Tar99

• Insurance Innovation cash call • ​Cameroon Anglo crisis clouds Biya poll • Nigeria Buhari back to the drawing board

South Africa

Ramaphosa and the cops

N ° 9 9 • A P R I L 2 018

w w w.t he a f r ic a r ep o r t .c om

THE AFRICA REPORT

African resources, strategic locations, new markets and reliable allies – China wants it all

MONTHLY • N° 99 • APRIL 2018

JEUNE AFRIQUE MEDIA GROUP

The Emperor’s appetite INTERNATIONAL EDITION

Algeria 550 DA • Belgium €5.90 • Canada CA$ 7.95 • DR Congo US$ 9 • Denmark 60 DK • DOM 8 € • Ethiopia 130 Birr • France €5.90 • Germany €5.90 • Ghana GH¢ 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

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• Insurance Innovation cash call • Cameroon Anglo crisis clouds Biya poll • Nigeria Buhari back to the drawing board

South Africa

Ramaphosa and the coops

N ° 9 9 • A P R I L 2 018

w w w.t he af r i c a r ep o r t . c om

African resources, strategic locations, new markets and reliable allies – China wants it all

JEUNE AFRIQUE MEDIA GROUP

THE AFRICA REPORT # 99 - APRIL 2018

The Emperor’s appetite INTERNATIONAL EDITION

Algeria 550 DA • Belgium €5.90 • Canada CA$ 7.95 • DR Congo US$ 9 • Denmark 60 DK • DOM 8 € • Ethiopia 130 Birr • France €5.90 • Germany €5.90 • Ghana GH¢ 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

04 EDITORIAL The price of dissent gets higher

20

06 LETTERS 08 THE QUESTION

BRIEFING 10 SIGNPOSTS 16 INTERNATIONAL 17 CALENDAR

68 TELECOMS Ethiotel strives for better signal

18 OPINION Tundu Lissu, Chief parliamentary whip, Tanzania

72 FINANCE Corresponding damage

FRONTLINE

73 HANNIBAL

20 CHINA-AFRICA New departures Rivalries between China and the US heat up as the two superpowers rethink long-term commitments to African partners

POLITICS

DOSSIER: INSURANCE

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COUNTRY FOCUS 47 CAMEROON What business wants Bankers and business leaders speak on the changes needed to re-dynamise the economy •

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80 INTERVIEW Julius Kipng’etich, Regional CEO, Jubilee Holdings

82 INTERVIEW King Sunny Adé The Nigerian musician and father of Juju music reflects on his decades-long journey and legacy

38 NIGERIA Back to the drawing board

44 ANANSI President Pompier-Pyromane

78 FRANCOPHONE AFRICA Reassuring the reinsurers

ART & LIFE

36 INTERVIEW Mohamed Ould Abdel Aziz, President, Mauritania

42 INTERVIEW Matthew Hassan Kukah, Bishop of Sokoto, Nigeria

74 Innovation is the best policy As new foreign players come on to the field, local Nigerian firms are being forced to think on their feet

30

30 SOUTH AFRICA Who guards the guardians?

First priority for the Ramaphosa administration is fixing the judicial, security and fiscal institutions undermined during Zuma’s presidency

COVER CREDITS: TASS/ABACA; THEMBA HADEBE/AP/SIPA

62 OIL & GAS ExxonMobil makes its comeback The Texas-based giant is capitalising on recent discoveries and the launch of new projects to regain market share in Africa 66 LEADERS Emmanuel Nnorom, chief executive, Heirs Holdings

12 PEOPLE

THE AFRICA REPORT

BUSINESS

82

86 LITERATURE Powering the word 87 TRANSPORTATION Electric avenue 88 LIFESTYLE South African actress Terry Pheto 89 TRAVEL White shark cage-diving in Dyer Island off Cape Town 90 DAY IN THE LIFE Congolese NGO founder Joseph Munyambanza

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THE AFRICA REPORT A Jeune Afrique Media Group 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 price of dissent gets higher

O

pposition politics is not for the faint-hearted. Ask Tanzania’s Tundu Lissu, who was shot last year by two men wielding sub-machine guns. Still in hospital, Lissu writes powerfully in the following pages about the struggle for political rights.

In Tanzania, political freedoms have been quashed in the name of nation building.

Those tactics and trends extend beyond Tanzania, and indeed Africa. Take Egypt’s March presidential election. Incumbent Abdel Fattah al-Sisi is essentially the sole candidate. All the major contenders were forced to withdraw from the race. Playing the national security card, Sisi says only his government can guard Egypt against an Islamist takeover. More than 150 politicians and seven parties disagree.

They are boycotting the elections, aiming to expose them as a farce.

In some countries, we are back in the land of ruling parties winning 95% of the vote. That is the case in both Ethiopia and Rwanda, whose regimes offer voters a Faustian bargain: higher economic growth but forget about political pluralism. The protests in the Oromia and Amhara regions, which prompted Prime Minister Hailemariam Desalegn’s resignation, show the limits of that trade-off in Ethiopia.

In those countries, and many others, the challenge to incumbent leaders is less from opposition parties and more from popular movements. Often with the help of social media, these mobilise on issues such as land rights, corruption and free elections.

Most dramatically, the Catholic church is championing political rights in the DRC. First, it

CHA I R M A N A ND F O UND E R BÉCHIR BEN YAHMED P UB L I S HE R DANIELLE BEN YAHMED publisher@theafricareport.com E X E CUT I VE P UB L I S HE R JÉRÔME MILLAN

mediated an accord under which President Joseph Kabila committed to standing down. Now its activists are campaigning outside churches for free elections.

Closer to Mammon than to God, corporate-funded civil society groups in South Africa took on Jacob Zuma’s network of business and political allies. Outfits such as Save South Africa launched court cases, financed investigations and took to the streets.

So can popular movements and civic activists claim victory, even if opposition parties are on the back foot? Yes, the activists have scored some ethActivists ical points on corruption, nepotism and have scored economic mismanagesome ethical ment. Yet, in so doing, points, yet they have reinforced the ruling parties in in so doing Angola, South Africa they have and Zimbabwe.

Multiparty politics is reinforced under pressure globalruling parties ly, and in Africa textbook multiparty elections – as in Ghana, Botswana and Senegal – are exceptional. What happens next in Kenya, where President Uhuru Kenyatta and oppositionist Raila Odinga have been parleying over national unity, could be a critical signal.

So far, one conclusion stands out. Those movements that embrace internal democracy and civil rights most assiduously will win the greatest popular support. But dissidents of all stripes know that the political weather is getting wintrier – a global political cooling. Their best weapons will be agility, courage and imagination ranged against the hob-nailed boots of autocracy.

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M A R K E T I NG & D E VE L O P M E NT ALISON KINGSLEY‑HALL E D I T O R I N CHI E F PATRICK SMITH M A NA G I NG E D I T O R NICHOLAS NORBROOK editorial@theafricareport.com A S S O CI AT E E D I T O R MARSHALL VAN VALEN B US I NE S S E D I T O R MARK ANDERSON R E S E A R CH & P R O D UCT I O N OHENEBA AMA NTI OSEI RE G IO NA L E D I T O R CRYSTAL ORDERSON (SOUTHERN AFRICA) A RT & LI FE ED I T O R BILLIE ADWOA MCTERNAN S UB - E D I T O R S ALISON CULLIFORD ERIN CONROY P R O O F R E A D I NG KATHLEEN GRAY A RT DI R E CT O R 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 O G R A P HY CLAIRE VATTEBLED FRANÇOIS GRIVELET XAVIER ROUSSEAU 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 A D VE RT I S I NG D I F CO M INTERNATIONAL ADVERTISING AND COMMUNICATION AGENCY 57‑BIS, RUE D’AUTEUIL 75016 PARIS ‑ FRANCE Tel: (33) 1 44 30 19‑60 – Fax: (33) 1 44 30 18 34 advertising@theafricareport.com PRINTER: SIEP 77 ‑ FRANCE N° DE COMMISSION PARITAIRE : 0720 I 86885 Dépôt légal à parution / ISSN 1950‑4810 THE AFRICA REPORT is published by GROUPE JEUNE AFRIQUE

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WINNER-TAKES-ALL POLITICS

W

Angola, South Affrrica, Zimbabwe...

Is this change we can believe in?

João Lourenço, Cyril Ramaphosa, and Emmerson Mnangagwa

Bright Ghana

Hoow w the country fifinally turned tthe lights on

hile it is true that Southern Africa is undergoing an unprecedented period of change following the resignation of Angola’s José Eduardo dos Santos and Zimbabwe’s Robert Mugabe, it is ill-advised to lay the subregion’s hopes in opposition parties [‘Southern Africa: Sweeping change’, TAR97 Feb 2018].

AFRICAN Not discussed in Nicholas Norbrook’s article on COMPANIES Mozambique are the ongoing peace talks between A glimmer of hope FRELIMO and RENAMO, which highlight the growing tendency on the part of Southern African opposition parties to threaten civil war when elections fail to yield favourable results.

Not mentioned in Alex Magaisa’s article on Zimbabwe is how the country’s main opposition, the MDC-T, is guilty of this practice. The Southern African elite, both opposition and incumbent, is yet to realise the value of power-sharing.

Tinashe Jakwa, Southern Africa analyst and doctoral researcher, University of Western Australia N ° 9 7 • F E B R U A R Y 2 0 18

w w w.t h e a f r i c a r e p o r t .co m

JEUNE AFRIQUE MEDIA GROUP

INTERNATIONAL EDITION

Algeria 550 DA • Belgium €5.90 • Canada CA$ 7.95 • DR Congo US$ 9 • Denmark 60 DK • DOM 8 € • Ethiopia 130 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

to barely six today and even fewer coal, chrome and base metal producers, it is much harder for local and international investors to take advantage in SA of the various ‘plays’ on commodity prices and ore body development. But with exchange-traded funds on the metals themselves – as well as on the JSE Resi 10 index – there is still a way for determined investors to participate.

