and Ghana Railway. The Ghanaians are keen to tap into Transnet’s operational expertise, he says. “They operate a railway that only runs about 500,000tn per annum. We [operate] a railway that runs well over 220m tonnes per annum. We are coming on board to up their game significantly,” says Mogoba. “Bauxite is [transported]

entirely on the road. Cocoa, all of it is [transported] on the road. Take all this bulk cargo, put it on rail, and [suddenly] you begin to have a logistics value chain that works.

“The ticket size [of the joint Western Region project] might be deceptive once we’ve done the numbers. But the systemic impact on Ghana’s economy is significant,” according to Mogoba. Transnet and Ghana Railway are now finalising due diligence. Once completed, work will begin on the line to rehabilitate it and make it safe.

The urgency of the task at hand is highlighted by the fact that the line is in dire straits. Derailments are a common occurrence – so are slow speeds. “We are going to send in our technical teams to work with the Ghanaian workforce as partners. We are going to do some work with our construction guys to fix the line and to maintain it,” says Mogoba. The work will start around March 2020 and will take between six and nine months.

An important aspect of the deal is that it has support from President Nana Akufo-Addo, minister of railways development Joe Ghartey and the railway administration.

“Hopefully, all those elements will come together to make the journey of change that much more palatable,” Mogoba enthuses.

Transnet rolls with rest of the continent Transnet is phasing out its ‘Market Demand Strategy’ and replacing it with ‘Transnet 4.0’ as it looks to the international market, particularly the rest of Africa, for revenue.

A key component of Transnet 4.0 is international expansion, according to Wilson Mogoba, a programme director at Transnet International Holdings. The Market Demand Strategy emphasised

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South Africa and its market requirements, while it did not give international expansion a place of prominence.

However, Transnet has had to confront operational challenges in its home market.

These include a struggling economy whose industrial base is in decline.

Transnet feels the effects of this development on its bulk cargo volumes, which have

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

been on a downward trend in recent years. In its 2019 annual report, the company noted the year was “turbulent” for Transnet Freight Rail, one of its five operating divisions.

Transnet Freight Rail is the company’s biggest operating division and provides rail and freight services to transport commodities for export.

Transnet cited a “sluggish economy, unstable market

conditions [and] operational and governance challenges.”

Volumes handled by Transnet Freight Rail dropped 4.9%.

This affected the division’s revenue intake and dragged it down 0.3%.

“Transnet 4.0 [looks at] new avenues of growth for Transnet to ensure we remain a sustainable company. Hence the rest of the continent offers [opportunities],” says Mogoba.

A monthly programme on BBC World News Each 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

TOP 50 DISRUPTORS /

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THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

Politicians, athletes, investigative journalists, techies and business barons are changing the rules of the game – some for better and others for worse. In vastly different ways these 50 Africans are transforming the continent

MAKSIM BLINOV/SPUTNIK; PHILL MAGAKOE/AFP; OSTYN AIMZ; MICHELE SPATARI/AFP; REX/SIPA; RAMZI BOUDINA/REUTERS/VINCENT FOURNIER/JA

By 'TOFE AYENI, ERIN CONROY, ALISON CULLIFORD, NICHOLAS NORBROOK and HONORÉ BANDA he toughest obstacles are perhaps in our own minds. When a regime is in its pomp, like the ruling MPLA in Angola, it can seem like it will rule for a hundred years. ‘Disruptors’ may be become a buzzword from the tech and start-up world but long before this it applied to those who won’t be silenced.

From those who scatter the business models of traditional taxi firm and bricks-andmortar banking to those who alter the way we think or give us hope, all make a mark by changing systems – the ways things are done – to impact generations.

Accepting the Nobel Peace Prize in December for helping to end decades of conflict in the Horn of Africa, Ethiopia’s Prime Minister Abiy Ahmed said: “Before we can harvest peace dividends, we must plant seeds of love, forgiveness, and reconciliation in the hearts and minds of our citizens. We must pull out the weeds of discord, hate and misunderstanding, and toil every day during good and bad days too.” Abiy is also looking to upend the rules of Ethiopia’s politics and economy, by opening them up to more competition and diminishing the influence of the ruling party. Weakening the role of the central government, however, could cause Abiy’s own plans for disruption to end up being disrupted.

In the grand innovation competition, whatever the sphere, it is disrupt or be disrupted. Jumia has yet to show it can run a profitable business, and Andela, which focuses on promoting African computer programming talent, is rowing back on its ambitions.

Our exclusive ranking of Africa’s Top 50 disruptors is based on three factors: innovation, disruption and heft. These criteria take into account how new the idea is, how big the change is and how many people are impacted. Maybe we have lost our heads: tell us how, on Twitter or Facebook, or message us at editorial@theafricareport.com.

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

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ZUMA PRESS/ZUMA/REA

TOP 50 DISRUPTORS /

Abiy Ahmed Peace and prosperity

ETHIOPIA

Dynamic, a reformer and an adept diplomat, Prime Minister Abiy Ahmed is at the heart of tectonic change in Ethiopia and in the region. The country was starting to outgrow the governing and economic model that had turned it into East Africa’s largest economy. Cue Abiy’s great opening: of the economy to foreign investment, the landlocked country to ports in the Horn of Africa, the state to differing opinions, and the region to new dynamics. He ended the war with neighbouring Eritrea (which won him the Nobel Peace Prize) and has taken a strong line on the GERD dam with Egypt. In two years Abiy has achieved much, but he is also juggling mounting security issues at home and abroad. This has taken him from being a symbol of unity to treading a thin line between order and authoritarianism.

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Aliko Dangote Refining the system

2

BENEDICTE KURZEN/NOOR-REA

NIGERIA

The energy market in West Africa will never be the same again. Since 2016, Aliko Dangote has been constructing Dangote Refinery in Lagos, Nigeria.

Due to be completed at the end of this year, the refinery is expected to be one of the world’s largest – with the capacity to process around 650,000 barrels of crude oil a day. The company expects fuel production within two months of construction completion and this will reverse the decades-old system the country has of exporting crude oil and importing refined petroleum products such as gasoline, diesel and lubricating oil. Industry experts say it is more likely that production will start in 2022, but it will ultimately ease pressure on Nigeria’s currency by freeing up about $8.7bn used to import refined petroleum products each year, as well as create many jobs. Africa’s richest man, owner of the Dangote Group, has an estimated net worth of $10bn.

THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

ANGOLA

Becoming Angolan president after 38 years of José Edouardo dos Santos in September 2017, it was as if João Lourenço pulled a switchblade on his former protector on the day of his inauguration. Starting with the presidential daughter Isabel dos Santos, sacked from state oil company Sonangol, and her brother José Filomeno (‘Zeno’), arrested for embezzlement, one by one, heads rolled through every strata of government, removing the tentacles of Dos Santos’s patronage structure. The key question now, for cynics, is will he be willing to make constitutional changes that dilute the centralised power structure that allowed these abuses to happen?

MAKSIM BLINOV/SPUTNIK

3

Tech

Civil society

Nana Akufo-Addo & Alassane Ouattara Currency and cocoa

GHANA & COTE D’IVOIRE

There is more than an entente cordiale between the presidents of Ghana and Cote d’Ivoire. Their joint projects are shaking up the region. First in cocoa: Akufo-Addo and his francophone neighbour are working together to disrupt the international market for the soft commodity and better protect the livelihoods of West Africa’s many cocoa farmers. Ouattara and Akufo-Addo succeeded in negotiating a $400-per-tonne surcharge on this season’s harvest, and, in doing so, coined a phrase (first heard at The Africa CEO Forum in Abidjan in 2018): ‘Cocopec’. Ouattara, an economist by profession, also caused a stir in West Africa at the end of last year by his surprise announcement – on a podium shared by France’s President Emmanuel Macron – of the proposed new currency, the eco, replacing the CFA franc (see page 12) in eight West African francophone countries. The project was soon backed by Ghana, despite the concerns from Nigeria and other anglophone countries that the eco was stealing thunder from the wider regional currency that has been planned. Akufo-Addo may be tempted to win support for landing the headquarters of the future regional central bank in Ghana by backing Ouattara in the battle of West African wills.

4

Koos Bekker Tech king

HALDEN KROG/BLOOMBERG VIA GETTY IMAGES

Off with their heads!

Business

JA

João Lourenço

CHRIS WILLIAMSON/GETTY IMAGES

Politics

6

SOUTH AFRICA

When Bekker first joined it in 1985, Naspers was effectively the propaganda arm of the National Party that constructed apartheid. He transformed it into a media giant, founding M-net, one of the first pay television services outside the US. His big bet: a Naspers investment in China’s Tencent. The pay-off has transformed Naspers into a truly global company. Bekker is also a founding director of mobile communication company MTN, and was instrumental in

launching MultiChoice and DStv. Having grown the company’s market cap from $1.2bn to $45bn, Bekker retired as CEO in 2014, then returned as chairman the following year. Bekker’s decision to appointed Bob van Dijk as CEO has been called into question, however, since the latter has made controversial management changes, appointing numerous foreigners to head a company that many South Africans believe is supposed to be for South Africa by South Africans.

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TOP 50 DISRUPTORS /

John Magufuli Authoritarian reformer TANZANIA

RAMZI BOUDINA/REUTERS

9

The unsung Algerian protester People power ALGERIA

Masses of Algerians – without a visible leader – shook the regime to its foundations in 2019. Hundreds of thousands of people regularly protested at the prospect of a fifth presidential term for the incapacitated strongman Abdelaziz Bouteflika. Despite the pressure of the street, the people were not able to stop the elite from pushing through an unpopular election in December 2019. The protests remain an important check on the new government, which is seeking a dialogue to address popular demands. Many have rejected this and want to maintain the tactics that have been put to good use since early 2019.

7

Khalifa Haftar Military offender

8 NICOLAS MESSYASZ/SIPA

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MICHELE SPATARI/AFP

LIBYA

After the late General Muammar Gaddafi was ousted in 2011, two opposing forces of power appeared in Libya: one in Tripoli, the UN- and Turkey-backed Government of National Accord (GNA); and one in the east, led by Gen. Khalifa Haftar and supported by Saudi Arabia, the UAE, Egypt and Russia. French involvement is also in question: Paris denied breaching an arms embargo after French-made missiles were found on a captured base of Haftar’s. With his Libyan National Army (LNA), strongman Haftar made a brutal assault on Tripoli in April 2019, which led Amnesty International to accuse him of war crimes. In early 2020 Russia and Turkey tried to broker a ceasefire agreement with Haftar in Moscow, but the warlord left without getting out his pen. He claims the LNA wants to restore order; his critics say he is preventing the growth of democracy in Libya.

