Tar88 lr

THE FOREMOST INTERNATIONAL MEETING FOR AFRICAN CEOs, BANKERS AND INVESTORS

• Nigeria Save our naira •T anzania Magufuli grabs regional role •T rump No lectures to Africa, please

N ° 8 8 • M A R C H 2 017

w w w.t he a f r ic a r ep or t .c om THE AFRICA REPORT

THE POWER FERIAL HAFFAJEE

AJAY GUPTA

MOGOENG MOGOENG NKOSAZANA DLAMINI-ZUMA

CHRISTO WIESE

PATRICE MOTSEPE JACOB ZUMA

PRAVIN GORDHAN

CYRIL RAMAPHOSA

DAVID MAHLOBO

JOHANN RUPERT

MONTHLY • N° 88 • MARCH 2017

Who runs South Africa?

INTERNATIONAL EDITION

Algeria 550 DA • Belgium €5.90 • Canada CA$ 7.95 • DR Congo US$ 9 • Denmark 60 DK • DOM 8 € • Ethiopia 90 Birr • France €5.90 Germany €5.90 • Ghana GH¢ 10 • Italy €5.90 • Kenya KES 410 • Morocco 40 DH • Netherlands €5.90 • Nigeria 800 NGN • Norway NK 70 Portugal €5.90 • Rwanda RWF 6,000 • Sierra Leone LE 15,000 • South Africa R40 (tax incl.) • Spain €5.90 • Sweden SEK 70 Switzerland 9.90 FS • Tanzania TZS 10,000 • Tunisia 5.4 DT • Uganda UGX 10,000 • UK £4.50 • United States US$ 6.95 • Zambia 48 ZMW Zimbabwe US$ 4 • CFA Countries 3,500 F CFA • Euro Zone €5.90

GROUPE JEUNE AFRIQUE

THE FOREMOST INTERNATIONAL MEETING FOR AFRICAN CEOs, BANKERS AND INVESTORS

THE FOREMOST INTERNATIONAL MEETING FOR AFRICAN CEOs, BANKERS AND INVESTORS

• Nigeria Save our naira • Tanzania Magufuli grabs regional role • Trump No lectures to Africa, please

N ° 8 8 • M A R C H 2 0 17

w w w.the af ric arepor t.com

THE FOREMOST INTERNATIONAL MEETING FOR AFRICAN CEOs, BANKERS AND INVESTORS

• South Africa The top 100 influencers • Tanzania Magufuli grabs regional role • Trump No lectures to Africa, please

N ° 8 8 • M A R C H 2 0 17

w w w.the af ric arepor t.com

FERIAL HAFFAJEE

the region

Buhari’s government must fight to save the currency

AJAY GUPTA

contents

Bulldozing

Save our Naira

THE POWER

Pipelines, integration, new partners: Magufuli redraws the map in East Africa

NKOSAZANA DLAMINI-ZUMA

PATRICE MOTSEPE JACOB ZUMA

N ° 8 8 • M A R C H 2 0 17

East Africa

Nigeria

MOGOENG MOGOENG

CHRISTO WIESE

• South Africa The top 100 influencers • Nigeria Save our naira • Trump No lectures to Africa, please

w w w.the af ric arepor t.com

PRAVIN GORDHAN

CYRIL RAMAPHOSA DAVID MAHLOBO

JOHANN RUPERT

The AfricA reporT # 88 - mArch 2017

Who runs South Africa?

GROUPE JEUNE AFRIQUE

INTERNATIONAL EDITION DITION

Algeria 550 DA • Belgium g gium €5.90 • Canada CA$ 7.95 7 • DR Congo g US$ 9 • D Denmark 60 0 DK • DOM 8 € • Ethiopia p 90 Birr • France €5.90 Germany €5.90 • Ghana ana GH¢ 10 • Italy €5 €5.90 90 • Ke Kenya KES 410 • Morocco 40 0 DH • Netherlands therlands €5 €5.90 90 • Nigeria 800 NGN • Norway NK 70 Por tugal €5.90 • Rwanda wanda RWF 6,000 6 000 • Sierra a Leone LE 15,000 • Soutth Africa R40 (tax incl.) incl ) • Spain €5.90 €5 90 • Sweden SEK 70 Switzerland 9.90 FS • Tanzania TZS 10,000 10 000 • Tun Tunisia isia 5 5.4 4 DT • Uganda UGX 1 10,000 • UK K £4 £4.50 50 • United States US$ 6 6.95 95 • Zambia 48 ZMW Zimbabwe US$ 4 • CFA FA C Countries ti 3 3,500 500 F CFA • E Euro uro Z Zone €5 €5.90 90

GROUPE JEUNE AFRIQUE

EAST AFRICA EDITION

WEST AFRICA EDITION

GROUPE JEUNE AFRIQUE

Algeria 550 DA • Belgium €5.90 • Canada CA$ 7.95 • DR Congo US$ 9 • Denmark 60 DK • DOM 8 € • Ethiopia 90 Birr • France €5.90 Germany €5.90 • Ghana GH¢ 10 • Italy €5.90 • Kenya KES 410 • Morocco 40 DH • Netherlands €5.90 • Nigeria 800 NGN • Norway NK 70 Portugal €5.90 • Rwanda RWF 6,000 • Sierra Leone LE 15,000 • South Africa R40 (tax incl.) • Spain €5.90 • Sweden SEK 70 Switzerland 9.90 FS • Tanzania TZS 10,000 • Tunisia 5.4 DT • Uganda UGX 10,000 • UK £4.50 • United States US$ 6.95 • Zambia 48 ZMW Zimbabwe US$ 4 • CFA Countries 3,500 F CFA • Euro Zone €5.90

Algeria 550 DA • Belgium €5.90 • Canada CA$ 7.95 • DR Congo US$ 9 • Denmark 60 DK • DOM 8 € • Ethiopia 90 Birr • France €5.90 Germany €5.90 • Ghana GH¢ 10 • Italy €5.90 • Kenya KES 410 • Morocco 40 DH • Netherlands €5.90 • Nigeria 800 NGN • Norway NK 70 Portugal €5.90 • Rwanda RWF 6,000 • Sierra Leone LE 15,000 • South Africa R40 (tax incl.) • Spain €5.90 • Sweden SEK 70 Switzerland 9.90 FS • Tanzania TZS 10,000 • Tunisia 5.4 DT • Uganda UGX 10,000 • UK £4.50 • United States US$ 6.95 • Zambia 48 ZMW Zimbabwe US$ 4 • CFA Countries 3,500 F CFA • Euro Zone €5.90

Business

THE POWER

06 Editorial The great unravelling 08 lEttErs

feriAL hAffAjee

10 thE QuEstion

AjAY gUpTA

MogoENg MogoENg NkosazaNa DlamiNi-zuma

Briefing

Christo Wiese

12 signposts

jaCob zuma

14 intErnational

22

prAvin gordhAn

Cyril ramaphosa

16 pEoplE

dAvid mAhLobo

18 opinion Alan Cowell, on the Trump Family Business and echoes across the continent

johaNN rupert

74 financE Zimbabwe’s bad bank, ZAMCO to the rescue

34

75 hannibal The African credit ratings agency takes Carlyle cash dossiEr insurancE

poLitics cover crediTs: eAsT AfricA ediTion: dAnieL hAYdUK/Afp; oTher ediTions: ALL righTs reserved

68 tunisia Seeking 20/20 vision

72 opinion Bright Simons, on artificial intelligence and the job market

frontLine

76 The threat of tech Some insurers are waking up to fintech eating their lunch

34 tanzania Magafuli bulldozes the region Although Dar es Salaam has gained a reputation as a tricky customer in East Africa, it has started to play a more inclusive game

79 East africa Insure thy neighbour

45

40 KEnya Wafula Chebukati, the election arbiter 42 anansi Ghana’s transitional moment

country focus 45 nigEria Save our naira Still battered by low oil prices and nursing an economy not as diversified as hoped, there is nonetheless a glimmer of hope ahead. A new plan hopes to break the national addiction to oil exports, and bolster agriculture and manufacturing the africa report

66 intErviEW Kais Marzouki, head West and Central Africa, Nestlé

70 lEadErs Safaricom CEO Bob Collymore

20 calEndar

22 Who runs south africa?

The power 100 From the fight between white capital and new money, to the institutional framework holding back the clique at the top, the inner workings of South Africa.

60 africa-sWitzErland Higher, faster, stronger The links between Africa and Switzerland are free from colonial baggage, but remain dominated by traders

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80 nigEria The price war, and the race to the bottom

Art & Life 82 WEddings The big contract Nigeria’s wedding planners 86 nEW agE sufism Egypt’s youth are breathing fresh life into the branch 88 travEl Bite-sized Benin 90 day in thE lifE Pepe Julian Onziema This issue carries an insert between pages 58 and 59 for selected countries

3

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6

editorial

The AfricA reporT A Groupe Jeune Afrique publication

By Patrick Smith

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

The great unravelling

I

t was a cold, dreary afternoon in London in early February when Nigeria’s President Muhammadu Buhari picked up the call from his counterpart in Washington DC, Donald Trump. The tone was cordial, with Trump suggesting they expand cooperation in fighting terrorism. More or less standard diplomacy – save for an unscripted question from Trump, who asked Buhari at one point: “So how many people have you got over there then?” An amused official said Trump seemed a little taken aback when he learned there would be more Nigerians than Americans by 2050.

A subsequent call from Trump to President Jacob Zuma was also fairly pro forma. Zuma congratulated Trump on his election.

Officials would not be drawn on whether the two discussed the Daily Show, whose comedians regularly lampoon Trump and Zuma, pointing out their similar views on women and family businesses.

So far, so normal. But underneath it all, not at all. Beyond Trump’s personal style, his authoritarian new government is endorsing nationalist and protectionist impulses across the globe through its stalled ban on immigration from seven majority-Muslim countries, its wall on the border with Mexico, its support for torture and disdain for human rights, its rejection of climate-change science and its sweeping deregulation of the financial sector.

Those surveying the chaos in the new US administration’s first weeks should not deceive themselves. These policies are on the agenda in DC and in several other capitals. And those usually sober voices who see in this the unravelling of the international

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

order – the UN, the IMF, the World Bank and the EU – are right to sound the alarms.

It is much harder, though, to produce a coherent response. For many working people, fighting globalisation seems as rational as striking for more pay. The idea that the US will cut its support for the IMF and the ‘Washington consensus’ – based on the free movement of capital and goods – must seem a kind of vindication for all those years opposing other Bretton Woods policies.

But be careful what you wish for. Doubtless, the IMF, World Bank and the UN need radical reform, Financial but their demolition in favour of a beggar-thyleaders are neighbour free-for-all talking could create a financial about ways crisis that would make the 2008 meltdown to reduce the look like a minor acworld’s counting error. When China’s President Xi dependency Jinping proselytises on US dollars for globalisation at the World Economic Forum, a serious shift in the balance of power has started.

It won’t stop there for the new nationalists. Dismantling or sabotaging international institutions could also end cross-border coordination on capital flows and immigration and trade policies, as well as the regulation of tax havens and illicit flows, which was designed to combat criminality and terrorist funding.

Some of it may quickly rebound on the US. Financial leaders in Asia, Europe and Africa are already talking about ways to reduce the world’s dependency on US dollars. ●

edit editorial@theafricareport.com the africa report

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m a r K e t i nG & d e ve loP me n t AlisOn KinGsley‑hAll e d i t o r i n Chie f PAtricK sMith m a na G i nG e d i t or nichOlAs nOrBrOOK editorial@theafricareport.com a s s o Ci at e e d it or MArshAll VAn VAlen bus in es s ed i t or MArK AndersOn e d i t o r i a l a s s i stan t OheneBA AMA nti Osei r e G i o na l e d i tors crystAl OrdersOn (sOuthern AFricA) Billie AdwOA McternAn (GhAnA) s ub - e d i t o r AlisOn culliFOrd ProofreadinG KAthleen GrAy a rt di r e Ct or MArc trensOn desiGn VAlérie OliVier (leAd desiGner) sydOnie GhAyeB christOPhe chAuVin (inFOGrAPhics) cAMille chAuVin r e s e a r Ch sylVie FOurnier P ho t oG r aP h y PierAnGélique schOuler sales sAndrA drOuet tel: (33) 1 44 30 18 07 – Fax: (33) 1 45 20 09 67 sales@theafricareport.com cOntAct FOr suBscriPtiOn: webscribe ltd unit 4 college road Business Park college road north Aston clinton hP22 5eZ united Kingdom tel: + 44 (0) 1442 820580 Fax: + 44 (0) 1442 827912 email: subs@webscribe.co.uk expressMag 8275 Avenue Marco Polo Montréal, qc h1e 7K1, canada t : +1 514 355 3333 1 year subscription (10 issues): All destinations: €39 ‑ $60 ‑ £35 tO Order Online: www.theafricareportstore.com d i f Co m internAtiOnAl AdVertisinG And cOMMunicAtiOn AGency 57‑Bis, rue d’Auteuil 75016 PAris ‑ FrAnce tel: (33) 1 44 30 19‑60 – Fax: (33) 1 44 30 18 34 advertising@theafricareport.com a d ve rt i s i nG d i r e C t or nAthAlie Guillery with séBAstien BlAche r e G i o na l m a naGe rs iBiJOKe FABOrOde PAscAle lAlleMAnd cécile lOuedec Printer: sieP 77 ‑ FrAnce n° de cOMMissiOn PAritAire : 0720 i 86885 dépôt légal à parution / issn 1950‑4810 the AFricA rePOrt is published by GrOuPe Jeune AFrique

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

risinG star oF splintered libYa is GaininG traction

G

Ghana Akufo-Addo promises to shine

Libya The West’s secret intelligence war

w w w.t heaf ric ar epor t . c om

Mauritius A big spring clean for Singapore status

N ° 8 7 • F E B R U A R Y 2 0 17

eneral Khalifa Haftar has a vital role to play in bringing short- and long-term stability to Libya if he is able to consolidate his legitimacy [‘Conflict: The secret war in Libya’, TAR87 Feb 2017]. Haftar will continue to play the fighting-terrorism card to seek collaboration with the US as he stated recently. The Trump The rush for a new business model administration’s plans to fight terrorism in Libya and in the region must involve Haftar because of his growing military power, influence, and ties with neighbouring countries like Chad and Egypt. While the Government of National Accord (GNA) in Tripoli made almost no progress in recent weeks and months, Haftar’s Libyan National Army (LNA) has been gaining major international traction. However, competition from Haftar’s rivals in Tripoli will persist, thus finding common ground between both governments is the only way to avoid civil war in Libya. Rida Lyammouri North Africa and Sahel analyst INTERNATIONAL EDITION

GROUPE JEUNE AFRIQUE

Algeria 550 DA • Belgium €5.90 • Canada CA$ 7.95 • DR Congo US$ 9 • Denmark 60 DK • Ethiopia 90 Birr • France €5.90 • Germany €5.90 • Ghana GH¢ 10 • Italy €5.90 • Kenya KES 410 • Morocco 40 DH • Netherlands €5.90 • Nigeria 800 NGN • Norway NK 70 • Portugal €5.90 • Rwanda RWF 6,000 • Sierra Leone LE 15,000 • South Africa R40 (tax incl.) • Spain €5.90 • Sweden SEK 70 • Switzerland 9.90 FS • Tanzania TZS 10,000 • Tunisia 5.4 DT • Uganda UGX 10,000 • UK £4.50 • United States US$ 6.95 • Zambia 40 ZMW • Zimbabwe US$ 4 • CFA Countries 3,500 F CFA • Euro Zone €5.90

While the rebound in production this season and the fall in prices should benefit local grinders, West Africa’s cocoa sector was badly it is causing fresh problems for West affected by last season’s El Niño African exporters. The larger exporters [‘Agribusiness: Cracks show after the are loath to buy beans at the high drought’, TAR87 Feb 2017]. This has fixed price, resulting in beans piling driven cocoa prices on a roller-coaster up at ports, while many small traders run, rising to record levels in mid-2016 in Côte d’Ivoire have been badly as supplies faltered, then causing a glut exposed by the dramatic price fall, that drove prices back down to their forcing them to renege on an lowest level in three years. West Africa’s estimated 100,000tn of export cocoa grinders were also badly affected contracts. The Ivorian cocoa regulator

by El Niño, which forced many smaller (CCC) has announced plans to resell grinders to suspend operations these contracts on the market, but because they were unable to source this could drive down prices further beans. As a result, Côte d’Ivoire lost its if cocoa supplies flood the market.

Edward George position as the world’s largest grinder Head of Group Research, Ecobank to the Netherlands.

chaos continues in the cocoa lands

when businessmen seek power I assumed Barack Obama and the Democrats had spawned a new era of liberalism and tolerance that had basically rendered the Republican Party obsolete [‘No room for African apathy towards Trumpismo’, TAR86 Dec/Jan 2017]. I assumed that the majority of voters were rational.

I assumed the majority of women embraced equality and cared about breaking the glass ceiling.

I assumed millennials would come to Hillary’s rescue like they did for Obama. I was wrong about everything and I felt terrible.

Donald Trump’s rise came from his rhetoric and boorishness.

The demographic that “once supported the Republican Party,” wanted a stronger message. They had endured “eight painful” years of a black man running the show and wanted “their” country back. Muslims, immigrants, building the wall, Hillary’s emails – these were all smokescreens; Trump’s rise came about as a result of hatred for Barack Obama.

In the past, business people simply went about their business, paid their taxes and contributed to society the best way they could. We are seeing in our era that money and respect is no longer sufficient for the wealthy and egotistical – power is the last piece of the puzzle needed to feel complete – all at the expense of our democracy.

Kwame Abruquah Maryland, US

How To gET youR copy of THE AfRIcA REpoRT On sale at your usual outlet. If you experience problems obtaining your copy, please contact your local distributor, as shown below. ethiopia: SHAMA PLC, Aisha Mohammed, +251 11 554 5290, aisham@shamaethiopia.com – Ghana: TM HUDU ENTERPRISE, T. M. Hudu, +233 (0)209 007 620, +233 (0)247 584 290, tmhuduenterprise@gmail.com – kenYa: NATION MEDIA GROUP, Christine Wangari, + 254 (0)20 328 8574, cwangari@ke.nationmendia.com – niGeria: NEWSSTAND AGENCIES LTD, Marketing manager, +234 (0) 909 6461 000, newsstand2008@gmail.com; MAGAzINE CIRCULATION NIGERIA LIMITED (MCNL), Distribution manager, +234 (0)803 727 5590/805 357 0984, mcnl3@yahoo.com – sierra leone: RAI GERB ENTERPRISES, Mohammad Gerber, +232 (0)336 72 469, raigerbenterprise@ gmail.com – southern aFrica: RNA Distribution, Yasmin Moodley, +27 11 248 3500, yasminm@rnad.co.za • SUBSCRIPTIONS: RNA SUBSCRIPTIONS, Tarryn de Swart, +27 11 248 3559, tarrynds@rnad.co.za – tanZania: MWANANCHI COMMUNICATIONS, Milli Makula, +255 716 500 500, mmakula@tz.nationmedia.com – uGanda: MONITOR PUBLICATIONS LTD, Micheal Kazinda, +256 (0)702 178 198, mkazinda@ug.nationmedia.com – united kinGdom: COMAG, Mark Swan, +44 (0)1895 433791, Mark.Swan@comag. co.uk – united states & canada: LMPI, Sylvain Fournier, +1 514 355 5610, lmpi@lmpi.com – Zambia: BOOKWORLD LTD, Shivani Patel, +260 (0)211 230 606, bookworld@ For other regions go to www.theafricareport.com realtime.zm – Zimbabwe: PRINT MEDIA DISTRIBUTION, Ian Munn, +263 778 075 147, ianmunn@mweb.co.zw

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Investing in livelihoods, skills and food security

Above: Olam’s rice farm in Nigeria Right: Tasty Tom brand in West Africa

From our 10,000 hectare rice farm in Nigeria to our state-of-the-art cocoa and cashew processing facilities in Côte d’Ivoire, Olam has been investing in Africa for over 25 years. Today we are present in 24 countries where we buy agricultural products such as cotton, sesame and coffee from 2.5 million smallholders.

Our 31 processing sites spread across the continent transform much of the raw material that we buy into value added ingredients for export and local consumption. But that‘s not all – we are also significant wheat millers in Africa providing local bakers with flour and are responsible for many well-known food brands such as Tasty Tom, Royal Aroma rice, Kingkrackers, Mama Gold, Bua pasta and Dona palm oil.

15,000 direct employees and 23,000 seasonal and contract staff help us deliver our goals. They are responsible for our success and continued belief in the potential of Africa.

Olam – born in Africa, believing in Africa.

For more information visit olamgroup.com and follow us on Twitter @Olam

10

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

After withdrawing from the African Union’s (AU) predecessor 33 years ago over the status of Western Sahara – a region supported by Algeria that is seeking a self-determination vote – Morocco joined the AU on 30 January

Will Morocco and Algeria ever make peace?

Yes OUALID KHELIFI Filmmaker, docu­ mentary photo­ grapher & producer

It is possible to say that the Maghreb’s two powerhouses are irreconcilable due to the Western Sahara quarrel, the regular accusations on drug smuggling or the bitter exchange around terrorism export.

But that denies the role and the say of both populations, their respective masses and their independent, young, progressive intelligentsia. In the present day, there are two realms of reality when it comes to the Algerian-Moroccan standoff. There is the institutional discourse which reigns at the helm of both neighbouring states, echoed by a servile media which fuels in its turn a sense of diplomatic warfare, mistrust and rivalry. Yet there is the street, filled with a disgruntled public and an increasingly savvy youth who might buy into some of Algiers’ or Rabat’s propaganda, but can still see very clearly at either side of the border that the two agents of this animosity are elitist, decadent regimes. When it comes to the question of Western Sahara, the vast majority of ordinary Algerians and Moroccans do not endure a state of constant obsessive paranoia, conditioning all interaction between the two parties to the feud. When they meet, they may agree or disagree over the fate of the Saharan territories, but they would talk about a whole array of other issues, which happen to be, more often than not, shared grievances of social injustice, political marginalisation, crackdown on dissent, and unemployment.

A true rapprochement may not be imminent, but it is probable. ●

No HAMDY A. HASSAN Professor of political science, Cairo University

It appears that the rivalry between Morocco and Algeria will not end in the foreseeable future.

There are complex issues associated with the contradictory historical and ideological paths of both countries, and the dispute over the demarcation of borders, as well as the issue of Western Sahara. Furthermore, Algeria politically and militarily supports the Polisario Front in line with the principles of decolonisation and the rights of the Sahrawi people to self-determination. In contrast, Morocco’s claim to full sovereignty over Western Sahara is a direct threat to regional unity.

Despite the fact that Algeria was amongst the supporters for the return of Morocco to the African Union (AU), it is not indicative of the possibility of a political rapprochement between the two countries. The Algerian argument would be that Morocco’s commitment to the principles of the AU implies that Morocco needs to abandon its demands for the expulsion of the Sahrawi Arab Democratic Republic from the AU, which in itself would be a tacit recognition of the Sahrawi Republic by Morocco. ●

YOUR VIEWS: The leadership of the AU needs to reconcile the two parties.

Obanisola Dele Algeria can’t make peace with Morocco as long as it stirs up the Western Sahara issue at the international level by corrupting politicians, journalists, fake activists...

This has to stop now!

Ahmed Salem A kingdom divided against itself is brought to desolation!

They should’ve sorted this shenanigan before allowing this reconciliation!

Szaack Sitii I suppose Algeria and Morocco can end up as allies. If we look back, we have a number of countries that fought each other but today these countries are friends.

So there is a possibility that Algeria and Morocco can find common grounds as far as the SADR issue is concerned.

Wilice Muyeche The issue of SADR and Morocco should be resolved first.

All African countries should be against an occupation of another. We cannot be a unified Africa if there are still internal conflicts.

Ro Senosi Algeria will end up understanding that the dispute over a part of Morocco isn’t a good thing for both. @OusamaJMARI

THE AFRICA REPORT

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5th

EDITION

20-21 March 2017, Geneva

Shaping the future of Africa

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briefing

signposts

kenya Female inmates raise a cheer after receiving a rose during a celebration called ‘Love behind bars’ inside the Langata women’s maximum security prison in Nairobi.

nigeria Abraham

Kiptum defied the fumes to win the Lagos marathon.

ghana With the realities of leaving the EU finally settling in, a less confident British foreign minister Boris Johnson is trying to drum up business in African countries.

Democratic republic of congo

Death and transitions

nigeria eurobonD euphoria Amidst a recession and with oil prices still low, investors gave the government of Nigeria a big boost in the middle of February.

Far exceeding the target of $1bn, Nigeria received $7.8bn in bids for its third eurobond – a name given to any bond issued in a foreign currency. This will help it to meet the deficit on the 2017 national budget, which is designed to help spend the country out of its economic troubles.

telecoms the cost of being connecteD Price of 1GB mobile broadband relative to monthly income (average price, 2015)

4.25% 17.49% 3.71%

0.9% 0.84% Africa

Asia-Pacific Latin America

Europe North America

NICOLAS MAETERLINCK/BELgA phOTO/AFp

12

etienne tshisekedi spent much of his life in the opposition

T

he 1 February death of veteran oppositionist Etienne Tshisekedi has thrown the DRC’s political transition into uncertainty. President Joseph Kabila overstayed the end of his last presidential term in December and was holding talks with the opposition about a succession plan that would have included elections this year – in which Kabila would not be able to run.

The sides had agreed a tentative deal on 31 December that is now in doubt.

The government now reports that it will not be able to afford the $1.8bn necessary to organise the vote this year.

Eyes are now turning to Félix Tshisekedi, the late opposition leader’s son and presumptive leader of the

Union pour la Démocratie et le Progrès Social (UDPS). Etienne’s return to Kinshasa in July had considerably strengthened the opposition. His death left not only the management of his party, but that of a wider opposition coalition, in doubt. Oppositionist and former Katanga Province governor Moïse Katumbi has legal problems of his own and had hoped in vain that the country’s transitional political deal would clear him to return to the country and active political life.