Peter Major, Director of Mining, Cadiz Corporate Solutions

THE PROOF IS IN THE PROCEEDS

The author raises valid concerns about the growth, serviceability and dollarisation of Nigerian sovereign borrowing [‘Can “Made in Nigeria” be financed by foreign investors?’, TAR97 of railway systems would enable the Feb 2018]. However, some benefits COMMUTING STRESS workforce to live in further places away should be highlighted. Finance AND PRODUCTIVITY from the city with less travel stress. minister Kemi Adeosun is right to The average working Ghanaian Kwame Adu-Appeah, Ghana exploit any funding arbitrage created spends about four to five hours a day by renewed foreign portfolio investor in traffic [‘Power is back on, but much demand for emergent market yields. more is needed’, TAR97 Feb 2018].

Foreign creditors limit some strategic LESS BANG FOR THE Hence, people get to work tired and flexibility, but policymakers must also BULLION have a slow start in commencing their address concerns about the crowdingThe world is enjoying great metal work for the day. Improving road out effect the government has networks and the overall transportation prices almost across the board. consistently had on local private credit. system would greatly reduce commute [‘Mining: Bouncing back from A primary reason Nigerian banks the bottom’, TAR97 Feb 2018]. […] stress and improve productivity. The do so little local lending to corporates Unfortunately, having done everything and SMEs is the availability of highmost cost-effective way would be to improve public transportation, starting in its power to destroy its mining yielding government bond instruments industry, South Africa is benefiting on major routes to the dense urban dominating local credit markets. The from this much less than in previous cores, and introducing congestion final verdict will be the use of proceeds.

Franklin O. Amoo, Partner, decades. From 60 listed South African charges, as done in Stockholm Baylis Emerging Markets, Nigeria gold producers in the early 1990s and Beijing. Also, the introduction 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.

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Annual Governance Weekend 27-29 April 2018, Kigali, Rwanda The annual Governance Weekend is the flagship event of the Mo Ibrahim Foundation, held every year in April in a different African country. This three-day event convenes prominent African political and business leaders, representatives from civil society, multilateral and regional institutions as well as Africa’s major international partners to debate issues of critical importance to Africa.

Friday, 27 April The Next Generation Forum is a closed-event preceding the Ibrahim Forum, where the next generation will debate Public Service in 21st Century Africa, both as citizens and as potential future civil servants. Outcomes from the discussion will be shared at the main Forum on Saturday. (09:00-13:00 GMT) The Leadership Ceremony will honour the 2017 Ibrahim Laureate, Her Excellency Ellen Johnson Sirleaf, former President of Liberia.

(20:30-22:00 GMT) Saturday, 28 April The Ibrahim Forum: the high level Forum this year will focus on “Public Service in 21st Century Africa”. (09:00-17:30 GMT)

Sunday, 29 April FREE Live music concert featuring Youssou N'Dour, Sauti Sol, Peter P-Square, Riderman, Knowless, Phionah Mbabazi. (19:00 GMT)

Participants will be able to follow all the open events on the Foundation’s Facebook page and website: mo.ibrahim.foundation/kigali

8

The Marvel comic blockbuster film is raking in money and tells the story of a technologically superior and wealthy African society that grapples with its responsibility to oppressed populations across the world.

Will Black Panther change media representations of Africa?

Yes FUNMI ADEBAYO Africa Credit

Black Panther is part of a wider movement across the arts inspired by Afrofuturism.

Afrofuturism emerged in the late 1990s and it is, in essence, a cultural movement reimagining what Africa could be or would have been without colonial interference. Afrofuturism has been the underlying philosophy inspiring a wide range of works, such as the art of Basquiat, black science fiction, as well as musicians such as Ibeyi, Oshun, Beyoncé and notably Janelle Monáe. Black Panther is a resounding ode to Afrofuturism by encapsulating practically all the different forms of art, both as a body of work in its own right, but also as a cultural inspiration. It has already inspired a global conversation across not only social media, but also in the press, due to its dazzling commercial success: as it stands, it has already surpassed the $1bn mark at box office globally and is one of the highest grossing films of all time. That Black Panther has already changed the media representation of Africa and its diaspora, in my opinion, is not up for debate. Whether or not it will result in a fairer, less condescending, ‘Heart of Darkness’-type media coverage of the Africa we know today is less certain, but it is at least a resounding call for us all to revisit what Africa is, what it could be, and therefore how we represent it in the media going forward.

No KHANYA K. MTSHALI Freelance writer

This question again? Frankly, it’s time for Africans to stop concerning ourselves with what the West could potentially think of us. There’s no point worrying about whether Black Panther will improve how Africa is viewed abroad.

Our continent has plenty of artists, writers, journalists, businesspeople and tech leaders who are advancing our prospects further as a continent. I believe the response to Black Panther reveals how deeply our perceptions of Africa and Africanness are still tied to the West.

While the film has highlighted the importance of representation and depicted a fictional African country free of colonialism and imperialism, it’s unhelpful to attach grand political expectations to what’s simply an enjoyable and well-made work of art. Despite caving in to the communal joy experienced by Africans on the continent and in the diaspora, I find it absurd that Black Panther has been tasked with inspiring radical change in America and changing the perception of Africa abroad. To me, it suggests that we’ve forgotten the work required to institute systemic changes around race and class. It also shows how much we’ve forgotten what sacrifices our forefathers and foremothers went through in order to make the world more bearable to inhabit. Yes, Black Panther is a phenomenal film. But it takes more than a film with teachable themes to create a new world order.

Yes! The numbers have spoken! People want positive African media content!

African-Tribe Unified Why would a fictional story change media representations of Africa?

Jane Eyre The inequality between white and black is simply too great to be filled by a single movie. #BlackPanther is a great feel-good movie, but beyond that, it is a very significant moment for the aspirations of the black race. @iDeric Black Panther is a hero, just like Obama and Simba (from Lion King).

These are symbols forever stamped in people’s minds.

We know well how powerful symbols can be!

Especially for a younger generation because it can shift consciousness. @SunsonSunda No, since his [Black Panther’s] culture and traditions are not African. @beyelaj The media is a mirror, it reflects images.

If the reflection is skewed, don’t blame the mirror, adjust your set. @tundeokeagi Black Panther alone can’t do it. But if the media is flooded with more Black Panthers that is where we can visibly notice the change. @KhezzHenski

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in a statement. Nasa suspended the operations of its People’s Assembly on 12 March and said it would wait to see if the government will respond to Odinga’s move with concrete responses to its demands for reform.

“An icebreaker”: But experts say Odinga is making the Kenyattaimportant decisions without the Odinga handshake support of other Nasa leaders, leaving at Harambee the coalition on the verge of splitting.

House Just as when Odinga swore himself in as the “people’s president” on 30 January, Nasa’s co-principals, Musalia Mudavadi, Kalonzo Musyoka and Moses Wetangula, were noticeably absent from the meeting with Kenyatta. As The Africa Report went to press, Nasa leaders were holding an emergency summit on the outskirts of Nairobi.

Michael Chege, a professor of politics at the University of Nairobi, tells The Africa Report: “Nasa is dead, which means Odinga can use his he final nail was hammered “As long as we remain divided Orange Democratic Movement party into the coffin of Kenya’s and corrupt, no amount of institutional to run in the 2022 presidential election opposition coalition on 9 March reforms will heal our differences,” unencumbered by the treaty he has when oppositionist Raila Odinga held he said on live television. “My brother signed with the Nasa co-principals.” an impromptu meeting with President [President Kenyatta] and I have decided Speculation is rife about the timing Uhuru Kenyatta at Nairobi’s Harambee to end these differences today.” of Odinga’s meeting with Kenyatta.

House. In a stunning departure Nasa scrambled to present It came hours before then US secretary from the unrelenting anti-government a united front after Odinga’s surprise of state Rex Tillerson arrived in rhetoric that Odinga’s National appearance alongside Kenyatta.

Nairobi on his first Africa trip since Super Alliance (Nasa) deployed “The handshake [with Kenyatta] he took office. Odinga had been under throughout the country’s prolonged was an icebreaker to pave [the] way pressure from Washington, a staunch campaign season last year, Odinga for serious talks on electoral justice ally in the war on terror, to accept stood next to Kenyatta and called and other key issues; not surrender his electoral defeat and move the for national reconciliation. to the status quo,” the coalition said country on from a political stalemate.

KENYA

BRIAN INGANGA/AP/SIPA

Opposition no more

T

“We want to

COFFEE NO BOUNCE IN THEIR BEANS Now could be the time for a big African caffeine boost.

The African Fine Coffees Association reported in February that after years of stagnant production, the continent was on course to almost double production over the next five years in order to keep up with the growth in demand. Consumption has been rising in recent years, but a pound of coffee was trading at $1.20 in early March 2018, down from $2.89 in April 2011.

The coffee trade

Africa’s top growers

(in millions of 60kg bags)

2017/2018 coffee production

140

6 4

100 SOURCE: USDA

8m tonnes

60

2

20

2014

15

16

17

2018

0

Ethiopia Uganda Côte d’Ivoire Tanzania Kenya

BURHAN OZBILICI/AP/SIPA

Sub-Saharan exports Global exports Global consumption

180

walk with Africa while a new world order is being established ” Turkey’s Turkey s President Recep Tayyip Erdogan wrapped up a trip to Algeria, Mauritania, Senega al and Mali in March by saying that t African countries need a biggerr say in global politics.

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PICTURE OF THE MONTH Aisha, a 14-year-old girl kidnapped by Boko Haram, was returned to safety in Nigeria’s city of Maiduguri.

Other girls have not been so fortunate, reporting rapes by the members of the Nigerian security forces tasked with saving them.