From day one – when he arrived unannounced in various civil-servant offices, and started slapping tax writs on bill dodgers – Magufuli has shaken things up in Tanzania. Now, he faces criticism from international human rights’ groups for his increasingly authoritarian attitude, particularly his repression of the press, freedom of speech, and his anti-LGBTQ+ stance.

In Tanzania, despite this, he is celebrated for economic reform – the country of 58 million people now boasts one of the highest economic growth rates in Africa.

Magufuli set an example by cutting his own salary from $15,000 to $4,000 per month, has ensured that civil servants turn up for work and has made it easier to do business. He has taken full advantage of Chinese financial help, and has embarked on a vast programme of infrastructure development, particularly in the rail industry (see page 86).

Politics

Business

Tech

Civil society

Julius Malema Black power

SOUTH AFRICA

As the leader of what is now the third-largest party in both houses of the South African Parliament, with 44 seats in the National Assembly, Julius Malema is aiming for at least 10 million votes in 2024.

The country’s demographics put him and his Economic Freedom Fighters (EFF) in a strong position. Disruptive in every sense of the word – the EFF’s red boilersuits are often seen storming or walking out of parliamentary sessions – Malema says his party was responsible for the resignation of corrupt former president Jacob Zuma: “The EFF motion of no confidence in the former president formed the basis of all deliberations and discussions that resulted in him resigning as president of the republic of South Africa – bringing to an end the rule by criminal syndicates.” To his young, overwhelmingly black support base he says South Africa should not be dependent on loans from the West, but should reclaim its sovereignty.

DEMOCRATIC REPUBLIC OF CONGO

When Joseph Kabila finally agreed to step down as president of the Democratic Republic of Congo (DRC) after 18 years in power things didn’t quite work out as he had planned. Instead of Kabila’s chosen dauphin, Ramazani Shadary, slipping into his still-warm seat the election result was disputed between oppositionists Martin Fayulu and Félix Tshisekedi. Kabila is widely thought to have done a backroom deal with Tshisekedi, to whom he handed the keys to the palace on 24 January 2019. Kabila is now a senator for life, in accordance with the country’s constitution.

Since then, it has been a competition between the two to see who can disrupt whose networks. The spoils are clear. The DRC has the richest subsoil of any nation on the continent, including the lion’s share of

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JAMES OATWAY/PANOS-REA ROBERT CARRUBA POUR JA

Power struggle

EVAN SCHNEIDER/UN PHOTO

Joseph Kabila & Félix Tshisekedi

10 the mineral for all our future electric battery needs: cobalt. Tshisekedi has railed about Kabila’s corruption to Western donors and is now taking steps to neutralise key Kabila allies.

Kabila and his allies control a majority in the legislature, giving them considerable power to stymie Tshisekedi. That has not prevented Tshisekedi from raising the ante: his government and security services are going after mining boss Albert Yuma, spy chief Kalev Mutond and Kabila’s sister Jaynet. Frustrated by Kabila trying to block many of his initiatives, Tshisekedi threatened to dissolve the National Assembly earlier this year, although this was later retracted.

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TOP 50 DISRUPTORS /

Bolaji Akinboro & Ken Njoroge Nigerian Demeter NIGERIA

The duo behind fintech Cellulant scribbled their first business plan on a napkin. With many a pivot later, they have transformed into a fintech company helping to build payment architectures that everyone from smallholder farmers to government agencies can trust.

Cellulant now works in 33 African countries, with 94% of the customer base never having used banking before.

Their biggest hit in Nigeria has been working to disrupt the corrupt networks that interfered with the

distribution of agricultural subsidies. The Growth Enhancement Support Scheme creates an e-wallet system to put the fertiliser subsidy in the phone of the farmer, for them to cash out at a shop. They are even bringing in a second phase to help connect farmers with banks, and fix the financing gap in African farming.

Their technology is being used as far away as Afghanistan and leans on distributed ledger technology to create trust right the way through the tangled web that makes up the agricultural value chain, from banks, agribusiness, exporters, government agencies, input-sellers, and, of course, the farmers themselves.

They are not stopping there, either: the energy sector may well feel their attention before long.

CELLULANT

13 Mitchell Elegbe Unicorn founder NIGERIA

Weaning Nigerians off cash is not easy, but Mitchell Elegbe is an optimist and he thinks big. The founder, MD and CEO of Interswitch, he pioneered the infrastructure to digitise the mainly paper-ledger and cash-based economy in Nigeria.

Today Interswitch’s technology processes over 500 million transactions a month; its Verve payment card is the largest domestic debit card scheme in Africa and it is expanding outside Nigeria in August 2019. Elegbe always saw his as an innovation that could facilitate the electronic circulation of money anywhere in Africa. Visa saw it too, and in November 2019 acquired a minority equity stake in Interswitch that took the company to unicorn status – valuation of $1bn. Interswitch could be Africa’s sole tech unicorn for some time as Jumia’s worth has dropped; an Interswitch IPO is still on the cards.

ALL RIGHTS RESERVED

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Politics

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Civil society

A new voice UGANDA

He’s an award-winning musician and has been an MP in Uganda since 2017. His People Power Movement aims to improve democracy, human rights and the rule of law, and denounces poverty, corruption and social injustice. The opposition leader’s next move is to run for president in 2021, against incumbent Museveni, who has been in power since 1986. Bobi Wine believes he has an 80-90% chance of winning, provided the elections are free and fair. Authorities arresting him for such crimes as “annoying the President”, preventing him from performing his music in public, and shutting down his political rallies, point to a worried administration.

Iyinoluwa Aboyeji

Pan-African lawyer

From grace to grace

Pushed out of the global law company Orrick, Herrington & Sutcliffe despite climbing to the number-two position, Agboyibor could have called it quits. Instead, he founded his own practice and now has the ‘magic circle’ of law firms quaking in their boots, scooping up deals previously reserved for them. “Our name, Asafo, derives its origin from elite groups of traditional West African warriors […] dedicated to the defence of cities and states in the region. The name underlines our commitment to defending our clients’ projects in Africa, with military discipline, rapid response and a high level of coordination,” Agboyibor says. Bringing together top lawyers from international firms such as Dentons, White & Case, and of course Orrick, who have years of experience dealing in African affairs, he has created a law firm completely dedicated to Africa.

Through its presence in the main business hubs the firm aims to handle major, complex cases with a rapid and integrated approach.

At 28, Iyinoluwa Aboyeji has already co-founded several successful start-ups in the public interest, notably Andela and Flutterwave. He’s not stopping there: he has recently launched the Future Africa Initiative, which will provide capital, coaching and a community for founders invested in rebuilding Africa ($50,000 capital will go to 20 start-up founders each year).

His first world-recognised project, Andela, invests in Africa’s most talented software engineers to help companies solve the technical talent shortage. The company gained global recognition after receiving $24m in funding from Mark Zuckerberg. He left Andela after three years and co-founded Flutterwave, a platform that makes it easier for banks and businesses to process payments across Africa.

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NIGERIA

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FACEBOOK

TOGO

VINCENT FOURNIER/JA

Tech

Bobi Wine

DAMIEN GRENON FOR JA

Pascal Agboyibor

Business

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TOP 50 DISRUPTORS /

CRISTINA ALDEHUELA / AFP

19 Anas Aremeyaw Anas

Herbert Wigwe

Name, shame and jail GHANA

The bigger banker NIGERIA

Known simply as “Anas”, the investigative journalist uncovers cases of corruption and human rights abuses in Ghana and sub-Saharan Africa. His groundbreaking investigation into corruption in Ghana’s legal system led to the suspension and/or indictment of seven out of the 12 High Court judges filmed accepting bribes in his 2015 documentary Ghana in the Eyes of God. In January 2019, Ahmed Hussein-Suale, who worked with Anas on an exposé that led to the dismantling of the Ghana Football Association (GFA) and sacking of a FIFA referee, was murdered, further underlining why Anas has chosen to protect his identity. This year, the Human Rights Courts in Accra dismissed Ibrahim Saanie Daara’s case against Anas. Daara, the former deputy general secretary of the GFA, was shown in Anas’s Number 12 football documentary collecting a bribe to influence the selection of a player.

Mining mogul

SOUTH AFRICA

DAMIEN MEYER/AFP

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mining industry, which employs nearly 170,000 people, to progress.

Radebe has political ties and was accused of meddling in the politics of neighbouring Botswana. She is insistent on not using her powerful family connections to prove her innocence, relying instead on the courts. In 2019, she was appointed as a member of the BRICS Business Council, set up to strengthen business, trade and investment between the business communities of the BRICS countries.

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ACCESS BANK

21

Bridgette Motsepe Radebe Radebe is South Africa’s leading black female mining entrepreneur, and founder of Mmakau Mining. The businesswoman is against the “capitalist mining model” through which the majority of the natural resources in the country passed from the white minority to corporate bodies at the end of apartheid. She is the president of the South African Mining Development Association and proposes a complete national­ isation of all mining operations, a state buyout of those with dwindling profitability that only exist in the name of black empowerment, and a cooperation movement between the public and private sectors over the running of South Africa’s mines. She argues that this would allow the

The cosy top three of Nigeria’s banking world was shattered in 2019 when Access Bank snapped up Diamond Bank. Access Bank’s CEO, Herbert Wigwe, admits that he is “still learning how to navigate such a massive institution”. When Wigwe and his business partner, Aigboje Aig-Imoukhuede, acquired Access Bank in 2002, it was ranked 65th out of 89 banks in the country. It now has just under 30 million customers.

Bigger, of course, may not be better. Investors raised eyebrows when he sold off nearly 7% of his bank stake.

Wigwe is also a philanthropist. Under the aegis of the bank, he created the “W” Initiative to accelerate female entrepreneurs and NollyFund to help Nollywood stakeholders with the production and distribution of films. Although not opposed to entering the political realm, he says that his years in the finance industry are not nearly over yet.

Politics

Business

Tech

Civil society

Adnan Abu Walid al-Sahrawi DR

Terrorist take-over

BURKINA FASO, MALI, NIGER

States across West Africa are being shaken to their core by the leader of the Islamic State in the Greater Sahara. Al-Sahrawi is at the forefront of terrorist activity in Burkina Faso, Mali and Niger. He previously was active in Gao, during the brief period in which the Malian city was under Islamist control.