Kinshasa’s international partners are getting impatient, but they and the opposition now have fewer levers they can use to persuade the government to hurry Kabila into retirement. the africa report

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somalia Crowds celebrated the possibility of a “new start” with the election of former prime minister Mohamed Abdullahi Mohamed as president on 8 February.

south africa

gambia On 21 January regional leaders finally persuaded

The opening of parliament provided pantomime.

cling-on president Yayha Jammeh to step down peacefully from the presidency in Gambia after weeks of tension.

ThOMAs MukOYA /reuTers; PIus uTOMI ekPeI /AFO;CrIsTINA ALDehueLA/AFP; FeIsAL OMAr/reuTers; suMAYA hIshAM/reuTers; sYLvAIN CherkAOuI FOr JA

south africa fixing for trouble

urbanisation making cities more liveable A new World Bank report on Africa’s cities argues that urban centres need to open themselves up to the world, producing more goods and services to trade internationally in order to provide better lives for their growing populations. The argument follows that cities must be well organised in order to attract investment. The report proposes a raft of policies to address the organisation of land and labour. For many African cities, this would mean reforms to land tenure policies and developing strong public transportation and other infrastructure – highlighted by the maps of Nairobi below.

In February, the Competition Commission announced that its two-year probe into bank collusion found that 17 financial institutions had colluded to fix the rand’s exchange rate to the US dollar. With the governing ANC party calling for “radical economic transformation”, there is a lot of pressure on South Africa’s banks to up their game.

Share of job opportunities accessible within an hour by car

“When

0-10 10-20 20-30

a black person takes over a business, they do not want to pay taxes ”

30-40 40-50 50-60 60-70

Source: AVNer AND LALL 2016

0

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5

10

AFDB/OWJM

70-80 80-90 90-100

Share of job opportunities accessible within an hour by matatu (minibus)

Zimba abwe’s finance min nister Patrick China amasa raises prob blems with the government’s indigen nisation drive.

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international 1

5 3

2 4

1

tUrkey

$10bn

Estimated cost of the planned TurkStream gas pipeline that will link Russia and Turkey. The governments approved the deal in early February, having resumed talks that halted after Turkish forces shot down a Russian plane in November 2015.

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United nations

Ganging up on Guterres

OliviER DOUliERy/SiPA

UN secretary general António Guterres took office on 1 January and is already having trouble trying to balance his own independence, the weight of the five veto-holding powers of the Security Council and the other members of the global body.

He has announced his plans for a vast reform programme, but the permanent members of the Security Council have been blocking his attempts to appoint officials from countries other than China, Britain, France, the US and Russia.

One bright spot for the new administration was the appointment of Nigeria’s Amina Mohammed as deputy secretary general.

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United states

Tripped-up Trump

US president Donald Trump’s first 100 days in office were not marked by the early victories he had promised. The courts blocked the implementation of his ban on immigrants from seven largely Muslim countries in February. His administration then suffered a block when leaks reported that his national security adviser, Michael Flynn, had spoken to Russia’s ambassador about US sanctions before he took office. The Logan Act forbids such discussions between foreign governments and private citizens, but the Trump team said Flynn was forced to resign after losing Trump’s trust and lying to vice-president Mike Pence about the talks.

Trump won the November 2016 election based on his bold claims about what he would do in office. He has tried to follow through on some things, but not on others. He has already pulled back from starting a trade war with China and removed the prospect of Washington recognising the sovereignty of Taiwan from the table. In February, however, he floated the idea that the US would not back a two-state solution to the Israel-Palestine conflict, which angered allies in the Middle East and raised doubts about whether the Trump government will make any more progress on the issue than its predecessors.

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Germany

Moving on Merkel

The parties of the German centre left are pinning their hopes on former European Parliament president Martin Schulz to upset Chancellor Angela Merkel – in power since 2005 – in September’s national elections.

In February, polls put Schulz’s Sozialdemokratische Partei Deutschlands just three percentage points behind the governing Christlich Demokratische Union. Merkel’s openness to immigration and her austerity policies are contributing to her party’s declining poll numbers.

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yE PiNGFAN/XiNHUA-REA

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canada

“If we are

successful, CETA will become the blueprint for all ambitious, future trade deals. If we are not, this could very well be the last” In Februa ary, Canada’s Prime Minister Justin J Trudeau sought to raise support s for the Compreh hensive Economic and Trade Ag greement between his country and a the European Union.

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debates Tough talk on development

“Is African development an illusion?”

Event coordinator: a.kingsley-hall@theafricareport.com Sponsoring: advertising@theafricareport.com

www.theafricareport.com

JEUNE AFRIQUE MEDIA GROUP

SAVE THE DATE

MARRAKECH, MOROCCO 7th April 2017

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people

spotlight

Mohamed abdullahi Mohamed The new president of Somalia wants to ‘make Somalia great again’, but a long list of threats – from Islamist insurgents to venal politicians and meddling neighbours – stands between him and that goal Say ‘cheeSe’ 5 May 1962 Born in Mogadishu 1985 Became first secretary at Somalia’s embassy in Washington DC 1993 Earned a bachelor’s degree in history from the State University of New York at Buffalo 1 November 2010 Became prime minister 16 February 2016 Became president of Somalia

Somalia as a country, and it is the beginning of democracy in Somalia and the fight against corruption. i promise not to abuse your trust, to work justly and to support the poor.” once the fanfare dies down, a series of huge tasks await. Serious challenges include systemic corruption, the insurgent Al-Shabaab jihadist group and rebuilding a failed state. he has

“ They’ve lost their

to pay tens of thousands of civil servants and security forces, some of whom have not been paid for nearly a year, from a minuscule federal budget.

A severe drought and looming famine have placed at least 6 million Somalis in desperate need of humanitarian assistance, according to the United nations. internal displacement and conflict over natural

“China has become a model not only

livestock, even their farming tools ” The South Sudan representative for the Food and Agriculture Organisation of the United Nations, Serge Tissot, as famine was declared there

AvAlon/vISUAl PreSS Agency

The elecTion of Mohamed Abdullahi Mohamed sparked wild jubilation across Somalia, highlighting the population’s optimism and his popularity, but high expectations could backfire for the new leader.

As one of Africa’s poorest and most conflict-prone countries, enormous challenges await ‘farmaajo’, as he is known, a nickname picked up from his father’s love of cheese (formaggio in italian) during the period when Somalia was colonised by italy. farmaajo, a former prime minister and an academic with a US passport, swept to power on 8 february on a campaign of ‘change’ that convincingly defeated the incumbent hassan Sheikh Mohamud’s push for ‘continuity’. As it was not a direct election, members of parliament voted against the increasingly unpopular former president, and in doing so moved power away from the hawiye clan, and more specifically Abgaal sub-clan, in favour of a Darod of the Marehan.

“This is the beginning of the unity of the Somali people,” farmaajo said after being sworn in. “it marks the beginning of a secure and stable

UnIDo

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for Ethiopia but now even for the new administration of the United States ” Ethiopia’s prime minister Hailemariam Desalegn says that US President Donald Trump’s focus on building up manufacturing at home takes inspiration from Beijing the africa report

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resources are going to be some of Farmaajo’s first and major challenges once he forms his government.

Farmaajo is already in the midst of fierce competition amongst Hawiye sub-clans to provide the next prime minister. The selection will ultimately inform how smoothly the next parliament will run and how disputes will play out in contentious regions like HirShabelle and Galmudug.

The key to the next government’s success is forming an equitable and inclusive power-sharing arrangement, namely amongst the rival clans and political groupings.

Farmaajo will also have to carefully manage the competition of foreign power in Somalia from the Gulf countries, Turkey, Saudi Arabia, Egypt and Ethiopia. Some of his campaign rhetoric, reflecting nationalist and populist sentiment – along the lines of making ‘Somalia great again’ – is likely to create anxiety among Western partners, regional power brokers and key neighbours. If Farmaajo ramps up the nationalist rhetoric, often aimed at Ethiopia, international partners may increase their spoiling activities and further destabilise the country.

And yet, there is great opportunity and hope for Somalia. Farmaajo’s popularity and clean break from the outgoing administration may just be enough of a mandate to build the necessary security architecture and reinvigorate the flailing national army. He will also finalise the writing of the country’s constitution.

While Mogadishu-based anti-corruption watchdog Marqaati described the February vote as the most corrupt election in Somalia’s history, the peaceful transition of power and graceful exit by Hassan Sheikh underscores a maturing Ilya Gridneff political process. ●

“Arrest all suspects of drugs abuse

[…] Even if you suspect my wife Janeth of being involved in this business, come and arrest her” Tanzania’s President John Magufuli says that the security forces must take tackling drug trafficking more seriously the africa report

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www.abaxservices.com

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opinion

Alan Cowell

Author* and former foreign correspondent for The New York Times

Looking for Africa’s place on a Trumped-up map

I

watched Donald Trump’s presidential inauguration on television as the sun began to dip over the Indian Ocean in South Africa. For all its signals of a changed world, though, the ceremony might have been unfolding in a different galaxy altogether, in which the vast continent stretching to the north of me had been airbrushed out of the debate.

Flying into Brexit-bound London a few days later, the same impression was overwhelming.

Never high on recent Western agendas, sub-Saharan Africa’s intractable tribulations now seem to have slipped yet further back.

The Western world, seized with talk of populist renewal, has little time, interest or appetite for the travails of its former playgrounds.

In this age of self-interest, protectionism and transactional politics, where the hard-nosed emphasis on ‘the deal’ is paramount, why should anyone bother?

China, in particular, has led a drive for access to arable land, investment and the mineral riches of African countries, supplanting the one-time influence that grew from centuries of Western colonialism, Christianity and commerce. The yuan, the Chinese currency, is now official tender in cash-strapped Zimbabwe, where Robert Mugabe’s hold on power has created a

warped land of rich elites and a populace denied all the promises of independence in 1980.

Russia, too, has made inroads.

In South Africa, the African National Congress (ANC), led by Jacob Zuma and under challenge at the polls, has seemed increasingly ready to fall back on its apartheid-era ties with Moscow.

Then, the Kremlin was its main backer in the underground war

Yet the shifts and transitions that are looming – from Kinshasa to Harare to Pretoria – could be as earth-shaking as anything produced by the disgruntled voters who have already spoken in Britain and the United States, and who will make their voices heard again in France, the Netherlands and Germany. Most certainly, Africa’s contortions will play into a broader geopolitical game with consequences far beyond its shores.

For years now, the West has ceded ground and influence. the africa report

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against white rule. Like Vladimir Putin, Zuma is a former denizen of the dark world of Cold War espionage. As head of intelligence in the ANC’s exiled liberation movement, he trained in Moscow. A couple of years back, when the South African president suspected that he had been poisoned, he flew to Moscow for treatment – a voyage that might have seemed grimly ironic given Russia’s role in the polonium poisoning of former Russian spy Alexander Litvinenko.

policy suggested that the Trump administration is deeply sceptical about continued development aid and reluctant to pour money into the pockets of corrupt leaders and their acolytes.

More broadly, the questions seemed to signal a policy switch

Corrupt regimes offer the biggest obstacles to unleashing the potential of new generations

More recently, there has been persistent speculation that the secretive relationship between Putin and Zuma is nudging South Africa closer to a contentious agreement with Russia to build a string of nuclear power stations – a multibillion-dollar transaction heavy with potential for vast amounts of money to go astray.

In the big picture, as seen from the West, does any of this matter? A leaked document listing 14 questions about future Africa

from Washington’s traditional humanitarianism to Trump’s familiar preoccupations with the bottom line and the challenges of terrorism. “How does US business compete with other nations in Africa? Are we losing out to the Chinese?” one section asked. “We’ve been fighting AlShabaab for a decade,” another said, referring to the Islamist militants based in Somalia.

“Why haven’t we won?”

This is hardly, though, the time to walk away. Western influence – depicted by former liberation movements as the heir to the imperialism they once fought against – is admittedly limited.

But, as Britain quests for postBrexit economic partners, it should not ignore the mineral riches and the human potential of its onetime possessions in Southern Africa and elsewhere.

It is unfashionable, perhaps, to talk about governance in a region whose leaders seem increasingly ready to resist account­ ability. But it is indisputable that corrupt, morally bankrupt and autocratic regimes offer possibly the biggest obstacles to unleashing the potential of new generations desperate to compete in an era of rapid technological advance and economic innovation.

At a time of opportunity, many African countries are falling behind as their leaders scramble over the dwindling spoils.

Later this year, the ANC will hold its elective congress to choose a replacement for Zuma.

In Zimbabwe, plots and counterplots over Mugabe’s succession could well turn bloody. In Gambia, far to the north, it took

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the threat of military intervention by West African troops to dislodge the long-serving and dictatorial president Yahya Jammeh in January, after he lost an election in December. And, when he finally went into exile in equally despotic Equatorial

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Guinea, he took the plunder of his 22-year rule – including two Rolls-Royces – with him.

Watching the inauguration in Washington, I pondered for a moment on what lessons Western leaders might offer, and came to a sobering conclusion. In South Africa, Zuma is manoeuvring to permit his former spouse, Nkosazana Dlamini-Zuma, to replace him. In Zimbabwe, Grace Mugabe, the president’s spendthrift second wife, is seeking to become her husband’s successor.

In the Democratic Republic of Congo, President Joseph Kabila is bent on holding onto the power he inherited from his father.

Family ties have built legacies of power in Botswana, Kenya, Gabon and elsewhere.

Yet Africa does not have an exclusive hold on such bequests.

On the podium in Washington, Trump was flanked by a clan including his son-in-law, Jared Kushner, set to be a key aide in the White House. Behind him, George W. Bush represented the lineage whose patriarch, George H. W. Bush, had – like Zuma and Putin – been an intelligence chief and a country’s leader. Hillary Clinton stood alongside her husband, smarting with the defeat of her bid to install a second Clinton in the Oval Office.

For years, Western leaders have chided their African counterparts on their ways with power. But in the magnetic appeal of family dynasties, it seems, there is little either side can learn from – or teach – the other. ● *Permanent Removal, a novel set in post-apartheid South Africa, is published by Jacana Media.

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calendar

NIGERIA OIL & GAS 27 Feb. – 2 Mar.

EAST AFRICA OIL & GAS 28-29 March

ABUJA | NIGERIA cwcnog.com

NAIROBI | KENYA eastafricaogs.com

AID & DEVELOPMENT AFRICA SUMMIT 28 Feb. – 1 Mar. NAIROBI | KENYA africa.aidforum.org

Jacques Torregano/Divergence/AFRICA CEO FORUM/JA

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RETAIL WORLD AFRICA 1-2 March JOHANNESBURG | SOUTH AFRICA 10times.com/retailworld-africa

20-21 March ASA BAAKO MUSIC FESTIVAL 1-6 March BUSUA & TAKORADI | GHANA Annual music festival coinciding with Ghana’s Independence Day on 6 March. asabaako.com nth

POWERING AFRICA SUMMIT 8-10 March WASHINGTON DC | US 10times.com/powering-africasummit

AFRICAN INSURANCE FORUM 9-10 March JOHANNESBURG | SOUTH AFRICA Speakers imparting their expertise include Simba Manunure, CEO of Sanlam Mozambique, and Group CEO of First Mutual Holdings Douglas Hoto. ins.fextons.com

GENEVA | SWITZERLAND Ethiopia and Senegal are guests of honour at this year’s edition, with more than 100 speakers and 1,000 participants from 63 countries expected to attend.

After a successful event last year in Abidjan, this fifth edition returns to Geneva with cutting-edge panel discussions, round tables and debate. International investment will be the main focus, mobilising key financial actors and CEOs from the largest global companies headquartered in Switzerland, looking to expand their activities in Africa. The awards ceremony will once again celebrate exceptional growth pioneers including the Africa CEO of the Year. theafricaceoforum.com

RUSSIAN-AFRICAN FORUM 13-14 March ACCRA | GHANA events.b2b-export.com

NORTH AFRICAN PETROLEUM EXHIBITION & CONFERENCE 21-24 March ORAN | ALGERIA napec-dz.com

TUNISIA MUNICIPAL ELECTIONS 26 March POWER & ELECTRICITY WORLD AFRICA 28-29 March JOHANNESBURG | SOUTH AFRICA With the Solar Show running alongside. terrapinn.com

SOUTH AFRICAn FASHION WEEK 28 Mar. – 4 Apr. johannesburg | south africa Showcasing the spring/ summer collections. safashionweek.co.za

CAPE TOWN INTERNATIONAL JAZZ FESTIVAL 31 Mar. – 1 Apr. CAPE TOWN | SOUTH AFRICA Local jazz legends Jonas Mosa Gwangwa, Judith Sephuma and Dope Saint Jude share the programme with visiting artists including Deepak Pandit (India), En Vogue (US) and Escalandrum (Argentina). capetownjazzfest.com

LSE AFRICA SUMMIT 31 Mar. – 1 Apr. LONDON | UK The London School of Economics conference looks for African solutions to the continent’s challenges. lseafricasummit.org

THE AFRICA REPORT DEBATES 7 April 2017 MARRAKECH | MOROCCO In Morocco for its fifth edition, TAR’s fast-paced, adversarial debate on the question: ‘Is African development an illusion?’ theafricareport.com/tar-debates the africa report

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Who runs South Africa?

Ferial haFFajee

Mogoeng Mogoeng

THE POWER

NkosazaNa DlamiNi-zum

Christo Wiese

patrice Motsepe jaCob zuma

Cyril ramaphosa DaviD Mahlobo

joh

frontline The Africa Report gives you an exclusive tour of the corridors of power in the twilight days of President Jacob Zuma’s time in office, highlighting the government, business and civil society leaders in charge today and seeking to shape tomorrow

ajay gupta

zuma

pravin gordhan

sa

johaNN rupert

By Crystal orderson and patrick smith in cape town

i

Africa’s political economy was evidently n a particularly opulent mansion in the Bishopscourt suburb of Cape in a state of terminal collapse. The politiTown – one of the wealthiest in all cians were out of control, all the institutions had been thoroughly criminalised. of Africa – a well connected busiYet there they all were, sitting on subness grandee decided to throw a stantial assets in a nearly $500bn ecohouse-warming party in February.

It was that week when the opening of nomy, speaking with peculiar relish about an Armageddon they could not parliament coincides with the Mining seriously contemplate. One man, deIndaba, so every serious South African politician or businessperson was in town. scribing himself as a gentleman farmer, Quite a few showed up at the party. Set started sounding alarms about “land out on several levels, with the outcrops of seizures à la Zimbabwe”. His companTableMountainbehind,weretheexpansions cast nervous glances at the verdant ive gardens with their manicured lawns. surrounding valleys. “But it can’t happen Sipping a glass of Chenin blanc on one here,” onesaidwithpleadingdesperation. of the many terraces, a wit remarked: So when asking the question: “Who “So the Great Gatsby finally meets the runs South Africa?”, it is useful to preface it with another – “Who owns South Africa?”

Western Cape.” Although the host was That is easier to work out, despite the less reclusive than Jay Gatsby, the main problematic data. Some 27 years ago at event that evening was the guest list.

On the other side of the pool, a group the time of its liberation election, South of billionaires, as identified by the wit, Africa was level-pegging with India and Brazil as one of the world’s most unequal were huddled conspiratorially around societies.Today,itsincomesandassetsare a government minister. more unequally distributed than either At the next table, a hedge fund owner was languidly puffing on a Cohiba while of the other two countries. listening to advice from an excitable Elected on a platform of creating ecoyoung currency trader: “You’ve got to nomic opportunities and spreading the understand that [finance minister] Pravin wealth, the ANC now talks of the need [Gordhan]’ssackingisahugeopportunity for “radical economic transformation” to short the rand. Are you in my friend?” in truth, power is as Twotablesdown,aclutch concentrated in as few hands of mining barons lamented – with no obvious fear of as it was before liberation contradiction – that South Africa’s economy was being driven off after two-and-a-half decades in power. a cliff, their industry in particular. A So who has been running South Africa? couple of senior figures from the govIn truth, power is as concentrated in erning African National Congress (ANC) as few hands as it was before liberation. nodded in assent. One, formerly a senior The corporate chiefs, hand-in-hand with minister, took the analysis further: “The thehereditarylandowners,stillhavehuge mining minister invites 6,000 investors influence over policy-making and implementation.Thatinfluenceisoftenbought, to the Indaba, then disappears without sometimes in rand or dollars, sometimes answering serious questions.” with entrance tickets to the magic circle.

The other ANC man sighed, launching The co-option of the political class into a description of life in the presidency under Jacob Zuma: “They’ve tripled the has accelerated. That largely explains civil servants there to a thousand, and why company owners and directors and their lawyers and accountants are so unthey’re sitting there playing Monopoly answerable to the government, to the and solitaire on their computers.” voters, even to their shareholders.

That evening, it was a little like being the White Queen in Lewis Carroll’s Yes, institutions and activists are Through the Looking-Glass: one was exstruggling with this. Meanwhile, the pected to believe six impossible things, in new ruling class – an unhappy marriage this case, before the last dram of 25-yearbetween posturing political leaders and old Laphroaig. From the witness statecorporate power – looks set to bump ments of the assembled guests, South along regardless. ●

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politics

Battlelines for the post-Zuma clash

O

The Zumaphiles and Number One Some turbulence is coming this year. “President Zuma is the captain of the plane – he can either let it crash or allow it to fly,” a top party apparatchik tells The Africa Report.

Friends and foes of Zuma know about his resilience. Charges of corruption have dogged him for decades, but he has always bounced back.

As head of intelligence for the ANC when it was banned under apartheid, Zuma was the consummate political operator, running teams of informants.

He has taken those skills to the presidency. Activists’ cellphones are tapped; their cars are followed.

After public protector Thuli Madonsela questioned the use of state funds on Zuma’s homestead, his appointees in the security services called her a CIA spy and set up their own investigation.

The top layer of Zumaphiles are an inner circle of three powerful

women: his ex-wife Nkosazana Dlamini-Zuma (pictured), who is back after a stint as chair of the African Union Commission and now running for the ANC presidency; Baleka Mbete, speaker of parliament, has her own ambitions for the party leadership should Dlamini-Zuma stumble; and Bathabile Dlamini is chair of the ANC Women’s League, where she has relentlessly promoted Dlamini-Zuma’s candidacy. The calculus is that Dlamini-Zuma will protect Zuma after he steps down.

The second layer of Zumaphiles is much depleted. Many who cheered Zuma into the presidency, such as South African Communist Party leader Blade Nzimande and trade unionist Zwelinzima Vavi, have fallen out with him. That leaves figures such as sports minister Fikile Mbalula and home affairs minister Malusi Gigaba to flaunt their loyalty to Number One.

Werner Beukes/SAPA

ne of the unsung political successes in the era of Jacob Zuma has been Parliament TV, which broadcasts debates live from the national assembly in Cape Town.

At first, its audience was in the tens of thousands – mostly middle-class politics nerds. Now the viewers are in the tens of millions, in the townships as well as the leafy suburbs.

Some South Africans see parliamentary debates as a power struggle, one that could transform their lives. Others enjoy watching the mayhem as Julius Malema and his allies from the Economic Freedom Fighters in their red boiler suits and hard hats clash with security guards, turning parliament intoa reality TV show.

Politics in South Africa is a bloodsport, especially this year. There is the national battle focusing on chipping away at the dominance of the African National Congress. From the left, Malema and his militants are winning over the poor, the landless and the dispossessed of apartheid. From the right, the Democratic Alliance, dark suits and sensible shoes, have boosted their votes under Mmusi Maimane’s leadership.

Caught in the middle is the governing party, its factions jockeying for votes ahead of the December leadership contest. For many ANC loyalists the party is at a fork in the road: will it reassert its stated commitment to social and economic justice, or will it increasingly come under the control of a narrow cabal maintaining dominance through patronage?

Behind that choice is concern that South Africa’s current political economy cannot meet the ANC’s aspirations: a low-growth economy, dominated by rentiers and monopolists, will not produce the millions of well-paid, modern sector jobs that people demand. The danger is that those big strategic questions will be lost in a highly personal battle to control the party.

Sycophants and chancers group around the wounded king as he tries to designate his heir. Rebel barons rattle their sabres. Turbulent priests, jesters and poets all demand their place on the stage. Everyone claims a stake in the party of Nelson Mandela, and the drama is coming to a TV screen near you. ●

Roger Askew/REX Shutter/SIPA

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Parliament and provinces The suave Mmusi Maimane, leader of the Democratic Alliance (DA), and the Economic Freedom Fighters’ Julius Malema (pictured left) would never admit it, but they

will both lament Zuma’s exit this year. He has been a tremendous lightning rod for their brand of opposition politics. Malema and his deputy, Floyd

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Shivambu, dispense with parliamentary niceties to pile abuse on Zuma and his business allies, the Guptas.

For the DA, shadow justice minister, Glynnis Breytenbach (pictured right) has also been landing punches in parliament about the ANC’s governance.

Both parties still need to build a formidable branch network if they are to stand any chance of pushing the ANC’s share of the vote to under 50% in national elections due in 2019.

Outside of parliament, how the provinces vote – and they all look split at the moment – will determine the next leader of the ANC and the next president of the country. Zuma and his ex-wife Dlamini-Zuma have the africa report

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The Awkward Squad and the Zumaphobes It was ANC tradition that individuals did not run personal leadership campaigns. That convention was finally trampled into the ground at the party conference in Polokwane in 2007, where Zuma ran a campaign for party presidency to oust Thabo Mbeki.

Now deputy president Cyril Ramaphosa (pictured) is trying the same trick against Zuma, building up party support branch by branch to try to win a clear majority of the 5,000 delegates to the party conference in December. The ANC’s anti-Zuma forces use a public code allowing them to pledge loyalty to the party’s principles but condemn those promoting “disunity and mistrust”.

Also on the Ramaphosa train is ANC secretary general Gwede Mantashe, an old comrade from their days together in the mineworkers’ union, who will deliver Eastern Cape for the deputy president. Mantashe can also keep an eye on electoral shenanigans that might work against Ramaphosa.

the backing of KwaZulu-Natal premier Willie Mchunu. Also in the frame to back her are the so-called Premier League provinces: North West (Supra Mahumapelo); Mpumalanga (David Mabuza); and Free State (Ace Magashule).

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ANC treasurer Zweli Mkhize, who can pull in some important delegates from KwaZulu-Natal, is backing Rampahosa more discreetly. If there is a stalemate, Mkhize would be a strong compromise candidate.