Nigeria’s crude production (millions of barrels a day)

MINING FLUSH WITH FUNDS

Capital imported into Nigeria ($bn)

5.3

2.5

SOURCE: NIGERIA OIL MINISTRY, BLOOMBERG

1.5

0.5

1.7

1.5

0.5

0.7

0.0 2000 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17

1

1

0.9

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 ‘16 ‘16 ‘16 2017 ‘17 ‘17 ‘17

SOURCE: NIGERIA NATIONAL BUREAU OF STATISTICS

4.1

2.0

Cutting costs and selling assets have been the recipe for success for the world’s top miners. Analysts predict generally rosier times for commodity prices in 2018, which should boost the bottom lines of the likes of BHP Billiton and Anglo American. There is more interest in exploration than in recent years, but reforms that the industry opposes in the DRC and South Africa could restrain appetites there.

Major miners rake in the cash

(Combined cash flow for BHP Billiton, Rio Tinto, Glencore and Anglo American) $35bn

25

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5 Economic growth of 1.9% might not be much to crow about, but this year’s predicted growth means that Nigeria is out of its recession. Oil prices have recently been high, but Nigeria continues to respect the OPEC cap on production of 1.8m barrels per day. Nigeria’s oil producers want to increase production by at least 250,000 barrels per day by 2020.

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-5

2010 11

12

13

14

15

16 2017

SOURCE: BLOOMBERG

NIGERIA TURNAROUND TIME BEGINS

ADAM FERGUSON, FOR THE NEW YORK TIMES/REUTERS

BRIEFING 11

12

A VOICE IN OPPOSITION 2 February 1978 Born in Gutu June 2006 Elected spokesman of the Movement for Democratic Change (MDC)

TSVANGIRAYI MUKWAZHI/AP/SIPA

13 February 2009 Named information technology minister of the national unity government 2016 Appointed vicepresident of the MDC 15 February 2018 President of the MDC on the death of Morgan Tsvangirai

SPOTLIGHT

Nelson Chamisa In Zimbabwe, the new leader of the opposition MDC is looking to restore unity in the party ahead of a face-off against ZANU-PF in this year’s historic post-Mugabe poll where everything is up for grabs THE ORATORICALLY GIFTED NELSON CHAMISA – who at 40 is the same age as France’s President Emmanuel Macron – has a mountain to climb. When he helped found the Movement for Democratic Change (MDC), an opposition party, he was just 21 years old. Elected president of the party in difficult circumstances, with his forces scattered by infighting, the former head of the MDC youth wing now wants to beat a Zimbabwe

African National Union-Patriotic Front (ZANU-PF) energised by the exit of its historical leader, Robert Mugabe.

The manner in which Chamisa grabbed the top spot in February has caused friction. A few days before MDC leader Morgan Tsvangirai’s death on 14 February, Chamisa claimed to have been anointed by the late firebrand politician to lead the opposition party – a move that got a nod from the MDC’s national council

despite opposition from Thokozani Khuphe and Elias Mudzuri, two of the MDC’s deputy presidents.

After all this controversy, things came to a head at Tsvangirai’s funeral, when pro-Chamisa supporters were said to have assaulted Khuphe, accusing her of working against an alliance of opposition parties that Tsvangirai had mooted ahead of this year’s polls. Violence was also to visit her Matabeleland base when youths supporting her clashed with Chamisa’s supporters as they fought for control of their party’s offices in Bulawayo, Zimbabwe’s second-largest city.

This may seem like a repeat of an MDC tradition of intraparty violence that dies away when more serious political challenges, like national elections, help concentrate minds. But the fact that Khuphe is a major MDC political ‘godmother’ in Matabeleland could be a serious SHAUN BOTTERILL/GETTY IMAGES/AFP

“A hungry nation can eat its leaders ” Oromo Federalist Congress leader Merera Gudina warned the Ethiopian authorities that it must listen to the country’s angry and hungry youths, as the government cracks down.

“African players are like any human beings in the world, everyone is different ” Ghanaian footballer André Ayew responded to West Ham’s Tony Henry’s comment that Africans “cause mayhem”.

BRIEFING 13

RUNGANO NYONI The Zambian-Welsh director and screenwriter was “genuinely shell-shocked” when she won a BAFTA for her 2017 feature debut I Am Not A Witch, a story of a nine-year-old Zambian girl accused of witchcraft.

ELLEN JOHNSON SIRLEAF The former president of Liberia was awarded the coveted $5m Mo Ibrahim Prize for Achievement in African Leadership. She is the fifth recipient of the prize established by the Mo Ibrahim Foundation in 2007.

Moroccan businessman Othman Benjelloun says that positivity is the key to good returns.

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RICK BAJORNAS/UN; JEAN-MARC FERRE/UN; ANTONIO MUCHAVE/SOWETAN/GALLO IMAGES/GALLO IMAGES/GETTY IMAGES

KEHINDE WILEY

“At BMCE Bank, you are forbidden to say the words ‘impossible’, ‘tired’ or ‘quit’ ” •

Arrested in New York last year on bribery and money-laundering charges alongside former Hong Kong home secretary Chi Ping Patrick Ho, the Senegalese diplomat and former foreign minister has pleaded not guilty.

The Nigerian-American painter created Barack Obama’s official portrait for the Smithsonian National Portrait Gallery. He and Amy Sherald are the first AfricanAmerican artists commissioned to paint a first couple.

Frank Chikowore in Harare

THE AFRICA REPORT

CHEIKH GADIO

PYRAMIDE_FILMS; CHAD BATKA/THE NEW YORK TIMES-REDUX-REA; JIRO OSE/REDUX-REA

thorn in the foot of the party’s progress in the elections that are due in May or June. Khuphe’s allies, like MDC chairman Lovemore Moyo and organising secretary Abednigo Bhebhe, are standing behind her, leaving Felix Mafa as Chamisa’s only major ally in Matebeleland.

But Chamisa is not leaving things to chance. Speaking at a rally in Dete in March, he took the time to address the massacres perpetrated by the ZANU-PF government in the 1980s in Matabeleland. “It’s pointless to try to wash away Gukurahundi,” he said.

“The most logical thing is to acknowledge that the massacres left deep scars in survivors’ hearts and there is a need to heal those psychological wounds through properly structured healing processes.”

If he hopes to win the national presidency, Chamisa must bring the wider MDC family back into the tent.

To some extent, that is happening.

Tendai Biti, a former finance minister who left the party after the shambles of the 2013 elections, is now crafting the MDC Alliance manifesto.

Welshman Ncube’s faction has also rejoined the MDC. Will this be enough to beat the ZANU-PF, which is busy on international roadshows to gather funds ahead of the elections?

Chamisa is banking on the youth – which now represents 70% of the population, according to the 2012 census – and the desire for a change after 37 years of ZANU-PF rule.

Given the crowds who gathered under the #ThisFlag protests to push Mugabe out, this may be a potent combination. But it might not be a match for the tools of vote rigging and electoral violence that the ZANU-PF developed for all those years under former president Mugabe.

GITHU MUIGAI Kenya’s attorney general handed his resignation to President Uhuru Kenyatta after a six-and-a-half year tenure. His departure is widely linked to the deportation of opposition lawyer Miguna Miguna and the resulting maelstrom.

LETHEBO RABALAGO The South African ‘Doom Pastor’, who made headlines in 2016 for spraying his congregants with insecticide as a supposed cure for cancer, was found guilty of assault in February and ordered to pay a R21,000 fine or face jail.

The system of multiparty cooperation provides a new way to view democracy

By Jiang Wei

R

ecently, Xi Jinping, General Secretary of the Communist Party of China (CPC) Central Committee, met with members of the China Democratic League, the China Zhi Gong Party, and the All-China Federation of Returned Overseas Chinese, as well as nonpartisan members, who gathered in Beijing to attend the First Session of the 13th National Committee of the Chinese People’s Political Consultative Conference (CPPCC), China’s top political advisory body. During the meeting, Xi stressed that China must consolidate and improve the multiparty cooperation and political consultation system under the leadership of the CPC, and tap the unique potential of multiparty cooperation to provide

practical advice and pool wisdom for advancing socialist democratic politics.

After nearly 69 years of progress and reform since its founding in 1949, the People’s Republic of China has developed

The CPC-led system of multiparty cooperation and political consultation is an innovation unique to China, with its roots spanning the vast expanse of the country’s past and present. Benefiting from achievements made in the progress of human politics, it breaks the pattern of repetitive party alternation and widens mankind’s vision.

a political party system unlike any other.

China’s system features multiparty cooperation under the leadership of the CPC, in which the CPC is the ruling party and other political parties participate in the discussion and management of state affairs. This political party system born in China is distinctly Chinese in its characteristics.

In establishing the system, China has avoided using other countries’ political systems as a criterion to restrict its own development, instead designing one specifically suited to its own national conditions.

With the leadership of the CPC as a precondition, the system aims to achieve unity, cooperation, and win-for-all integration. China’s various political parties are not in competition or opposition to one another, but friendly entities that participate in the running of state affairs.

China’s new type of political party system avoids the disadvantages which arise from a lack of democratic supervision under one-party rule, as well as the political upheaval caused by destructive competition among multiple parties seeking to rule the country. The CPC, www.chinafrica.cn www.chinafrica.cn

PHOTO: XINHUA

A Chinese Solution

The First Session of the 13th National Committee of the Chinese People’s Political Consultative Conference opens in the Great Hall of the People in Beijing on March 3

the non-Communist parties and other nonpartisan members have formed a harmonious and democratic political ecosystem through effective cooperation and interaction.

The system has absorbed the functional aspects of a range of world civilizations, all rich in democratic values, adhering to the will of the people through a democratic decision-making mechanism. China’s major policies and decisions are not made by any single political party, but are the result of democratic consultation and scientific deliberation by the CPC and all other political parties together. They pool their wisdom to develop a blueprint for the future of the nation, uniting to properly handle state affairs.