The $5m offer from the US government for information on his whereabouts makes it clear that he is seen as a global threat and the noted geographical expanse of his group’s activities is met with fear. Similarly, it was in 2019 that the organisation began to receive regular attention from formal Islamic State (IS) media outlets. When the group is not participating in militant activities, it is building relationships with local communities and taking advantage of tensions. It then uses these relationships to recruit supporters. Al-Sahrawi learned from IS’s errors in the Middle East, where too much emphasis was put on gaining territory and not enough on communities’ needs.

FARMCROWDY GROUP

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Onyeka Akumah

Agri-fin-tech NIGERIA

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Strive Masiyiwa

From Zimbabwe to the world ZIMBABWE

JUSTIN CHIN/BLOOMBERG VIA GETTY IMAGES

Strive Masiyiwa claims that in 1978 a senior officer in Zimbabwe guerilla forces told him he wasn’t needed as a fighter but he would be needed to rebuild the country. That’s what he’s been doing ever since. After winning a protracted legal battle to remove the state monopoly on telecoms he founded Econet Wireless Zimbabwe, parent company of the Econet Group, which has operations in more than 15 countries worldwide. Masiyiwa also wanted to get into mobile money, so his firm bought a bank rather than wait for changes in legislation. Not all his gambles work out, however: in February he placed Econet Media under administration. Zimbabwe’s (legitimately) richest man is also Africa’s most prolific philanthropist. His various foundations educate children, fight disease, invest in rural entrepreneurs and militate against climate change.

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What if you could invest in Nigerian agriculture from the relative comfort of your own sitting room in Lagos?

Onyeka Akumah is making that possible and reshaping agricultural value chains as he does it. The technology entrepreneur is the co-founder and CEO of Farmcrowdy, an agricultural platform connecting small-scale farmers to investors with the goal of boosting local food production. The company took off fast, receiving its first angel investment of $60,000 just a month after launching. Farmcrowdy and the Oyo State government announced a partnership in August 2019 that will involve 50,000 farmers.

Farmcrowdy bought Best Foods in February to grow its footprint in livestock and processing. Akumah is a mentor and investor, sitting on the boards of start-ups from New York to Lagos.

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TOP 50 DISRUPTORS /

Eliud Kipchoge Breaking limits

LINKEDIN

KENYA

Peter Njonjo

Success in food supplying KENYA

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REX/SIPA

26 Moustapha Cisse

Fairness, transparency and reliability SENEGAL

Moustapha Cisse heads the Google Artificial Intelligence (AI) Centre in Accra, Ghana. The Senegalese native is committed to improving the lives of those most in need in African societies. His current research efforts focus on the essential prerequisites of such AI – fairness, transparency and reliability. He believes that Africa’s technological solutions should be developed within the continent, and wants to create AI programmes to help farmers diagnose blights affecting their harvests, and translation software to better connect speakers of Africa’s 1,500-2,000 languages. Lack of opportunity on his own continent led him to study in Europe and then found the African Institute for Mathematical Sciences (AIMS), a pan-African network of centres for post-graduate training, research and public engagement in maths and sciences.

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@KENTWISTPHOTOGRAPHY

Retailers of Kenya beware. Peter Njonjo is the CEO of Twiga Foods, one of Kenya’s most successful start-ups, created in 2014 as a solution to inefficiency in Africa’s large, but highly fragmented, informal fruit and vegetable market.

The company uses a technology-enabled B2B platform to source products from 17,000 farmers across 20 Kenyan counties and deliver them directly to 2,500 vendors per day in Nairobi and its environs. It is now expanding into fast-moving consumer goods (FMCG), and targets continental expansion by the third quarter of 2020, starting with Frenchspeaking West Africa, and then Nigeria.

The company has been credited with raising farmers’ yields while stabilising consumer prices, and is building a new distribution centre that will have state-ofthe-art cold rooms, conveyors and sorting equipment, enabling Twiga Foods to offer supply-chain services for both agricultural and FMCG products.

“Personally, I don’t believe in limits,” says runner Eliud Kipchoge, who broke the marathon world record in Berlin in 2018, completing it in 2:01:39 – 1 minute and 18 seconds faster than the previous record. He won the 2019 London Marathon in a time of 2:02:37, so he now holds the records for the fastest and second-fastest marathon speeds of all time.

But neither of those are his fastest recorded time. Having won 12 out of the 13 marathons he has entered, he became the first person in recorded history to finish a marathon in under two hours in October 2019.

The time did not count as a new world record under IAAF rules owing to the set-up of the challenge, but it earned him two Guinness World Records: ‘Fastest marathon distance (male)’ and ‘First marathon distance under two hours’. The runner has no plans of retiring soon: will he break any more of his own records?

Politics

Business

Tech

Civil society

UMIT BEKTAS/REUTERS

28 Alaa Salah

Image of the revolution SUDAN

A new dawn or a new dictator?

Shamila Batohi AP/SIPA

Mohamed Hamdan Dagalo ‘Hemeti’ SUDAN

The creation of a stable, democratic state is what many Sudanese civilians expected after the ousting of Omar al-Bashir at the end of months of protests on 11 April 2019. Instead, ‘Hemeti’ seems to be running the country.

The leader of the Rapid Support Forces (RSF), a paramilitary force accused of myriad human-rights abuses in the western province of Darfur and elsewhere, Hemeti is also now the deputy head of the Transitional Military Council, set

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SIPHIWE SIBEKO/REUTERS

“Women-led resistance committees and sit-ins, planned protest routes and disobeyed curfews, […] despite this visible role, despite their courage and their leadership, women have been sidelined in the formal political process in the months following the revolution,” Alaa Salah told the UN Security Council in October, 2019. The Sudanese protester personified the revolution that ousted President Omar al-Bashir after 30 years of authoritarian rule, when a photo of her standing in a white toub on a car, leading a crowd of pro-democracy protesters in a chant, went viral. Becoming the symbol of the integral role women played on the front lines of the protests (making up about 70% of the protesters), she is insisting that women – half of the 43 million Sudanese population – have 50% representation in the transitional leadership institutions.

up to run the country for a couple of years until elections. He says he wants democracy in Sudan, and refused orders from Bashir to violently disperse the sit-in outside the military headquarters that precipitated the dictator’s fall, but the RSF has lately been accused of attacking prodemocracy protesters. He reportedly receives Saudi and Emirati support, in the form of weapons and money, as the Middle Eastern countries want to ensure continued participation of the RSF in the war in Yemen.

Prosecutorial pressure SOUTH AFRICA

Slow but sure-footed is the style of the head of the National Prosecuting Authority picked by South Africa’s President Cyril Ramaphosa to show that the days of ‘state capture’style corruption are over. She has been methodically and successfully holding to account the networks of corrupt officials and businessmen allied to former president Jacob Zuma. Her office worked with the US authorities to apply the Magnitsky Act against the Gupta family of businessmen, has frozen the assets of Regiments Capital and filed fraud charges against former state security minister Bongani Bongo.

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Eleni Gabre-Madhin Planting seeds

TREVOR SNAPP/BLOOMBERG VIA GETTY IMAGES

ETHIOPIA

The Ethiopian businesswoman summed up her philosophy to reporters: “The difference between where ideas thrive and where they die is the fertile ground on which they fall.” Having set up the country’s first commodities exchange and then moved on to found blueMoon, a tech incubator, she knows whereof she speaks. With its traceability and predictability, the commodities exchange is now a critical part of the agriculture system’s hardware, allowing farmers to have the documentation they need to access loans and services from the banking sector.

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Henry Costa Airwaves activist

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LIBERIA

The euphoria that followed ex-footballer George Weah into office quickly dissipated. Repeated corruption allegations dog the new government. And quality of life has not improved. Popular radio host Henry Costa has channeled public anger into a series of demonstrations against the administration, gathering hundreds of thousands of Liberians onto the streets of Monrovia to show Weah the red card. With the news that Liberia will auction oil blocks in 2020, Costa is organising new protests with his ‘Council of Patriots’. The government arrested him over immigration irregularities in Sierra Leone in January this year, having shut down his radio station in October 2019.

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Touria El Glaoui Art vanguard

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ZOOM DOSSO / AFP

El Glaoui is one of many pushing for Africa to get the seat it deserves on the international cultural scene. She founded the 1-54 Contemporary African Art Fair in 2013 to give exposure to more African trendsetters.

At auctions, African art is fetching ever higher prices, and this is accompanied by a stronger movement to have African art that was stolen or otherwise procured under unclear circumstances to be returned to Africa, bolstering collections and serving as foundations for new museums.

BEN HOFFMAN

MOROCCO

Politics

Oluseun Onigbinde

Civil society

Zingiswa Losi SOUTH AFRICA

The new head of the Congress of South African Trade Unions (Cosatu) is hoping to leverage its closeness to President Cyril Ramaphosa. “We fought hard to ensure his election and to give the ANC a clear anti-corruption, pro-worker election mandate”, says Losi, the first woman to hold the position. She has a tough job on her hands. Cosatu has suffered splits, and is not seeing eye-to-eye with the other members of the tripartite alliance that includes the ruling ANC and the South African Communist Party. But she is getting results: including forcing a new conversation on how to finance the overhaul of power utility Eskom using pension funds. And she is a fighter; scarred from a public clash with her predecessor Zwelinzima Vavi, Losi battled back to lead the organisation. She had previously been aiming for a job as deputy secretary-general of the ANC .

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NIGERIA

RAJESH JANTILAL / AFP

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BUDGIT

Tech

Tough negotiator

Transparency toolbox

36 MULUGETA AYENE/AP/SIPA

BudgIT is the tool that enables Nigerians to fight bad governance, with proof. Having co-founded the company in 2011, Onigbinde continues to encourage citizens to hold the government accountable. An entrepreneur and open data analyst, fiscal transparency advocate and a firm believer in the power of open data, he was appointed as Technical Adviser in the Ministry of Budget and National Planning on 13 September 2019, but came under fire on social media due to his open and long-term criticism of the same government that appointed him. This caused him to resign three days later. His LinkedIn ‘About’ profile states: “I believe in a just, transparent and fair society where every citizen within a community has equal access to information about the fiscal position of their society and uses such opportunity to demand accountability as well as efficient service delivery.”