Paid-up members of Ramaphosa’s ‘Awkward Squad’ are technology minister Naledi Pandor, MP Thoko Didiza, tourism minister Derek Hanekom, health minister Aaron Motsoaledi, public works minister Thulas Nxesi and ANC chief whip Jackson Mthembu.

The Presidency of the Republic of South Africa

A third layer of Zumaphiles, better known as the ‘deployables’, is fanatically loyal to Number One. They include mining minister Mosebenzi Zwane and cooperative government minister David van Rooyen. They take up any posting, no matter how qualified they are for it.

At the bottom of the Zumaphile pyramid are the 50 or so members of the ANC’s National Executive Committee. They, too, are a dwindling band, but presidential patronage keeps them on side.

Against those delegate-rich provinces Ramaphosa has his own loyalists in: Northern Cape (Sylvia Lucas); Eastern Cape (Phumulo Masualle); Limpopo (Stanley Mathabatha); and Gauteng (David Makhura). Most ANC

supporters in Western Cape back Ramaphosa but the party does not control the province. Horse-trading in the provinces could decide the outcome of one of the most consequential points in the ANC’s 105-year history.

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business

Who owns South Africa?

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gainst a backdrop of worsening inequality and economic contraction, two phrases have alreadybecomemantrasinpoliticalargumentsthisyear:“whitemonopolycapital” and “radical economic transformation”.

Of the more than R14.5trn ($1.1trn) capital in Africa’s largest equities market, the Johannesburg Stock Exchange, the ownership breaks down as follows: the old, white-owned conglomerates control about a quarter; the state-owned Public Investment Corporation controls about 13%; and various Black Economic Empowerment companies owned by entrepreneurs such as Patrice Motsepe (pictured far right), Saki Macozoma and Tokyo Sexwale control around 10%; the rest is owned by small shareholders and pension and equity funds.

Oxfam, the British non-governmental organisation, used data from Credit Suisse’s Global Wealth Report last year to calculate that three South Africans –ChristoWiese(picturedfarleft),Stephen

Saad and Ivan Glasenberg – have a joint net wealth equivalent to the total assets of the poorest 50% in the country. Credit Suisse also reported that the richest 1% of South Africans have 42% – or $272bn –of the country’s total private assets.

Old money, white capital Although some of the bastions of old moneymaysatirisethesoubriquet“white monopoly capital”, they know the mood is changing. The companies referred to are mostly, but not exclusively, in the hands of old, white capital: the retail conglomerates ShopRite, chaired

by Wiese, Pick n Pay (owner Raymond Ackerman) and Woolworths (CEO Ian Moir); and the four big banks – Absa/ Barclays (CEO Maria Ramos, a former CEO of Transnet), Nedbank (CEO Mike Brown), Standard Bank (co-CEO Sim Tshabalala), Rand Merchant Bank (CEO James Formby). Meanwhile, the dominance of the telecoms market by two postapartheid conglomerates – Vodacom

(CEO Shameel Joosub) and MTN – has prompted wider concern about the need for greater competition. Such is the market dominance of these companies that eventhebusiness-friendlyWorldBank,as deputypresidentCyrilRamaphosapoints out, has suggested that these concentrations of capital are holding back growth and economic restructuring.

One the country’s richest businessmen, Nicky Oppenheimer sold the diamond conglomerate De Beers to Anglo American for $5.5bn, much of which is now an international investment fund. Other mining barons such as Desmond Sacco, chairman of Assore, and Neal Froneman of Sibanye Gold are still on the South African scene but are also diversifying overseas.

A gutsy operator, Froneman is suing the government, claiming losses from a forced mine closure; last year he called on Zuma to resign in the middle of the Nkandlascandal.Hismorediplomaticcolleagues – Anglo American CEO Norman the africa report

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LSE AfricA Summit; BLoomBErg; mArtin rhodES/BuSinESS dAy/gALLo imAgES; Simon dAwSon/gEtty imAgES

the power 100: who runs south africa? | frontline

MbazimaandGoldFieldsCEONickHolland–warnedthegovernmentattheMining Indaba in February that investors are increasinglylookingnorthofSouthAfrica.

Glasenberg, the CEO of Switzerland-based Glencore – which has been on a financial roller coaster over the past five years – keeps a low profile in South Africa, where he cut his teeth as a coal trader under the legendary Marc Rich.

Legacy operators like Johann Rupert (pictured second from left), chairman of the Richemont luxury goods company, have expanded operations vastly since 1994. Koos Bekker has turned Naspers into a highly profitable global media company with stakes in China’s Tencent Holdings, Russia’s mail.ru and Brazilian publishers Abril. Saad, CEO of Aspen Pharmacare, has presided over one of the country’s fastest-growing big companies.

New money, black capital A triumvirate of black businessmen – African Rainbow Minerals chairman Motsepe, Safika Holdings chairman Macozoma and Mvelaphanda Resources chairman Sexwale – epitomised efforts the africa report

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by the ANC government to create a new black capitalist class. They were all politically connected; Motsepe and Macozoma were particularly close to former president Thabo Mbeki.

Butithasremainedatinyandtight-knit elite: Motsepe’s sister Bridgette Radebe founded Mmakau Mining and is married to Jeff Radebe, minister of Monitoring and Implementation. She is also the sister-in-law of Cyril Ramaphosa, deputy president and former chairman of Shanduka, in which he had a controlling stake.

For the ANC government, the next stage in the project is to create a black shareholder class: “Only 10% of the top 100 companies on the Johannesburg StockExchangeareownedbyblackSouth Africans,” Zuma lamented at the opening of parliament in February.

Many of the country’s black business elite say they have been held back by the government: Sipho Pityana – chairman of AngloGold and founder of Izingwe Capital, a black-owned investment group – leads the Save South Africa campaign, which accuses Zuma of creating economic instability.

Some cerebral and technocratic figures are likely to surface in innovative new ventures in the coming years: watch out for Phuthuma Nhleko, brought back temporarily to steer MTN through its Nigeriacrisis,orOyamaMabandla,executivechairmanofLangaGroup,whohave impressive international contact books.

Political money, stooge capital It is not an original model – for either Donald Trump or Zuma – but presidents whose families operate their businesses at close range to the government risk all manner of conflicts of interest. There are looming problems for the two presidential family members: Edward Zuma, owner of Blockbuster; and Khulubuse Zuma, director of the shadowy Caprikat oil company, which has acreage in the Democratic Republic of Congo.

Such familial business ties do not sit well with Zuma critics such as Pityana and Julius Malema of the Economic Freedom Fighters. Businesspeople from the President’s home base in KwaZulu-Natal are more tolerant on the nepotism front because their companies have also benefited from Pretoria largesse.

A large delegation of companies from the province turned up at the Mining Indaba enthusing about the useful support their new enterprises were getting from government in the form of backing for finance, procurement and concession contracts.

Less popular, and increasingly precarious, are business alliances that Zuma has struck with people as such as Vivian Reddy, founder of the Edison Group.

Zuma’s relationship with the Gupta family,Ajay (pictured second from right), Atul andRajesh,directorsofOakbay,hasbeen the subject of a prolonged investigation by public protector Thuli Madonsela, who recommended a judge should be appointed to evaluate her findings.

Public anger over the matter is unlikely to dissipate. It has further divided the rival factions in the ANC, where critics argue that the President’s relationship with the Guptas has proved extraordinarily costly for the country. In turn, the Guptas deny all wrongdoing. And there is unlikely to be any early resolution to the fierce arguments over the issue. ●

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Law, order, spooks and the state

Institutional fight-back

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ho runs South Africa’s institutions? How strong is our democracy? Is this what we fought for? Such questions have been whizzing around the country over the past five years as concerns multiplied both about corruption charges against President Zuma and his business friends, and the use of the state security machinery to stymie political opponents.

After the furore of the $5bn arms deal in 1999, a key test for the country’s institutions was the seemingly mundane matter of whether Zuma had the right to spend $20m of state funds on improvements to his homestead in Nkandla.

The saga touched on key institutional themes: accountability of state power,

law of the land,” he wrote. Mogoeng and a full bench of the Constitutional Court ruled that Zuma had breached the constitution by failing to comply with Madonsela’s recommendations, and issued a remedial order to repay the state funds. In a humiliating U-turn, Zuma offered a qualified apology and promised to repay the funds.

A few months later, Pretoria’s High Court overturned the National Prosecuting Authority (NPA)’s 2009 decision to drop 783 corruption charges against Zuma and reinstated the charges. Then it denied the NPA leave to appeal. It was the dropping of those 783 charges that allowed Zuma to stand as ANC president in 2009. ●

judicial independence and the abuse of power by the security services.

After investigative journalists Stefaans Brümmer and Sam Sole broke the Nkandla story, the then public protector Thuli Madonsela examined the case at length, concluding that Zuma should repay the state funds used. Zuma demurred and launched his own investigation. Meanwhile, the security services started investigating a claim that Madonsela had links with US intelligence. This counter strategy failed.

Chief Justice Mogoeng Mogoeng delivered an historic and scathing judgement against Zuma in March 2016. “The President failed to uphold‚ defend and respect the constitution as the supreme

LEáNNE STANDEr

The sight of more than 6,000 armed police and 441 soldiers standing in conspicuous guard over the opening of parliament in early February appalled many South Africans. Activists accused the government of “militarising” parliament, and older critics said it evoked the era of apartheid securocrat leader P. W. Botha. As a head of ANC intelligence under apartheid, Zuma knows and understands the power of the security services. He has used them to his great advantage to help fight both his legal and political battles.

Zuma’s two key allies here are state security minister David Mahlobo (pictured) and police minister Nkosinathi Nhleko. Both are younger than him, and in thrall to his knowledge and experience. In turn, Mahlobo and Nhleko have appointed obedient apparatchiks such as Berning Ntlemeza to head the Hawks special investigative unit and Khomotso Phahlane to be acting national police commissioner.

Here again, Zuma’s opponents are using institutions to scupper his plans. Enter Robert McBride, a former fighter with the Umkhonto we Sizwe guerilla force and now head of the Independent Police Investigative Directorate. He wants to bring the police and the spies to account. Getting the message, Nhleko, Ntlemeza and Phahlane want to sack the obstructive McBride, but he refuses to go without a fight.

SHArON DAvIS

Security and spookery

State companies and sinecures At the centre of so many of South Africa’s political dramas are its state-owned companies. One of the costliest has been Eskom, the state power company that seemed to run out of power and then run out of money. After a lengthy audit, several of its senior management were forced out after being deemed complicit in schemes to buy overpriced fuel and coal from politically connected local suppliers. the africa report

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The success of South Africa’s post-liberation constitution drafters and judiciary is reflected in the widespread support for their principles and institutional roles. The independence of the courts is central to the effectiveness of the social welfare, regulatory and intelligence organisations set up under the provisions of the constitution.

There are huge risks, however: firstly of complacency – there are growing threats to judicial independence at the provincial and local government levels. Another risk is of overreach as judges try to constrain moves by Zuma’s government to flaunt the letter and spirit of the law in its daily operations. The problems of the political opposition mean that some citizens want the judiciary to take on a more adversarial or activist role. Then South Africa would risk becoming a kritarchy: government by the judges.

For now, that looks improbable, given the rigour and independence of its top judges. Mogoeng Mogoeng (pictured) as chief justice, has an excellent reputation, nationally and internationally. So do the judges on the Constitutional Court: Sisi Khampepe, Mbuyiseli Madlanga, Nonkosi Mhlantla, Bess Nkabinde, Raymond Zondo, Edwin Cameron, Johan Froneman and Chris Jafta.

Two other figures heading regulatory agencies play vital roles in the wider economy, and they are coming under growing political pressure. They are Murray Michell, director of the Financial Intelligence Agency, and Tembinkosi Bonakele, director of the Competition Commission. But the

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heaviest pressures rest on Busisiwe Mkhwebane, who replaced Thuli Madonsela as public protector in October 2016. As an experienced intelligence operative with high-level political connections, Mkhwebane is accused of undermining Madonsela’s work. Her short-term priorities – such as withholding termination payments to Madonsela – have prompted comment. And the record of Shaun Abrahams as director of public prosecutions – he is responsible for the cack-handed attempts to prosecute finance minister Gordhan – is almost universally excoriated.

A bank, a broadcaster and a tax collector Less high-profile than finance minister Gordhan, reserve bank governor Lesetja Kganyago (pictured) has sounded similar warnings over state entities cutting bad deals with politically connected companies.

This prompted the then public protector Madonsela to investigate claims of the Gupta family’s

Elmond Jiyane/GCIS

One of the highest-profile casualties in Eskom’s crisis was chief executive Brian Molefe, a close Zuma ally. An even closer presidential ally is Dudu Myeni (pictured) chairwoman of South African Airways, another financially precarious state company. As with Eskom, the state airline has been used to enrich politically connected companies that provide it with overpriced goods and services.

Finance minister Pravin Gordhan scuppered a plan for the airline to enter a financing arrangement at usurious rates under Myeni’s management.

According to ratings agencies such as Moody’s, the reckless management at the state-owned companies creates wider financial risks and could trigger a ratings downgrade that would hit the country’s ability to raise funds. Such warnings are laughed off by ANC politicians such as energy minister Tina Joemat-Pettersson and her colleague Phumzile Tshelane, who runs the South African Nuclear Energy Corporation, a key player in a mooted $50bn atomic deal with Russia.

Kopano Tlape/GCIS

Kritarchy and the judicial activists

influence, which the Guptas deny.

Now the Reserve Bank has to manage demands for a tougher line against the country’s big four banks and claims they benefited unduly, and perhaps improperly, from forex trades.

Another case in the courts is the fight over Hlaudi Motsoeneng’s management at the South African Broadcasting Corporation.

The Western Cape High Court ruled that Motsoeneng, another Zuma ally, was unfit and unqualified to hold any role at the state broadcaster. He was seen as trying to run it as an overt propaganda machine for Zuma.

Another key Zuma ally, Tom Moyane, head of the South African Revenue Service, is widely seen as undermining credible investigations and thwarting Gordhan.

frontline | the power 100: who runs south africa?

Civil society

The ungovernment: activists and thinkers

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n the wake of South Africa’s glorious revolution of 1994, radical theorists imagined an exhilarating landscape where activist groups from the liberation era would walk hand-in-hand with the new political chiefs and build the future together. The plot worked out differently.

At first, the government and nongovernment spheres were eager to consummate the marriage. With Nelson Mandela at the helm, government had a tangible moral power. Then all sides – the victorious ANC, the apartheid parties and the forces of civil society – negotiated a new liberal constitution, one of the world’s most progressive, to ensure that no ruling party would be able to repeat the abuses of the previous half-century.

That was the high-water mark of collaboration. A panoply of activist and social movements had a distinct voice in the new order alongside the ruling party and its trade union partners. Grassroots and community groups pushed the limits of the new democracy. Faith organisations such as the South African Council of Churches, which had carried the anti-apartheid flame at the peak of nationalist oppression, searched for a role. They found it, just as a younger generation of writers and intellectuals started shining a critical light on the new order.

The government is under fire in this new age of activism. Just days before Zuma’s State of the Nation address in February, more than 1,000 supporters of the Save South Africa campaign gathered in St George’s Cathedral behind parliament in Cape Town. Addressing them was veteran activist Sipho Pityana, who called for Zuma to stand down immediately, lambasting him and his family for grand corruption.

Save South Africa – with backing from ANC members and even former ministers, trade unionists and businesspeople – is a new face of activism.

Its agenda is to demand that Zuma and his ministers respect the constitution and be held to account accordingly.

Alongside it are thousands of grassroots groups demanding better services and legal rights for their communities. ●

Call of the faithful As popular protests have mounted against the Zuma government, the clergy have stepped up their activism. Nobel laureate and former archbishop Desmond Tutu has been direct

in his criticism of the government, as has his activist daughter Mpho Tutu. Tutu’s successor, Anglican Archbishop Thabo Makgoba, has dismissed Zuma’s calls for the church to stay out of politics, drawing a parallel with attacks on the activist clergy under apartheid.

The South African Council of Churches, with its Economic Justice Network, defends communities against political and commercial interests, running events like the Alternative Mining Indaba. Also active are Archbishop Buti Joseph Tlhagale of the Catholic Church in Johannesburg, Jeff Katz of the Jewish Board of Deputies and Faisal Suliman of the South African Muslim Network. One of the country’s biggest faith organisations, the Zion Christian Church under Bishop Barnabas Lekganyane (pictured), keeps its distance from social activism but is courted by all the political parties.

Media: owners and scribblers The old newspaper empires have been hollowed out and asset-stripped.

Business Day and The Sunday Times are owned by the Times Media Group: Bongani Siqoko, editor of The Sunday Times, carries a flag for independent reporting. The privately owned, 24-hour TV news station eNCA, is popular, with Anton Harber at the helm.

Zimbabwe’s Trevor Ncube publishes the Mail & Guardian (M&G), whose current editor is Khadija Patel. In alliance with Stefaans

Gallo Images/Destiny/Getty Images

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Brümmer’s not-forprofit group amaBhungane (isiZulu for dung beetle), it has broken some important stories. The Star (Johannesburg), The Mercury (Durban) and the Cape Times come under Iqbal Survé’s

Independent News empire, which is now highly supportive of the Zuma government.

Closest of all to Number One is the Gupta family’s The New Age and their television station ANN7.

Journalists such as Mondli Makhanya, Ferial Haffajee (pictured) and Eusebius McKaiser have attacked political and business shenanigans. And Daily Maverick columnists Ranjeni Munusamy and Marianne Thamm have exposed the rot in the ANC.

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activists and the next wind of change Radical groups such as the #FeesMustFall movement led by activists such Busisiwe Seabe (pictured), have shaken political structures at the top. Zackie Achmat, who led a lobbying group for universal access to anti-AIDS drugs, now chairs the Equal Education group.

Emblematic of a new spirit of activism, Save South Africa is heterogeneous, drawing in ANC stalwarts such as Max Sisulu, Paul Mashatile, Trevor Manuel, former ambassador Cheryl Carolus and former minister Barbara Hogan to rail against the Zuma government.

They work with business leaders such as Exxaro’s Mxolisi Mgojo, Barclays’ Maria Ramos, Goldman Sachs’ Colin Coleman, Rothschild’s Martin Kingston, Telkom’s Jabu Mabuza and Nestlé’s Ravi Pillay.

Backed by the Gupta family, Mzwanele Manyi’s Progressive Professionals Council rallies people to support Zuma and his choice of successor, though it recently vehemently opposed his anti-corruption bill.

WIllEM DE lANGE/SAIIA/TUSK/SToPIVoRy

thinkers: their tanks and ivory towers With their foundations in the country’s leading universities – Witwatersrand, Rhodes, KwaZuluNatal, Cape Town and Stellenbosch – the country’s think tanks proliferate and shift their shape.

Chris Landsberg, professor of politics at the University of Johannesburg, has produced cutting-edge analysis on security strategy and foreign policy for over two decades.

He was formerly at the Centre for Policy Studies, where Khehla Shubane, another veteran activist, is a research officer. Steven Friedman at the Centre for the Study of Democracy, also in Johannesburg, is both a prolific the africa report

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author and producer of innovative social science research.

The venerable South African Institute of International Affairs wields considerable prestige nationally and abroad. Elizabeth Sidiropoulos (pictured) is its chief executive and Moeletsi Mbeki chairs its executive council.

Smaller foundations with a focus on governance include Corruption Watch (David Lewis), the Institute of Race Relations (Frans Cronje) and the Helen Suzman Foundation (Francis Antonie).

AlEXANDER JoE/AFP

CoRNEl VAN HEERDEN/Al JAZEERA

FRonTLInE

trade unions: labour’s long march The Congress of South African Trade Unions (Cosatu) was a key ally of the African National Congress and the South African Communist Party in the Tripartite Alliance, but relations deteriorated after the 1994 elections.

As general secretary of Cosatu (1999-2015), Zwelinzima Vavi charted a more radical course, falling out with its president, Sdumo Dlamini, a Zuma ally.

The police massacre of 34 workers at the Marikana platinum mine in August 2012 was a turning point: it further divided the unions. The National Union of Mineworkers (general secretary Kolekile David Sipunzi and president Piet Matosa) stayed with Cosatu, as did the National Education, Health and Allied Workers’ Union (general secretary Bereng Soke and president Mzwandile Makwayiba).

But the new, radical Association of Mineworkers and Construction Union (general secretary Jeff Mphahlele and president Joseph Mathunjwa – pictured) had led the protests at Marikana and challenged the established union leadership. Two years later, Cosatu expelled the National Union of Metalworkers of South Africa, whose secretary general Irvin Jim and president Andrew Chirwa refused to back the ANC under Zuma’s leadership.

It then expelled Vavi, who is now trying to launch a new federation.

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EasT africa

Tanzania’s

With a president cultivating a no-nonsense reputation and an economy set to be supercharged, Tanzania is making sure its voice is heard throughout the region

By Joseph Burite in Kampala, Dar es Salaam and Nairobi

Y

ou are on holiday. Perhaps in Kenya’s Maasai Mara game reserve.

The thought occurs : How about crossing to the world-famous Serengeti, on the Tanzanian side? Foiled ... The switch won’t be easy, requiring a five-hour detour, another visa and a new set of immigration rules.

For nearly four decades now, Tanzania has maintained a blockade of Bologonja, a border crossing between the Maasai Mara and Serengeti. It claims access for mass tourism could harm the ecosystem of the world her-

itage site, which “harbours the largest remaining unaltered animal migration in the world,” according to the United Nations Educational, Scientific and Cultural Organisation.

But ever keen to do business and tap its tourism potential, Kenya sees this differently. It argues that its southern neighbour is out to make business unsustainable for Kenyan tour operators who ferry curious visitors eager to witness wildebeests on the march.

What you are witnessing are age-old rivalries, so bitter they have defied a wave of economic integration slowly sweeping across the continent. And the africa report

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John Magufuli, seen here with Rwanda’s Paul Kagame, is eager to negotiate regional mega-projects

power play KHALS/PAuLKAgAme/FLicKr

they are just two of many regional disputes involving Tanzania that have earned the country a reputation as a spiky neighbour.

Voicing a popular view, Uganda’s minister for general duties Tarsis Kabwegyere said in February on a television talk show: “The political class in Tanzania is not yet attuned to regional integration.” ‘coalition of the willing’

During March 2016 talks with Kenya’s President Uhuru Kenyatta, he and Tanzania’s President John Magufuli agreed to form a joint ministerial commission the africa report

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to resolve outstanding issues related to the Maasai Mara-Serengeti conflict. Yet Tanzanian foreign minister Augustine Mahiga, who was selected to chair the commission, has not held a meeting since. “Tanzania is looking beyond traditional tourism,” says Mahiga.

Compounding this has been the ‘coalition of the willing’, the regional grouping of Rwanda, Uganda and Kenya who have sought to fast-track projects including a standard gauge railway linking Mombasa, Nairobi, Kampala and Kigali; a single tourist visa; cross-border movement of East African Community (EAC) nationals; and eliminating roam-

ing fees on mobile phone calls in the region. In 2014, Kenya, Rwanda and Uganda formed the coalition, denouncing what they saw as the plodding leadership in Dar es Salaam.

But is that perception entirely correct? While Tanzania resisted pressure to join those initiatives, the country at the same time liberalised its capital account, permitting free movement of capital across the region well ahead of the bloc’s 2015 deadline.

It has also negotiated a customs union with the Democratic Republic of Congo (DRC), increasing the chances of the former Belgian colony joining

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the EAC. This year, Tanzania will open up further to the world as it seeks to attract more foreign capital, having “fiC.A.R. nalised provisions to guard against volatility,” central bank governor Benno Ndulu told reporters late last year. The country is also looking to allow its pension funds – which mobilise as much as $1bn in annual D.R.C. savings – to invest across East Africa, according to the sector’s regulator.

These regional initiatives have accelerated since President John Magufuli took power in October 2015. In March 2016, Magufuli and Uganda’s President Yoweri Museveni agreed to build a $4bn crude pipeline to pump Ugandan oil to the Tanzanian town of Tanga instead of using Kenya’s Lamu port.

The move saw France’s Total outmanoeuvre Britain’s Tullow Oil, which preferred the latter. race for the hinterland

And Magufuli met Kenya’s President Uhuru Kenyatta a day later, adroitly giving back with one hand what he takes with the other. They launched a joint road project to connect the towns of Arusha and Voi via Taveta in Kenya, providing a quicker link for transporters between Mombasa and Rwanda compared to the route through Uganda.

Magufuli also met with Rwanda’s Paul Kagame the following month to hash out plans for a standard gauge railway line from Dar es Salaam to Rwanda – sparking a race for the hinter-

South Sudan

Ethiopia

Uganda Kenya Rwanda Burundi

On the security front, Magufuli has been less active, however. His government has tacitly endorsed Pierre Nkurunziza’s controversial hold on power in neighbouring Burundi by going along with Tanzania’s Somalia former president Benjamin Mkapa, a facilitator of peace talks, who has told the opposition they must recognise the government. courting china

But in South Sudan where the United Nations warned in February of worrying levels of fighting, Magufuli, the curComores rent chairman of the EAC, has toed the regional line. The EAC Mozambique backs the peace process under Zambia the Intergovernmental Authority on Development, parting ways with Magufuli’s predecessor Jakaya Kikwete, Zimbabwe who hosted talks in Arusha to reconcile President Salva Kiir and former land with the Kenyan line – and other deals to reduce work permit fees, to vice-president Riek Machar. allow Rwandan logistical players more And while the countries of East Africa access to the port of Dar es Salaam are getting a lot of attention from inand to increase cooperation in the ternational partners, Magufuli, nicknamed ‘the bulldozer’, has played host aviation sector. to one of the longest lists of courtiers.

In October, joint oil exploration That includes India’s Prime Minister deals covering Lake Tanganyika were Narendra Modi, Turkey’s President signed with the DRC’s Joseph Kabila.

In November, Magufuli and his ZamRecep Tayyip Erdogan and China’s bian counterpart, Edgar Lungu, ordered foreign minister Wang Yi, who said 200 changes to the management strucChinese factories are seeking to relocate to Tanzania, with “which China tures at the struggling Tanzania-Zambia Railway. The two leaders also laid out shares strong history”. plans to increase volumes by boosting Moses Kulaba, executive director operations at the Tazama refined oil of the Dar es Salaam-based thinkpipeline that serves Africa’s secondtank the Governance and Economic largest copper producer.