The CPC has provided institutional guarantees for this new-type political party system. A guideline on further improving the multiparty cooperation and political consultation system under the leadership of the CPC, published by the CPC Central Committee in 2005, said the CPC committees should regard the work of supporting other political parties in strengthening self-construction as an important political responsibility. The guideline has provided institutional and procedural conditions for non-Communist parties to perform their duties, improving the democratic nature of party cooperation and giving full range to democratic supervision.

The political party system perfectly combines both theory and practice.

The theory of the CPC-led multiparty cooperation and political consultation system is rooted in the history of modern China, specifically after the Opium Wars in the 19th century. It was a choice made by the Chinese people in the salvation of the nation through the fusion of Marxist party theory and China’s actual conditions.

China, in the past, copied the political models of other countries and failed in the process. Ultimately, the political system of multiparty cooperation and political consultation was chosen because of its incorporation of the theories of people’s democracy, multiparty cooperation, the united front and the mass line, representing a fusion of Eastern and Western political thoughts as well www.chinafrica.cn www.chinafrica.cn

The political party system perfectly combines both theory and practice.

The theory of the CPC-led multiparty cooperation and political consultation system is rooted in the history of modern China. as the fruits of modern human cultural progress. China respects the development models chosen by other countries and hopes in turn that other countries can respect the political system chosen by the Chinese people.

Multiparty cooperation and political consultation integrate a number of elements including the leadership of the CPC, the rule of law, people being the masters of their own country, construction of community-level democracy and civil society. The harmonious interaction of these elements has driven China’s social progress, making China’s party system an open and broadly inclusive political system.

In the process of developing its system of political consultation, the CPC, non-Communist parties and nonparty personages have achieved a great political innovation. The history and achievements of the People’s Republic of China have proven that this new type of political party system that integrates theory and practice can authentically represent and realize the fundamental interests of the Chinese people of all ethnic groups.

The CPC-led multiparty cooperation and political consultation system combines both democracy and republicanism, using the former to solve the problem of who is the majority while relying on the latter to ensure that the minority’s rights are not infringed upon while conforming to the majority. China’s new party system taps into the advantages of democracy and republicanism by respecting the will of the majority while allowing other parties besides the CPC to express their opinions.

All political parties in China work together toward the common goal of building a stronger country and realizing the prosperity of the people. They understand and communicate with each other to effectively avoid competition.

China has built a more rational and

efficient decision-making mechanism, namely consultative democracy. Today, there are two kinds of democracy in the world - electoral and consultative.

China has chosen the latter which is a scientific system of decision-making, governance and supervision. Different parties work toward the national interest and people’s welfare in the process of consultation rather than striving for the interests of their own members.

China needs an efficient and rational decision-making mechanism as it has a huge population. Political consultation emphasizes the role of the system and respect for procedure while evading the social fragmentation caused by the ideological differences between political parties. The political consultation system advocates dialogue and inclusiveness, and represents an important contribution to the political civilization of humanity.

The CPC-led system of multiparty cooperation and political consultation is an innovation unique to China, with its roots spanning the vast expanse of the country’s past and present. Benefiting from achievements made in the progress of human politics, it breaks the pattern of repetitive party alternation and widens mankind’s vision. China’s new type of political party system provides a distinctly Chinese solution in mankind’s creation of a democratic, harmonious and beautiful political and social life. * (The author is a research fellow at the Party Building Base of the Party School of Beijing Municipal Committee of the CPC and the Coordination and Innovation Center for the Research of Socialism with Chinese Characteristics in Beijing Colleges and Universities.) * Comments to niyanshuo@chinafrica.cn

Scan QR code to visit ChinAfrica’s website

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WORLD

$81bn

Rise in investments in companies that produce nuclear arms from 2016 to 2017, hitting a total of $525bn, according to the 2018 ‘Don’t Bank on the Bomb’ report. Analysts warn about a new arms race between Russia and the United States.

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The Congress of China’s Communist Party approved the lifting of term limits on the presidency, allowing President Xi Jinping to rule for life, should he choose to. The concentration of power under Xi marks a change from the more collective Chinese leadership of the past decades. But Xi is not as free as critics think. The Chinese public, after 20 years of improving living standards, are ever-more vocal. Economists say China needs to transition from a lowwage model to a more consumptiondriven economic model, which forces policy choices that anger powerful business interests. If Xi stumbles in that arbitrage, nothing is likely to save him.

NAPOLI/GIACOMINO/ROPI-REA

ITALY

Can the centre hold?

The EU was basking in the election of France’s President Emmanuel Macron and Germany’s Chancellor Angela Merkel, giving at least 36 months of firm centrist pro-European leadership, but it did not take long for the Eurocrats to have more to worry about. Italy’s populist parties on the right and left took more than 50% of votes in March’s parliamentary elections, casting the country into a long slog to find a workable government coalition. Luigi Di Maio, leader of the Five Star Movement (M5S) – a populist party started by comedian Beppe Grillo – is now a candidate for prime minister. His rise represents the anger of an impoverished southern Italy. Far right leader Matteo Salvini, meanwhile, represents the xenophobic and pro-Vladimir Putin voters of Italy’s north.

Bankers fear that the anti-EU rhetoric on display will at best slow down Italian efforts to remain relevant in a union with an activist France and Germany. At worst, it could trigger worrying capital flight, with Italy’s debtto-GDP ratio second only to Greece in the EU, at 130%. Some in Brussels quietly ponder whether the eurozone should have overhauled its institutions before the Italians face a Greek-style crisis. The idea of a common budget run by a eurozone finance minister now faces roadblocks from Italian members of the European Parliament who are hostile to the project.

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ISRAEL

Boo-boos for Bibi

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YE PINGFAN/XINHUA-REA

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CHINA

All that Xi wants

Populist Luigi Di Maio after M5S’s poll triumph

HUNGARY

“The West

falls as it fails to see Europe being overrun ”

In his state of the nation speech, Prime Minister Viktor Orbán warned about immigration from Africa, and offered inward-looking nostalgia to the party faithful.

With former allies becoming witnesses for the prosecution in a series of corruption cases, Prime Minister Benjamin Netanyahu is on the political back foot. He is whipping up his base with anti-immigrant rhetoric in case he decides to hold early elections – they are due to take place in November 2019 – in an attempt to take the sting out of what many analysts say are pending indictments after the police interviewed Netanyahu in early March.

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JOHANNESBURG | SOUTH AFRICA Speakers include Douglas Hoto, Group CEO of First Mutual, Aguinaldo Jaime, CEO of Angolan state agency ARSEG and Dr. Lovemore Gomera, CEO of MMI Holdings. ins.fextons.com/

ANNUAL INVESTMENT MEETING 9-11 April

Editor Patrick Smith, Mo Ibrahim and panellists at The Africa Report debates

DUBAI | UAE aimcongress.com/en/

MO IBRAHIM FOUNDATION GOVERNANCE WEEKEND 27-29 April KIGALI | RWANDA Now in its 12th edition, the Mo Ibrahim Foundation Governance Weekend visits Kigali this year, for the usual action-packed, three-day event. It begins with the presentation of the 2017 Ibrahim Prize for Achievement in African Leadership to former president Ellen Johnson Sirleaf of Liberia, whose laureateship has been met with mixed reactions. A one-day Ibrahim Forum discussing the continent’s pressing needs and a public concert of big-name African talents are also on the agenda. One of the main side events taking place on the first day will be the ‘The Africa Report Debates’, co-hosted by the The Africa Report and deliberating on the topic, ‘Is the African Union still revelant?’. mo.ibrahim.foundation/annual-event

AFRICA BANKING & FINANCE CONFERENCE 10-11 April LAGOS | NIGERIA aidembs.com/banking_ conference/

LSE AFRICA SUMMIT 20-21 April

GHANA MUSIC AWARDS 14 April ACCRA | GHANA Ebony Reigns, who was widely tipped to scoop the artist of the year award but died in a tragic car accident in February, will be honoured with a posthumous award at the Vodafonesponsored event. ghanamusicawards.com

WORLD TRAVEL MARKET AFRICA 18-20 April

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WORLD BANK GROUP & IMF SPRING MEETINGS 20-22 April WASHINGTON DC | US Finance ministers, central bankers, CEOs and academics go on their annual Spring pilgrimage to discuss global problems. imf.org/external/am/index.htm

CAPE TOWN | SOUTH AFRICA All about Africa’s travel and tourism potential. wtmafrica.com/ THE AFRICA REPORT

LONDON | UK Participants will debate the theme ‘Africa at Work: Educated. Employed.

Empowered’. lseafricasummit.org/

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TANA HIGHLEVEL FORUM ON SECURITY IN AFRICA 21-22 April BAHIR DAR | ETHIOPIA Financing and reforming the African Union (AU) will be the central theme, with AU chair Paul Kagame keen to make the continent’s peacekeeping more autonomous. tanaforum.org/

LONDON MARATHON 22 April LONDON | UK Confirmed Kenyan participants include Olympic champion and two-time winner Eliud Kipchoge, reigning men’s champion Daniel Wanjiru and the current women’s world champion Rose Chelimo. virginmoneylondonmarathon.com

AFRICAN VENTURE CAPITAL ASSOCIATION CONFERENCE 22-26 April MARRAKECH | MOROCCO avcaconference.com/

EAST AFRICA PROPERTY INVESTMENT SUMMIT 24-25 April NAIROBI | KENYA eapisummit.com/

THE AFRICA REPORT DEBATES 27 April KIGALI | RWANDA Our side-event at the Mo Ibrahim Forum (see above). theafricareport.com/TAR-Debates/

FRANCIS KOKOROKO FOR TAR

4TH AFRICAN INSURANCE FORUM 5-6 April

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Tundu Lissu Chief parliamentary whip, Tanzania

Tanzania has always been an autocracy

A

t lunchtime on 7 September 2017, I was followed home from parliament.

Outside my home, two gunmen emerged from a car and opened fire at close range with sub-machine guns.