Business

Jawar Mohammed Empowered opposition ETHIOPIA

The Oromo activist has announced he will join the opposition Oromo Federalist Congress party ahead of August 2020 elections. Jawar, a founder of the Oromia Media Network, was a key organiser of the 2016 Ethiopian protests and had sparked deadly demonstrations in the Oromia region in October 2019 with a Facebook post in which he accused the government of ordering the withdrawal of his security detail in an attempt to facilitate an attack on him. Tensions between Abiy’s government and Jawar, a former ally, rose after his US-based Oromia Media Network – which has more than a million followers on Facebook – began reporting aggressively on the situation in western and southern Oromia and conflict in Amhara region. Jawar has said he wants a government that respects calls for greater regional sovereignty. There will be hurdles as he launches his political career. In February, Ethiopia’s electoral agency asked immigration authorities to establish Jawar’s citizenship after he gave up his American passport to run for election in the Ethiopian polls.

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Noordin M. Haji

Crime fighter KENYA

Haji is delivering on his promise to tackle graft. The director of public prosecutions orchestrated the July 2019 arrest of the country’s finance minister, Henry Rotich, on suspicion of financial misconduct, which Rotich denies; 27 other government officials were also charged. Rotich was the first sitting cabinet member to be charged with financial misconduct in the country’s history. Days later Haji ordered the arrest of a governor on the outskirts of Nairobi for abuse of office, conflict of interest and dealing with suspect property; another governor was arrested in December for misappropriating public funds. Dozens of current and former public officials have been charged and more than 300 prosecutors have had their appointments revoked. Trained as a lawyer, Haji worked for 18 years in the Kenyan intelligence service before joining the public service in January 2000 as state council in the attorney general’s office.

SIMON MAINA/AFP

AFRICAN BANK

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Basani Maluleke

Expanding the customer base SOUTH AFRICA

The CEO of African Bank is the first black woman to be the head of a bank in South Africa, a position she acquired at the age of 42. Advocating for more leadership roles for women, she is also interested in helping South African students, founding Get Me To Graduation NPC – a non-profit organisation established to fund the subsistence needs of students in the tertiary education system. As CEO, she changed the bank’s policy to ensure that all South Africans get the best interest rates, unlike the traditional system whereby most banks only provide a good rate when people invest R100,000 or more. The MyWORLD scheme started under her leadership, enabling customers to have all their products (including transactional banking) with the bank, rather than just a loan as was previously the case. The product was a part of the African Bank’s efforts to diversify its revenue schemes and broaden its customer base, with the aim of having 1.7 million customers by 2021. In 2019, the bank recorded a third successive year of increasing profit, despite less than ideal economic conditions in the country.

Kamal Yakub Uber for tractors GHANA

Like most good business ideas, the Uber for tractor hire seems incredibly obvious, but it took Kamal Yakub to make it happen. Like many African countries, Ghana has a majority of smallholder farmers who cannot afford to buy a tractor, but for whom a couple of days of ploughing make a huge difference to agricultural productivity. More than enough to pay for hiring a tractor.

Connecting tractors to farmholders via mobile phone is Trotro Tractor’s raison d’etre. Yakub has enabled a great leap forward in rural incomes, allowing farmers to make more investments in their land, pay for children’s education,

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YOUTUBE

39

and slow the drift of kids to the cities in search of work. He is a great advocate of getting young people into agriculture, saying the technology makes it far more profitable now to grow crops. “If you used to do two days on an acre with four people, now you use 45 minutes to finish that acre so it allows you to do more,” Yakub told reporters. He is now expanding to Zimbabwe, with other markets in sight.

Tazi’s meteoric ascent has seen him go from creating an offshoring platform to heading Morocco’s largest private-sector insurer, Saham, by 2014. He quit in 2017 to buy local insurance marketer Beassur, selling a stake to global insurance giant Marsh in 2019. This has generated political capital to go alongside his financial muscle, and Tazi has parlayed this into taking up a new role; as vicepresident of Morocco’s confederation of chambers of commerce, the CGEM. It is a powerful position in a powerful organisation that brings together the country’s biggest businesses with the economic advisers around King Mohammed VI. He hopes to shake up the staid CGEM alongside its president, Chakib Alj, especially in this downcycle of the Moroccan economy.

Many small businesses are suffering from unpaid bills, especially from the government, something Tazi and Alj are campaigning to change.

SAHAM

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Civil society

Zitto Kabwe TANZANIA

He is one of the few opposition politicians to grill the executive. In 2018 the government agreed to sell cashew nuts to a Kenyan company called Indo Power Solution that, it later emerged, does not even exist: Kabwe called them out. The government of John Magufuli regularly returns the favour by detaining and harassing him. The latest skirmish involves a $500m education support loan from the World Bank, which Kabwe delayed the disbursement of for a second time in order to protest Magufuli’s policy of excluding pregnant girls from school. Kabwe has received death threats from ruling party politicians. He says he would do it again.

“We just wrote a letter. This reaction should be a lesson for the World Bank.”

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Caster Semenya Genetically gifted SOUTH AFRICA

The South African middle distance runner is a two-time Olympic gold medalist, but her journey has not been an easy one. After winning the 800m in the 2009 World Championships, the International Association of Athletics Federations (IAAF) subjected her to sex testing, and concluded that she is “biologically male” and needs to reduce her natural testosterone levels. From 2010-15, Semanya reluctantly agreed to take testosteronesuppressing contraceptives recommended by the IAAF so she could keep running, but these had negative effects on her health.

Older now, the athlete is no longer comfortable with being used as a lab rat, or being told she is not a woman. Losing an original appeal, Semenya has taken her case to Switzerland’s supreme court, and has won an interim ruling.

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Agnes Kalibata Food for all RWANDA

The Rwandan president of the Alliance for a Green Revolution in Africa now has a bigger platform. With AGRA, she is working to increase the incomes and improve food security for 30m farming households in 11 African countries by 2021. Last year, in addition to receiving another honorary doctorate, this time from McGill University, and winning the National Academy of Sciences’ Public Welfare Medal, she was appointed by UN Secretary General António Guterres as his Special Envoy for the 2021 Food Systems Summit. The summit aims to generate momentum, expand knowledge, and encourage the sharing of experiences and approaches to help countries unleash the benefits of food systems for all people. Kalibata’s role will be to provide leadership, guidance and strategic direction, as well as being responsible for outreach and cooperation with key leaders.

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THURMAN JAMES/CSM/SIPA

MOROCCO

Tech

Standing up

MARKIRUNGU

Mehdi Tazi

Supporting local players

Business

EMMANUEL HERMAN/REUTERS

Politics

TOP 50 DISRUPTORS /

Nelson Boateng Yellow brick road GHANA

Got too much plastic? Nelson has the solution. Boateng has filed for a patent for his ‘plastic bricks’, made by shredding and melting mountains of discarded plastic to mix them with sand and red oxide. The pavement slabs and tiles are then used for roads and buildings in greater Accra. Boateng’s company is also expanding into roofing tiles and consultancy for launching recycling companies. Nelplast says it aims to recycle about 70% of plastics waste generated by the country daily “into useful products that can be used for a lifetime”. The initiative has also created jobs too, and Ghana’s environment ministry will now fund it.

NELPLAST

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Kako Nubukpo

Bibi Bakare-Yusuf

Out with the franc TOGO

Books sprouting like leaves NIGERIA

Economist Kako Nubukpo (who writes an opinion piece on page 12) is a leading voice in the campaign to remove French influence in the form of the CFA franc currency of the eight member states of the West African Economic and Monetary Union (WAEMU).

Unhappy with interest rates flowing from the European Central Bank he went against the views of elites keen to retain the status quo. In a book (Sortir l’Afrique de la Servitude Monétaire) and articles in Jeune Afrique and Le Monde Nubukpo called the CFA franc “monetary slavery” and accused the Central Bank of West African States of refusing a debate on its future. This led the International Organisation of La Francophonie to suspend him from his post as its economic and digital director. France announced the removal of the CFA franc at the end of 2019, and introduced the new currency – the Eco –which will remain pegged to the Euro, but countries no longer have to store 50% of their foreign reserves with France.

The ultimate aim a is to combine all mon netary zones in the Eco onomic Community off West African Statess.

Getting her books on the Nigerian school syllabus is a goal for Bibi Bakare-Yusuf. The co-founder and director of Cassava Press, her aim is to provide quality, affordable African literature to the largest number of readers. She started the company “with the mission to feed and nourish the African imagination with literature from the African world, starting on the continent and eventually including Africans in Europe and the Americas,” and has recently opened a London office. Cassava Press attempts to challenge stereotypes of what African literature ‘should’ be. Strong recent books include The Hundred Wells of Salaga by Ayesha Harruna Attah, a historical fiction about the intrigues in pre-colonial Ghana, and Elnathan John’s Born on a Tuesday, a coming-of-age story set in the sectarian religious violence of northern Nigeria.

46 OSTYN AIMZ

VINCENT FOURNIER/JA

45

Politics

Business

Edwin Macharia KENYA

Solar trailblazer EGYPT

COURTESY OF DALBERG

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Célestin Tawamba

Tax reformist OLIVIER FOR JA

CAMEROON

CÔTE D’IVOIRE

At its best, journalism can seek to hold the powerful to account.

Through his satirical newspaper L’Eléphant Déchaîné – the raging elephant, modelled on France’s Le Canard Enchaîné – publisher Tiémoko Assalé and his journalist allies take on the rich and powerful Ivorian elite. He has reported, for instance, on a vast network of customs fraud and the financial interests of powerful Ivorians in tax havens. As if he doesn’t already have enough enemies, Assalé recently ventured into politics, elected mayor of Tiassalé in 2018.

The head of the business lobby Groupement InterPatronal du Cameroun (GICAM) has been championing the development of Cameroon’s private sector since he was appointed to the leadership role in 2017.

He made headlines in January 2020, however, after a letter was leaked in which he called for the sacking of Cameroon’s tax chief. It is rare in Cameroon for major business leaders to speak up at all, let alone criticise government figures; a sign of the times perhaps.

Tawamba, who is also the founder of the Cadyst Invest Group, has advocates abandoning taxation based on activity in favour of a tax based on profit.

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50

VINCENT FOURNIER/JA

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The co-founder and chief executive officer of KarmSolar has been instrumental in efforts to move communities in Egypt away from centralised power to independent, more sustainable options. KarmSolar was the first private solar company in the country to obtain licences to generate, sell and distribute electricity to consumers, and to operate a feed-in tariff station selling power to the national grid.