Policy Centre, explains: “Tanzania is Tanzania

Dar es Salaam as a regional player

1960

1970 1975

1962

Mandela comes to Tanzania to set up an ANC rear base, making Dar a revolutionary hub

Opening of the Tazara railway linking Dar and Kapiri Mposhi in Zambia. The 1,860km, jointly owned train line was built with the help of China and became a key route for copper exports from Africa’s two largest producers, Zambia and the Democratic Republic of Congo.

1980

1990

1977

2000

Tanzania-Uganda War, with Ugandan dictator Idi Amin kicked out in 1978

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Revival of the East African Community (EAC), which was originally launched in 1967 but collapsed in 1977. The three original member states – Tanzania, Kenya and Uganda – signed the treaty in Arusha, which hosts the organisation’s headquarters •

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attracting interest because of its location but also future potential […] If you look at Tanzania, 50 years from now you will still have things that can be exploited by countries like China, which are looking ahead.”

This has resulted in rising confidence – and the government is now more willing than ever to challenge neighbours. Last year, against Kenya’s desperate wishes, Tanzania forced a postponement of the signing of the EAC’s economic partnership agreement with the European Union, insisting it needed to evaluate how the agreement impacts its new ambitions for an industrial economy. This followed negotiations that dragged for more than 14 years.

“Contrary to the belief that Tanzania is slowing down the process,

some of the questions it’s raising are valid. It might be true on the free movement of people, but some agreements – like political federation – were rushed,” Kulaba argues. “Tanzania is buying time for countries to think about the process.”

For all of Magufuli’s attempts to reach out and shape a region in which Tanzania’s voice has been muted, there are some hurdles to be cleared first.

Graft, policy choices and competitiveness will remain a drag on any desire to bulldoze East Africa.

Following a rough patch sparring with industrialists like Aliko Dangote, business seems to value Magufuli’s crusade against corruption, thanks to indictments of several officials and efforts to curb resource wastage with a tight fiscal regime.

2010

2000 Launch of the EAC common market, which allows for the free transit of goods, services, people and capital within its borders. Member states, which by this time include Burundi and Rwanda, are confident the protocol will attract overseas investors

2016

South Sudan joins the EAC to become the bloc’s sixth partner state

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REX/REX/SIPA; UPI/AFP; all rights reserved

2010

President John Magufuli has been praised for his frugal ways and efforts against corruption

Jim Kabeho, a director on the East African Business Council says: “He looks like a man we can work with […]

You know, for us, if someone is fighting corruption, it’s very good.”

But it is not just corruption that is a problem for the government’s wider ambitions. The administration’s fiscal policies, especially on the taxation of services offered for transit cargo, have been met with criticism because they hurt regional traders. port inefficiencies

About 40% of Tanzania’s estimated 23,000 trucks are idle, with some relocating to Namibia’s Walvis Bay. The country has lost 65% of Zambia’s copper shipments and 50% of Congolese cargo, according to estimates from the Tanzania Private Sector Foundation (TPSF).

“We [Dar es Salaam port] are losing customers because we are not competitive,” says Salum Shamte, TPSF’s deputy chairman. “We are uncompetitive because we instituted value-added tax on auxiliary services,” he says in reference to a levy slapped on cargo-clearing services last year that also applies to transit cargo.

“We should not tax transit trade, period. We should not tax it at all,” says Shamte, whose business interests include one of Tanzania’s largest sisal growers. “Let us use transit trade as a tool for competitiveness, not just for revenue.”

politics

Even as plans to tap regional business hinge on the harbour, the port of Dar es Salaam is already bogged down by inefficiency and is consistently outmatched by Mombasa, Beira and Durban. A report by TradeMark East Africa, a trade facilitation organisation, found it to be the most expensive for importers in the region.

The government, in an effort to revamp facilities at the port, has sought to borrow as much as $690m from the World Bank since 2015. The World Bank instead is planning to release money in phases in a bid to force Tanzania to tighten up the necessary planning for the project. Bella Bird, the World Bank’s country director for Tanzania tells The Africa Report: “The first phase is expected to involve an International Development Association credit of $345m, together with a [UK] Department for International Development grant of $13m and a Tanzania Ports Authority contribution of $63m.”

Still, some of the port’s largest users are now subjects of constant suspicion by the new government. It has A new crude pipeline will pump oil from Uganda’s Lake Albert to the Tanzanian port of Tanga

accused large importers of tax evasion and corruption. The government also wants to be sure that it is getting all of the revenue it is due from the mining sector, which accounts for about 4% of gross domestic product and boasts giants like Acacia and AngloGold.

LNG plans stalled

the respective projects,” says Gulbrand Wangen, director for midstream projects in Africa, Brazil and India at Norwegian Energy Partners. The industry lobby counts Statoil, a key player in Tanzania, among its members.

In Magufuli’s first days, many East Africans took to social media praising Magufuli’s frugal ways and efforts against corruption, asking #WhatWouldMagufuliDo. Fresh into office, the then-56-year-old received ap-

Other areas of the economy are also under pressure. Already falling way behind Mozambique in terms of gas development, Tanzania’s long timelines in the nasThe lack of administrative cent energy sector have capacity has slowed the left potential investors energy sector’s development frustrated despite calls

by Magufuli for works to plause when he wore gloves and gum go faster. Front-end engineering and boots to join in cleaning up a shabby design is well on schedule but final Dar es Salaam market. investment decisions, while eagerly But he would struggle to get such anticipated, are unlikely to be made praise from neighbouring countries earlier than 2019. The government today, as the old regional rivalries and expects to commission a planned liperceptions remain. Driving across quefied natural gas (LNG) plant in Nairobi on a sunny Thursday morning, 2025. The lack of administrative caStephen Mwangi, an Uber driver, asks pacity and other issues have slowed if the cab-hailing service he works for the sector’s development. exists in Tanzania. “Yes, since June,” “At the moment, we are just waiting I respond. “But is it as successful as for the investment decision either by in Nairobi? You know Magufuli is Statoil and Shell jointly for the LNG anti-business,” replies the driver. ● plant, or as individual proposals for

Xan Rice

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Grand Palais 30th March - 2nd April 2017 Africa guest of honour www.artparis.com

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profile

Wafula Chebukati

Chairman, Independent Electoral and Boundaries Commission, Kenya

There’s been an element of mistrust The new chairman of Kenya’s electoral commission has yet to win the confidence of all the country’s main political players for the IEBC ahead of August elections

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very day, headlines splash across the front pages of Kenya’s newspapers, scrutinising the Independent Electoral and Boundaries Commission’s (IEBC) preparations for the 8 August general election. On the minds of many readers is the need to avoid a recurrence of the violencethatrippedthroughKenya nearly a decade ago.

Voter registration in the buildup to the poll, and vote-tallying on election day, are key issues at stake. Kenya’s main opposition leader, Raila Odinga, is threatening mass protests if his powerful opposition coalition perceives the election as rigged. Odinga’s Coalition for Reform and Democracy held rallies last year about the bias of the IEBC. It was these demonstrations that prompted President Uhuru Kenyatta to appoint a new chairman, along with six new commissioners, in December 2016.

The man in charge of running the upcoming election is Wafula Chebukati, the IEBC’s new chairman, who was sworn into office on 20 January. If he is to succeed, Chebukati must perform a delicate balancing act, carefully treating all political interests fairly and ensuring that voter registration goes smoothly. On election day, the voting process, vote-tallying

and vote transmission will be under close scrutiny.

Speaking in his office in downtown Nairobi, Chebukati told The Africa Report that he is trying to forge a new relationship with the country’s political parties as his commission prepares for its first election under his stewardship: “There’s been an element of mistrust by some political parties in the previous commissions […].

There’s a lot of suspicion between political parties and the IEBC. Our job is to ensure that we work independently,” Chebukati says.

ODINGA CHALLENGE

Kenyatta has moved swiftly to prevent the opposition from blaming the IEBC as a means of rejecting the outcome of August’s elections.

“The reconstitution of this commission was a bipartisan process that breathes new life into the electoral body while at the same time restoring confidence in its capacity and competence to deliver on its constitutional and statutory mandates,” Kenyattasaidinastatement on 18 January.

But Odinga is not swayed by the restructuring of the IEBC. He said as recently as 15 February that the IEBC’s voter registration drive –whichaimstoaddsixmillionnew voters to the electoral register of 16 million people – is adding fraud-

Election arbiter 1985 Earned a bachelor’s degree in law from the University of Nairobi 2007 Unsuccessfully ran for the Saboti parliamentary seat on the Orange Democratic Movement ticket 2014 Received a master’s in business administration from Jomo Kenyatta University of Agriculture and Technology 20 January 2017 Became chairman of the IEBC

ulent names in a bid to help the governing Jubilee Alliance Party to win. “The executive office is trying to downplay it,” Odinga told reporters. “It is a major, major mess.”

Trying to draw a line under previous electoral commissions, Chebukati has been busy meeting with political party representatives, journalists and government officials to prepare for the vote.

“We have an open-door policy, so that if you have anything, any problem, or you think there’s an issue, come to us and let’s engage,” he says. “Quite a number of political party representatives have been [in my office], and we have given them answers to what they think are problems.”

There is much at stake. An estimated 1,100 Kenyans were killed in post-electoral violence in the aftermath of the December 2007 elections. Analysts worry that lessons learned in 2013, when all actors were on their best behaviour, are in danger of being forgotten.

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politics

ballot-printing contracts to British firm Smith & Ouzman. The scandal has become known as ‘Chickengate’becauseIEBCofficialsused the codeword ‘chicken’ to refer to bribes. “As long as Kenyans can see that some people have been taken to court over what has popularly been known as the Chickengate scandal, we believe that the current commission is going to be much more careful in its observance of the procurement laws,” Julius Muraya, a deputy director at the Ethics and Anti-Corruption Commission, told reporters.

mark anderson for tar

parallel systems

Chebukati inherited a difficult position from his predecessor, Ahmed Issack Hassan. During Kenya’s last election, in March 2013, Hassan’s administration came under fire for failing to properly test biometric voter identification technology before the polls were held. On the day of the vote, the biometric identifiers failed, forcing electoral officials to switch to manual vote-tallying methods at the last minute. This led to accusations of vote-rigging from the opposition, after it lost the election. costly mistakes

Chebukati says the biometric identification worked during the registration process in 2013, but failed to work on election day itself. “That [was the] problem in 2013 – you’re supposed to be identified before you cast your ballot paper,” he says.

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ing data in real time to an online tallying platform. Chebukati did not say if these methods would be used in August.

Another set of headaches for the IEBC surrounds ballot-paper printing. A $24m contract for the printing signed with Dubai-based company Al Ghurair last year was cancelled by Kenya’s High Court in February, saying it did not meet election guidelines. This ruling has

Cleaning the voter register to remove nearly 80,000 duplicate voters is a priority for the IEBC forced the IEBC to launch a new tender. “We have enough time to restart the process and procure ballot papers,” Chebukati says.

The IEBC is carefully reviewing electoral procurement laws after its previous chief executive, James Oswago, was arrested on 8 February on charges of receiving bribes in exchange for awarding previous

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The issue of manual vote-tallying is a hot one. At the beginning of the year, President Kenyatta signed a bill amending the country’s constitution to allow manual voteridentification and vote-transmission systems to run in conjunction with electronic counters. Opposition parties have criticised the amendment, saying it could help the governing party rig the vote.

For the moment, cleaning the voter register to remove nearly 80,000 duplicate voters is among the IEBC’s biggest priorities. “The only problem is unnecessary data, which we are removing – the data of double IDs and so forth,” says Chebukati. A team of data-entry analysts is tasked with removing all duplicates before the register is officially submitted.

During Ghana’s election late last year, the opposition National Patriotic Party was able to access vote-transmission data from the country’s electoral commission.

This helped them to monitor the results of the election in real time, and, some say, build trust in the electoral process.

Asked if Kenya might consider providing political parties with the electoral commission’s vote transmission results, Chebukati is firm: “We have no problem with political parties running their own tallying system, but we shall not allow them to access the data we are transmitting [when the votes are being counted],” he says. “We want to manage it as independently as possible.” ● Mark Anderson in Nairobi

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anansi A man in a hurry

W

e heard the news early that morning on 21 February that our new president, Nana Akufo-Addo, was planning to abolish GMT – that is Ghana Man Time. So we piled into the old Nissan and headed to parliament while the cocks were still crowing out in Teshie-Nungua. Our mission: to hear Akufo-Addo deliver his first State of the Nation Address.

The warning proved true. At 6am, there was already a line of hopeful citizens outside parliament queuing to get into the public gallery, alongside rows of television broadcast vehicles with those rotating satellite dishes.

Two hours later, we squeezed into the chamber and, shockingly, proceedings began promptly at the allotted hour of 9am.

No ifs, no buts and no special latecomers’ passes for very important personas. Two former presidents – Jerry John Rawlings and John Agyekum Kufuor – were already sitting in their reserved seats alongside us.

Partly in explanation of this punctuality, an innovation in parliamentary proceedings, Akufo-Addo started out: “I have heard it said that I am behaving like a man in a hurry. I am indeed in a great hurry.”

He looked around the chamber at his fellow politicians: “The times in which we live demand that we, all, be in a hurry to deal with the problems we face.”

Driving home this sense of urgency, he added: “I have heard some offer the preposterous excuse that there is something cultural about not paying attention to time. Mr Speaker, let us […] acknowledge that change has indeed come by being punctual to functions. I intend to set a personal example.”

Nervous parliamentarians looked at their watches. Then Akufo-Addo, in the most formal of dark suits relieved only by a white tie and shirt, proceeded to read an obituary for his predecessor’s government.

The outgoing government under President John Mahama raised the country’s debt to ¢122bn ($26.8bn) last year, up from the ¢9.5bn it had inherited in 2009.

Despite pledging not to ramp up spending in an election year, the Mahama government overshot its target by ¢6.5bn. Eco-

nomic growth last year slumped to 3.6%, the lowest in more than two decades.

Mahama was not in parliament that day to hear his record shredded. The glossy ‘green books’ that his government had produced detailing its ‘transformational achievements’ were nowhere to be seen.

Instead, members of parliament (MPs) from the opposition National Democratic Congress (NDC) tried to defend Mahama’s honour by interrupting Akufo-Addo’s speech with a stirring rendition of star musician Kofi Kinaata’s ‘Confession’ song.

Changing the lyrics around, the NDC MPs sang that if AkufoAddo was getting tired after a Akufo-Addo, few minutes of heckling, he in the most should let a fitter man – that is Mahama – take over. formal of dark But Akufo-Addo kept at it for suits relieved over an hour, his oratorical style and arguments honed from his only by many years as an advocate in a white tie the Accra courts. Once past the doleful recitation of economic and shirt, data, Akufo-Addo’s speech adproceeded dressed myriad problems, many to read without obvious or quick solutions: the chronic lack of jobs for an obituary school leavers, low productivity for his on farms, the painfully slow pace of industrialisation and economic predecessor’s modernisation, and the over­ government pricing of electricity tariffs and frequent breakdowns in supplies.

Also on the radar were AkufoAddo’s pledges to repair a creaky public health insurance scheme and to ensure that all Ghanaians have access to free secondary education from this year. But there is one stubborn reality – unaffected by the culture of discipline and punctuality – and that is money. As we walked towards Anansi’s battered Nissan after the speech, we oscillated between hope for a serious bid to modernise our country and deep worry about the state of our public – and, in Anansi’s case, private – finances.

The heavy burden of fixing that is due to fall on the slim shoulders of finance minister Ken Ofori-Atta, who was due to read his budget in late February. ●

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Nigeria How to end an oil addiction

As production slides and prices slump, an economy and political culture that has been hooked on oil for a generation is facing huge strains – but also starting to show signs of change

Eko Atlantic City, a property development, had been hoping for faster growth before the oil crash

HAMILTON/REA

By Honoré Banda in Abuja and Patrick Smith

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his month, Nigeria’s government is due to unveil its long-awaited economic plan to address the country’s recession. At its centre will be a strategy for the economy to break its addiction to oil exports as the main motor for state spending. the africa report

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Although this is hardly a novel goal in the country, the plan innovates in its focus on policy mechanisms.

Will the government, as many local and foreign bankers want, allow the naira to float while scarce foreign exchange is allocated according to market demand? The resulting sharp devalu-

ation in the currency, so the theory goes, will compel Nigeria to cut imports and boost local production.

It will also trigger, they argue, a deluge of foreign investment once the currency is in line with international prices. Yet, for almost two years, the government under President ● ● ●

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Akos Stiller/Bloomberg via Getty Images

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Muhammadu Buhari, along with central bank governor Godwin Emefiele, has fought against such advice.

“Nowthere’salotoftalkaboutachange in forex policy,” says Stuart Culverhouse, who heads the London-based Exotix frontier markets investment bank. “But the sequencing will be critical […] first, perhaps the economic plan and negotiations with the World Bank and the AfricanDevelopmentBank,andthennew policies.” Culverhouse argues that the fact that Nigeria’s $1bn eurobond issue in February was eight times oversubscribed says “more about the market hunger for yield rather than expectation of any early shift on the naira exchange rate”. ●●●

the billionaire club

Emefiele, who had accompanied finance minister Kemi Adeosun on the roadshow to launch the eurobond, gave no hint of a policy U-turn. The argument has not changed, he insists: with the economy still chronically dependent on imports – and with oil providing 90% of foreignexchange earnings and 70% of state revenues – a devaluation would simply drive up prices. This has already happened.

Inflation hit 18.7% at the end of January, rising each month for the past year.

After last year’s crash in oil prices, the government tinkered with foreignexchange policy, ending a peg of N197199 to $1 and allowing the currency to fall to around N315 to the dollar.

It also banned more than 40 goods that it deemed non-essential from the

Petroleum resources minister Emmanuel Kachikwu is attempting to reform the NNPC

Data in Nigeria are notoriously unreliable and open to political manipulation.

But there are some anecdotal signs of change. Traders say they can no longer afford to buy dollars to import rice and other agricultural products. Instead, they are travelling to Sokoto and Kebbi in the north-west, paying farmers three or four times the price that they were receiving two years ago. Sorghum and millet farmers say beer producers are also switching to local sourcing, while soya and cocoa farmers are also reporting a boom. no country for foreign rice

Although the pain of inflation in cities such as Lagos is obvious, officials speak of a new prosperity in a long-forgotten rural economy. They are trying to promote investment in fertilisers, farm services and processing facilities. In political terms, it is also a means to reach out to rural voters ahead of the 2019 elections.

Describing the plan to journalists at the World Economic Forum in January, vice-president Yemi Osinbajo (see page 30) said: “it would first address the ways of getting Nigeria out of the recession and then on the route to sustainable growth […] The most important parts are macroeconomic stability, diversification of the economy, and a very robust social investment scheme”, with immediate priorities of food and energy security. It would boost oil production and power

forex market. On the parallel market, the exchange rate has since fallen to about N500 to $1.

Worse still, a resurgence in sabotage and unrest in the Niger Delta saw production plunge. Revenue from oil in 2016 was barely a third of what it had been just two years earlier.

Presidency sources say Buhari had tried to bolster Jonathan wanted to measure public finances by delaying Nigeria’s wealth by the devaluation. The central bank had also wanted the number of private jets to stabilise the foreigngeneration, resuscitaterefineries and petexchange market by discouraging rochemicalplants,anddeliverinvestment speculation, but its strategy has comto mines and food-processing zones. prehensively failed. There is, they say, no quick fix to the underlying structural There is a contradiction here, however.

Investments in power and transport, problem for an export economy built alwhich are key to this diversification, most exclusively on an underperforming oil sector in a difficult external market. require billions of dollars of finance.

According to one senior aide: For now, the oil and gas industry is the only one that can generate the amount “[Former president Olusegun] Obasof investment required. anjo said his finest achievement was But oil and gas have been at the very to create 20 billionaires. [Former president Goodluck] Jonathan wanted to heart of Nigeria’s casino culture of cormeasure Nigeria’s wealth by the numruption, underwriting a generally parasitic business sector. bers of private jets in Lagos and Abuja.

They created very few jobs, and the vast Between 2007 and 2015, only one masums allocated to power and transport jor new oil licence was awarded, a billiondelivered almost nothing in terms of dollar deepwater deal under which Shell infrastructure. Business as usual was and Eni took over the OPL 245 block.

Even that deal has proved controversial, unsustainable even when there was triggering investigations into claims of money. Transition is never an easy procorruption in Europe and Nigeria. cess, but it offers the majority far more.” the africa report

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39 successful bidders for NNPC 2017/2018 crude-oil term contracts

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18

• Oando • Sahara Energy • MRS Oil • A.A. Rano • Bono Energy • Masters Energy • Externa Oil and Gas • Cassiva Energy • Hyde Energy

International traders • Optima Energy • Heritage Oil • Levene Energy • Glencore • Litasco Supply and Trading

• Trafigura • ENOC • BP Trading • Total Trading • UCL Petro Energy • Mocoh Trading

3

5

National oil companies

• India (Indian Oil Company) • China (Sinopec) • South Africa (SacOil)

Nigerian companies

2

NNPC trading arms

• Brittania-U • Northwest Petroleum • AMG Petroenergy • Arkleen Oil & Gas Ltd. • Shoreline Limited • Emo Oil • Setana Energy • Prudent Energy • Tevier Petroleum

Foreign refineries

• Hindustan Petroleum • Varo Energy

• Sonara (Cameroon) • Bharat Petroleum • CEPSA

• Duke Oil Limited • Calson/Hyson

When oil prices were high and the Delta relatively stable, major producers such as Shell, Chevron and Conoco­ Phillips tried to get out of proven assets and joint­venture commitments. With almost no international interest in those blocks, not even from Chinese com­ panies, President Goodluck Jonathan’s government presented a desperate dis­ investment programme as a successful indigenisation exercise. Local compan­ ies, often politically well connected and with little industry experience, stretched local banks to pay for overpriced assets. amnesty amnesia

Meanwhile, the Petroleum Industry Bill, which seeks to overhaul the oil industry’s management and was first presented to the national assembly in 2008, remains a work in progress. Opposition seems to be mounting to proposals by state pet­ roleum minister Emmanuel Kachikwu to increase powers over appointments and contract awards.

Initially the previous administration’s Niger Delta amnesty programme helped halt disruption and sabotage. But in­ stead of rebuilding the local economy, the africa report

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the amnesty launched in 2009 became Industry sources say the latest round of oil­trading contracts follows a pat­ a protection racket, paying militants not to be violent while an emerging gener­ tern of political patronage but few of ation watched on the sidelines. the beneficiaries are linked to Buhari.

As a northerner taking over the pres­ Instead, awards to Brittania­U, Prudent Energy, Arkleen Oil and Gas, Masters idency from an Ijaw from Bayelsa State, Buhari was likely to face suspicion in Energy, Shoreline and North West are the Delta. Certainly, his call to mil­ targeted to win over the Niger Delta. itants in August 2016 to negotiate or South­Western companies – such as face military force was taken as a chal­ Oando, Emo and Sacoil – benefit, as do lenge. Another trigger for the current northern­owned companies such as Ca­ unrest, say officials, was a botched siva Energy, AA Rano, MRS and Eterna.

There is little prospect of an early effort to arrest Government Tompolo, a former warlord linked to the abuse return to $100­a­barrel prices, partly of government contracts.

The Economic and Fin­ Recent awards of oil contracts ancial Crimes Commission target companies from (EFCC) is looking into im­ the despondent Niger Delta propriety in the oil sector.

It is working closely with the police in Britain on an investigation due to yields from global investment in into former oil minister Diezani Alis­ green energy and fracking. But demand – and prices – are already nudging up­ on­Madueke and associates. In January, the EFCC sought the seizure of more wards in an ever more volatile world. The government sees no alternatives to the than $150m linked to claimed impropri­ eties during Alison­Madueke’s tenure. difficult transition it has embarked on.

In February, officials seized $10m in It seems those vested interests that have cash from the home of Andrew Yakubu, held back the economy, particularly the former boss of the state oil company. oil and gas industry, are not so sure. ●

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country focus | nigeria

PROFILE

Yemi Osinbajo

Vice-president, Nigeria

We hear you loud and clear

Stepping up during President Buhari’s illness, Nigeria’s vice-president has developed a plan to try to solve the country’s economic woes

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ne of vice-presa pastor at the Redeemed Chrissenate is being kept informed and ident Yemi Osingovernmentbusinessiscontinuing tian Church of God in Lagos until under vice-president Osinbajo.” becoming vice-president. He puts bajo’s favourite great emphasis on the church’s Nigeria’s biggest problem, says stories about life social justice projects, such as free Fayemi, is launching and getting on the campaign financeforitseconomicrestructurprimaryeducationandhealthcare, trail is a moment of truth with and shelters for the homeless. ing programme. He and his fellow Muhammadu Buhari a few days Since the heady days of their before voting in March 2015. The ministers are acutely conscious of the political calendar. The ecotwo men were on their campaign election victory, Buhari and nomic recession that started last bus surrounded by thousands of Osinbajo have been thrown eager supporters reaching out year has held up their plans, and together in Nigeria’s political to shake their hands and wish they now have to start projects that maelstrom, navigating financial will have a tangible social benefit them well. “You know, my friend,” crashes and partisan manoeuvBuhari said soberly to Osinbajo ahead of the 2019 elections. rings. A bond of trust seems to above the melee, “if we win this One of the government’s top sehave grown up between the two. curity officials agrees with Fayemi’s election, from that day onwards assessment: “Osinbajo is getting full authority these people will expect us to on with the job. That’s what we This is now being tested by deliver immediately.”