My car was sprayed with 38 rounds of bullets, 16 of which hit my body. I was flown to the Nairobi Hospital in Kenya for emergency treatment. My lead surgeon later told me that I lost my entire stock of blood three times over.

As I write, I am preparing to undergo my 19th round of surgery. My attackers have not been identified, and the government’s response is a wall of silence. A parliamentary inquiry was ordered, but this appears to have been torpedoed as any discussion on the parliamentary floor has been prohibited. To add salt to my wounds, payment of my medical costs and personal allowances – which are my statutory rights – have been withheld.

Threeweeksbeforethismindlessattackonme,Ihad publicly embarrassed President John Magufuli on the national stage. Most of the money he had earmarked for the overhaul of Air Tanzania, which comprised a large part of Tanzania’s foreign-currency reserves, had been squandered. Newly purchased Bombardier aircraft were seized by Sterling Engineering, a Canadian engineeringcompanythathadwonanarbitrationcase against the government after a contract to upgrade roads was not honoured. To make matters worse, Magufuli had been minister of works when the government defaulted on the contract with Sterling. By sharing this fact, I hit a raw nerve.

To be sure, my attempted assassination is a dark moment in Tanzania’s recent history, but it is certainly not an isolated incident. Magufuli has overseen a brutal crackdown on the opposition since he came into office in November 2015. I have been arrested six timessincethen,andmycolleagueZittoKabwe,leader of Alliance for Change and Transparency-Wazalendo, has been arrested several times as well. Just two weeks before I was attacked, the Dar es Salaam offices of my lawyer, Fatma Karume, were bombed. There have been dozens of abductions of journalists and

politicians, and a litany of attacks by special forces known as ‘zombies’ against opposition members.

But to those who are surprised by these developments, I ask you to consider some history. The very idea that Tanzania is sliding from a beacon of democracy into an authoritarian state is based on a woefully erroneous assumption that we were and have always been a functioning democracy and a liberal state.

If democracy was what we had hoped for, then we were doomed from the day the Tanganyika African National Union (TANU) and the Afro-Shirazi Party (ASP) assumed power. After independence, TANU and ASP laid the foundations for what is now known as the ‘imperial presidency’.

Tanzania’s first president, Julius Nyerere, prevented a bill of rights from being introduced. He also passed the Preventive Detention Act, which empowered the president to detain indefinitely and without trial anyone deemed to be a threat to national security.

Just a few years after independence, Tanzania had become a one-party state. But the citizens of Tanzania, confident that TANU and ASP were

‘When you eat from a blind man’s plate, don’t touch his hand’ – Kiswahili saying safeguarding their hard-won freedoms from colonial rule, sat back in trust or in fear, blind to the fact that their freedoms were being systematically eroded by the very people who had fought for this value.

Soon enough, freedom was relegated to oblivion, and the narrative became one of ‘nation building’.

It would eventually evolve to become Ujamaa na Kujitegemea (socialism and self-reliance), Nyerere’s famous socialist initiative. In reality, the imperial presidency was tightening its grip over the country and a cowed population.

Between 1973 and 1977, more than nine million rural inhabitants – about 75% of the population – were forciblymovedfromtheirancestrallandstonewvillages in the name of Ujamaa. No regard was paid to land tenure systems or land rights, and no compensation THE AFRICA REPORT

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whatsoever was paid for the destruction of their settlements and loss of their livelihoods. During this period, thousands were detained without trial on Nyerere’s orders; people’s assets were nationalised without compensation; the economy became tightly state-controlled; and the freedom that Tanzanians had expected after independence was replaced with one mantra: “Ujamaa na Kujitegemea.”

Tanzania became a nation consistently on the verge of starvation. Between 1964 and 1984, Tanzania had to be rescued from famine by food aid, grants and loans from the International Monetary Fund, the World Bank and donor countries. In fact, our staple food, ugali, made from maize flour, came to be known as ‘dona’ as a result of the hundreds of thousands of packages of maize flour stamped “donor” that came from the United States.

In 1977, ASP and TANU united and formed the Chama Cha Mapinduzi (CCM). With that union, Tanzania was given the union constitution of 1977, which entrenched the one-party system, defined Tanzania as a socialist country and fortified presidential imperialism. It was not until 1984 that concessions – in the form of a watered down bill of rights and presidential term limits – were made.

It was only in 1991 that the CCM dared to contemplate the return of multiparty democracy. In 1992, the government amended the constitution to reintroduce multiparty democracy, but the foundations of the imperial presidency were never touched. Each subsequent president has jealously guarded the THE AFRICA REPORT

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powers of the imperial presidency, blissfully unaware that one day he too will be a citizen subject to the powers of another imperial president.

Magufuli is different from his predecessors. Former presidents were fully conscious of their vast powers, but they were careful to hide them. They practised the Kiswahili saying ‘ukila na kipofu, usimshikemkono’ (When you eat from a blind man’s plate, don’t touch his hand.) So the blind, both in Tanzania and abroad, believed that Tanzania was a multiparty democracy, while it was in fact a one-party autocracy.

Magufuli has declared an absolute ban on public demonstrations. On the pretext of saving government expenses, Magufuli has banned the live transmission of parliamentary sessions. What is available for consumption is determined by Magufuli, as he warns newspapers, TV and radio stations about their contents. Even social media has been subject to Magufuli’s whims. Youths have been arrested and charged for criticising Magufuli on their Facebook pages. Members of WhatsApp groups have been arrested and charged under the draconian 2015 Media Services Act. Fortunately for all of us, John Pombe Magufuli sees no reason to refrain from touching the blind man’s hand, and Tanzanians are waking up to the fact that we permitted CCM to take all our freedoms on the pretext of nation-building. With that awareness, trust in those who allegedly brought us freedom is eroding slowly but surely.

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New de

Kenya’s Standard Gauge Railway line, financed by China and built by the China Road and Bridge Corporation (CRBC)

By Stephen Chan

C

hina’s long-term interests as a rising power are in the spotlight across the world.

Former United States (US) secretary of state Rex Tillerson launched his Africa tour in March with strong criticism of China’s role on the continent. Going in all guns blazing was a way for Tillerson to draw attention in the US media and to help construct an agenda. A lot of damage has been done by Donald Trump’s remarks about Africa. There is criticism that the US administration seemed to be neglecting the region. Perhaps Tillerson’s remarks can be seen as a compensation.

General Thomas Waldhauser’s remarks about China’s base in Djibouti

partures

are in a different category. The head of the US Africa Command told the House Armed Services Committee on 6 March he was concerned that the Chinese may take over the port, which services US military operations. Djibouti, as China’s only overseas military base, has a strategic value. It is at the apex of some key international trade routes. The general may want to talk up the threat. Many countries – China, France, Germany, Italy, Russia and the US – have bases in Djibouti. Perhaps the US concern is that China is using its presence in Djibouti to build up its capacity. They should be delighted that China is basing its ships there, as it gives them a good opportunity for reconnaissance.

THOMAS MUKOYA/REUTERS

Both China and the United States are rethinking their long-term commitments to their partners in Africa, as the rhetorical and other rivalries between the two superpowers heat up

22 FRONTLINE | CHINA /AFRICA: NEW DEPARTURES

Justin Yifu Lin

Xu Jinghu

Chi Jianxin

Song Dongsheng

The former World Bank chief economist has been a big proponent of Africa learning from Asia’s experience. He is now based at Peking University at the Center for New Structural Economics. A backer of the idea that governments should use industrial policy to strengthen their economies, he wrote last year: “Africa desperately needs an industrial revolution if it is to create jobs for its fast-growing youth population and reduce migration pressure.”

Xu is Beijing’s special representative on African affairs.

The post was created for Zhong Jianhua, a former ambassador to South Africa who helped to shape China’s interests in Africa. Xu keeps busy with face-to-face meetings, and travelled to the Seychelles, Chad and South Africa last year. She is working on plans for the next big China-Africa summit and was a crucial player in the launch of the first Forum on China-Africa Cooperation in 2000.

Chi is an important face in China-Africa ties as the chairman of the China-Africa Development Fund (CADF), a state institution that provides funding to Chinese companies looking to invest in ventures on the continent.

As of December 2017, the CADF had invested $3.4bn in 91 projects. It is due to have a capital base of $10bn for investment in African projects, many of which have so far been focused on the manufacturing sector.

The chairman of state-owned firm Sinohydro has been signing big deals with African countries, as the World Bank and other financiers have shied away from big dam projects because of their impact on the environment and populations.

Sinohydro completed the 275MW Soubre Dam in Côte d’Ivoire late last year and is in talks to build three more dams there. It wants to be part of the infrastructure boom that Beijing has promised with its One Belt, One Road strategy.

For Trump, China’s presence in Africa is low on the list of priorities.

There is dialogue all the time about Africa. We hear that Tillerson checked in at the same hotel in Addis Ababa as Russia’s foreign minister Sergey Lavrov.

I would be surprised if there was not a discreet meeting. African governments should be able to find ways to benefit from the competition between different powers, but it is easy to say that and much harder to do it.

Africa is not at the top of China’s priority list either and it is not something that is going to claim primacy of attention.

The Chinese have been very concerned about the North Korean issue, and they are very concerned about making sure that the One Belt, One Road construction initiative gets up and running. They are genuinely concerned about building up a presence in the Asia Pacific region. In all of this, individual African countries are down the list.

Beijing is building up its diplomatic capacity just as the US seems to be winding down its own. China is putting money into peacekeeping and humanitarian operations. Beijing is making an investment. Look at the numbers of visits to Africa by its presidents and prime ministers; compare those numbers with the trips by top officials from Britain, France or the US. Specialised agencies, such as the Chinese prime minister’s State Council and the country’s think tanks now have a lot of expertise on Africa. So the division

of labour there is to have more kinds of things prepared in advance … for when the presidency thinks it’s time to take initiatives on Africa policy. But in terms of being consumed with Africa 24 hours a day, that’s definitely not the case at all.