French group EDF announced in late 2019 that it would invest up to $25m in Zahran’s Cairo start-up, making it a leading supplier of solar power in Egypt, which has set a target to generate 42% of its electricity from renewable resources by 2035. Zahran has worked in renewable energy for more than a decade in Tunisia, the UK and Egypt with Shell International and Tri Ocean Energy. He is also co-founder of Nahdet El Mahrousa, a social-change incubator.

KARM SOLAR

The global consulting firm Dalberg Advisors has hired Macharia as its global managing partner – the first time a Kenyan has taken the role. Rather than sit in headquarters in New York, Macharia has tilted the whole company towards the continent, doing much of his work from Nairobi. A former McKinsey employee who also worked at the Clinton Foundation, Macharia is responsible for innovating across the the whole group, according to founder Henrik Skovby. He also set up the Kenya office in 2008. Don’t bet on him staying in consulting forever. He has already run once to be an MP.

From critic to policy-maker

Civil society

Ahmed Zahran

Consulting crew

Tiémoko Assalé

Tech

THEAFRICAREPORT

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FOCUS /

LAGOS Lagos is un a country 112 THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

STATE

On its own, Nigeria's economic capital would rank as Africa’s seventh-largest economy. Known for its traffic snarls and entrepreneurial dynamism, Lagos is a megalopolis with mega-needs

The Third Mainland Bridge is the longest of the three bridges that connect Lagos Island to the mainland

EYEEM/GETTY IMAGES

By EROMO EGBEJULE in Lagos Nigeria’s smallest state is also its most populous. The country’s top economic performer, Lagos is bursting at the seams as more people arrive in search of opportunity, creating demand for roads and electricity, amongst other things.

Long seen as a bastion of the opposition, Lagos has not received the investment that it needs to grow in a well-planned way, despite the fact that it generates more tax revenue per capita than any other Nigerian state. Lagos’s population swelled to more than 20 million in 2019.

This number is projected to double by 2050, and the mega-city’s problems could equally double.

Babajide Sanwo-Olu of President Muhammadu Buhari’s All Progressives Congress (APC) became governor of Lagos State in May 2019. With Lagos sorely needing solutions to combat its infrastructure problems, he unveiled the Lagos Innovation Master Plan and also announced a N250m ($685,000) tech fund for research and development in the state in December 2019. The master plan seeks to make Lagos a ‘smart’ city and to provide the foundation for the growing tech sector based in Yaba (see page 128) to grow.

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LAGOS STATE FOCUS / Lagos is a country

‘Very soon Lekki will turn into Apapa […]. All thanks to Dangote refinery’

motorcycles and tricycles (see page 118), which rose as stop-gap solutions to the endless traffic jams and dysfunctional mass transit system. This, despite public meetings with representatives of various ride-hailing start-ups.

“Both the federal and Lagos state government since 1999 have governed using a business/neoliberal model, forgetting that over 60% of the population live below the poverty line,” says Taibat Lawanson, associate professor of

THE GROWTH OF LAGOS, NIGERIA

Evictions of urban poor

With tony projects like Eko Atlantic adding space to the city for the country’s richest inhabitants, Lagos’s poorer citizens argue that they are being sidelined in the city’s modernisation plans. So far, Sanwo-Olu has followed in the footsteps of his predecessors. This January, a team of naval personnel and soldiers evicted residents of the popular Tarkwa Bay beach community.

It was the latest 1984 round of recurring evictions since the 1990 exercise in the shantytown of Maroko, part of what is today’s highbrow Oniru and Lekki neighbourhoods.

The communities provided shelter for low-income earners grappling with survival in the absence of state housing programmes. Lagos has not had an efficient public housing policy since the Lateef Jakande adminis2000 (1979-1983). tration Jakande, who was also a former housing minister, supervised the building of over 30,000 housing units, mostly low-cost estates. He also initiated a metro line project that was halted by the military government that came to power in the 1983 palace coup, headed by a certain Muhammadu Buhari.

Sanwo-Olu also recently banned the use of the ubiquitous okada

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1984 Ogun State Lagos Ikorodu

Airport LAGOS Yaba

Lagos Island Victoria Island

Gulf of Guinea 20 km

2000 Ogun State Lagos Ikorodu

Airport

LAGOS Lagos Yaba Island

Lekki

Victoria Island Gulf of Guinea 20 km

2013

Loburo

Airport LAGOS Yaba

Reclaimed Gulf of Guinea

Sagamu Ogun State Lagos Ikorodu

Lagos Island

Lekki

Victoria Island 20 km

SOURCE: URBAN EXPANSION PROJECT

However, despite all its predilections for grandeur, Lagos has no proper sewage, drainage or mass transit systems, triggering complications during floods and traffic surges. Unlike the PretoriaGauteng metro service in South Africa, there is no interstate rail connecting the metropolis with satellite towns and the city of Ibadan, 129km away. There is a running joke that a Lagosian can land in London after a six-hour flight in the same time it takes his neighbour to go across the mega-city on a Friday evening.

urban regional planning and codirector of the Centre for Housing and Sustainable Development at the University of Lagos. “The only one urban planning solution that comes to mind in which both poor and middle-class Lagosians in many parts of the city have been able to benefit is the BRT [Bus Rapid Transit] system, though it has been plagued by many challenges.”

“Lagos can’t become a mega-city by violently displacing the poor,” concurs Ugochukwu Ikeakor, a Lagos-based policy analyst. “Very soon Lekki will turn into Apapa [with the same chaos]. All thanks to Dangote refinery. We don’t have a rail line that works, our roads are in a terrible state. Lagos is a dysfunctional city and it’s not the 2013 fault of the urban poor.” The plans for the mega-refinery highlight the need for joined-up planning at the state level so that companies and workers both have the infrastructure they need.

Since the return of democracy in 1999, Lagos has effectively been ruled by the same party – the APC, its current iteration, evolved from the Action Congress of Nigeria (ACN) and Action Congress (AC).

Ahmed Bola Tinubu, a political godfather and current APC national leader, won two terms between 1999 and 2007 before supporting a series of protégés as his successors.

Babatunde Fashola, now minister of works and housing, is seen as the brightest of them all. He initiated a series of projects in a bid to keep crime low during his tenure as governor

LEV RADIN /PACIFIC PRESS/ZUMA/REA

Lagos State governor Babajide Sanwo-Olu

(2007-2015). One publication labelled him ‘the man who tamed Nigeria’s most lawless city’. But even he fell short in some areas: a $1.2bn, seven-line light rail project originally conceived under Tinubu in the early 2000s and initiated early in Fashola’s second term remains unfinished.

Transport commissioner Frederic Oladeinde says that more alternatives are needed: “Building more roads will not solve our problems because people will continue to buy new cars; the solution to our problems is creating more options.”

Cutting ribbons regardless

Bureaucratic and other hurdles often stop projects from making progress. With his exit already on the cards, Akinwunmi Ambode, who had built a number of overhead bridges and intrastate access roads during his tenure (2015-2019), invited President Muhammadu Buhari to cut the ribbons for the 10-lane road to the international airport and a multi-level transport interchange just after the elections, even though both projects were still under construction. It was the

president’s second visit in a year, after the commissioning of a mega bus terminal, which has scarcely been used since.

Since Fashola’s exit as the state’s chief executive governance standards have slipped. Ahead of the 2015 general elections, party supporters were convinced that if both Lagos and Abuja could

be held by the same ruling party for the first time since the return of democracy in 1999 it would be an alignment for accelerated development.

Fashola was named infrastructure minister in Buhari’s cabinet but that has failed to translate into major projects benefiting Lagos. His gubernatorial successor Ambode’s legacy was tarnished by the spectacular fumbling of sanitation in the mega-city after awarding a multi-billion naira contract to untested company Visionscape.

It was one of a list of unforgivable sins that led party elders to rally the troops around Sanwo-Olu, another Tinubu protégé, at the party’s primaries, leading to the incumbent’s defeat.

Since Ambode lost the governorship primaries in 2018, Visionscape has been forgotten, replaced by the Lagos Waste Management Authority and its Private Sector Participation operators. But the mountain of filth in Lagos will take a while to clean up.

Planning priorities In his 2019 inauguration speech as Lagos State governor, Babajide Sanwo-Olu named transportation, power, health and education as priorities for his term. As part of its plan to increase commuter options, Sanwo-Olu’s government has announced that the first phase of the light rail network will be operational in 2021. Bids for the long-touted 38km-long 4th Mainland Bridge to connect both island and mainland districts also opened in December 2019. But experts say the government still needs to take innovative approaches to addressing the major infrastructural challenges.

“For example, sewage will require a decentralised approach focused on empowering the local government system […] and providing community sewers,” says the University of Lagos’s Taibat Lawanson. “Mass transit will require a more centralised approach that is private sector-led, albeit supported with government subsidies.”

Transportation minister and former governor Babatunde Fashola, whose stint as power minister failed to bridge the energy deficit, initiated five independent power projects (IPPs) to boost the power supply to government establishments. A sixth, 12MW one was switched on at the Lekki Free Trade Zone. Keen to make his own mark, Akinwunmi Ambode set up the Light Up Lagos initiative, which did little to boost the state’s electricity situation. His successor has announced plans to resuscitate that initiative, beginning with a proposed partnership with Siemens and the expansion of another IPP. More IPPs could emerge, powered by Lagos’s own mini-grid using pipeline gas supply, now that it has discovered oil and gas deposits.

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OLAMIKAN GBEMIGA/AP/SIPA

LAGOS STATE FOCUS /

Nigeria’s economic capital has no shortage of movers and shakers. From its elder statesman to sisters in STEM, don’t let these Lagosians out of your sight

Bola Tinubu Kingmaker eyes the crown

The influential former state governor, one of Lagos’s richest men, is considering running for the presidency.

He would be stepping out from behind the scenes after supporting Muhammadu Buhari’s two presidential campaigns and the rise of vice-president Yemi Osinbajo.

Temie Giwa-Tubosun The business of saving lives

Musiliu Akinsanya

A $250,000 grant from the Jack Ma Foundation will help Giwa-Tubosun adapt her tech-driven model for delivering blood and other health products needed in hospitals, including medical oxygen, vaccines and antivenom. Launched in 2016, LifeBank moved 9,000 pints of blood by motorcycle in its first 24 months and made $90,000 in revenue – this “double bottom line” is important for Giwa-Tubosun, who says a business must be successful to do good. In 2018, she announced plans to add drones and to expand to Abuja, Kaduna, and other parts of northern Nigeria, where maternal mortality rates are the highest.