Buhari’s prolonged absence This warning from the elder want from him. The fact that he’s not really a politician is probably a candidate to his deputy says as from Nigeria on sick leave since goodthing[…].Hecanconcentrate mid-January. Although Buhari much as about the high expectaon policy and fixing the economy.” has followed the constitutional tions after Nigerian elections as Osinbajo, the non-politician, aboutthechemistrybetweenthese rules assiduously, informing the partly owes his position to Bola Senate and granting full authority two very different men. Buhari, the general-turned-military-leaderto Osinbajo to take over in the inTinubu, the Lagos political godturned-democraticOsinbajo is particularly keen on a scheme politician, has been in some kind of power to hire graduates as teachers and farm workers politics for most of his life. Osinbajo – a former lawyer, father who co-founded the ruling terim, the President’s absence has academic and part-time pastor – All Progressives Congress. A canny sparked all manner of speculation.

At first, some Nigerians said it operator, Tinubu was always gois a model technocrat, almost an would paralyse the government. ing to be seen as suspect by his anti-politician.

There are a few similarities. Both rivals. When Buhari asked Tinubu Now, there is excitable chatmen – Buhari in his long white to suggest a running mate, Osinter comparing it to the crisis in kaftans and Osinbajo in his grey bajo’s name came up after much 2010 over President Umaru Musa deliberation. He was attorney genYar’Adua’s illness, the seriousness buba tunic and sokoto trousers – of which had been covered up by eral in Lagos State when Tinubu dress simply and abjure ostenwas governor but was not a man his close aides and family. Kayode tation. Both are devout but not Fayemi, Nigeria’s mines minister, excessively evangelical. Buhari is desperate for a top job. tells The Africa Report the situa Sunni Muslim with a modest inAs acting president, Osinbajo ations are different: “Everything come compared to most top-level has tried to be visible and reassurNigerian politicians; Osinbajo was is being done constitutionally, the ing. It is certainly a change of style

nigeria | country focus

at the top. He visited Gbaramatu in the Niger Delta, centre of some of the most serious attacks in the region, as well as Bayelsa State. In February, he won applause from community groups in the Delta with a plan to licence the small and currently illegal refineries as part of a job-creation scheme.

PEOPLE PERSON

Buhari’s right-hand man 8 March 1957 Born in Lagos 1981 Earned a master’s in law from the London School of Economics 1997 Appointed head of the public law department at the University of Lagos 1999 Named attorney general of Lagos State 2007 Hired as a senior partner at the SimmonsCooper Partners law firm

George Osodi/Bloomberg via Getty Images

29 May 2015 Became vice-president of Nigeria

When protesters marched on the presidential villa in Abuja, complaining about the lack of information on Buhari’s illness and the poor state of the economy, Osinbajo came out to meet some of them, putting out a statement: “To those who are protesting […] we hear you loud and clear. You deserve a decent life, and we are working night and day to make life easier.”

Just months after the BuhariOsinbajo ticket won the election in March 2015 with 15.4 million votes against President Goodluck Jonathan’s 12.8 million, the country’s economics doused expectations. Crashing oil prices and militant attacks on export terminals cut state revenue by 60%.

Buhari has concentrated on reorganising the military, defeating the Boko Haram militia and fighting corruption. Osinbajo has taken on the economy, tackling the short-term crisis as well developing a plan to break the country’s chronicdependenceonoilexports.

Osinbajo is particularly keen on a social investment scheme that will hire 500,000 graduates each year “to be teachers in primary schools, public health officials as well as extension workers for the farms.” It will develop the graduates’ capacities, he says, especially with information technology and other new technologies, and have a multiplier effect in the wider economy.

The next challenge is for Osinbajo to launch the plan with Buhari, who is expected back in the country in mid-March, according to the senior security official.

It will coincide with the reading of the 2017 budget and the start of negotiations for finance of around $2bn from the World Bank. ● Patrick Smith

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Distribution companies paid only 27% of the N331bn bill owed to generation companies in 2016

George Osodi/Bloomberg via Getty Images

52

bond which will help Discos raise operational funds to bridge the gap.” Power minister Babatunde Fashola also says a recovery plan is nigh. “We intend to settle the outstanding liabilities [...] and provide the assurance from government that every month, those who actually produce power will get paid,” Fashola told reporters in mid-February. new tariff regime

It was not until February 2016 that the consumer tariff incorporated the true cost of supplying electricity. At that point, much of the damage to the sector had already been done. Meanwhile, the government faces a key challenge to its recovery plan with its inability to Electricity put in place a new tariff. A judgement by a federal court set it aside as being illegal due to procedural faults. The government is appealing the decisions.

Beyond financial woes, there is the Privatisation of Nigeria’s power sector has not been problem of how to create more power. the development silver bullet many had hoped. Supply One approach being explored is embedded generation, a system in which challenges now threaten to bring the sector to its knees power is supplied directly to distribution companies by generation companies, bypassing the government-run utoftheashesofadefunctmonoGovernment data from February shows transmission system. poly,privatelyownedgeneration total debt owed to generation companies by the Discos for power supplied in With embedded generation, smaller anddistributioncompanieswere 2016 was N234bn ($737m). Of the total mini-grids can be built, enabling power supposedtoemergetriumphant.Thathas not been the case, and industry players generators to connect directly to them N331bn bill for the year, the Discos only paid for 27%. Government institutions and supply power to customers. Desare now grappling with a series of grave are among those that are not paying pite the issuance of licences in 2015, threats to their operations.

In 2014, a decade-long effort to reform their electricity bills, creating problems implementation is yet to fully take off Nigeria’s power sector reached its peak down the chain of production. as investors are wary of the On top of this, challenges re- Decrease with the government’s divestment from prevailing tariff regime. main with the supply of gas to in power core activities in the sector. “By the end Moses Nasamu, executive director of non-governmental of 2014”, promised then-president Goodpower plants, and the national generation grid infrastructure remains in (MW) due to organisation Energy Savers luck Jonathan, “over 6,000MW will have need of a significant upgrade. scarcity of gas Nigeria, says Nigeria could been generated by independent power producers such as Dangote, Lafarge, achieve 25% to 30% improveAliko Dangote, Africa’s 4,285 Notore, Supertek, Geometric Power, ment in electricity availability richest man and an investor 3,321 with embedded generation.

Chevron, ExxonMobil, Total Fina, Hudin the power sector, has gone son Power, Agip, Negris and Mabon.”

“It will reduce the reliance on so far as to suggest privatisation The government assumed the role of should be reversed. Others, a national grid that is largely Sept.

Dec. inadequate and responsible umpire for the sector, setting up two key like Tony Elumelu – chairman 2016 2016 of Transcorp Holdings – say Source: Nigeria agencies: the Nigerian Electricity Regufor a significant volume of latory Commission and Nigerian Bulk the government needs to move Electricity System technical losses.”

Electricity Trading. Things, it seemed, quickly to stem the haemor- Operator The government is increasrhage in the sector or risk its collapse. were moving in a positive direction. ingly talking about off-grid solutions, A source in the presidency who spoke But three years on, widespread and and increasing metering, as metered customers are generally more efficient on condition of anonymity, says: “A veriregular power remains a pipe dream. fication exercise to determine what is consumers of power. The growth of And now the very health of the sector owed to Discos is ongoing, after which rooftop solar panel companies may help is threatened by the mounting load of take an edge off grid demand, too. ● debt owed to the generation companies debts will be settled. The government Charles Idem in Lagos by the distribution companies (Discos). is also in the process of guaranteeing a

The great power squeeze

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Lagos

Middle-class life in Lekki Malls, art and improving infrastructure are attracting people to this fast-growing part of Lagos

W

Ikoyi Logbara Shagamu

Lekki-Ikoyi bridge

hen Facebook founder Mark Zuckerberg visited Lagos last August, he went on a Ikorodu Ojodu jog across the Lekki-Ikoyi Bridge. It is a landmark that serves as a gateway Lekki Dangote refinery Lagoon to a relatively new district of the city: Lagos Lagoon Lagos the development of Lekki Peninsula is Lagos Refuge about the same age as the millennial Island Island Ita Oko generation to which the tech company Island billionaire belongs.

Free trade zone 10 km Lagos’s administrators uphold Lekki as an ideal neighbourhood for the middle class. To residents, the hope is that Lekki’s light traffic. Set in an area that is still development can be controlled to allow ies such as beaches, a wildlife conservait to remain an attractive piece of real tion area and night-time spots. very much under development, the This growth of amenities is part of estate for a long time, unlike parts of the mall has been established in anticipLagos mainland. Jerry Agba, a human what makes Lekki attractive to residation of an expected boom. Manager resources professional who lives in a ents. So says Ashley Okwuosa, a journof the mall Johan Blom notes that the alist who recently moved back to NiLekki suburb, tells The Africa Report: “We number of residential estates within moved here because it’s a new area, ungeria from the United States: “Lekki is a proximity of the facility underscores a like Anthony, where I used to live. Lekki thriving hub, and it’s one of the reasons market opportunity: “There are no less I like living here,” she says. Drawing than 15 residential estates nearby, in is decent and neat compared with other parts of Lagos, so we hope the governparallels between Lekki and Newark, addition to the Lekki Free Trade Zone New Jersey, she counts the abundance ment can keep it this way.” area, where numerous commercial activof establishments that provide essenities are already developing,” he says.

Located on a naturally formed neck of tial services, and even cultural instituland, Lekki has been blossoming graduBlom points out that since the mall was ally since the early 1980s, opened in August, customer traffic has tions like the popular Nike when the state government been increasing by 30% each month.

Centre for Art and Culture, built 80km of roads through as part of what makes Lekki But despite the residential and comwhat was then mostly a a desirable place to live. “I mercial boom throughout the Lekki swampy rainforest. The road can find almost everything I Peninsula, there are notable infrastruclinked the upscale Victoria need without having to cross ture challenges that threaten its appeal.

Island district to Epe, an the toll gate or Lekki-Ikoyi One of these is power. Blom notes that 2 Bridge,” she adds. constant power from the national grid ancient town at the eastern Size of Novare to the area remains a challenge, but edge of the state.

The peninsula is also Lekki mall, the adds that this is not peculiar to the home to an emerging freebiggest shopping all about the mall trade zone that is located area where the mall is located. mall in Lagos, About 10 years ago, Lekki further afield from VicWithin the housing estates and inwhich opened became the site of the ner streets of the main Lekki comtoria Island. Major indusin August 2016 munities, the state of roads are far country’s first modern trial projects in the area SOURCE: NOVARE LEKKI include an oil refinery comshopping mall, the Palms from ideal, while drainage systems Shopping Centre. Located plex currently being built by are particularly problematic, causnear Victoria Island, it has anchor the Dangote Group, as well as a deeping flooding – and traffic – whenever sea port and an international airport, stores that include ShopRite and Game it rains. The well-heeled residents, – South African department stores both of which are being promoted by some of whose properties sit on plots of land that are valued at as much as brands that have since expanded their the state government. footprint in the country.

N500m ($1.6m) in the prime areas like There is also a new shopping mall.

Lekki Phase 1 and 2, hope the urban Since then, Lekki has become a prized The Novare Lekki mall is situated in the residential district, with the sprouting Sangotedo area, about 4km from the planning mishaps that plague other up of numerous housing estates, more campus of the Lagos Business School parts of Lagos will not re-occur. ● Charles Idem in Lagos shopping malls and recreational facilitand one hour from Victoria Island in

22,000m

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53

The Nigerian Content Development and Monitoring Board (NCDMB) MANDATE : The Nigerian Content Development and Monitoring Board (NCDMB) is the Agency of the Federal Government vested with the mandate to make procedures that will guide, monitor, coordinate and implement the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act enacted in April 2010. Key initiatives of the Board include: 8. Create over 10,000 direct, indirect and induced jobs 9. Retain industry spend on procurement of goods 10. Promote training and developmentSIWES, skills acquisition Some state governments have welcomed the scheme and helped in facilitating the necessary approvals for the Board to commence work. Construction work for phase 1 of NOGaPS is scheduled to commence in 2017.

MILESTONES: Acquired land in three (3) States - Bayelsa, Cross River and Imo States Commenced EIA studies and land clearing for sites in Bayelsa, Cross River and Imo States · Developed marketing strategy for NOGaPS  FMC Technologies’Production Base, Onne, Nigeria.

EQUIPMENT COMPONENTS MANUFACTURING INITIATIVE (ECMI) The ECMI is a key plank of the Board’s implementation program and Federal Government’s drive to industrialize the economy and create employment for the nation’s teeming population.

It promotes local manufacturing of equipment components, spare parts and accessories for the oil and gas industry The implementation is geared to get Nigerian representatives of Original Equipment Manufacturers (OEMs) and SME manufacturers to partner with the OEMs and establish facilities for manufacturing equipment components.

Local manufacturing of components used by the oil and gas industry holds the key to unlocking jobs in the industry,spend retention and industrialization of the economy.

The ECMI is one key strategy to create sustainable employment opportunities within and outside the oil and gas industry and create enduring linkages with other sectors of the economy.

MARINE VESSEL OWNERSHIP STRATEGY NIGERIA OIL AND GAS PARK SCHEME (NOGaPS) NOGaPS is one of the Board’s flagship projects that will further help alleviate poverty and unemployment in the oil and gas producing communities. Under the scheme, the NCDMB will develop worldclass oil and gas parks in each of the nine (9) oil producing states of Nigeria,that will serve as manufacturing hub for equipment and component parts that are used in the oil and gas industry.

The primary objectives of NOGaPS are to: 1. Attract domestic and foreign direct investment to oil producing states.

2. Promote community participation in manufacturing and other industry activities.

3. Develop and integrate the local supply chain to support Oil and Gas operations.

4. Foster mentoring of local SMEs by international OEMs for mutual benefits.

5. Facilitate new business start-ups, technology acquisition and competitiveness.

6.Provide a range of made in Nigeria goods for the Oil and Gas industry.

7. Attract at least 15 OEMs to set up in the 3 parks (5 per location)

The objectives of this strategy are to encourage the construction and dry docking of vessels in Nigerian yards, promote ownership of marine vessels by Nigerian entities,stimulate flagging and registration of vessels in Nigeria, deepen Nigerian manning of marine vessels and maximize the use of Nigerian service providers for legal, insurance, catering, inspection & certification etc for transactions connected to utilization of vessels.

The Board deployed the marine vessel categorization program as the key tool of this strategy, using indices like ownership, site of construction and among others.The implementation ensures that all vessels owned by Nigerians and built in Nigeria get priority opportunity for engagement by industry.Reports are issued periodically and they form the basis for pre-qualification of marine service vendors by industry.

PIPEMILL SCHEME The development of a local pipe mill industry is one of the seven cardinal targets of the Board, primarily because steel line pipes are some of the critical

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Multi-purpose support vessel working currently for Chevron at Agbami field.

inputs in the oil and gas industry. It has high potential for employment generation, local value addition, retention of industry spend and linkage opportunities to other sectors of the economy.

The projected annual industry demand of line pipe is put at over 800,000 tons, arising from the demands from Gas Master Plan, replacement of aged pipes and new fields development projects against the current supply opportunity of 100,000 MT (HSAW) per annum.

Currently, SCC Abuja expanded its capacity to produce HSAW steel pipes of 270,000 Mt/annum.

Yulong Steel Pipes has added 250,000mt per annum HSAW steel pipes and is targeting industry need in Nigeria and other West Africa Countries.The company plans second and third development phases that will be dedicated to Longitudinal Submerged Arc Welding (LSAW) pipes and ER Welding pipes respectively.

NIGERIAN OIL & GAS INDUSTRY CONTENT JOINT QUALIFICATION SYSTEM (NOGICJQS) The NOGIC JQS electronic platform provides credible databank of available capacities in the oil and gas sector, which helps in planning for projects, contracting, employment and other activities in the industry. Its establishment is anchored on Sections 55 & 56 of the Nigerian Content Act. Specifically, NJQS helps the Board in: · Verification of contractors’capacities and capabilities. · Evaluation of applications of Nigerian Content in the operations of oil companies and contractors. · It also serves as a database pool for national skills development.

The Nigerian Content Development Fund (NCDF) was established by Section 104 of the Nigerian Oil & Gas Industry Content Development Act of 2010 to fund the implementation of Nigerian Content development through various projects, programmes and activities as well as capacity building activities to enhance the Nigerian Oil & Gas industry.

With the introduction and implementation of the Treasury Single Account (TSA) policy by the Federal Government, a new model for the fund- the Nigerian Content Intervention (NCI) Fund was introduced.The revised model involves financing manufacturing initiatives in the Oil & Gas industry, with Bank of Industry managing the fund. It is undergoing relevant approval processes and will commence upon completion with N31 billion (Naira equivalent of $100 million).

The revised model has entrenched the avowed Board objectives of cheap lending with longer tenor, as opposed to the conventional short tenor with high interest rates by commercial banks.

EMPLOYMENT AND TRAINING PROGRAMMES

 Commissioning of Solewant pipe coating facility by the Executive Secretary, NCDMB, Engr. Simbi Wabote

Nigerian Content Development and Monitoring Board Glass House, Isaac Boro Expressway, Opolo-Yenagoa, Bayelsa State, Nigeria Website: http://www.ncdmb.gov.ng

DIFCOM/DF - PHOTOS: DR.

The Board introduced several Human Capital Development programmes, such as Geosciences training, Machinist Training, Artisans Training, Pipe Mill training, Underwater Welders training as well as Oil Spill Management and Environmental Remediation Training (OSMERT) to meet immediate industry and host community needs. Project based training has also progressed significantly in which 10% of total project man hours is being allocated to training on the projects.The training and attachment scheme enabled thousands of Nigerians to acquire relevant skills and are attached to various projects to gain requisite industry experience.

Significantly,over 30,000 direct and indirect training and employment opportunities have been created in the last Six years of the Act’s implementation The Board also collaborates with Operating companies, Service companies and other stakeholders to facilitate on-the-job trainings of young Nigerians in specialized areas thereby guaranteeing the Nigerian Content drive for sustainability.

country focus | nigeria

PeoPle to Watch

Finance talents in troubled times

With exposure to problematic sectors like property, oil and power, Nigerian banks could do without a tumbling naira and a tough foreign-exchange regime

ceNTRAl BANK of NIgeRIA

coRoNATIoN meRchANT BANK

Aigboje Aig-Imoukhuede Business-booster Aig-Imoukhuede was chief executive of Access Bank during the toxic-asset meltdown of 2009 – at which point he oversaw the takeover of Intercontinental Bank. After stepping down in 2013 and becoming president of the Nigerian Stock Exchange in 2014, Aig-Imoukhuede is back with new ventures. In 2014, he founded Coronation Capital, a private-equity fund based in Mauritius, which has invested in Nigerian insurer Wapic.

And his latest bet is on Coronation Merchant Bank, which aims to bolster the long-term financing gap in the Nigerian market.

fINANce mINISTRy

Kemi Adeosun Convincing presentation

Investors came, they liked what they saw and they improved Nigeria’s solvency. Credit for the success of the latest bond roadshow has to go to finance minister Adeosun, who has been in the role since November 2015. Investors praised her assured presentations on Nigeria’s route out

of oil dependency.

With a closing price of 7.9%, and oversubscribed to the tune of $7.8bn from an original $1bn target, the $1bn eurobond is a solid start to fixing the gaping hole in the ambitious 2017 budget. Next stop for Adeosun is the World Bank, which is contemplating a loan of its own.

Not thought to be an initial convert to the intractable foreign-exchange policies of President Muhammadu Buhari, central bank governor Emefiele has proved adaptable.

His is the tough task of distributing the scarce US dollars to competing power bases, from the importers of fuel to commercial lenders. He was forced to tell Nigerians not to panic when the naira-to-dollar exchange rate approached 500:1 and nonperforming loans hit 12.5% – which is well above the 5% regulatory maximum.

SUNTRUST BANK

Muhammad Jibrin Technophile In 2015, SunTrust Bank – originally a mortgage finance company – won the country’s first new commercial banking licence since 2001. Chief executive Jibrin has managed the institution through its metamorphosis into a modern lender: it is the first branchless bank in Nigeria, doing what many banks talk about but few have the courage to follow through on. Jibrin sees the legions of unbanked youth and Nigeria’s thousands of creditstarved small businesses as an opportunity. With SunTrust’s virtual doors thrown open in August 2016, analysts are keen to see its firstNicholas Norbrook year results. the africa report

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all rights reserved

all rights reserved

Godwin Emefiele Keeping a cool head

stephen Jaffe/imf

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COUNTRY FOCUS | NIGERIA

DEBATE

Is the government right to get involved in church affairs?

The Nigerian government wants to regulate the church. It is targeting the tenure of church leaders, kicking a hornet’s nest in the process

I

n January, prominent Redeemed Christian Church of God pastor Enoch Adeboye resigned from his position as overseer of the church in Nigeria, citing the Financial Reporting Council’s (FRC) Code of Corporate Governance for his action. His decision sparked furore among sympathisers in the deeply religious West African country. They have questioned the government’s authority to regulate faith-based organisations.

At issue is the fact that the federal government created a law to regulate non-profit organisations – including churches and mosques – in 2015 that went into effect in October 2016.

It stipulates that religious leaders and founders of religious institutions must hand over leadership to a non-family member after reaching 70 years of age or after 20 years of heading an institution.

After widespread controversy and condemnation, the law was suspended on 10 January “pending a detailed review, extensive consultation with stakeholders and reconstitution of the board of the FRC,” according to a statement issued by the industry, trade and investment ministry. ●

Francis Bola Akin-John Founder and president, International Church Growth Ministries

Any law-abiding church has these rules in place already Every responsible nation will want to enact good laws to help institutions, including the church, to function properly.

For churches that have branches in Europe and North America, you will notice that the laws guiding churches in those

places are more stringent than the ones in Nigeria.

Here, not-for-profit organisations, including churches, are registered under the 1990 Companies and Allied Matters Decree. Nigeria’s Code of Corporate Governance is simply a little amplification

Oyewole Olusoji Testimony Onifade

Senior special assistant to the national president, Christian Association of Nigeria, and national director of ecumenism, Nigerian Baptist Convention

The government appears to have a hidden agenda The interference of any state or national government in the administration of the church will be a disaster to the course of Jesus Christ.

At present, the role of political leaders in exploiting the church for their own election to office has seriously threatened the integrity

of the leadership of the church. Churches are being perceived as corrupt and partisan, and it becomes obvious that such embarrassment to the church will persist if it should continue to rely upon the state’s funds for survival – because he who pays the piper dictates the tune.

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of this decree, so any law-abiding church should find it easy to operate by.

I’ve realised most of the opposition to this law is coming from Pentecostal and Evangelical churches, and this is no surprise.

Most of these churches are not organised or transparent in how they run their institutions.

They are shrouded in secrecy when it comes to money or succession matters, and there is no proper governance in place.

A leader often remains in position for life and when he dies, his wife or children take over. This is the practice the code is trying to change.

Other institutions, such as the Catholic and Anglican churches, are indifferent

financial management and accountability, retirement, succession and general administration of a church.

We are now bound by the code because any registered church is bound by the laws of the land and must obey what the government says, except when it is against the scriptures or against the clear leading of the Lord.

I disagree when my Christian counterparts say

biblical and practical. In the Bible, Joshua succeeded Moses and Solomon succeeded David, even while David was still alive.

Practically speaking, I know of leaders in Nigeria who have handed over to their successors while they are still alive so that the work can continue smoothly.

The advantage is that they are able to monitor their successor and provide

overseer or church founder must have a succession plan in place so the church doesn’t become a personal enterprise for personal gain.

A leader can still teach, travel around the world and provide personal counselling. When he or she is more than 70 years old, it is best to leave the day-today running of the church to someone else who is equally capable to lead effectively. ●

That is why the present administration of the Christian Association of Nigeria is vehemently against the government making policy for the church administration. The reasons are not far-fetched.

What knowledge of church administration training does the government personnel have to promulgate policy for day-to-day activities of the church? The government is purely secular, while the church – by provision, principles, practices and

to be left alone as it has been from ages past.

Government by the constitution of the nation affirms that the nation shall be a secular state, not interfering or imposing any religion upon its citizenry.

There should be freedom of worship and recognition of every individual to worship without any threat whatsoever.

In the Islamic faith, it becomes so difficult to separate the administration of Islamic religion from traditional practice –

to be the spiritual head of the Muslim community in Nigeria? As a Nigerian I can say authoritatively that Islamic clerics, chief imams, grand khandis and others who are in charge of mosques, cities, states and regions occupy their spiritual offices until death. Has any government law altered that practice?

If any law is made by government, it must be binding to all religions.

Does the government appoint the pastor or the general overseer? Does

government make policy for the retirement age of clergy? Hence, government’s interference in church policy appears to be a hidden agenda that may harm the future of evangelisation in the country.

If the clergy is not an employee of the government, the government should tread cautiously. Such a law on firing someone you do not hire must be abrogated, not just suspended.

If by law there is any investment run by the church, it should pay tax as a patriotic institution.

The church cannot be taxed, because every member of the church is already a taxpayer in his or her capacity. Government should maintain its secular stance on the regulation of religious organisations. ●

because they already have systems in place that conform to this law.

Personally, I think it’s a shame to wait for the government to enact a code to regulate the leadership,

the government has no right to interfere in church affairs.

It is worth noting that we are first citizens of our country before we become citizens of heaven. There are examples of pastoral succession, both

I think it’s a shame to wait for the government to enact a code to regulate leadership

If the clergy is not an employee of the government, then the government should tread cautiously operation – is spiritual.

While the faith-adherents uphold diverse values which are too complex to be guided by a policy, it is better for the government to stay clear, each of them THE AFRICA REPORT

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guidance so that the ministry can keep on flourishing.

The code doesn’t say a leader’s ministry has come to an end when he or she hands over power. The law simply says that every

most especially, whereby the sultan of Sokoto is he general overseer of the Islamic community in Nigeria. Can any government make policy to make the sultan cease

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the government fix the salary or allowances for the clergymen? Does the government provide conditions of service when such leaders are appointed? Will the

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business africaswitzerland

Higher, faster, stronger Switzerland’s relationship to Africa is evolving, bringing the private sector to the fore and proving that changing conditions – from the commodities downturn to calls for banking transparency – can turn out to be opportunities

By Olivier Caslin in Geneva

S

witzerland’s bankers, commodity traders, charities and business leaders are taking a new look at the continent, as they expand their reach and interests beyond Europe. Meanwhile, African governments and entrepreneurs are continually on the lookout for new partners outside of their old colonial relationships.