Having said that, China’s future scenarios do need Africa to be cooperative and friendly. Look at the size and structure of the investments they’ve made. They are front-loaded so they would like an assurance there would be redemption of that investment in the future. Just because Africa is not top of the list, it doesn’t mean it is bottom of the list either.

China-Africa trade (US$ billion) 250

China’s exports to Africa China’s imports from Africa Total trade

200

150

100

SOURCE: UN COMTRADE

J. CHAN/EYEPRESS/NEWSCOM/SIPA; TWITTER OF THE MINISTRY OF FOREIGN AFFAIRS OF THE REPUBLIC OF UGANDA; B. LEVY FOR JA; WLADIMIR JÁTIVA/VICEPRESIDENCIA ECUADOR

bankers, builders uilders and think thinkerss focused ocused oon Africa ca Chinese bankers

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0

2010 2011 2012 2013 2014 2015 2016

The political effects of ending term limits in China President Xi Jinping’s lifting of terms limits on the presidency will not have any direct effect on Africa because the continent has already taken a turn towards forms of limited democracy. And there is a lot of pressure on presidents who want to overstay their welcomes. The Democratic Republic of Congo (DRC) is a case in point. So, the Chinese example of president Xi being in office longer than two terms is not going to be determinate.

Opposition does exist in African countries of a kind that’s not possible in China. Those opposition movements are not going to want to have to roll back on the limitation of presidential terms in their countries.

As for the Chinese themselves, I think there is a weary resignation that this man is going to be around for a long time and that he is going to be some kind of elevated demi-god type of figure like Mao Zedong became. He will be tolerated if he can keep producing the goods in terms of the continual rise in the standard of living. This brings us full circle, of course, because this will depend on the success of international trade.

Xihastodeliverprosperityandstability, and he needs to have a foreign policy, an international trade and investment policy. China does not want to run down itshugesavingspilebeyondacertainpoint.

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CHINA /AFRICA: NEW DEPARTURES | FRONTLINE 23

Sim Tshabalala

Lamido Sanusi

Arkebe Oqubay

Ismaïl Omar Guelleh

With 20% of South Africa’s giant Standard Bank owned by China’s ICBC, chief executive Tshabalala is a key financial dealmaker.

In January, Standard and ICBC announced that they are the biggest contributors to a $8bn investment in Mozambique’s burgeoning natural gas sector.

In the hope of being involved in more projects that bring African and Asian investors together, Standard Bank set up the Africa China Banking Centre in 2017.

In 2013, the then governor of Nigeria’s central bank wrote in the Financial Times: “China takes from us primary goods and sells us manufactured ones. This was also the essence of colonialism.”

Sanusi is now the emir of Kano and he continues to urge African leaders to adopt a more strategic approach to China’s interest in Africa. Last year, he went to China with a team of officials from Kano State and went away with deals for a textile plant and other projects.

Recent Ethiopian governments have been inspired by China’s strong state and its development path. As special adviser to the prime minister, Oqubay is involved in Addis Ababa’s planning for the country’s own industrial revolution, which is attracting Chinese textile investors and business leaders from other economic sectors.

Setting out his stall, Oqubay told media last year: “Africa is perhaps the last frontier on the earth for textile production.”

Perhaps no other African president has embraced China so deeply and fully. Djibouti is home to a new Chinese naval base and is polkadotted with Chinese rail, port and other projects (see page 26).

Analysts are issuing warnings that the projects must pay off as planned if the government is going to be able to repay Beijing billions of dollars. With Djibouti’s strategic position, Guelleh is also welcoming the military bases and investment of other world powers.

Africa’s growing debts to China When you add it all together, China has a very large commitment to Africa.

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return on their money. They certainly they don’t have stability in terms of the African partner on fiscal issues, then need to recuperate their money. There is anxiety in China that this should they can be very reluctant to take too not become a liability in the future, so many risks themselves. they are applying banking criteria and attaching conditions.

China’s scramble Even if a loan is, to a large extent, a for strategic minerals soft loan, it either has to be repaid or to be renegotiated into some other kind of The Chinese want to secure the best posliquid asset. A lot of African countries sible deal, and if this means getting into bed with companies such as Glencore, are being careless about how much debt they are taking on, on the assumption they would be prepared to do it – not only that China will write down in mining but also in petroor write off these debts. leum exploration. Now, the I don’t think the Chinese Chineseknowthatyouhave have got a strategy to a concentration of cobalt in The value of loans make African countries the DRC, just as they know China extended to there is a concentration of indebted. There is meant African governments platinum in South Africa to be some kind of control and state-owned and some kind of African and Namibia. They will enterprises between agency when it comes to be very careful to secure 2000 and 2015. financial management. some kind of entry point Angola received the This is where the Chinese for platinum and cobalt. highest amount, do have a line. In other All this is looking into with $19.2bn in words, if it all gets too the future, it is a strategic cumulative loans over the 15-year period. careless on the part of the interest. No one needs the partner government, then, cobalt now. Although we’re as in the case with Zimbabwe, they are making a turn to electric cars, it is going to be some years before we have a fully prepared to see, let us say, unorthodox change take place. electrified car network throughout the I do not think it is going to be a battle Western world, never mind the rest of of ideas, certainly not of ideologies like the car-driving world. What is at stake in the past. But that is something that now is ownership or strategic interest in the Chinese would like the Africans to minerals like cobalt for the future. Just howmuchofalonggame aretheChinese emulate – a greater capacity to direct going to be prepared to play for this national finances at central bank govparticular mineral? They have already ernor and finance minister levels. They want to have a surety of relationship. If got long-term futures in petroleum and

$94.4bn

SOURCE: UN COMTRADE

the stock market. They’ve got to control the overheating of the property market.

PresidentXihastobringprogresstobearon alloftheseareas.Andifheisnotsuccessful, no matter whether or not he serves two terms, three terms, or whatever, pressure willbuild up withintheCommunist Party for him to go. My assumption is that President Xi will not want to have term limits removed for officials beneath him, because of course he wants to maintain ways of getting rid of people.

You’re going to see smarter forms of central control. In many countries, civil society is much more inventive with media, as both governing parties and opposition parties are slow to catch up with mobile and internet technologies.

So this can still be a citizen-led revolution in many, many jurisdictions. China can censor communications because it is one country with one gigantic, joined-up network. That’s just not the case in Africa, where there are so many providers and where communications services cross national boundaries. One company may provide communications for three or four countries in Southern Africa. China is a very different example to what you get in the more fragmented African situation.

D. ANGERER/BLOOMBERG VIA GETTY IMAGES; V. FOURNIER/JA/REA; AIDA MULUNEH FOR TAR; V. FOURNIER/JA/REA

presidents, fi financiers i and d pl plaann ners woorrking with t China Africcan president

24 FRONTLINE | CHINA /AFRICA: NEW DEPARTURES

platinum. Even for China, there is going to be over-exposure at some point. So they are likely to drive a very hard bargain in a place that is as volatile as the DRC. Analysts have voiced concerns about the Chinese economy and the role of its market in global demand for resources. It is a very, very big one, and there are all types of corrective mechanisms to withstand trouble hotspots. It’s going to take an awful lot to bring the entire economy of China into some kind of endangered zone.

Non-interference and Zimbabwe’s transition General Constantino Chiwenga was in Beijing shortly before the coup in Zimbabwe. I’m absolutely certain, although there is never going to be any iron-clad evidence, that the Chinese were informed of the options that Chiwenga was facing.

And so the Chinese said they would not intervene.

One thing the Chinese quite like is stability, not only in China but in its relationships with other countries. They put a high premium on good management. It is clear that those things were left behind during the last years of former president Robert Mugabe. The Chinese were concerned about pouring more good money after bad, so I think they were happy to see there would be a change of regime. What surprised a lot of us was that the Chinese did not come immediatelytoZimbabwe’seconomic aid. The government is in arrears to international financial institutions and has billions of dollars in foreign debt. There will not be any serious discussion about renegotiating the debt until those arrears are paid off.

China, like the Western powers, is waitingforevidencethatMnangagwa is serious. For the Western powers, the elections this year are a litmus test. I’m not sure what the litmus test is for the Chinese. Perhaps they want to see more heads rolling in terms of the anti-corruption campaign. This makes it difficult for Mnangagwa, as some of his closest lieutenants have been massively corrupt.

Stephen Chan is rector of London University’s School of Oriental and African Studies

Zimbabwe Lighting up a new relationship Chinese investment and demand for tobacco have contributed to a boom in small-scale farming in the Zimbabwe countryside, but can the good times last?

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fter the party, the reconstruction.

Any jubilation at political change in Zimbabwe is tempered by the damage inflicted by two decades of decline. As President Emmerson Mnangagwa’s administration surveys the wreckage done to the economy, a clear list of priorities emerges: rebuilding infrastructure, restoring vital services and bringing investment back into agriculture, mining and tourism.

One area, however, remains bright: tobacco. For the past decade, tobacco sales by small farmers have allowed a new narrative to emerge around land reform. About 100,000 new black farming families grow tobacco, and, after a huge slump, export volumes have returned to where they were at the turn of the century.

To a great extent, this is the result of Chinese investment. With an estimated 300 million smokers in its population, demand for tobacco products in China is high. When Zimbabwe’s ‘fast-track’ land reform started in 2001 – seen by some as a long-due redistribution of stolen property and by others as a brutal seizure of land handed over to political allies – it disrupted tobacco exports. To ensure a steady flow of tobacco and cigarettes, state-owned China National Tobacco Corporation opened a Tian Ze subsidiary in Zimbabwe in 2005 to buy and export tobacco products to China.

“Thanks to our soil and our climate, tobacco in Zimbabwe is some of the world’s finest,” says Andrew Matibiri, chief executive of Zimbabwe’s Tobacco Industry and Marketing Board (TIMB).