Pulling no punches

Popularly known as MC Oluomo, Akinsanya will play a crucial role of mobilising resources for the APC in the 2023 elections. His connection to Bola Tinubu as well as the power he wields as Lagos chairman of National Union of Road Transport Workers (NURTW) make him influential. Akinsanya was reportedly stabbed multiple times at a rally for the governing APC in January during a fracas with another faction of the union.

Funke Opeke

LIFEBANK

Faster connections

Olubankole Wellington Attempting a crossover

TS

H RIG D RVE

SE RE

116 THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

ALL

The US-born musician, actor and record producer Olubankole Wellington (aka Banky W) made headlines in late 2018 when he announced he was standing for parliament. He gave the governing APC “a run for their money” but lost to a ruling-party candidate. The 38-year-old pop singer says it’s not over for him or his Modern Democratic Party, which aims to give a platform to young Nigerians who want to fix a country burdened with corruption, a struggling economy and poor infrastructure.

Engineer Opeke’s goal is to drive broadband penetration in Nigeria and the region. She is the founder and CEO of MainOne, which plans to invest N25bn ($68.5m) to add 2,700km to the existing 7,000km undersea fibre-optic cable in the next two to three years. The investments will help “develop critical fibre-optic infrastructure to enable broadband services across Lagos state,” according to Opeke, whose company has to date secured more than N120bn in investment to expand broadband.

LAGOS STATE FOCUS /

A typical evening traffic jam on Victoria Island

TRANSPORT

Commuting conundrums The government has banned okadas in the city centre, exacerbating the traffic problem while delays weigh on the planned new-generation public transport schemes

By OLUWATOSIN ADESHOKAN in Lagos Overlooking the ever-present traffic on the Eko Bridge as it leads away from Victoria Island is the nearly invisible Lagos light rail project. Analysts see it as a gamechanger, as it will remove tens of thousands of people from the city’s roads on a daily basis. However, the lack of progress means that Lagosians continue to spend hours each day in the mega-city’s notorious ‘go-slows’.

The light rail project was initially due to be completed in 2011. After many delays caused by funding shortfalls, the opening date has now been postponed until at least 2022. France’s Alstom is the lead contractor on the project.

With an estimated 20 million people living in Lagos, a city whose infrastructure was originally

designed to cater to 6 million people, the lack of any updating of the city plans has led to several infrastructure problems.

But in Lagos, long lines of traffic are its identity. In Lagos, it is estimated that traffic jams can add up to four hours to daily commutes. For Jennifer Abah, a communications expert living and working in Lagos, the traffic is the bane of her existence. “In the mornings, I can escape the traffic to an extent. I find myself leaving the house before 6am.

At night, it [traffic] is inevitable.”

4 hours

Time Lagosians would typically gain per day to spend productively or with their families if traffic jams were no more

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ANDREW ESIEBO/PANOS-REA

Apps to get rides on okadas (motorbikes) and kekes (threewheeled) have sprung up to provide solutions to Lagos’s transportation snarls. However, they do not seem to be what policy-makers prefer for a city of Lagos’s size and stature.

The government created a social media storm in early February when it banned such means of transport from the city centre.

Blue buses

Some improvement has come with the introduction of a Bus Rapid Transit (BRT) system connecting Lagos mainland with the Island.

Launched in March 2008, BRT operates 16 hours per day from Mile 12 through Ikorodu Road and Funsho Williams Avenue up to CMS – a distance of 22km. The 220 buses in their own dedicated lane transport more than 200,000 passengers daily. The World Bank, which loaned money and advised on the project, says it has cut the journey time down by 25 minutes, greenhouse gas emissions by 20%, and that it carries 25% of all trips along the corridor with just 4% of the vehicles. But it’s not enough.

Lagos’s traffic problems go hand in hand with its housing problems. New housing estates are going up farther and farther from the city centre. Tunde Braimoh, a lawmaker in the Lagos State House of Assembly, argues that improvements are in the works.

“The government of Lagos State has a long-term plan especially as Lagos evolves into a smart city.

One problem is transport links, and we are currently working on BRTs connecting satellite towns.”

For Abah, the rail and other projects need to come soon. The roads are always congested and her personal life is suffering due to the stress she goes through every day.

“Lagos needs to provide alternatives because living and working here feels like hell, she says.”

DEVELOPERS

Satellite city solutions New developments like Alaro and Eko Atlantic are aiming at different segments of the market but seeking to resolve problems like the lack of housing and poor infrastructure

By NICHOLAS NORBROOK Snaking away from Lagos’s centre towards the west lies the Lekki-Epe axis, a fast-urbanising strip of land that runs along the Atlantic. Alaro City is at the end of this road, in the Lekki Free Zone, close to the new airport and port projects that Lagos city planners hope will free Nigeria’s economic hub from its daily traffic heart attack.

“Almost without exception, subSaharan African cities are broken”, says Steven Jennings, the CEO of Rendeavour, an African new-city builder, referring to congestion, lack of planning and logistics.

“There are major issues around land title and ownership, the cost of enforcing property rights can be prohibitively expensive”, says Jennings, who cut his teeth in African city building on Kenya’s Tatu City project and learnt a thing or two about the subject the hard way.

Exit the choked city centre

on around 30,000m2 of land at the front of the development.

They are not alone. As Lagos State governor Babajide Sanwo-Olu noted at the recent opening ceremony: “I am equally pleased to welcome Universal Homes, HMD Africa, Sana Industries, Loatsad, Kenol and ASB Valiant to the Lekki Free Zone. The confidence of international and Nigerian investors is a testament to Alaro City as the location of choice for businesses in the Lekki Free Zone and to the ease of doing business in Lagos State.”

Executive director of Universal Homes John Latham says units in the first phase of 500 apartments

“Almost without exception, subSaharan African cities are broken”

for sale at Alaro City will start at $55,000 and a further 2,000 will be added.

Lessons learnt in Kenya have been invaluable, says Yomi Ademola, head of West Africa for Rendeavour. In particular, the sequencing and roll-out of infrastructure, creating “complete, developed, liveable and workable enclaves that are not disrupted by subsequent construction when we move on to other enclaves.”

Alaro is not the only new city being built in the metropolis. Eko Atlantic City continues to grow on land reclaimed from the ocean in downtown Lagos. It has created some healthy competition, as Jennings points out. “Their reclamation costs are around $1,000 per square metre. Our site-levelling costs at Alaro are about $1 per square metre. So they have this massive cost structure they have to try to recover from their clients.”

Buildings are springing up at the Alaro City development

REANDEAVOUR

His Rendeavour group, operational for the past 10 years, has been tapping into the huge pent-up demand for a more chaos-free urban environment. By guaranteeing secure title, controlling the building-approvals process and fixing the infrastructure gap, the hope is to lure customers seeking to exit the choked centre of Lagos.

It is taking off. The first client to have opened is an Ariel Foods, run by its chairman, Dhiren Chandaria, a member of the entrepreneurial Kenyan Chandaria business family.

Their therapeutic food factory sits

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LAGOS STATE FOCUS /

TECH

Canaries in digital coal mines A lot of money is being poured into Nigerian start-ups. Many investors are looking to be a part of the next big thing, which seems to be fintech

Flutterwave raised $35m in Janaury 2020

2019 was a big year for Nigeria, emerging for the first time in over half a decade as the top venturecapital investment destination in Africa, beating South Africa and Kenya for the biggest share of $1.3bn in funding. This year, the smart money will mainly go to fintech, although 2020 will likely see start-ups consolidating on seed-stage funding from 2019, according to Victor Asemota, an investor in the Nigerian tech space.

“The important thing to notice is how many seed investments were made. An existing investor will always assist with follow-on funding for selfish reasons. New investments are the canary in the shaft,” says Asemota, founder of SwiftaCorp, a pioneering software and technology services group with operations in over 14 countries in Africa. Asemota is also the co-founder of MFISA, a mobile financial services accelerator.

Start-ups in health, agriculture and energy, as well as ride-hailing services, cornered some funding last year. However, Sunday Folayan, co-founder and CEO of

$1.3bn

Total amount of funding received by start-ups operating in Africa in 2019 according to data from WeeTracker

FLUTTERWAVE

By RUTH OLUROUNBI in Abuja

General Data Engineering Services (Skannet) believes that “fintech is where the investors are looking at the moment, and it is where Nigeria will experience growth, thanks to innovation and the huge market that is the Nigerian population. It is what has attracted start-ups like OPay and PalmPay to Nigeria.” Funding from Chinese investors in OPay and PalmPay boosted the country’s payment system by over $210m in 2019.

Investing in fintech

Asian investors such as Tolaram Group and HQ Financial Group, and governments such as that of the UK, see big opportunities in the Nigerian fintech space. While companies are looking to grab market share, the UK government will provide support for expansion in the sector.

In February, HQ Financial Group provided $10m in debt financing to Aella, a fintech start-up that seeks to “serve the underbanked population in West Africa and other emerging markets,” according to CEO Akin Jones. A month before,

120 THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

Flutterwave CEO Olugbenga Agboola announced that the company had raised $35m in a Series B round and a partnership with Worldpay FIS to grow market share in operating countries.

The biggest investments are expected from South African telecommunication company MTN, which is launching its mobile payment platform, similar to Safaricom’s M-Pesa, this year.

Tolaram Group sees “a huge opportunity” in Africa’s digital banking space and is planning to invest in Nigeria, Egypt, South Africa and Ghana.

Nigerian fintech provides an exciting future for investors such as MTN, as telco-backed mobile money systems will lead to “increased adoption of the blockchain, cryptocurrencies and AI-powered fintech products in our markets,” says Lagos-based analyst Chukwuemeka Monyei.

Consequently, he expects Nigerian services around energy, healthcare and education to experience growth on the platform of telco-backed mobile-money payment systems.

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INSURANCE DOSSIER

Consolidation is on the cards for the Nigerian insurance sector as the government raises minimum capital requirements at the end of the year

By DAVID WHITEHOUSE Nigeria’s insurance sector may be on the threshold of a watershed moment similar to that of the banking sector in 2004. In the case of the banks, reforms imposed new capital requirements that led to a sharp reduction in the number of operators. The result was the emergence of financially stronger players who were able to increase the size of the industry. Now the National Insurance Commission (NAICOM) is imposing increased capital requirements on insurers that

122 THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

are scheduled to take effect at the end of December.