The Swiss authorities are keen to emphasise that they do not come with any colonial baggage in their relationships with African

€506m Switzerland’s aid budget for Africa in 2015, a small portion of its total €3bn overseas development assistance

Source: Swiss Agency for Development and Cooperation, May 2016

leaders. Anne Lugon-Moulin, head of the Africa and Francophonie division of the Federal Department of Foreign Affairs (FDFA) in Bern, explains that the Swiss government is shifting its strategy “from the aid and development focus that was in place until the 1990s” to a more privatesector focused policy.

But, as with many European partners, there has been a more opaque side to Switzerland’s engagement. For example, in the 1960s and 1970s, the government and the country’s big commod-

companies & markets

ity traders are believed to have supported autocratic regimes such as Joseph Mobutu Sese Seko’s Zaire and South Africa under apartheid. The key foreign policy aims, rarely discussed today, were solidly from the realpolitik school. What was important was that these countries had natural resources and remained staunchly anti-Communist.

Today, after a decade of African growth, there are broader and deeper ties with Switzerland.

The head of the Swiss-African business circle, Anthony Travis, points to the large amount of capital pumped into local economies by a decade of high commodity prices. “Our companies have lots to offer in terms of engineering, energy, agribusiness and IT [information technology],” he says.

adrià fruitós for JA

commodities rewired

Despite the price crash of recent years, Swiss commodity traders have managed to rewire their business model – and are again on the hunt for deals. On 13 February, Glencore, based in the Swiss canton of Baar, announced it would be buying larger stakes in Congolese copper and cobalt mines in Mutanda and Katanga, for $960m.

Five of the largest trading companies have their HQ or offices in Switzerland (Vitol, Glencore, Trafigura, Mercuria and Gunvor), sharing among them nearly half of all world trade in commodities.

Today, the FDFA – the Swiss equivalent of a foreign ministry – often remains discreet about its diplomatic role, so as not to draw attention to its often confidential participation in conflictresolution talks in Darfur, South Sudan, Burundi, Somalia, and more recently in Mali and the Central African Republic.

More visible are the activities of the Geneva-based International Committee of the Red Cross, the humanitarian organisation whose red cross on a white background is often visible at moments of crisis on the continent. Geneva plays a strong role in African affairs.

Partly this is down to the hosting of United Nations’ bodies,

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busINEss |

afRIca-swItzERLaND

but also because of its banking heritage: it is home to an international financial centre with a strong reputation and know-how.

The city also returns this year as the location for the annual Africa CEO Forum on 20-21 March, hosted by Groupe Jeune Afrique and the African Development Bank (see page 20). Watch out for our side event, The Africa Report Debate on 21 March, which asks: ‘Will economic nationalism put Africa First’?

Swiss private-sector interest in Africa has seen an increasingg number of federal institutions looking to the continent, from the FDFA to the State Secretariat for Economic Affairs, the Department of Economic Affairs, Education and Research, and the Department of Justice and Police – which deals with the sensitive issue of immigration. Which perhaps explains the government’s focus on coordinating its activities.

Of late, pharmaceutical and chemical companies such as Novartis have joined the Swiss commodity traders, logistics companies like Panalpina, and agro-industrial giants like Nestlé, in Africa. Trading on the fabled Swiss accuracy, the world leaders in certification Cotecna and SGS are already well known on the continent, and are seeking to further expand their business. Africa “has a strong demand for our services in terms of verification and risk analysis”, says Robert Massey, Cotecna’s CEO. SGS, which celebrates its 140th birthday next year, has 26 offices and laboratories in South Africa alone.

DELIVERY DRONEs

Swiss innovators and startups, too, are busy finding solutions that can take flight on the continent. The Ecole Polytechnique of Lausanne shelters Afrotech, a centre of research and development created in 2012. Its first project, launched in October 2016, is Redline – a drone service in Rwanda that delivers blood and plasma to hospitals in areas lacking easy road access.

Swiss bankers and wealth managers are also criss-crossing the

them in countries where there is no Swiss embassy. The countries cover most of the continent, espeThis is a 48.9% decrease from 2014 and cially those of greatest diplomatic represents 0.9% of Switzerland’s total imports. The main imports from the continent importance to the government and the countries targeted by its include oil and precious metals. biggest economic players.

Over the past few years, the foreign affairs ministry has been undertaking an internal reorganisation. Critics say that the government has several, rather than one, Africa policy based on particular A diplomatic, economic and aid €4.3bn dossiers. The federal government has been seeking to streamline Sw wiss-Africa its skills and resources in order trade to make its programmes more coherent and effective.

Swiss-Africa trade relations Swiss imports from Africa

€1.4bn

SOURCES: SWISS CUSTOMS, JUNE 2016

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Swiss exports This is a 12.7% drop from 2014 and represents to Africa 2% of Switzerland’s total exports.

The main exports to Africa include chemicals, pharmaceuticals and machinery.

€2.9bn

continent in search of clients to make up for the loss of investors from the US and the European Union over the past five years.

Some, like the giant re-insurer Swiss Re, are even innovating on the continent. “They are playing across the whole value chain now”, says Corneille Karekezi, CEO of Swiss Re’s competitor Africa Re. “They are even buying insurance companies.”

Switzerland’s total Africa trade of €4.3bn in 2015 is modest when compared to France’s €51bn. But Swiss diplomats and company executives are actively seeking to multiply that base. They are using the country’s reputation and behind-the-scenes activities to strengthen their relationships across the continent. Swiss companies, too, are looking at how to work better together. Most Swiss companies wishing to expand abroad have little knowledge of Africa’s business environment.

Given Switzerland’s size, it does not have embassies in all of Africa’s 54 countries. It currently has 19 diplomatic offices in Africa after temporarily closing the embassy in Libya. In addition, the Swiss Agency for Development and Cooperation (SDC) also has 19 African offices, with eight of

baNkINg sEcREcY

Transparency might be another of its tacit goals. The government has tried to address the fact that corrupt African leaders have used the country’s secrecy provisions to spirit away funds. It took a new direction about 15 years ago and took a step forward through its returning of funds stolen by Nigeria’s former dictator Sani Abacha in 2004. In 2015, the Swiss authorities returned a last tranche of funds from the billions of US dollars that Abacha had hidden in Switzerland during his reign from 1993 to 1998.

In the meantime, the government reformed its banking secrecy laws under pressure from European countries and the US, which sought to strengthen tax collection after the 2008/2009 economic crisis. A policy of automatic banking informationsharing went into force on 1 January of this year.

The next step in the fight for more transparency could be for the government to take more action against the multinationals that have set up operations over the past 50 years in Geneva and in the canton of Zug, close to Zurich.

Campaigners have been calling for the government to focus especially on commodity traders, which are often privately owned and loath to share information about their activities, especially payments to governments. A popular referendum on the issue is due to be held in 2018. ●

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The Credit Recovery Agency (SL) Ltd (CRASL) is the: ➤ First Debt Collection Agency with cross-boarder networks in Sierra Leone and around the world ➤ No. 1 Debt Collector in Sierra Leone with rich experience in debt management and collection ➤ The Best Cadastral Software Developers Correcting the Housing Addressing System the country ➤ The ONLY collection company mandated by Local Councils to Fix the addressing system and collect Property Rate

across their jurisdictions ➤ No 1 Due Diligent debt management researchers ➦ The Only Debt collectors that guarantee collections Our Services ➤ We collect all types of aged debt at No Recovery No Fee Basis ➤ We Collect Local Council Property/City Rate ➤ We Develop Cadastral Software that is geared toward aiding the navigation between properties, hence, help collectors in tracing debt in Africa ➦ Skip Tracing ➦ Cross-Boarder Collections

The Founder

Mr Peter Marrah Kamara is tthe founder of The Credo iit Recovery Agency A Ltd. The Founder is committed to restore credit security within our environment and help local council to be self-reliance in managing their councils without depending on donors

fundings. Mr Kamara has wealth experience in debt management and collection.

He will be happy to help you.

The Credit Recovery Agency Ltd 25 Lightfoot Boston Street Freetown, Sierra Leone West Africa T= +232222202147/157 (Ext 101) M= +23276356425 E= info@thecrasl.com

www.thecrasl.com

business |

africa-switzerland

PeoPle to Watch

Traders and connectors

the leaders from industry and government who are shaping ties between Switzerland and its economic partners across the continent

SwiSS Re

Tavaziva Madzinga Insured for success

all rights reserved

Writing in The Actuary in 2014, when he was still chief operating officer for Africa at Old Mutual, Tavaziva Madzinga said: “The future is digital, whichever direction you look.” The South Africa-trained Zimbabwean actuary, who has consistently stressed the importance of innovation and gaining the trust of customers, will be putting those ideas into practice as head of the Middle East and Africa for Zürichbased Swiss Re. While reinsurance is Swiss Re’s main trade, it owns stakes in insurers in Kenya,

Morocco, Nigeria and Tunisia.

Madzinga specialised in Southern and Eastern African markets for Old Mutual, so Swiss Re may be looking at those regions first for its expansion plans, after purchasing a 25% stake in Nigeria’s Leadway Assurance in July 2016. The Swiss company wants to be the dominant player in Africa’s reinsurance market, and Madzinga’s appointment is set to provide it with the insight it needs to expand its market share in the face of growing national and international honoré Banda competition. ●

TRafiguRa

Jeremy Weir Turning over a new leaf Trafigura is a major global player in oil and natural gas trading. Weir took over as chief executive officer at the Geneva-headquarted commodities trader after founder Claude Dauphin retired in 2014. An Australian executive with experience in geology and banking, Weir’s leadership style contrasts with that of his high-flying predecessor.

Weir says Trafigura is fighting against the opacity that has marked the commodity-trading sector. In May 2016, he told The Business Times: “To turn around and say we’re a private company and you don’t want to know much about us – we think that’s incorrect.”

Trafigura joined the Extractive Industries Transparency Initiative in November 2014 and now regularly reports on the payments it makes to governments.

Like its Swiss commodity-trading peer Glencore, Trafigura is pursuing a strategy of vertical integration by buying up mining assets. In February, it bought a stake in the Terrafame nickel and zinc mine in Finland.

Africa is a key market for Trafigura, typically accounting for about 25% of its revenue, according to company documents. Trafigura co-owns Puma Energy, which trades and distributes fuel, with Angola’s

state-owned oil company Sonangol.

After the 2006 Probo Koala scandal in Côte d’Ivoire – where 500tn of toxic waste from a Trafigura vessel was dumped at the port of Abidjan – the company has focused on improving its global image with environmental and social responsibility projects. But the company still has room to improve, according to Swiss non-governmental organisation Public Eye, which published a report last year showing that Swiss petrol traders like Vitol and Trafigura are dumping poor quality fuel in African markets. ●

trafigura

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Ministry of foreign AffAirs

AnnA PIZZOLAnTE/REZO.ch fOR JA

Livia Leu Strengthening trade links

swiss-AfricAn Business circle

Established in 2010, the Swiss-African Business Circle (SABC) is headed by British former broker and investment adviser Anthony Travis. He told Jeune Afrique: “Africa is much more complex than people think here [in Switzerland], where few companies – apart from a couple, like Nestlé – have an historic presence on the continent. The SABC helps provide a better understanding of the African context, with a big synergy for its members.” Travis sits on the board of the Compagnie Benjamin de Rothschild and has decades of experience in African countries, both as a commodities trader and working for O.C. non-governmental organisations. ● the africa report

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AgOsTInO PAccIAnI fOR JA

Anthony Travis Boosting business

The head of bilateral relations at the State Secretariat for Economic Affairs, Livia Leu is at the forefront of Switzerland’s economic ties with countries in Africa. She is responsible for coordinating the activities of her secretariat with the ministry of foreign affairs and the Swiss Agency for Development and Cooperation.

Leu told our sister publication Jeune Afrique that the Swiss government has four principal partners in Africa: Egypt, Ghana, South Africa and Tunisia.

She added: “With the Arab Spring, we strengthened our presence in North Africa, which became a priority area. Our activities relate to the improvement of economic performance and the diversification of their exports.”

A lawyer by training, Leu is a veteran of the Swiss foreign ministry, and served as ambassador to Iran from 2009-2013. She was the ministry’s director for political affairs for the Middle East and Africa from 2006, and has worked at the Swiss embassy to the Olivier Caslin United Nations. ●

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interview

last year. This has led to a lack of forex availability in the country, which has put a lot of pressure on people importing products.

We were in a good position because we are manufacturing locally. Nevertheless, we have to import some raw materials. We have had for many years a strategy of local sourcing of our raw materials and have got down to a ratio of more than 70% sourced locally. We still have to import the remaining [share].

Kais Marzouki

Head of West and Central Africa, Nestlé

“We invest continuously, good times or bad” admitting that the middle-class miracle it had predicted was falling short, nestlé cut 15% of its africa workforce in 2015, but it still sees long-term value on the continent TAR: How do you tailor products to places?

KAis MARzouKi: Tastes, as you can imagine, are very local. The tasteofour products varies around the world. Maggi stock cubes in Germany don’t taste the same as they do in Nigeria because they are based [in Nigeria] on fermented soy, which is a staple of local cuisine. We have all our research and development in Abidjan to work with all our brands.

Then we have a challenge with visual communication. We want nutrition to be at the forefront. Half of our consumers don’t know how to read, so we have to explain in a visual way what fortification in iron means, what vitamin D does to your body, to [help people to] understandthebenefits. Andthen, of course, it needs to be affordable, especially with these difficult economic conditions. Many of our consumers are living on $2 a day, so you have to have the right offering at the right price point, sometimesinsmallerservingsizes.

What goes hand-in-hand with this is the capability to distribute widely. Our trade is extremely fragmented. You can’t just drop it off at the supermarkets. We have to make our products available in tens of thousands of points in the country. And this is day in, day out. It requires a big team.

How is that done?

What are the ways of getting market

What are the most resilient product lines?

It depends how deep down the socioeconomic axis you go.

For example, there are certain products that are not consumed by every person every day. Other things, like Maggi, are in every pot every day. So when you are entrenched in the daily consumption habits, these are the resilient ones. The products used by the middle and upper classes, these ones will be less resilient.

information about, say, demand from a small rural town?

We walk the streets to count all the doors, and then we map them to determine how we are going to cover it, mostly by third-party distributors. We employ around 4,500 people for selling in the streets. They are all entrepreneurs. They have their pushcarts, and they enable us to reach our consumers in a different way.

Was it too early for Nestlé to talk of a real middle class in Africa?

From our point of view, there is a rising middle class despite all the economic, political and social difficulties. In the past 10 years, every single year, these markets have outperformed the group’s results in terms of growth. This can only come from the fact that our products are consumed by the middle class. You just have to look out of the window and you see traffic jams because more and more people have cars.

Have you been affected by currency fluctuations? What are your mitigation mechanisms?

The depreciation of the naira was, of course, a big event for us

All

rIg

Hts

res

erv

ed

Do you have expansion plans, despite the harsh economic weather?

In the past four years we have invested over Fr300m ($297.5m) in our region, across distribution centres, manufacturing sites, offices and machinery, so obviously investing is something we do continuously, good times or bad. It’s a long-term outlook.

We won’t stop investing in Côted’Ivoirejustbecause it has one bad year. ● Interview by Nicholas Norbrook

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This is Africa’s

CENTURY

3rd to 5th May 2017, Park Plaza, Riverbank, London, UK

Don’t Miss Out

Invest in Africa’s Financial Services Sector

Learn more @ www.afsic.net or email us at event@afsic.net

AFSIC 2016 SPONSORS

Banks, Insurance, Microfinance and Leasing companies and other African focused Financial Services companies from across Africa attend the annual AFSIC conference, which is being held in London from 3rd-5th May 2017. Multiple opportunities for African Financial Services companies to network with Investors are built into the event Programme. Want to widen your deal network further across Africa? Don’t miss out on the Meet African Dealmakers event being held in the British Houses of Parliament.

14th Annual AVCA Conference

4th – 5th April 2017

GP-LP Summit & Welcome Cocktails: 3rd April 2017 Professional Development Programmes: 6th – 7th April 2017

ABIDJAN, CÔTE D’IVOIRE #AVCACon2017 avcaconference.com

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business | CoMPanIEs & MarkETs

International partners pledged nearly $15bn during the investment forum

TunIsIa

Seeking 20/20 vision Nicolas Fauqué/www.imagesdetuNisie.com For Ja

The government of President Béji Caïd Essebsi is working with the IMF and investors to turn around the economy within the next three years

T

unisia’s government considers the country’s post2011 political transition a big success, but the economy has been sputtering. The ratings agency Fitch downgraded the country’s credit rating in late January, at a time when the government was in the market to raise $2.8bn in order to meet its national budget deficit. Fitch cited government uncertainty, a weak tourism sector and a lack of investment as causes for concern.

These issues and several others have long been on the agenda of President Béji Caïd Essebsi and his government, led by prime minister Youssef Chahed. To address some of the economic problems that contributed to the revolution and the downfall of the regime of President Zine el-Abidine Ben Ali – like unemployment and regional disparities in growth – Essebsi’s government organised the Tunisia 2020 forum on 29-30 November 2016.

Mohamed El Kettani, the chief executive of Morocco’s

Attijariwafa Bank, outlined the stakes at the Tunisia 2020 conference: “Tunisia pulled off its democratic transition; it must now succeed in its economic transition.”

Hachemi Alaya, an economist and founder of the Tema thinktank, spoke to The Africa Report at his office in the quiet coastal town of Carthage. He says the role of the government is a major challenge: “Like in Egypt, the Tunisian economy is controlled by the state, and this is what has caused problems in our countries.” a lesson from egypt

Over the two days of the Tunisia 2020 conference, the government in Tunis received financing pledges of D34bn ($14.9bn), which included signed investments and aid promises. However, it will take a huge political will to turn the conferenceagreementsintomeaningful changes in people’s lives.

Egypt offers a key point of comparison for Tunisia. While Egypt faces magnified versions of Tunisia’s economic ailments,

$2.9 bn

Loan obtained from the IMF in June 2016 Source: IMF

its political sphere has been weakened since 2011. A similar conference organised in 2014 in Sharm El-Sheikh was meant to lure billions of dollars of investments into major projects.

Despite garnering a sizable number of agreements and pledges during the event, the fanfare has borne little results.

The International Monetary Fund (IMF) estimated that the Tunisian economy had grown by just 1.5% in 2016, not enough to make a major impact on unemployment and poverty levels.

Alaya says that the economic crisis has grown more complicated due to political power struggles that impede the implementation of broad reforms. “One of the advantages of the revolution […] is that it birthed a new political class. Unfortunately, it is not competent enough, it is weak and has no awareness of the economic problems,” he argues.

Tunisia has a government that includes several parties, but infighting has limited its ability to

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Amira Salah-Ahmed in Tunis

Promoting PPP Although public-private partnerships (PPP) have been overhyped as a solution to Africa’s infrastructure deficit, the Tunisian government considers them a crucial part of its economic strategy.

It passed a new law on PPPs in 2015 in the hopes of attracting more investment and assuring investors about the business climate.

Speaking to The Africa Report on the sidelines of the Tunisia 2020 conference in November 2016, Atef Majdoub, head of the Instance Générale des Partenariats Publics-Privés, says the PPP law creates a new framework that will “contribute to implementing megainfrastructure projects.” The need for the law is mainly due to the “lack of government resources to fund these infrastructure projects,” he explains. “We have high expectations from citizens and from entities that have not had the funding for years, so PPP has two goals: providing funding resources, and easing the burden on the state budget and speeding up the process of completing mega-projects.”

The government has chosen two pilot projects for the PPP scheme: a seawater desalination plant and a wastewater management project.

There is a pressing need for ports, roads, water and renewable energy, says Majdoub. “Foreign or local investors look for regulatory and legislative stability, and guarantees offered by laws.” ● A.S.A. the africa report

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www.mixtelematics-africa.com

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When the government passed a new budget late last year and decided to temporarily freeze public sector wage increases in a bid to ease the deficit, the union retaliated by threatening a general strike that was planned just a week after Tunisia 2020. The threat worked well to scare off the politicians.

One area where the government has been slow is in creating new mechanisms to raise finance.

For years it has shown interest in rolling out more sharia-compliant financial instruments to attract more money from the Gulf and other parts of the world. A sukuk – an Islamic bond – worth $500m has been under discussion since 2015, and finance minister Lamia Zribi says she is confident that it will finally happen this year.

Working with the IMF on a $2.9bn programme that was approved last year has helped to crys-

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resistance to austerity

tallise the government’s focus. It rushed through a new banking law in July of last year and issued a new investment code in September.

One of the biggest recent economic challenges has been the harsh blow dealt to the vital tourism sector after the terror attacks of 2015. Tourism arrivals were down 38% in the first quarter of 2016.

Drawing on its need to diversify the economy, at Tunisia 2020 the government presented a list of potential infrastructure projects for roads, airports, water plants and renewable energy. Panelists discussed tourism as well as investing in the green economy, aviation, textiles and automotives in order to capitalise on the country’s competitive labour, energy and transportation costs as well as its pool of engineers.

Arif Naqvi, group chief executive of private equity investor Abraaj Group, said his firm’s interest in Tunisia is driven by the government prioritising the private sector’s role. At the forum, he announced plans to invest in pharmaceuticals and agribusiness. “When you deploy capital, you cannot do so without accepting some measure of risk, and in Tunisia, the level of risk has minimised due to economic reforms,” he said. ●

Come over to the safe side

pass reforms due to the parties’ divergent opinions.

Labour unions continue to play an important political role.

The Nobel Prize-winning Union Générale Tunisienne du Travailhas more than half a million members, giving it more power and credibility than any party. It also enjoys a stronger presence on the street.

business | leaders

profile

Bob Collymore

Chief executive officer, Safaricom

A decade on, M-Pesa has room to grow

Building on the success of its lending model and branching into e-commerce, Collymore has a long list of plans for Kenya’s pioneering mobile money platform

I

t was a text message sent to a Kenyan farmer that sparked the mobile money revolution. On a bright morning a little over a decade ago, Michael Joseph, the former chief executive officer of Kenyan telecoms firm Safaricom,wassummonedtomeetwith Kenya’s minister of finance to pitch a new service that allowed users to send and receive digital funds through text messages. “[Joseph] took the minister of finance through the process and demonstrated to him early one morning – because he was an early bird – and he took his phone and paid one of the minister’s farm workers out in the countryside,” Bob Collymore, chief executive officer of Safaricom, tells The Africa Report. “The minister immediately saw the potential [of M-Pesa].”

This month Safaricom is marking the 10th anniversary since the first M-Pesa payment was made.

The company estimates that its mobile money platform has generated 860,000 jobs and $1bn of economic activity so far. With about

STUART PRICE/MAKE IT KENYA PHOTO

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$600m sitting in the system at any one time, transaction charges have proved to be a valuable part of the business, contributing 23% to the company’s turnover last year. “We currently contribute overall about 6.5% of Kenya’s gross domestic product through our activity,” Collymore says. global appeal

But although M-Pesa has found enormous success in Kenya and Tanzania, it has struggled to make as big an impact in other countries.

“M-Pesa is very popular although it hasn’t really worked in many places,” Collymore says. Governments still regularly come from around the continent to Nairobi to learn about the mobile money platform. Most recently, Togo’s President Faure Gnassingbé visited in December.

Part of Safaricom’s success with M-Pesa is down to the role of government regulators, who allowed the service to take off despite intense lobbying from banks and other groups. “When

mobile service chief 1958 Born in Guyana January 1978 Joins British Telecom December 1998 Named handset purchasing director at Vodafone UK February 2009 Appointed Vodacom’s chief officer for corporate affairs November 2010 Became chief executive officer of Safaricom

M-Pesa came there were no regulations around moving money on a mobile phone,” says Collymore. “[Kenyan] regulators allowed innovation to run slightly ahead of the technology, [whereas] most other places have regulated and then innovation has to innovate within those bars – and that’s been a problem.” And Safaricom’s situation was certainly helped by the fact that the Kenyan government owns a 35% stake in the business.

Collymore sees plenty of room to keep expanding M-Pesa. Even in Kenya, which is widely seen as a trailblazer in mobile money, an estimated93%ofpaymentsaremade in cash. “There’s a hell of a lot of growth that’s left in [M-Pesa],” he says. One idea to expand the service is to roll out contactless cards that are linked to M-Pesa accounts, making transactions easier and more seamless.

Safaricom has also seen success through its partnerships with Kenya Commercial Bank and the Commercial Bank of Africa to offer loans through M-Pesa. Collymore

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connected farming

Bu i l d i n g p o p u l a r i t y w i t h low-income Kenyans and with farmers in particular is another part of Safaricom’s growth strategy.

Collymore speaks excitedly about the Connected Farmer Alliance, a project spearheaded by UK telecoms firm Vodafone, which owns a 40% stake in Safaricom. “[It] uses the mobile phone to give people farming information to improve the yield of whatever they are farming – their cows, for example,” Collymore says. the africa report

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Stayingwith thisexample,Collymore explains that a dairy farmer could deliver his milk to a processing plant and then be paid for his produce through M-Pesa. The mobile money platform will also tell farmers about the quality of their milk. “If you speak to some of these farmers, they are absolutely astounded with the difference this has made to their yield,” Collymore says. “You can go to a farmer who is probably delivering five or six litres a day – it’s nothing.

[Now they are] delivering 20 litres per cow. The difference there is enormous, [from the] same cow.” development-led

Behind this strategy is the desire to forgenewrelationshipswithyoung customers. “[It makes] that farmer more successful; if it makes that farmer more successful, of course he’ll be able to educate his children;ifhecaneducatehischildren, they’ll want to use our internet, they’ll want to use mobile phones,” Collymore says. “There’s no such thing as a successful business environment in a failing society.”

More businesses need to adopt a development-led approach to their customers, Collymore says.

“One of the most important elements of successful e-commerce is of course trust” But more than anything else, it’s climate change that worries Collymore. Asked about US President Donald Trump’s sceptical position on global warming, Collymore frowns.

“It’s more than disheartening …

And here in Kenya, we feel it,” he says. “It’s palpable. We have a drought. I have been living in this country now for six years – this is our third drought and this drought is pretty bad. You see rising sea levels, you see declining available arable land. So, companies that aren’t addressing that issue, or rather, not just not addressing but positively contributing to planet degradation, I think really need to kind of get a grip on it.” ●

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Interview by Mark Anderson in Nairobi

APPoINTMeNTS

Danquah Addo-Yobo The former manager at logistics company A.P. Moller–Maersk became the first Ghanaian managing director of agriculture company Yara Ghana in January.