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Farmers often travel long distances to sell their crop at the Tobacco Sales Floor in Harare

“At the end of the day, better investment in tobacco farmers will create a better quality product for Chinese buyers,” says Olivia Macheri, a tobacco buyer for Tian Ze. The company has installed centre pivot irrigation systems and tobacco drying infrastructure alongside more classical extension work like advice and seed stock.

Sciences. Through contracts, farmers are not only provided with inputs – such as fertiliser, tools and other necessary equipment – but are also given a prearranged price for the final product, one that is often higher than what they could earn on the auction floor.

CHINESE NOT RACIST As Toendepi Shonhe, a Some farmers prefer doing business with Chinese post-doctoral research fellow at the Centre for African Studies at investors. “When Chinese Cape Town University, says: investment came in, they made it a level playing “Contract farming increased competition between tofield,” says one smallbacco companies because scale tobacco farmer farmers could shop around based just outside of China remains the for a better deal. Tian Ze’s Harare. “Chinese invesnumber one export competitors were forced to tors don’t care about the destination of change their models.” colour of your skin – only Zimbabwe’s tobacco on the quality of your Sakata adds: “The tobacco as of November 2017, product. I think black industry went from strength importing more than to strength, and others took farmers are doing much 47m kilograms at an notice. China opened up better since the Chinese average price of $7.77/ the door to other investors entered the market bekg. South Africa is from Japan, the United Arab cause they don’t take race in second position, into account.”

Emirates, and others – many followed by Belgium and Indonesia. of which have started conThe current economic tract farming in Zimbabwe.” and financial context has For Ronnie Atenzi Danga, managing created some difficulties in the industry. director of Leanrise Agriculture and For instance, the cash shortage means that setting prices is a challenge, says presidentof theAgroDealersAssociation of Zimbabwe, contract farming has Cephas Rukweza, the chief executive benefited many small-scale farmers of Agritrade Leaf Tobacco, based in in the sector. “Previously, small-scale Harare: “For example, payments for farmers were overlooked in favour of tobacco on the auction floor can be large-scale producers. But as the market made electronically – using EcoCash, grew, buyers looked to small-, mediumOneMoney and a variety of other and large-scale farmers to fulfil growing mobile-money payment systems. But needs. As a result, small-scale farmers if buyers can pay in cash, they will were able to get a fairer price for their usually get a discount. And the price changes again if someone is buying in products,” he says bond notes or in US dollars. Now we Tian Ze also introduced programmes are in a situation where there are so of interest-free loans, technical help and education as well as subsidies for inputs. many prices for the same product,” says Rukweza. “Smaller-scale farmers – who Zimbabwe Tobacco Regional Exports arguably rely much more heavily on (Jan-Dec 2016) cash – are losing out,” he adds.

European In the long-term, contracts could Union be problematic for the industry.

13% “Currently, the proportion of trades Europe carried out on the auction floor are fall(outside EU) ing dramatically as contracts become 9% much more popular. And if auction East Asia Middle trading ceases to exist, prices could 6% East 52% collapse and farmers will struggle,” the University of Zimbabwe’s Sakata says.

In 2016 The Africa Report spoke to 20% several tobacco farmers who said they Africa were getting out of the industry: despite

“And its quality and flavour is particularly sought-after by the Chinese.”

Certainly, 2005 was a trying time for Zimbabwe. The indigenisation policies that took land from the white minority and gave it to the black majority led to the imposition of international sanctions, and many international investors pulled out. To a certain extent, China had the market to itself.

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SOURCE: TIMB ZIMBABWE

CONTRACT FARMING

“China came in to buy – that was it,” says Matibiri. “And that was a great thing for the sector because it was able to develop outside of politics.” The average price of tobacco has skyrocketed – from around $2.19/kg in 2005 to around $6.80/kg today for some of the highest-grade tobacco, according to Matibiri.

The introduction of contract farming, around the same time Chinese investment flooded the sector, completely transformed the industry. Tian Ze was the first tobacco company to use contracts in tobacco farming. “China and Tian Ze slipped into the existing framework and were able to shape the entire industry,” says Yumi Sakata, a research associate at the University of Zimbabwe’s Centre for Applied Social

SOURCE: TIMB ZIMBABWE

TSVANGIRAYI MUKWAZHI/AP/SIPA

47m

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a tough drought and crop failure, Tian Ze demanded back loans when farmers could not deliver the crop (TAR 82-83, July-Aug 2016). Other concerns include fears that small farmers will be exploited by increasing prices for inputs. As their success becomes visible, new networks of fertiliser and seed sellers, as well as farmgate buyers, are emerging to take their cut of the profit.

And there may be other more existential challenges ahead. Although

China falls way behind international standards in terms of anti-smoking laws, several have been introduced in the country.

Most recently, at the end of 2017, China introduced a nationwide smoking ban in public places that may affect demand for tobacco and cigarettes.

Critics, however, are sceptical that smokers will heed new legislation and, for now at least, Chinese demand for tobacco remains high.

“It’s a lifestyle choice,” says the TIMB’s Matibiri. “And despite anti-smoking lobbies nationally and internationally, I believe that China will remain hugely invested in our tobacco.” But with the fast growth of vaping – for which pharmaceutical-grade nicotine is synthesised from a strong strain of tobacco, requiring nowhere near the quantities that go into cigarettes – the days of bumper tobacco profits may be going up in smoke.

Kanika Saigal in Harare

Djibouti Small country, big stakes

With its strategic location in East Africa, Djibouti is building ports and other transport infrastructure to serve as a link between the continent, the Middle East and Asia

I

t is one of the most significant attempts Ababa-Djibouti standard-gauge electric to open up the Red Sea since 1250 railway line that opened to the public in BC, when Moses allegedly parted the January 2018 (see page 87). The new rail waters to help the fleeing Israelites. Three replaces the old one built in 1917. With new ports opened last year in the tiny a capacity to haul 3,500tn, it connects landlocked Ethiopia and its 95 million country of Djibouti and another one is on the way. In May 2017, the Doraleh Multicitizens to its smaller neighbour, which purpose Port, with a capacity to handle sits strategically at the entrance to the as much as 8m tonnes annually, includRed Sea on the route to the Suez Canal. ing container traffic and bulk cargo, All these logistics investments fall was launched. Doraleh’s bulk terminal into a wider strategic jigsaw: Beijing’s can handle 2m tonnes of cargo a year, One Belt, One Road initiative unveiled with space for 100,000tn in 2013, which intends to of fertiliser, 100,000tn of link 60 countries across grain, and warehouses for three continents and effectively connect the world’s othergoods.Already,heavy ships are docking, with most populous country to thousands of containers the world. In East Africa, Djibouti, a gateway to unloaded onto feeder ships from Mombasa and other Asia and the Middle East, is crucial to China’s grand smaller ports in East Africa. blueprint – a conscious Then, in June, the $64m Cost of the new port of Ghoubet and the echo of the historic Silk international airport $90m port of Tadjourah Road trade route. in Ali Sabieh, Djibouti’s – with the capacity to exsecond biggest BANKS AND BANNERS port more than 5m tonnes city. The project of salt per year from Lake And it is more than just is scheduled for Assal and 4m tonnes of an echo. In January 2017, completion this year potash respectively, were a branch of the Silkroad and is one of two new Chinese-funded air launched. They are part of International Bank opened travel infrastructure an ambitious programme its doors in the capital, upgrades. funded with loans from Djibouti. The ExportChina and Middle East Import Bank of China is countries to establish what has been setting up shop too, with its headquartermed ‘Africa’s largest free-trade zone’. ters under construction nearby. On the It will handle a projected $7bn of goods streets, some of the public buses already bear Chinese inscriptions, just like the annually and tie in the large-scale mancoloured flags on the dusty footpath ufacturing zones opening in East Africa to Asian economies. leading up to the Nagad train station.

An important element is the Aboubaker Omar Hadi, chairman Chinese-financed, 754km long Addis of the Djibouti Ports and Free Zones

Authority (DPFZA), tells The Africa Report: “We sit on two of the world’s busiest maritime trade routes […]. With 90% of global trade being carried by sea, our location makes us the gateway between Africa and the world. Djibouti has the potential to be the access point to the global economy for up to 13 landlocked African countries. All of this means that China’s hospital ship Peace Ark made a goodwill stop in Djibouti in August 2017

SOURCE: GOVERNMENT OF DJIBOUTI

$599m

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anyone willing to visit for good reasons,” says Osman Abdi Mohammed, managing director of the Djibouti national tourist office. “We have seen a more than 14% increase in the number of tourists coming since 2016, and to achieve our stated goal we are working to improve hotel logistics, transport, marketing and diversification,” adds Mohammed.

ERITREA ETHIOPIA

Tadjourah Doraleh Ghoubet

Gulf of Aden

Djibouti

INVESTMENT BRINGS GROWTH

Ali Sabieh 40 km

SOMALIA

be part of a trans-continental network reaching all the way to the Gulf of Guinea, in West Africa, connecting the Red Sea to the Atlantic Ocean.

Meanwhile, Djibouti is getting on with it. In Ali Sabieh, the second biggest city, the first of two new airports being built at a combined price tag of $599m is nearing completion. There is also a liquefied natural gas terminal that is due to be operational in 2019.

Toacceleratecommerce,businessmen and tourists can apply for visas on arrival, a process that will soon become electronic. “We are opening up our country to

VCG VIA GETTY IMAGES

Djibouti is at the forefront of the rapid growth which we are experiencing in the East African region. In particular, we are supporting Africa’s fastest-growing economy, with over 90% of Ethiopia’s goods transiting through our country.”

Funding for three of the new seaports, along with the new airports and railway, comes from Chinese loans. In nearby Ethiopia, China Civil Engineering Construction Corporation is building a new airport terminal. Djibouti-China cooperation also includes a naval base on which China holds a 10-year lease at a cost of $20m annually. This allows Beijing to project power outside of Asia.