The industry will benefit from the new rules, says Rashidat Adebisi, chief distribution officer at AXA Mansard in Lagos. The minimum capital base for life insurers, for example, will rise from N2bn ($5.5m) to N8bn. “We expect to see some consolidation,” and more major foreign players could enter the market if they see penetration starting to increase, she says.

A report by investment bank Chapel Hill Denham predicts the winners in the exercise as FBN

The sheer number of Nigerians makes the growth potential for insurers hard to match

Insurance, Custodian & Allied, Zenith General, Wapic General, Leadway, AXA Mansard, Prudential Zenith Life, Custodian Life, N.E.M. and Linkage Assurance, which can meet the new rules ‘relatively seamlessly’.

Its research identifies the biggest capital shortfalls among composite insurers like Goldlink and Standard Alliance. In non-life, Staco Insurance and International Energy have the biggest shortfalls, while African Alliance and Capital Express Insurance face the highest life-insurance hurdle.

Some composite insurers may be

forced to choose between a life or a non-life licence to stay in business, according to the report.

The long-term growth potential of the Nigerian market is hard to match. The United Nations Children’s Fund predicts that by 2050, births in Nigeria will represent 10% of the total births in the world. In its 2019 Nigeria insurance industry report, ‘From the Lagoon to the Ocean’, Coronation Merchant Bank puts the country’s insurance penetration at 0.31%, far behind countries with comparable per capita GDP, such as India on 3.69%.

According to Coronation, following the banking reform, total gross loans grew at a compound inflation-adjusted annual rate of 26.9% between 2004 and 2009. That raises the prospect that Nigerian penetration could grow by a factor of 10 over the next eight to 10 years, the bank says. “The technological infrastructure and data necessary for expansion are largely available.”

In US dollar terms, Coronation’s research notes, the Nigerian insurance industry has barely grown over the past 10 years. Analysts at WSTC Financial Services in Lagos,

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123

TOM SAATER/BLOOMBERG VIA GETTY IMAGES

Level up or clear out

INSURANCE DOSSIER / Level up or clear out

Advertising is one way to challenge consumer indifference to insurance

The report notes the extension of NAICOM’s original deadline for the new financing rules by six months to the end of December this year.

NAICOM said in its announcement that the postponement followed a review of recapitalisation plans submitted by operators. Declining yields in Nigeria’s fixed-income better. The issuing of bank verific­ market means that investment ation numbers and SIM card registr­ income – a major source of revenue ations have created significant levels for insurance companies – will be of personal data. In Lagos, traffic under pressure, thus affecting profit­ police use number-plate recognition ability, WSTC says. to check motor insurance cover.

Valentine Ojumah, CEO at FBN ‘Whereas some Nigerian insurance Insurance in Nigeria, says the companies are set up to process tens low penetration in Nigeria is due mainly to “poverty, cultural beliefs, INSURANCE PENETRATION RATES IN SELECTED AFRICAN COUNTRIES poor understanding of the role of insurance and legacy issues relating Penetration rate to past poor customer/claims man4.0% Total penetration rate agement services and professional 3.5% misconduct amongst practitioners.”

Life penetration rate 3.0% He adds: “I do not see any reason Non-life penetration rate 2.5% why 2020 will be a breakthrough 2.0% year. […] There will be gradual 1.5% improvement in penetration.”

Chapel Hill Denham analysts argue 1.0% that the new capital rules are likely to 0.5% lead to more foreign insurers entering 0.0% the Nigerian market. Existing foreign Egypt Kenya Nigeria Morocco Tunisia Algeria Angola investors such as AXA, Prudential and Allianz may want to increase their INSURANCE PREMIUMS IN NIGERIA, 1980-2016 exposure, and the number of insurers may drop from 57 to 20 at most, the Premium in US$bn Market share, 2016 firm says. FBN’s Ojumah expects 2 32% Life some consolidation in the industry and 68% General says that FBN “may play a supporting role, if we are requested to do so”.

The industry is changing, but not as 1 quickly as it should, AXA Mansard’s Adebisi says. The historical slowness, or failure, of insurers to pay claims led to a lack of trust, to the point 0 1980 1985 1990 1995 2000 2005 2010 2015 where paying claims was originally

124 THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

SOURCE: DELOITTE

Lack of trust

AXA Mansard’s main selling point.

The number of Nigerian insurance agents was stagnant for years, as it was not seen as a lucrative career.

Advertising power is needed to make people understand the benefits of insurance. “People still see us as an additional expense,” adds Adebisi. But, with the new capital rules, employment in the industry is likely to increase over time and the opportunity exists for “a totally different industry”, she says.

François Jurd de Girancourt, head of the McKinsey Africa financial institutions practice, points out that increased capital requirements for insurers are a continent-wide trend highlighted in Kenya and Morocco as well as in Nigeria. “Regulators are clearly pushing for bigger, more solvent players in each country,” he tells The Africa Report.

Coronation Merchant Bank’s report argues that many of the required tools are now on hand to manage data

SOURCE: SWISS RE, 2017

in their 2020 country outlook, are sceptical that much will change in the short term. WSTC does not expect the exercise ‘to stoke any significant activity in the capital-market space, due to investor apathy to the insurance sector’.

HAMILTON/REA

of thousands of customers, the technological platforms and the customer data exist to service tens of millions,’ the report says.

That upbeat view finds support from the Mo Ibrahim Foundation, which in its latest African Governance Report found that only four African countries in 2018 met 80% or more of data coverage criteria issued by Open Data Watch’s Open Data Inventory. At 90%, Nigeria scored higher than any other African country.

Multifunction ID cards

The government reported that it had issued more than 30 million Nigerian national identity cards by October 2019. The cards, which contain 10 fingerprints, serve multiple purposes.

An application turns the ID card into a tool for payments, to be used at ATMs or for transfers. Since 2015, insurers and banks have been legally obliged to demand national ID numbers from their customers.

Adebisi at AXA Mansard hopes that this will lead to progress in targeting fraudulent claims: “This could make a big difference,” she says. Credit scoring remains “in its infancy” and needs to be coupled with the ID numbers, she adds.

Regulatory obstacles remain.

Insurers who want to start

microinsurance operations still need to go through the costly process of creating a new company with a new board, rather than grouping the activity under an existing structure. According to Coronation, in other countries, such as India and Ghana, rolling out microinsurance as a matter of national policy has helped to create mass awareness of insurance. Insurance companies often work with banks, telecom companies or government institutions on microinsurance projects, which improve penetration. ‘If Ghana’s experience could be replicated in Nigeria, the effect would be revolutionary,’ Coronation’s report says.

Adebisi at AXA Mansard has argued the case with Nigeria’s regulators to little apparent effect.

“Time is passing by” with no clear sign of a change in the regulatory stance, and some in the industry are holding back resources as they wait, she says. Still, there has been some tempering of attitudes and Nigeria’s financial inclusion targets may lead to progress in 2020.

Efeomo Olotu and Demola Makinwa at George Etomi & Partners, a commercial law firm in Lagos, have argued that capital requirements alone may not have the capacity to increase the profit ability of insurance firms in Nigeria.

Regulators also need to consider other performance indicators like average cost per claim and loss ratios, according to the lawyers.

Ojumah at FBN hopes that “in the coming months, the regulator will be looking at various statutes and regulations impeding the growth of insurance in Nigeria, and make necessary changes to encourage growth.” At AXA Mansard, Adebisi argues that the industry’s pricing of policies does not yet follow standard criteria but is often driven by the urge to increase premiums as quickly as possible. Insurers cannot afford to wait for the regulator to lead the way on proper pricing methods, she says.

Government provides a helping hand Insurance companies welcomed Nigeria’s 2019 finance bill, signed into law

by President Muhammadu Buhari in mid-January 2020, for its simplification of their tax liabilities. Insurers will be able to carry forward losses indefinitely as opposed to the previous four-year restriction. ‘The sector has longed for this amendment for many years,’ according to analysis from PwC. Life and non-life businesses will no longer be liable to special minimum tax provision and all reasonable expenses will be tax deductible. In addition, ‘taxable investment income’ is limited to income from the investment of shareholder funds, as opposed to income for the insurance fund.

Deloitte’s review of the changes hailed a ‘gamechanger’ for insurance companies.

PwC notes that the cost of compliance for insurance companies will be reduced as ambiguous sections of the tax law are either eliminated or amended.

‘This eliminates the inconsistent treatment in the industry and the opportunity for one taxpayer to be treated more favourably than others based on “relationship” with the tax authorities,’ PwC says.

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INSURANCE DOSSIER

INTERVIEW

Coenraad Vrolijk ‘One size fits all doesn’t make sense’ The CEO of Allianz Africa talks about the need for targeted regulations in Africa’s insurance markets and the markets the company wants to invest in Interview by DAVID WHITEHOUSE Ethiopia is among the most attractive untapped insurance markets and the opening of the sector to foreign investment is just a matter of time, Allianz Africa CEO Coenraad Vrolijk tells The Africa Report. Foreign direct investment in insurance is not allowed in Ethiopia. But there are very few countries that persist in excluding foreign capital in the long term, he says. Vrolijk hopes to oversee Allianz’s entry into Ethiopia within the next three years: “It’s a question of when.” Signs of market opening remain at this point “discussions”, but they are “positive discussions which are picking up in frequency”.

African insurance has shown average annual organic growth of 10% in dollar terms since the mid-1990s, and Vrolijk sees no

sign of that slowing. Markets with substantial growth potential include Morocco, Nigeria, Kenya and Ghana, he says. Allianz has a wide range of possible new African markets. About half of the continent’s 54 countries are “interesting”, yet Allianz is present in only 13.

Vrolijk says he is “slightly more optimistic” for the company’s prospects in 2020 than he was at the start of 2019. This is due to internal organisational improvements, such as IT system upgrades.

The growth story in Africa faces a possible hurdle in the form of claims ratios, which push up costs for insurers when they increase.

François Jurd de Girancourt, head of the McKinsey Africa financial institutions practice, says they could derail the industry’s growth.

Claims-to-premiums ratios in auto insurance, the largest line

126 THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

of business in many countries, have deteriorated in the past three years in maturer markets such as South Africa and Morocco, he says: “This is not just a short-term effect, but a trend which requires insurers to revisit their business model.” Capturing and using data, combating fraud, reviewing claims processes and reinventing the relationship with agents are all areas insurers must look with regard to these markets, De Girancourt says.