Under his leadership, Yara will work with cocoa farmers to increase p oduc o and a d quality. qua y production

Rajeev Sethi In early January, Indian telecoms player Bharti Airtel named Sethi as its new chief commercial officer for Africa.

The former chief executive of Grameenphone in Bangladesh will manage commercial strategy across 15 African countries.

Victor Letsoejane Litlhakanyane Infrastructure development firm Bigen Africa hired Litlhakanyane in January to help it start a division focused on healthcare.

The new managing director for health is an oncologist and founder of Ditau Health Solutions.

ALL rIGHTS reServeD

estimates that up to 160,000 loans are disbursed every day through the service. “Most of these [loan requests] are done very early in the morning – they are done at 3 or 4 o’clock in the morning,” Collymore says. “These are traders who are using it for cash flow. So they are borrowing the money, they are buying their goods and by 7 o’clock they are ready to repay it because they bought it, they’ve transported it, they sold it and they might do two or more transactions per day.”

Looking to the future, Safaricom is targeting fixed-data services as an important new revenue stream.

Last year, fixed services made up less than 2% of the company’s total turnover. Going forward, it will be important to meet demand for unlimited data, Collymore says.

Kenyans are watching more video-on-demand services such as Netflix than ever before. This has led Safaricom to partner with South African media company Naspers to sell access to its ShowMax platform through M-Pesa.

Another new area that Collymore is targeting is e-commerce.

“One of the most important elements of successful e-commerce is of course trust,” says Collymore.

“And we are trusted – we have very high trust scores as Safaricom – and so, why wouldn’t you leverage on that if you’ve also got the system, and you’ve also got the payment system?” Collymore sees Nigeria’s Jumia as a good example of African e-commerce success.

“We want to be spreading our wings much wider rather than pick on a single thing and say that’s going to be the core,” Collymore says.

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opInIon

B Bright Simons F Founder, mPedigree

Fear not, robots will not be stealing Africa’s jobs any time soon

I

t has been a mantra of capitalism since the beginning: using a tractor boosts your yield compared to using a spade. Mechanising your factory can multiply your output. Technology boosts productivity.

It follows that Africa, with its current economic worries, could do with a productivity bump. But the adoption of new technology anywhere in the world is not a foregone conclusion. The majority of smartphone owners, for instance, only use about 10% of the features on their phones.

We should not forget the importance of ‘ergonomics’ – user-friendliness – in the adoption of new technology in the emerging world, especially in Africa. For example, the mobile boom in Africa was due as much to the convenience of the technology as it was to its price.

So how can we make adopting new technologies more convenient? Artificial intelligence (AI) can empower average or even mediocre workers to fit better into high-performance environments. The result is raised productivity and the unleashing of innovative business models, which are so often hobbled by the lack of talent.

of failure related to current workplace automation tools. A few years ago, I was a consultant to one of the world’s biggest custom software groups. Our strategy in Africa was to target traditional ERP vendors by pointing to the abysmal success rates of deploying ERPs and CRMs on the continent.

When one digs into the source of the failures of most of these programmes, it becomes obvious

In the next 10 to 25 years, AI is likely to save rather than destroy jobs Often when people think of automation, their mental images are of robots on a production line or behind a fast-food counter. But the most pervasive form of automation in the workplace today is actually software, often in the form of enterprise resource planning (ERP) platforms and customer relationship management (CRM) systems.

Here is a dirty little secret: Companies have been spending millions in business automation for years at every level of the enterprise. These efforts frequently fail, and the impact on productivity has been less than impressive.

In Africa, as I came to learn during my enterprise software advisory days, there is an epidemic the africa report

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that the problem is poor user interfaces. Crucially, these programmes have to work by understanding how people communicate with each other. Clearly, for such tools to fit into the African enterprise and help spur productivity, much more intelligence is needed to adapt them to their users. In this context a fascinating link between AI and jobs emerges.

In the early-medium term – say the next 10 to 25 years – AI is likely to save rather than destroy jobs in many sectors around the world, including in Africa. For AI fearmongers, robots will simply take over end-to-end. Yet the truth is that we are so far away from being able to build such robots.

There are more plausible alternatives to the possibility of robots quickly replacing all workers. For example, we are more likely to see AIenhanced training tools to bridge the skills gap.

Imagine web-training videos that can interact with a learner, adjusting settings to suit their evolving understanding.

The critical insight here is that ‘specialised AI’ that complements average human performers is accelerating at a much faster pace than ‘general AI’ that can effectively and fully replace an average worker. Hence the usual suggestion that AI

will replace mid-level workers and leave only the super-talented at the helm refers to a much more distant horizon than current socio-economic forecasting tools can handle. And frankly, diehard futurists aside, such timescales are not particularly useful for human planning.

Africa’s biggest economic challenge today is filling up large sections of its economy with average workers primed to perform average tasks far better than most workers are currently managing to do. In South Africa, as many as 31% of employers cannot fill their vacancies – a major component of overall unemployment.

The tools that exist today to train and empower such workers are dumb. This frustrates enterprises

With cleverer tools, more workers will fit better into more multi-tasking roles and entrepreneurs who are forced to scale down the absorption of labour to meet expansion and innovation requirements. With cleverer personnel augmentation and empowerment tools, more workers will fit better into more roles in a multi-tasking, fast-paced and rapidly mutating work environment – thereby boosting productivity and lifting overall employment levels on the continent.

We are already seeing the impact of near-AI or pseudo-AI capabilities in several segments of the continent’s labour landscape. African software developers, many of whom do not have the experience and exposure of their peers elsewhere, are using tools like Jade to smooth the learning curves for building complex enterprise software architectures, and Chef to better control and harmonise the infrastructure on which the code runs.

Without many of these ever-smarter tools, it is highly unlikely that the thousands of developers filling programming roles on the continent would have been up to scratch. The software being built by tech startups all over the continent would not have been built here, and the jobs they have created would not have existed. Similar signs are now visible across the design and engineering domains, which are precisely the ones where the skills shortage on the continent is most intense and where the unfilled vacancies and unharnessed job opportunities are most concentrated.

But is AI not too advanced for Africa? Should we be mastering simpler technologies first? Well, the truth is that the days when a society could ‘strategically choose’ to be ‘technologically backward’ are fast disappearing. Technology systems are much too deeply interconnected across global ecosystems for such choices to be viable. An even more critical point anyway is that AI will actually make technology easier to adopt and harness in Africa.

AI, looked at this way, ties strongly with Africa’s current priorities, and African technologists are more primed for it than many might imagine. ●

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Simone Golob/getty images

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Zimbabwe

Zamco to the rescue?

The state-run body that buys bad debts has helped some companies relaunch their activities, but its reliance on treasury bonds may further weaken the financial sector

S

moke puffs from a Cairns Foods factory in the Ard­ bennie industrial area in southern Harare. It is a rare oc­ currence in this part of town, where life was once a bustling af­ fair. While a few factories remain in production in the proximity, many have closed.

From near collapse, the factory is running at close to full throttle after its debt was expunged by the Zimbabwe Asset Management Corporation (Zamco), a special purpose vehicle that the Reserve Bank of Zimbabwe (RBZ) created in July 2014 to deal with high levels of non-performing loans (NPLs) in the banking sector.

The government has been try­ ing to get the economy to rebound after a period of hyperinflation that ended with the collapse of the Zimbabwe dollar and its re­ placement with the United States dollar and other currencies. The creation of Zamco and the gov­ ernment’s attempted rapproche­ ment with multilateral lenders

are just some of the measures Harare has taken to turn the ailing economy around. With investors scared off by the government’s indigenisation programme, Zimbabwe is now in the throes of a major foreign-currency short­ age and a period of economic stagnation. Without other eco­ nomic reforms, Zamco alone may have only a small impact on the overall financial sector. debt restructuring

The revival of Cairns Foods shows what Zamco can do. The com­ pany, previously listed on the Zimbabwe Stock Exchange, went into administration when it could not repay a $25m debt in 2012.

Zamco restructured the debt, which helped to persuade local investor and major shareholder Takura Capital to buy the food manufacturer for $30m and to in­ ject $14m in fresh capital. Cairns Foods reopened its food-canning factory in the eastern border town of Mutare last year.

$3.9 bn

2015 gross loans and advances by banks, a decrease of 3.5% from 2014 Source: RBZ

“You can agree with me that when you go into supermarkets you can see many products of Cairns Foods that were no longer on the market,” Zamco chief ex­ ecutive Cosmas Kanhai tells The Africa Report from his leatherand teak-decked office on Sam­ ora Machel Avenue.

“We helped them out by play­ ing a part in the restructuring of their loans to the banks. We have also helped [mining company] RioZim, who have gone to open a new gold plant at [the] Cam and Motor [mine] in Kadoma. These are some of the benefits arising from reduced interests rates that are offered from the restructuring of their loans by us,” says Kanhai.

The banking sector experienced high levels of NPLs as many com­ panies borrowed money to revive operations after the transition to a multiple currency system in February 2009. In December 2009, the NPL ratio (percentage of total loans) averaged 1.1%, and they peaked at 20.1% in September 2014. International best practices say they should be below 5%. The NPL crisis crippled lending to the private sector.

“Our principal mandate is to clean up the balance sheet of banks by taking over NPLs so that banks can operate with a clean sheet and then be able lend to other economic sectors”, Kan­ hai says. “As at end of December 2016, the NPL ratio to total loans has declined to about 8%.”

Zamco failed to meet its goal of reducing NPLs to 5% by Decem­ ber 2016 by acquiring $750m in bad loans. The asset manager has been paying for the acquired NPLs through long-dated treas­ ury bills (TBs), which earn a coupon rate of 5% per annum. loss-leading loans

Banks that have sold loans to Zamco are wary of issuing new loans due to the dire economic climate and shortage of dollars.

According to the RBZ, gross loans and advances by banks decreased by 3.5% from $4bn in 2014 to $3.9bn in 2015. Banker and eco­ nomist Persistence Gwanyanya says: “In terms of writing new the africa report

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hannibal debt, they are not very aggressive […]. But the biggest challenge is the rate at which Zamco is buying the debt. It is low, and it is highly discounted. I’m sure the rate is as much as 60% [of face value].”

Prosper Chitambara, an economist with the Labour and Economic Development Research Institute, says the government is already having problems paying its debts and is just issuing new debt to buy the NPLs. crowding out

Chitanbara argues that the treasury bills the banks get for their bad loans are crowding out the private sector from borrowing: “The greatest threat facing the financial system has to do with issuance of non-performing TBs

by Zamco. It threatens to affect the sustainability of the financial system because government has been rolling over the TBs and most banks find themselves with huge stockpiles of non-performing assets in their balance sheets, so it could leave some not-so-well capitalised banks in a precarious situation,” Chitambara says.

Analysts are also worried about the long-term impact of Zamco.

Chitambara says: “Another disadvantage to Zamco could be the issue of moral hazard, whereby if you take over NPLs of banks, you are encouraging others not to pay what they owe.” The government insists that moral hazard will not be a problem because Zamco will not exist forever: it is due to be wound down by 2025.

Meanwhile, Zimbabwe’s economy continues to create NPLs. Clever Zvarevashe, a 28-year-old accounts clerk who lives with his parents in the suburb of Highfields, had taken out a loan to buy a car but lost his job before he could pay it off. “My bank has been pursuing me to pay back the $3,000 I borrowed”, he says. “I’ve simply ignored the numerous threats of legal action because I do not have the money to service the loan.” He hopes, after some weeks of silence by the bank, that it has given up on chasing a loan he cannot pay back. ● Tonderayi Mukeredzi in Harare

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Credit where it is due While analysts worry about high debt levels and the politics of economic decision-making – from Mozambique’s troubled tuna bonds to South Africa’s potential downgrade to junk status – there are new wrinkles in how credit risk will be analysed. New York-based private equity group Carlyle announced in January that it intends to become the majority shareholder of Africa’s largest credit ratings agency, Global Credit Ratings (GCR). ` Anansi wonders if GCR’s analysts will give African governments and firms a fair shake when its main investor is on the lookout for “distressed” assets.

IMF-speak During her January visit to Kampala, International Monetary Fund managing director Christine Lagarde appeared to be trying to send a message while talking about the country’s planned standard gauge railway, to be built and financed with the help of Beijing.

With her usual level of diplomacy, she said: “Relying on borrowing alone to finance infrastructure will not cut the bill in and of itself, and it will be unworkable because debt will become too high.” Parliamentarians have now called for an investigation into the railway’s contracts after noting that Ethiopia and Djibouti got Beijing-backed railways at much lower costs.

Playing the numbers The new government in Ghana under President Nana Akufo-Addo has had some unpleasant surprises since taking over in January. Last October, then finance minister Seth Terkper told The Africa Report (TAR85, Nov. 2016) how his government would seek to adhere to a strict IMF budget and persuade voters in a tense election season. Former president John Mahama seems to have failed on both accounts. In a speech broadcast on 31 January, vice-president Mahamudu Bawumia said the new administration had found an unreported $1.6bn hole in the national budget. This leaves the new government, elected on a promise of economic turnaround, in search of creative ways out of a crisis.

Resource wrangles The fallout from the crash in commodity prices seems to be causing an uptick in conflicts between African governments and global mining companies. Despite international corruption investigations linked to the Simandou iron ore mine in Guinea, Rio Tinto insists that it is going to go ahead with its sale of its stake in the asset to China’s Chinalco. Meanwhile, in Zambia, Canada’s First Quantum Minerals is the subject of a lawsuit from majority government-owned Zambia Consolidated Copper Mines Investment Holdings, which claims that the miner illegally used loans issued to one of its subsidiaries. ●

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dossier insurance

The threat No insurer wants to see new innovators encroaching on their territory. To outflank them, some are working with these fintech companies to help pursue their own technological projects, reach the continent’s large uninsured populations, develop new products and cut costs

By Marcia Klein in Cape Town

A

frican banking is no stranger to financial technology, known as fintech. In some areasitisleadingthe way, especially in loan, payment and remittance technology. But in the sedate world of insurance, fintech has been slower off the blocks, especially on the continent.

That is not to say that insurers are sleeping on the threat. According to PwC research published last year, around half “of insurers [globally] fear that up to 20% of their business could be lost to standalone fintech companies within the next five years.” The

threat comes from nimble feet.

PwC said tech startup companies “are accessing and analysing data in new ways and in record time, not hindered by legacy technology systems as their incumbent competitors are.”

This does not mean the industry is at a point of weakness. Running an insurance company requires heavy lifting: policies need large pools of capital, and regulation is tight. Fintech companies generally do not want to be insurers but to provide services to the industry.

Innovative technology can reduce costs and bureaucracy and help to keep customers happy.

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of tech Insurers are waking up to the fact that they need to speed up the adoption of fintech. And they are betting big. Investment in ‘insurtech’ grew from $800m in 2014 to over $2.6bn in 2015, according to Accenture research. A fraction of this is directed towards Africa, where there is a low takeup of insurance in many countries.

But insurance coverage is growing. funding is up

A Disrupt Africa funding report showed that African tech startups in all sectors raised more than $129m in 2016, with the bulk going to fintech companthe africa report

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$2.6 bn

Global investment in ‘insurtech’ in 2015.

It grew from $800m in 2014.

SOURCE: aCCEntURE

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ies. The number of startups securing funding rose 16.8%, with South Africa, Nigeria and Kenya clinching the bulk of the deals.

South Africa has the continent’s most developed insurance market. And much of the fintech innovation in the insurance space has taken place at South African insurance group Discovery – an early adopter of fintech in health insurance, and later in car and life insurance. Through its Vitality offering, Discovery uses tech solutions to track gym visits, for example, so as to reward customers that make healthy choices and thus reduce Discovery’s outlays.

In South Africa, Discovery uses technology to track the lifestyle choices of its health insurance clients

Jamie Whittaker, the chief digital officer at Discovery, says insurance “is possibly behind the curve in adopting new technology, but this is changing rapidly.” Discovery, he says, was bolder than its competitors: “For years we have been pushing what technology was available topushout products, cut costs and save time when it comes to servicing people.” Discovery uses technology to connect with members, doctors, pharmacies and hospitals.

He adds: “Ten years ago, we put a number of systems in place which would now be commoditised. But back then, they weren’t

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dossier | insurance

easily available – things like customer relationship management systems and communication systems. We have always been at the forefront of tech adoption.”

With car insurance, for example, technologyisusedtomonitordriving habits and get quick assistance to the scenes of accidents.

Members’ behaviour is monitored through technology and, again, good habits get rewarded.

For Discovery, the advantages of usingadvancedfintecharenumerous. And it’s not just about collecting data, says Whittaker, but also “passing data back to members and helping them change certain behaviours”. The idea is that being toldthatyouregularlyspeedonthe motorway might help you check your speed in the future.

And fintech also cuts admin costs. “In the call centre, for example, Discovery has managed to reduce volume using self-service options by 60%,” says Whittaker.

There has also been significant growth in the use of internet and mobile claims processes, reducing the time it takes to process claims.

He explains: “The best interaction with a health or insurance company is no interaction. We want to remove complexity and administrative burden.” looking to china

Originally, Discovery developed its own technology, but it has changed its approach over time as off-the-peg solutions improved.

“We recognise the tech space in finance and insurance is a lot more exciting and fast-moving than 10 years ago, and we are taking advantage of startup innovation.”

Whittaker says the most exciting fintech development is taking place in China, “where they have the ability to get out to a large marketplace very quickly […]. We have partners over there. We see their challenges and opportunities, and look at how these can be adapted for an African context.”

He adds that focusing on technology from the United States can be problematic: “We are often blinded by the bright and shiny Silicon [Valley], but often the application is limited in Africa. Our

One such potential disruptor is South African Riovic, which connects people looking for insurance with low premiums. Riovic co-founder and chief executive Phiwa Nkambule says Riovic has partnered with one South African insurance broker and reached launch stage. people-to-people

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client baseand populations aredifferent. In Africa, there is lower income,lessconnectivityandunique African problems that need to be solved. We also are aware of the quality of people we have and the context they have and we need to leverage off our own smart people.”

Innovation in the insurtech space is also taking place in other African countries, especially in terms of micro-insurance (see TAR80, May 2016). In the fintech space, banks, telecom operators and startups are competing for a share of the market. For example, in Zimbabwe, mobile operator Econet introduced its EcoFarmer mobile-based insurance programme for agriculture producers in 2013, after an unsuccessful foray into life insurance. It followed up with EcoSure, a low-cost insurance offering, in December 2014, hitting one million customers in early 2015. Both services use Econet’s EcoCash mobile-money platform.

Back in South Africa, Discovery executives say they are aware of the role that disruptors can play. “Any small startup has the capacity to be disruptive.Itdoesn’ttakemoneyor manpower, they just need to find a niche,” says Discovery’s Whittaker.

“Our challenge is to keep up, to partner with them and to outdo them. Lots of large organisations become encumbered, and we are aware of that and structure internally to compete.”

Adrian Gore, the founder and chief executive of Discovery, which has reaped the rewards of early tech adoption

20%

About half of insurers surveyed fear a fifth of their business could be lost to standalone fintech companies within the next five years Source: PwC

“What we are offering is unique,” Nkambule tells The Africa Report.

“The full model will be funded by people-to-people insurance – funded by people with lower operating costs than the big insurers – making it cheaper.” There will also be different pools of funds with different risk rates that will be applied depending on the insurance required.

While startups are more agile than big companies, raising funding is challenging. “We started with bootstrappingfromfoundingstage up until we were ready for market.

We were in development stage for two years – all self-funded.

We had investors ready, but there was no revenue at that point,” says Nkambule. “We have only started engaging potential investors now, and are working with Rand Merchant Insurance’s (RMI) incubator AlphaCode, which provides us with support.”

RMI launched the AlphaCode hub for supporting and funding new business ventures after realising that its core business “is being threatened by new, disruptive ventures”, according to its website.

Riovic is perfecting its model in South Africa, is involved in a startup in Zimbabwe and has other international aspirations. “The financial sector has focused on payments and loans rather than insurance,” Nkambule says. “There is huge potential in Africa at the moment in the micro-insurance sector, which has not been doing well, largely because insurance companies find it too expensive to provide insurance at this level.”

Nkambule adds: “But there are a large number of people, such as subsistence farmers and owners of cheaper cars who cannot afford insurance. We are making insurance out there as cheap as possible.” ●

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East Africa

Insure thy neighbour Kenyan insurers are quickly expanding into regional markets, but a handful of foreign firms are threatening to edge them out

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Tom Grill Images/LLC/getty images

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enya’s insurers are expanding into neighbouring countries off the back of stronggrowthinthe domesticmarket for non-life insurance. Kenya has the most advanced insurance market in East Africa, with a penetration rate of about 2.4% – which measures the sector’s contribution togrossdomesticproduct–according toprofessional services firm EY. Kenyan firms have been busy expanding in recent years into new markets in the East African Community, the Common Market for Eastern and Southern Africa and the Southern African Development Community. According to data provided by the Association of Kenya Insurers (AKI), Kenya’s 51 insurers are active in Burundi, Tanzania, Uganda, Rwanda, South Sudan, the Democratic Republic of Congo, Mauritius, Mozambique, Malawi and Zambia.

In a report on the sector’s performance, the AKI wrote: “This [growth] has been necessitated by [insurers]in Kenya with interests in manufacturing, tourism, transport and communication, building and construction across the region to be covered by the same insurer.”

The biggest Kenyan insurer by turnover is Jubilee Holdings, which has been on an expansion drive in recent years, launching new businesses in Uganda, Tanzania, Burundi and Mauritius.

The business run by Tanzanian billionaire Mohammed Dewji could give Kenyan insurers a run for their money. Dewji, who runs Mohammed Enterprises Tanzania Limited (MeTL), the country’s biggest company by turnover, is bullish on the region’s insurance

A new law requires all cargo coming into the country to be insured by a local insurance company

sector. “I think we are quite underinsured in East Africa. I think the growth potential is there,” he tells The Africa Report. Mo Assurance, the company’s only financial services entity, is ready for expansion, Dewji says: “It’s non-life, so I want to go into life. I see that there is an opportunity there.” rising demand

2.4%

Kenya’s insurance penetration rate in 2015

Source: Ernst & Young

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But foreign competition is mounting. Investors are eyeing the East African market as ripe for new and innovative services. The region’s growing middle class, its young population and returning diaspora have contributed to rising disposable incomes and a greater demandforinsuranceproducts.“The outlook is optimistic,” James Norman, head of insurance at KPMG East Africa, tells The Africa Report.

“We are seeing a walk towards riskbasedsupervisionandmorerobust solvencyandcapitalrequirements, led by Kenya.”

Morocco-based Saham Finances and South Africa’s Sanlam Finance are among the most active insurance companies in East Africa. In 2013, Saham bought a controlling stake in Kenya-based Mercantile Insurance, and in 2014 it bought a 66% stake in Rwandan insurerCorar-AG.Meanwhile,San-

lamhassetupoperationsinKenya, Tanzania, Uganda and Rwanda.

However, Kenyan insurers could get a boost after parliament passed a law requiring transport firms to deal with local insurers for goods passing through Mombasa port as of January of this year. “That will fuel the market with new premiums and will give the market new growth,” says Lukas Müller, head of Africa at Swiss Re. Innovation in the sector could also see new products launched in the near future. “This year we’ll start to see insurance premiums really just broken down to consumer levels of understanding where […] you can pay for insurance for a single day,” says Edward Ndichu, head of digital financial services and mobile payments at Kenya’s KCB Group.

Fraud is perhaps the biggest challenge in Kenya’s insurance sector. In EY’s survey of insurance executives last year, 95% of respondents said fraud was a key risk of expanding in Kenya.

“Fraud is high and there is a limited appetite to invest in controls,” says KPMG’s Norman. However, 23% of respondents said regulatory changes were driving growth in the sector. ● Mark Anderson

dossier | insurance

Nigerian insurer Leadway Assurance has signed a retail deal with Total Nigeria

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Nigeria

Insurers race to the bottom in a price war

With an ailing national economy, insurance companies are fighting over customers whose greatest concern is cost

A

sNigeriabattlesalingering recession, local insurers are struggling to find ways to weather the economic headwinds. In response to slow business, insurers have quietly agreed to sell policies at lower rates. A staff member at one of the leading insurance companies confirmed to The Africa Report that they had been advised to “seek management approval” when clients have said they can only afford lower rates. The goal is to keep cash coming in, despite the contracting economy.

The reality is that most Nigerians are not covered by insurance policies. However, a highly competitive market exists aroundthose who are, and it has become even more so given the troubled economy over the past year.

Afolabi Lawal, an executive with one of the leading local insurers, agrees that operators are competing on rates to lure customers. He cites the reduction in disposable income and the challenging business environment as the reason

why price is an ever more important factor for individuals and companieswhoareconsideringbuying an insurance policy. However, he points out that slashing rates is not in the best interest of the industry: “Among ourselves we’ve tried to sound that warning – that it’s going to be a fight to the bottom, and that’s not great for the operators.”

He says one possible alternative strategy is for the operators to target retail customers, who have been overlooked in favour of risk-conscious corporates.

With corporate clients cutting back spending on insurance as part of broad measures to reduce spending, Lawal asserts that this is the right time for the operators to be more creative and design better products for the retail market.

Indeed, there have been attempts by operators to tap the potential of the retail market. For instance, Leadway Assurance, one of the country’s largest insurers, partnered with Total Nigeria – the local subsidiary of the French oil giant – in September 2016 to sell

350 Nbn

Estimate of gross premiums for Nigeria’s insurance sector in 2015 Source: Ministry of Finance

third-party motor vehicle insurance policies via the latter’s retail outlets. Leadway says that it hopes to scale up the partnership so that customers will be able to process claims at Total petrol stations.

But despite such innovative developments, stakeholders say that more needs to be done from a policy perspective to facilitate the growth of the market. Insurers have criticised the industry regulator, the National Insurance Commission (Naicom), for halting their attempts to execute bancassurance partnerships.

This arrangement would allow insurers to leverage the branch networks of the banks to sell their policies. Another industry complaint is that the government does not enforce relevant laws, such as those that make certain classes of insurance compulsory.

In response to this criticism, Naicom’s head of corporate affairs, Rasaaq Salami, notes that bancassurance is one of the strategies the commission is looking at to increase insurance penetration. Referring to Naicom’s statement of regulatory priorities for 2017,henotesthatthecommission is prioritising the Market Development and Restructuring Initiative (MDRI), a reform programme that was originally launched in 2009 with the goal of deepening and growing the insurance market. flagging growth

At its conception, the MDRI was a medium-term plan that set targets for the industry over a period of three years. These included raising gross premiums from N164bn ($522m) to N1trn and increasing the sector’s contribution to GDP to 4% by 2012. However, based on numbers presented by finance minister Kemi Adeosun at Naicom’s annual conference last year, these targets are still far off being achieved. Quoting figures for 2015, Adeosun said gross premiums were estimated at N350bn, while the sector’s contribution to GDP had

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insurance | dossier

dropped to 0.3%, revealing that a lot still needs to be done to spur growth in the sector.

Another issue that has received much attention over the years is capitalisation, which is often cited as the reason why local insurers are unable to provide coverage to players in sectors such as the aviation industry or on major industrial and infrastructure projects. The impact of this situation was seen last year when Nigeria’s largest airline operator, Arik Air, temporarily halted flights due to challenges in renewing its insurance with Lloyd’s of London. This has revived the debate about the need to raise capital requirements.

However, Naicom’s priorities for the year state that capital verification will be the focus in the current year, implying that recapitalisation is not the immediate concern.

Industry expert Lawal says that regulators should not rush to consolidate the industry through higher capital requirements. He explains: “Before you can speak about consolidation, you have assumed that they [operators] have insufficient capital to carry additional risk. But based on the report [presented at an industry forum last year], the capacity that they have has not even been exhausted.

So it is a difficult argument to make to say they are undercapitalised.” ● Charles Idem in Lagos

interview

Afolabi Lawal Insurance industry expert, Nigeria

Insurers need to be creative TAR: How has the industry fared over the past year?

Afolabi Lawal: The insurance sector follows the direction of the economy. If the economy is growing, we expect that the insurance business will grow as well. It has been taken for granted that if the economy is down, in recession, people will want more protection.

It doesn’t work that way.

Even if they want more protection, they don’t have that disposable income to actually buy that protection.

What have been the most profitable segments historically?

For the general business, 80% of premiums come from the corporates […].

Once you make 80% from corporates you are not sweating the small stuff, as you would expect.

If what is being made from the corporate will continue to fall, you might need to push the retail end and be creative. Create products that you think people want to have. Some have done that and are reaping the benefits.

What about the issue of consolidation?

Maybe because we are too many, some are cutting rates, seeing it as a fight for cash flow rather than for profitability and sustainability.

However, I have not seen consolidation being pushed by the regulator at this time.

Why has the National Insurance Commission (Naicom) stopped banks and insurance companies from working together through bancassurance?

Naicom in particular thinks that you are crossing boundaries, and so they need to have more clarity

rdcongo@sireavantage.com

around this for one reason or the other. So they pulled the plug and that discussion will have to begin again.

Any other thoughts about developments in the sector?

While rate cutting has been around for a long time, some insurance companies can give a quotation knowing full well that we are just in this for cash flow. If the unexpected event happens, maybe we will not settle claims. We need the regulator to come down hard on companies that are not paying claims.

We like to say that it’s losses that discipline companies, so we need them to come down hard on companies that are not prudent in their underwriting. So two things [are needed]: upholding the laws and enforcement. ● Interview by C.I. in Lagos

china@sireavantage.com

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art & life

weddings

The big Contract

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The typical Nigerian wedding is a carnival of its own that has given rise to an informal micro-economy, as ever-industrious Nigerians look to make gains from happy days

D A Yoruba bride dances during the traditional introduction to the groom’s family

all pictures by: ipinayo ade-akingboye/weddingsbyipinayo.com

By Eromo Egbejule in Lagos

Decked in a three-piece, snow white agbada with fila to match and a leather purse tucked under his left arm, a ‘big man’ steps out of his car. To his side his wife or a female companion, primed as arm candy, is in a brightly coloured aso ebi with a gele extending skywards, the bigger the better.

Two or three women dash to him, dangling bundles of crisp 100-naira and 200-naira notes. They are the moneychangers who will take his foreign currency or 1,000-naira and 500-naira notes and exchange them – for a fee – for lower denominations to lengthen the time he will ‘spray’ the couple during their first dance.

The culture of spraying – dexterously flicking off naira notes in one hand with the thumb of the other to rest momentarily on the bride, before slithering to the floor – is an opportunity for moneybags and social climbers to draw attention to themselves under the pretext of being a supportive friend.

“It’s an opportunity for many people to show off their status and fine dresses,” says Alicia Odemwingie, who got married in a lavish wedding last September in Benin City. “But also for the couple to recoup money spent on the wedding.

My husband decided to position one or two people at the entrance to help them change money for a token.”

Only a few years ago those wanting to spray would have visited the bank the day before or restricted their spending to just a few notes. But money-changers are one in a long line of jobs that have come to be thanks to the evolution of the Nigerian wedding.

Big weddings can be as expensive as you like. Some budgets can come in at N2m ($6,500), while those that want to pull out all the stops can spend as much as N30m.

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“People are using helicopters to leave the church wedding and arrive at the reception,” says Tolulope Balogun, a radio presenter at 99.3 Nigeria Info.

“It’s a new trend. My friend last year wanted to do it but she couldn’t because there was nowhere for the helicopter to land at the church.”

“It is no joke,” she adds. “Particularly in Lagos. A laser-cut iro and buba from [fashion designer] Deola Sagoe can easily run over a million naira alone.”

Every true party-goer in Lagos knows that as important as predicting the traffic situation and turning up in flamboyant outfits is the ability to find a secure parking space. It is to touts and parking attendants like Jimoh Olaitan that they turn to for instructions. The father-oftwo leads a three-person crew who eke out a living parking vehicles around visa-application centres on weekdays and event halls on weekends, in Lekki, a suburb in the city’s island district. By the end of the night, each car owner will have given them tips of N200-N500 each.

Clockwise from right: Extravagant cocktails matching the bridal party’s colours add to the festive atmosphere; professional wedding MCs are in high demand to entertain guests and get them up on the dance floor; professional make-up is essential, for close-ups will be displayed for all to see on Instagram

movers and shakers

Nigerian weddings are the hallmarks of high society, a glassy showcase of opulence crammed into one day while guests enjoy the ‘movers and shakers of Nigerian society painting the city red’, as tabloids are wont to describe the day.

The ceremonies come in a sequence: the introduction of the groom to the bride’s family after the engagement, then native law and custom, followed by the church wedding and a grand reception.

For recently married Odemwingie, after initially settling for 400 guests, her parents and in-laws doubled the list, so their budget increased accordingly. “My mother told me that everyone she knew had to be at the wedding. She looked at me point blank and said: ‘Don’t you know this is is also my wedding?’”

And as every Saturday is party o’clock across Nigeria, for regular gatecrashers finding a wedding reception is only a matter of patience. It is the party that matters: food and drinks are usually overflowing as the parents of both groom and bride fall over each other to impress the attendees and etch their names in the annals of glamorous history.

With plenty guests come great expectations. The task of ensuring first impressions are well taken care of, and that the who’s who of town are all present, falls to the wedding planner. It’s an arduous job as much as it is a satisfying

one, says Lagos-based planner Ngozi Rume Otogbolu. Once she got a brief where the family of the bride specifically instructed that the guests should not be allowed to interfere with the running of the day. As a result she was the target of eyeballing and rude comments as her staff batted away friends and relatives of both families who wanted to exert undue influence to get food early.

Once the merrymakers are seated, they have to stay alert for when the true spice of every modern Nigerian party – finger foods or ‘small chops’ – passes by before the main dinner is served. Sometimes wedding planners have to work with as many as 10 to 20 different service-providers, Otogbolu says. “Every wedding is different. We have to hire ushers, DJs, live band, food vendors, drinks vendors, décor and confetti people, bouncers and, in some

cases, even lighting and special-effects vendors according to the budget and preferences of the bride and her family.

Some clients also let you handle cinematography bookings.”

In the past even wedding planners were not a big deal. “Ten years ago, there were planners already,” Otogbolu says. “But the market wasn’t as big and we were not as appreciated as we are today.” Planners sometimes also get the responsibility of picking the life of the party – the wedding MC. He is the one who transforms a wedding from a nervous and boring choral affair to a full-on party with jokes bursting with innuendos and repurposed clichés. In the past, the job of wedding compere was usually a favour done by a friend of the couple, but as in-demand wedding MC Tomiwa Kukoyi has found out, the role has acquired a life of its own. the africa report

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“A lot has changed for this generathe bride to take Bella Naija-worthy tion,” the 29-year-old, who is also an photos of the day’s belle.

Self-acclaimed as Africa’s top wedactor, points out. “Kids born in 1994 are now getting married. The game ding website, Bella Naija Weddings has improved tremendously so MCs has elevated weddings from routine ceremonies to awe-inspiring art status. earn better, are more engaged and In certain circles, a wedding is not constantly in demand.” considered up to standard if it does Comperes can earn anything from N250,000 to N2m per wedding, plus logistics costs if the wedding is outside Lagos. Kukoyi has had to turn down many weddings for clashing with his booked schedules.

The same higher stakes have buoyed the careers of uests 400 g r o another band of creatives: f e ... N1m S e r v ic ............ .. .. photographers and cinema.. .. .. ..

1m ............ ......... N tographers. “People love wedDécor ............ .. .. .. ..

0k .. tal .. ding memories just like they ... N20 Hall ren irs ...... a h c g in did years ago,” says Ipinayo Ade 250k ri wedd ........ N Chiava ............

Akingboye, a Lagos-based pho.. .. .. y 00k raph s .. N4 Photog tographer who gets called to docg drone in d lu c phy in ument happiness at least once a Videogra month. “But a lot more people now r in k k and d care about how they look on their .. N800 Food ............ .. .. .. .. .. wedding day and social media has 200k ............ ........ N Food .. ............ helped in increasing our audience.” .. .. k .. s . N600 chop

not make the Bella Naija blog or Instagram account – which has over two million followers, even though most of the features are paid ads.

The desire of the bride to look good enough ‘for the gram’ has driven up the demand for make-up artists, so much so that some like Kaka Eve-Offiah shuttle across the country to do ‘face beats’, earning as much as N200,000 per event.

Other celebrity make-up artists are known to charge closer to N1m.

“The process of transforming people is emotional”, Eve-Offiah states matter-of-factly. “It even shows in their carriage afterwards […] their confidence level is boosted and generally their day becomes better.”

The job of detecting confidence levels at the ceremony and estimating their personal worth falls to the praise singers – called alaga in Yoruba – who sing and drum till they get money gifts.

For those like the big man described above who are dressed to kill, they swarm around like an army of locusts till they are sated. In the distance, the touts who helped them .... .. .. ..

Small secure a good parking space will .. .. ..........

N120k ils ...... . .. ta hang around their cars, waiting k .. c .. o .. ..

C ........ ............ patiently for their return. s il ta k c Mo “This is our own office,” says s fect ia l e f parking attendant Olaitan of his c e p S 100k informal hustle in a smattering ....... N .. .. .. .. .. ...... k of Yoruba and pidgin English. rs ........ . N100 Sparkle ............ .. .. .. .. .. ..

“I make up to ten thousand k ..

0 ..

0 ..

1 .. g ...... N Low fo naira every day and share ............ .. rs k 0 te i blas .... N10 .. .. with my boys. It is our share ..

Confett .. .. e ...... machin of the national cake.” ● le b b u B

ng da i d d e w r u It’s yo

calling the shots

Her camera gear is insured and the cost of that is reflected in the going price. All event long, she will comb the venue taking shots from every imaginable angle with an assistant, then produce photobooks and framed pictures afterwards. But long before revellers begin to prepare to wine, dine and cheer, she is already at the maternal home of the africa report

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y!

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art & life

Sufism

New age, old ways

Once out of favour for its superstition and lack of political engagement, the mystical branch of Islam is being reclaimed by Egypt’s educated youth

I

t is Thursday evening. As the weekers in the 1960s and ’70s predicted in end begins, Mohamed, a 29-year-old Egypt, says Costantino Paonessa, an political science graduate, gathers academic researcher based in Cairo. with fellow members of his Sufi order Sufism, once the dominant religion, in a cosy old flat in Central Cairo. They had begun receding as people moved will sing dikhr, which means rememto the cities. The worship of Sufism’s bering: they repeat together the name revered figures as saints, able to perof God and of the Muslim revered figform miracles, was frowned on by the more rational believers, and even more ures. Their words and the rhythm of so by the growing numbers of Muslim the chants lead the worshippers to the Brotherhood, or Salafists. state of mind they crave: connected to God, immersed in love, understanding trinkets at the tombs and forgiveness, and released from the world and its difficulties.

In particular they decried the annual mawlid celebrations, where thousands The dikhr is not dissimilar to that practised by Sufis in traditional mosques, of people gather around the tombs of more often on a Friday. But the comthese saints amid a deluge of trinkets, sweets,snake-charmingandotherfunfair position of the group is different. At entertainment. Critics also denounced the Al-Rifa’i mosque in Old Cairo, for instance, the worshippers are made up some orders as cults whose leaders were of local, rural or working-class people, swindling people out of money.

Today there are between 10 and 20 like Samir, who comes from a governate just north of Cairo. A monshid, who asmillion Sufis in Egypt – up to a quarter sists the sheikh in leading the prayers, of the population. “Studies have shown a he joined the Al-Rifa’i group some 50 decrease in the number of young people years ago, attracted, he says, by the idea of tolerance and Sufism’s theological tenets love between the peoples resonate with the young who of all religions. Speaking to The Africa Report outbelieved in social change side the mosque, Samir was careful not to go into any depth about joining orders in the countryside,” says his beliefs, conscious of the presence Amr Ezzat, a researcher and officer at freedom advocacy group the Egyptian of the police who guard the mosque.

In Egypt religion is such a sensitive isInitiative for Personal Rights. “But in sue that only authorised spokespeople better educated and wealthier social from the government and Al-Azhar, the classes, they may follow sheikhs who country’s Sunni Muslim institution, are talk philosophy, in English, and not permitted to talk to journalists about it. necessarily Egyptian.”

Even the folkloric elements of Sufism urban intelligentsia areundergoinga newpopularity.Former In contrast to the group at the mosque, activists and photojournalists have starMohamed’s order is mainly composed of ted going to mawlid celebrations, where families camp outside and men and young, urban, highly educated people.

Some say the group also welcomes nonwomen dance together to the rhythmic Muslims and atheists. The flat where dikhr chants and music, embodying a they meet belongs to their sheikh, who trance-like state, shaking their heads is not always present: he is often away back and forth and spinning in circles. in Europe, where he works as a doctor.

Mohamed makes the link between this and the spirit of the Arab Spring: “They The rise of a younger group of Sufis enjoy seeing crowds of people, all walks contradicts the trend that research-

of life together, coming from all over Egypt,” he says. “We used to see that in demonstrations over the past years, but now they’re basically forbidden.”

Mohamed admits there is a certain ‘hipsterisation’ of Sufism, with the proliferation of wellness centres offering Sufi meditation and the verses of the Sufi poet Rumi on everyone’s lips. But for him it goes beyond that: “Don’t the africa report

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art & life

Clockwise from left: Men sing dikhr at the traditional Al-Rifa’i mosque; mawlid celebrations in the Gamaleya quarter of Cairo; dikhr and dancing in the street

“After the toppling of Mubarak, many young people left their [Sufi] orders, disapproving of the passivity of Sufi leaders in politics – none [were] speaking up against injustice”, says Tarek Ghanem, a member of the Chazli order and an editor on the Islamic Analytic Theology review. In 2011, a Sufi sheikh in Cairo, Emad Effat, tried to carve a path that would be closer to the Azhar institution, but could not unify pro-revolution and pro-establishment factions. Effat himself was killed during the December 2011 clashes between demonstrators and security forces.

all pictures by Vinciane Jacquet for tar

two worlds meet

underestimate the spiritual calling.

There is a part [played by] folklore and the new-age appetite for the ‘Sufi’ trend among the wealthy in Egypt these days, but some of us really need some relief.”

He joined his Sufi group last October and since then has been attending once or twice a week. His practice, he says, has fulfilled his religious and spiritual needs and improved his psychological state. the africa report

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For the Egyptian youth whose hopes were high in 2011 after the uprising the past years have been heart-breaking.

Sufism’s theological tenets, based on love, tolerance, doing good and letting go, resonate with the young who believed in social change, and who shun Salafism, as well as the Muslim Brotherhood’s political Islam and the atheist wave that rode the post-2011 period.

Sufism’s interpretation on the political spectrum can be paradoxical, says researcher Ezzat: “Sufism [simultaneously] carries liberal potentialities, because of its spiritual aspect – as opposed to a legalist, rule-abiding view of religion – and conservative ones, as it can be very individualistic, and not bothered about society as a whole.”

Amr Yakan is a 23-year-old singer and sales worker who identifies as Sufi, although he does not belong to a specific group or order. Describing his songs as Sufi, socialist and communist, he says: “I know I am trying to make two worlds meet that are not supposed to. Likewise there is a contradiction inside me, betweenmymindandmyheart.Between what I know and see about politics and religion [as] the opiate of the people, and what I feel. I believe in God, and I believe reason will never move people like their hearts will,” he says. “I sing better when I sing in the way that feels right […]. And my heart goes to the songs I grew up with, the Sufi singers.”

Yakan comes from a religious and politically conservative home. Though his parents disapproved of his taking part in the revolution and of his way of practising his religion they eventually came to accept it. “They are real Sufis even if they do not know it,” he says.

“They are so loving and tolerant. Sufism is not even about a religion, you could be a Christian Sufi, I guess you could even be an atheist Sufi. It is all about a state of mind and being, humanity.” ● Sophie Anmuth in Cairo

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lifestyle behind the scenes

TWITTer Trends #AFCOn2017

Abubakar Adam Ibrahim

tweeters took their eyes off the ball to give a running commentary on the africa cup of nations.

the award-winning Season of Crimson Blossoms author plans to keep doing what he loves: writing

All rIghTs reserved/TWeeTers

On your travels, what city stuck with you the most?

One of the most fascinating places I’ve been to is Cartagena in Colombia.

It’s quaint and beautiful, it’s like it’s stuck in time. I’d love to go there again and write for some time.

What was the last book you read that really moved you?

Kathleen Ndongmo @KathleenNdongmo

A Thousand Splendid Suns by Khaled Hosseini. It is such a deeply moving story in how it depicts Afghanistan before the war and then the crisis.

A fun moment – when the indomitable lions repeat that hilarious #BidoungChallenge.

You gotta have fun. #AFCOn2017

What job would you do if you weren’t a writer?

I was going to go to medical school before changing to mass communications so probably I would be a doctor. Funnily, my mum had high hopes that I would be a professional footballer, even though she’d never seen me play. Maybe if she had she’d have thought differently!

Bernard Sabiti @BernardSabiti

What do you like to do when you’re not writing?

When Cameroon President Paul Biya assumed power in 1982, none of the players that just won the #AFCOnFInAl were born. #AFCOn2017 VintagebyKenya ® @callme_KENYA

When you know your people will be more heartbroken when you don’t win finals so u lose semis #AFCOn2017 Juju The Jinjah @ShokiScientist

When you want to banter ghana for getting knocked out of #AFCOn but your country didn’t qualify...

Angiro Isaac Ojok @AngiroIsaacOjok

If you are feeling low, remember..#UgandaCranes made it to #AFCOn2017 nigeria didn’t, not enough?

Champions #IvoryCoast crushed out.

I play video games, mainly Pro Evolution Soccer.

JIll JennIngs

88

What are you and your friends discussing over dinner?

With my childhood friends, probably the silly things we did, the girls we dated, or more likely the ones we attempted to date but failed.

With my writer friends, about development and social issues. I don’t like talking about politics as it frustrates me.

What inspires you or your writing?

The hope that several years from now someone might pick up my book and not be appalled by it!

The idea of the future looking back and being able to understand how we lived through our literature. ●

Interview by Emmanuel Akinwotu

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89

travel benin

FONDATION ZINSOU; all rights reserved

2

3

1

Benin bites

Get your foodie fill in Cotonou! With its old city feel, great bread, beaches and colourful markets, Benin’s economic capital makes a perfect weekend getaway

F

irst up, know that in Cotonou man can live by bread alone. You’ll find bread everywhere, from pain sucre – sweet sticks of bread sold in huge silver basins on every other street corner – to various types of baguette in the boulangeries. La Galette à Sucre (2) has delicious breads and home-made jams, with a seating area where you can enjoy a relaxed breakfast.

Take a short drive around the city to see its architectural masterpieces, like the 19th-century Notre-Dame-deMiséricorde, also known as Cotonou Cathedral,withitsstripedburgundy-andwhite brick facade; the tower and green domes of Cotonou Central Mosque; and the Ancien Pont, built in the late 1920s, that bridges the Cotonou Lagoon.

Spend the rest of the day at Fondation Zinsou (1) soaking up contemporary art and culture across three floors. Launched in 2005, the space is tastefully designed, with fascinating exhibitions. After a stop at the gift shop eat lunch in the cafe: with a range of local dishes and a regularly changing menu you may be surprised.

If you’re lucky you’ll find peanut sauce the africa report

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with wagashi, a local cheese curd, and rice. To wash it down? Try some chilled bissap, an infusion of dried hibiscus and ginger sweetened with pineapple juice.

For your second day in Cotonou head west along the scenic beach route, destination Casa Del Papa, a stilted beachside resort on a palm-tree-lined strip between the Atlantic and the lagoon in Ouidah. The town is famed for its museums chronicling the practice of Voodoo and the slavery that gave its name to the UNESCO World Heritage-protected site, the Point of No Return. lake kayaking

Just before the road turns to sand you’ll see Erevan, a hypermarket full of local and European treats. Grab some snacks, bread, cold cuts and note the things you’ll return for on your way back.

At Casa venture out onto the lake for kayaking: you’ll be sharing the waters with fishermen, knee-deep in the water, stealthily casting their nets. Try the catch of the day and delicacies like attiéké, a cassava dish similar to couscous, which originates from Cote d’Ivoire but is loved

across Francophone Africa, as well as the tomato-and-onion-based moyo sauce, green chilli sauce and more. Take some time to digest and stroll along the beach.

With its gorgeous scenery, white sand, palm trees, hammocks and cute bungalows it is full of photo ops.

On the road back to Cotonou allow the coconut sellers to tempt you with some fresh coconut water from huge, green young coconuts, expertly opened. Once you’ve downed the refreshing water you can eat the soft, jelly-like coconut meat with a small scoop the sellers fashion from the side of the coconut.

Back in town, choose from a plethora of Beninese, French and Asian restaurants. Stop by the Benin Marina Hotel for some cocktails by the pool, or end the evening with some truly great gelato at Ci Gusta (3), before kissing the city, with its noise and twinkling lights, good night.

If you have more time to spend, relax in the quiet of Porto-Novo, the administrative capital, with two great museums: the Musée da Silva, with an eclectic collection in a late-19th-century AfroBrazilian house; and the Musée Honmè, the royal palace of King Toffa, a 300-year royalresidence.Thenfinishupwithatour of the Songhai Center farms where you can eat, drink and tour local. ● Ozoz Sokoh in Cotonou

day in the life Extraordinary stories of ordinary people

Sexual Minorities Uganda (SMUG) as an umbrella organisation for these outfits that create advocacy, amplify disenfranchised voices and work to break stigma against AIDS. It was through working in the NGO world that I learnt of the term ‘transgender’. ‘Tomboy’ and ‘shemale’ had been popular labels at the time but they didn’t feel right. Understanding the proper word for what I was and the possibilities of gender reassignment surgery helped me regain my confidence.

not alone

Daniella Zalcman

90

Championing change In a country renowned for its anti-gay laws, Ugandan transman Pepe Julian Onziema makes his own transition a form of activism

M

y family is from Ar ua, a small town in northwest Uganda. Looking back on my childhood, I recognise now that my family raised me as a gender non-conforming person.

When I was five, I wore khaki shorts and shirts to school. My school skirt was for when the principal really pressed me to wear it, but even then I’d leave home in a skirt with shorts underneath.

My first kiss happened when I was eight or nine during a make-believe game with a girl. I was reprimanded by one of my brothers and there was a

lot of backlash from the wider community. That was the first time I was labelled as ‘gay’ and ‘homosexual’. I asked my favourite brother to look up the terms in the dictionary for me. I didn’t take them as derogatory words but rather took pride in them.

After all, I was the only one.

I came out to a cousin when I was 12. A year later, I came out to my biological mother. She opened her Bible to 1 Corinthians: 13 and recited to me: “Love is kind. Love is patient.” Despite this warm, supportive reaction, I left my mother’s room feeling worse. At that time the most comfortable

thing to do was to come out a lesbian. What I really wanted to tell her is that I was a boy.

As a teenager returning from school in Lesotho, I saw an article in one of the national papers naming teenagers expelled from high school on suspicion of being gay. In my fury and naivety I wrote to the newspaper decrying the act. When it was published my Ugandan schoolmates shunned me, but that act sparked the activist in me.

Years later I joined Freedom & Roam, a lesbian association, and then Spectrum Initiatives, a gay association. In 2004, I formed

In 2015 I began the process and currently I’m on bi-monthly testosterone injections. It was important that I transition in Uganda.

I wanted people to see me, to see the changes happening day-by-day, month-tomonth. I was transitioning with my country, with my society. This served to create a sense of safety for me and allowed young LGBTI people to come out and contact SMUG. My mother believes my political activism work is my calling. Before I kicked it off in 2014, I decided to warn my family. I recall an uncle asking me why I wanted to do it while I was already widely accepted.

For me it was because I am not the only one.

My greatest goal is not fostering tolerance, which gives space for scape­ goating and opting out, but acceptance. People say that being gay is a Western thing and yet we have evidence to the contrary. I would love to see Africa take its own roots and embrace its diversity. ● Interview by Wanjeri Gakuru

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