Insurance yo-yo

Vrolijk “strongly disagrees” with McKinsey’s worries. Africa, he says, has “the lowest claims ratios of any continent in the world and will remain so for the next five years”.

Kenyan experience supports his argument. According to Deloitte’s Insurance Outlook for 2019-2020 in East Africa, expense and claims ratios in Kenya, one of Africa’s more mature insurance markets, showed a slight upward trend from 2012 to 2017, before declining to just over 40% in 2018. As markets mature, Vrolijk says, claims ratios

FRANÇOIS GRIVELET FOR JA

of collective savings means that they can be the biggest buyers of bonds issued by African governments, he says. “When governments issue bonds, we jump on them.”

Third-party insurance for cars and accidents at work should be compulsory too, he says. Whereas third-party liability in Morocco is unlimited, such cover for Nigerian road accidents results in meaninglessly small payouts, he says.

INSURING SUCCESS 1992-1995 PhD in economics at Brown University, US

Need for a strong judiciary

2003 Joined consulting firm McKinsey & Company 2011-2013 Head of financial markets advisory at BlackRock, UK 2013-2014 CEO of start-up Rosewood Insurance Group, Switzerland tend to go up. When that happens, he argues, premiums will rise and claims will fall again. He says that claims ratios that are too low show that little is being given back to the customer. Managers reporting claims ratios of less than 40% have to provide him with explanations.

Vrolijk sits on the board of the Africa Reinsurance Corporation, which gives him access to insurance regulators who are also board members. He is encouraged by the conversations he has had, which leave him with no reason to slow down investment. There is a continent-wide trend towards improving capital and solvency rules, he says. “African regulators are making the journey.”

Large-risk and industrial insurance in Africa are problems,

‘AFRICA HAS THE LOWEST CLAIMS RATIOS IN THE WORLD ’

January 2017 Became regional CEO for Allianz in Africa

as very little experience has been accumulated on quantifying losses in those fields, he says. Some African insurers also fail to reinsure their risks, he says. “It keeps regulators awake at night.”

Nigerian penetration has been held back by a lack of insurance agents. There are fewer agents in the whole of Nigeria than at the largest Kenyan insurer, Vrolijk says.

Likewise, bancassurance in Nigeria has so far been “ineffective” and remains a tiny market. “There have to be people selling insurance.”

Still, the Nigerian insurance market is “professionalising very quickly” after years of being “extremely fragmented” (see page 130).

Compulsory insurance offers one way forward, he says. The first job is to get governments comfortable with why an insurance industry is needed in their country. The role of insurers in developing a pool

Kenya’s much higher levels of insurance penetration, by contrast, have been achieved because of “relatively liberal” regulatory rules that have allowed insurance companies to start innovating, Vrolijk says.

The main obstacle to compulsory insurance, he says, is that it takes time to develop and is complicated to enforce. A crucial ingredient, he says, is an “effective, fast and predictable” judiciary system, essential to adjudicating third-party claims.

The strength and independence of a judiciary and the extent of insurance penetration have a “very strong” correlation, he adds.

African free trade, Vrolijk says, is “not yet really happening on the ground.” It remains impossible for Allianz to draw on shared supplier services – such as in the back office – across jurisdictions because “the taxman won’t accept it”. This hurts smaller African countries in particular, as its means it is not viable to run operations there.

Allianz has pulled out of some smaller markets such as Mali, Central African Republic (CAR), Togo and Burkina Faso. These, he says, are too small to justify meeting regulatory requirements on capital. Even 100% market dominance in CAR, he says, would not justify the funding injection demanded. “Capital requirements need to be scaled to the size of the market,” he says. “One size fits all doesn’t make sense.”

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INSURANCE DOSSIER

The challenge is to convert informal community arrangements into modern insurance services, he says. “We need the right partners.” Increasing access to the internet in rural areas will help to spread the message: “The level of understanding is still very low.”

Sanlam has partnered with NBC in Tanzania

Banking partnerships

Sanlam seeks local partnerships The South African insurer sees lots of potential in the market, but it needs bancassurance allies and better messaging to reach more customers

By DAVID WHITEHOUSE Partnerships between insurers and banks can help to increase the penetration rate of insurance in Tanzania in 2020, says Geofray Masige, chief financial officer of Sanlam General Insurance Tanzania. Bancassurance “has the potential to be transformative,” Masige tells The Africa Report.

The country’s main banks now all have a physical presence across Tanzania, which Masige sees as “a very significant improvement. The levels of service will be quite high.”

Tanzania’s insurance penetration rate is among the lowest in Africa, at 0.5% in December, according to GCR Ratings in Johannesburg.

GCR sees a “moderately healthy” outlook for growth, with gross premiums predicted to increase

at a compound annual rate of 4% over the next five years.

For foreign insurers, Masige says, there is “a lot of potential in this market. The future is open for those who come here with products.”

The biggest challenge, according to him, is to use “local means to reach local people in a language and with a message that they can understand.” Clear examples of this working are so far lacking, he says. In terms of life insurance, “something has to change in the way we put across the message.”

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0.5%

Tanzania’s insurance penetration rate, compared to an average among regional peers of 2.5%

PHOTO12/ALAMY/JAXPIX

TANZANIA

The fact that banks in Tanzania are now allowed to use their branch networks for insurance distribution is “a positive move”, Masige says.

There has been “lots of appetite from top-tier banks,” he adds. “We should be able to make progress.”

Tanzanian government attempts at industrialisation are also increasing the size of the potential market. Sanlam, which is seeking operational expansion into areas such as Arusha, is open to partnership proposals from banks.

In Tanzania, Sanlam’s bancassurance partners include the National Bank of Commerce. Across Africa, the firm has teamed up with banks such as Fidelity, Zenith and Stanbic, as well as with telecoms giant MTN to extend its reach. Such a strategy aims at giving Sanlam protection against a slowdown in its in South African home market.

According to François Jurd de Girancourt, head of the McKinsey Africa financial institutions practice, African insurance is expected to grow by 7%-8% in local currency terms in the coming five years. South Africa is likely to be an exception to that rule, owing to “subdued local economic conditions, coupled with the maturity of the South African market,” says Yvonne Mujuru, head of insurance ratings at GCR. Sanlam bought the remaining shares in Moroccan insurance company Saham for $1.1bn in late 2018. Faster-growing markets such as Kenya, Uganda and Tanzania could help mitigate challenging growth prospects in South Africa.

Get the full picture www.theafricareport.com

N° 111 • APRIL-MAY-JUNE 2020

9-10 March 2020

ABIDJAN

Exclusive ranking of the TOP 50 Africans shaking up the status quo

Disruptors INTERVIEW

Chimamanda Ngo ozi Adichie A “So many problems trace t e back to colon nial policy” p THE SAHELL SQ QUEEZE Insurgents’ quick march across West W t Africa Angola’s President João Lourenço is breaking the mould

REBOOTING CA APITTALISM From ren nt seeking to businesss building

JEUNE AFRIQUE MEDIA GROUP INTERNATIONAL EDITION Algeria DA610 • Belgium €7.90 • Canada CA$12 • Denmark DK80 • D.R.C. US$10 • Ethiopia Birr200 • France €7.90 • Germany €7.90 • Ghan na GH¢3 35 • Kenya KES1000 • Morocco DH45 • Netherlands €7.90 • Nigeria NGN2000 • Norway NK95 • Rwanda RWF7,500 • Sierra Leone LE79,000 • South Afriica R75 (tax incl.) Sweden ambia ZMW80 Z • Zimbabwe SEK100 • Switzerland FS10.90 • Tanzania TZS20,000 • Tunisia DT15 • Uganda UGX40,000 • UK £7.20 • United States US$15.99 • Za US$6.20 • CFA Countries F.CFA3,900 • Euro Zone €7.90

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LAST WORD

FFounder/CIO, Consonance Investment Managers

Africa’s working-age population is expected to reach 1 billion by 2030. This surge will require immense job creation: African countries must collectively generate 1 million jobs per month.

Creative industries, which are recession-proof, are a job multiplier and generate $4.2bn in revenue in Africa. But, lying in the informal sector, creative industries need investment. Here are three requirements to make creative investments a reality in Africa.

1

Understand value-chain complexities Creative industry value chains are complex.

This can deter investors, as assessing risk can be difficult. Production and distribution broadly represent the two sides of value chains, yet an array of activities ties the two together.

For example, a film value chain has up to seven steps, and one player’s underperformance can jeopardise the entire production.

Value chains also vary from one African market to another. In Nollywood, industry players assume multiple roles, which can increase risk in a production. In Liberia’s music industry, informal street vendors transfer music files to consumers’ mobile phones for a fee, serving as a retail outlet. However, they are often overlooked by financiers because of their relative invisibility. If investors understand

130 THEAFRICAREPORT / N° 111 / APRIL-MAY-JUNE 2020

Diversify investments across the supply chain and strategically use insurance products Financiers can copy a venture-capital approach in the creative industry. Just like venture investors bank on one investment turning into a unicorn (a company exceeding $1bn in value), investors can fund a “slate” (portfolio) of films with the expectation that one can drive significant returns. Investors are able to spread production risks, such as location mishaps and potential third-party property damage, across movies.

They can also strategically use insurance products to hedge against the non-completion of a creative venture. For example, a completion bond, issued to film producers, guarantees that a film finishes on schedule and within budget. Credit-wrapped bonds are also effective de-risking tools.

3

Mitigate local monetisation problems with international distribution Despite strong local demand for creative content, rampant piracy has undermined growth. With the rise of streaming services, African creative producers can access a global audience, overcoming distribution obstacles. iROKOtv, a Nollywood movie streaming service, has viewership in 178 countries, and Netflix’s investments in African content have been a game changer.

Music, possibly Africa’s biggest creative export, is also enjoying an international moment. In 2018, TPG Growth, a multibillion-dollar US investment fund platform, acquired a majority stake in TRACE, Africa’s leading media company, and Universal Music Group opened a Lagos office.

If properly financed, Africa’s creative industries can generate immense job opportunities.

OCK

MOBOLAJI ADEOYE M

2

SHUTTER ST

INVEST FOR CREATIVE CREATION

the complexities of creative industry value chains, they can develop new and relevant risk profiles before financing projects.

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