However, another case shows that this could become a bone of contention if Djibouti is unable to repay its loans. Sri Lanka gave China a 99-year lease to the strategic southern port of Hambantota, after Colombo failed to pay down a loan of $8bn in December 2017. The South Asian country also granted numerous tax concessions to big Chinese multinationals, a path that Djibouti seems to be treading as well.

Some analysts point to the transformative nature of Djibouti’s China-backed projects. The rail line could one day

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Cumulatively, these strategic moves are helping Djibouti to achieve Vision 2035, its grand strategic plan to triple per capita income by the year 2035, as well as create more than 200,000 new jobs.

Unemployment and poverty remain big challenges for the economy. But, according to the African Development Bank’s ‘African Economic Outlook for 2018’, “[Its] economic growth has exceeded 5% in recent years, reached an estimated 6.8% in 2017, and is projected to be 6.9% in 2018 and 2019.” A similar economic outlook from the World Bank in October 2017 predicted 7% growth for the economy as a result of the recent major investments. However, there is still a lot to be done in terms of reforms to make Djibouti attractive for investors.

The country ranked 154th out of 190 countries in the World Bank’s 2018 Doing Business survey.

The capital city is dusty and hot, with temperatures sometimes reaching 42°C in February. Across the city, Yemeni refugees forge a living in the country after fleeing a protracted civil war at home.

In downtown Djibouti, new electronics stores and mini-marts are opening up to accommodate rising demand from the foreigners and returning citizens who have schooled and worked in the diaspora. Opposite the presidential office, the country’s first mall – funded by the United Arab Emirates – has just opened.

“We don’t care if it is China or Ethiopia helping us”, says Ali Farah, owner of a hardware store in downtown Djibouti, while chewing on qat, a popular local drug. “Things are so expensive in this country that we want progress, from anywhere. I import everything from Ethiopia and France. It’s not good” Nearby, taxi drivers jostle over two foreigners, happy for the influx of visitors into their country. “We see new people every time”, one of them, Said Ali Said, tells The Africa Report. “They pay well. I carry Chinese, I carry black brothers like you and I carry the French.

Money don’t discriminate.” Said also

28 FRONTLINE | CHINA /AFRICA: NEW DEPARTURES

moonlights as a tourist guide in the capital city and Ali Sabieh.

China is not alone in courting Ethiopia and the wider region.

Turkey signed an accord in 2002 to use Djibouti’s ports to trade with Ethiopia. And companies from the United Arab Emirates were involved in the Doraleh container port and the Bawadi Mall.

Turkey’s President Recep Erdogan recently stressed that Djibouti is the gateway to the African continent and Ankarawouldmaximisetheopportunity to use it. Erdogan even suggested that Djibouti’s free trade zone should be further extended to 5,000ha.

Turkey’s ambassador to Djibouti, Sadi Altinok, also mentioned plans for a Turkish economic zone close to Doraleh multipurpose port.

South Africa The Ma, the merrier

DEBT CONCERNS

Navigating the geopolitical and economic challenges that come with increased foreign interest are a big test for the government. For some, the outstretched hand of China’s President Xi Jinping brings the threat of unsustainable debt and undue pressure. Currently, Djibouti’s indebtednesstoChinarepresentsmore than 60% of its national debt. The DPFZA’s Hadi brushes away such concerns and insists that the debt is sustainable: “We are confident about the sustainability of these loans. Our multipurpose port is working at full capacity and the demand for our infrastructure keeps increasing. This proves that our investment strategy is already paying off […]. Most importantly, these are investments for the future generations of Djibouti.”

Suggestions of ulterior motives from the the eastern superpower seem to have angered a number of people in President Ismaïl Guelleh’s cabinet, including foreign affairs minister Mahmoud Ali Youssouf.

“Other countries have turned their backs on us when China agreed to help us,” he told media last September, defending the alliance.

“We did not reach out to the devil but seized an opportunity.”

Eromo Egbejule in Djibouti

This story was made possible by a grant from the Africa-China Reporting Project, University of Witswatersrand, South Africa.

Alibaba founder Jack Ma is helping African start-up entrepreneurs to learn from his company’s successes in China and apply that knowledge at home

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t did not take very long for Lars Veul to decide. After all, an invitation from Jack Ma, China’s most successful tech entrepreneur, who founded Alibaba, an e-commerce group with a $580bn market capitalisation, does not arrive every day. “It was inspirational,” admits Veul, whose parcel delivery company, Pargo, was one of 24 African start-ups selected to send representatives to Alibaba’s headquarters for training and mentoring in November 2017.

“There were lectures at their campus in Hangzhou by top Alibaba executives, including Ma himself, as well as site visits across the country,” says Veul.

“The role that e-commerce has played there is huge, with internet and mobile,

apps and technology which made things accessible for Chinese people that previously weren’t.” And, by the sounds of it, the African start-uppers were kept busy. “It’s a beautiful city, with a lake.

But between the talks and the trips, we didn’t really get a chance to look around”, Veul says.

Getting Africans to grow their own successful businesses will make the difference between another half century of dependency and genuine industrial growth, argues United Nations Conference on Trade and Development (UNCTAD) secretary-general, Mukhisa Kituyi. He says: “African entrepreneurs should not be asking successful businesses, ‘How can I distribute your THE AFRICA REPORT

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Alibaba Group headquarters in Hangzhou, China. The city has become a tech hub on the back of the e-commerce giant

have connected Chinese producers and Africa will have a smartphone, that’s businesses in far-flung villages deep in about half the continent.” the rural areas to consumers in the cities.

Government has a role to play, both A big business-to-consumer platas a catalyst for businesses and an infraform in China is Alibaba’s Tmall.com, structure provider. From China’s large investments in fibre networks and partially “and they have named some of these state-run telecoms operaplaces Tmall villages”, says Veul. He explains how tors to small e-commerce government funding and cooperativecentres, Beijing is not shy about using the e-commerce companies state to power its digital like Alibaba are co-funding centres where farmers and transformation. rural producers can come African countries, too, together to form small are not being left behind. companies and learn how Nigeria’s investment in to market and package cheap, reliable internet Chinese e-commerce products for sale into, for was essential for Yaba, giant Alibaba recorded example, the rapacious the tech hub in Lagos, a 56% increase Beijing market. to flourish (see TAR98, in its third-quarter March 2018). In South revenue in 2017 SELLING TO CHINA Africa, “government is to 83bn yuan ($13bn), really very active in trying Beyond Chinese examples, up from the 53bn yuan the African entrepreneurs to make Cape Town a tech generated during the same period in 2016. hub for Africa,” says Veul. also saw how Alibaba is using ‘big data’ to structure its “Everybody is realising the businesses – an idea that Veul wants to power and the opportunity that tech can have, and, as in China, that can be apply to his businessback in South Africa.

“We are now more actively using data, much bigger than just a few companies asking our partners and our customers, but actually a complete ecosystem of small and medium-sized enterprises and using that data to really find answers to the problems we face,” Veul says. taking the next step.”

But key to a real blossoming of the As for his own company, the China visit could be the start of that next step.

China-Africa commercial relationship Pargo has asked Alibaba if it can help will be the growth of African exporters provide last-mile logistics solutions for selling into the Chinese market. “With Taobao and Tmall, it is absolutely posChinese importers. “We are in discussion sible for a Cape Town winery to set up to see if there is an opportunity to use our an account and start selling their wines, services to get parcels into South Africa or for a Kenyan tea farmer to start selland help streamline their processes,” ing Kenyan tea on that platform,” says says Veul. That makes his two weeks Veul. “Global ecommerce is already in Hangzhou well spent.

Nicholas Norbrook happening, and I think that’s going to take off in the future.”

For that to happen, a step-change in marketing and packaging will have to take place in Africa – but here too, solutions are available. “There are a huge amount of Chinese companies who advise. We would call them digital marketers. So if you, say, want to sell some wine but don’t speak Chinese, don’t know the price range, appropriate quantities or the right shipping channels and packaging to penetrate the Chinese Jack Ma, who was rejected from 30 jobs before starting Alibaba from home, gives market, they can help you,” says Veul. advice to young entrepreneurs in Nairobi.

Nairobi None of this will happen without bandwidth, the lifeblood of the digital economy. “Not being connected to the internet today is worse than not having electricity 100 years ago,” as Ma puts it.

For Veul, there is at least slow progress: “By 2025, about 600 million people in

products?’ Africans should be saying ‘I have an idea I want to grow. How can you help me to grow it? How can you help me market it?’”

Ma, who advises UNCTAD on youth entrepreneurship, agrees on that point.

On a visit to East Africa in July 2017, he launched his $10m African Young Entrepreneurs fund to help businesses get hands-on experience: “I want them to go to China, meet our people, see all the things we have been doing, all the great ideas China has,” he said.

What the 24 business leaders saw certainly can be applied back home, says Veul. He explains, for example, how 91% of all payments done on the Alibaba site take place on mobile phones, not a million miles from how mobile-money platform M-Pesa is revolutionising commerce in Kenya. But there are more profound changes taking place in China.

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“You have to get used to failure. If you can’t, then how can you win? ”

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QILAI SHEN/BLOOMBERG VIA GETTY IMAGES

SOURCE: ALIBABA

56%

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SOUTH AFRICA

Who guards

the guardians?

Key judicial and security institutions were undermined over the course of Zuma’s two terms as president.

Fixing them is one of the new Ramaphosa administration’s top goals

By William Gumede in Johannesburg

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upid can wait. Early on Valentine’s Day, the only winged creature swooping overSaxonwoldwasanelite unit of the South African police known as the Hawks. The Hawks’ raidelectrifiedthecountry,whichhadbecome used to seeing the Gupta brothers – close allies of former president Jacob Zuma –pushing around the political elite rather than sitting in police cars.

Zuma’s strategy to secure control of the African National Congress (ANC) and the government was to appoint pliant allies to control the security and prosecuting authorities. That also helped

to stall or erase corruption investigations and prosecutions targeting him.

But as power swings to President Cyril Ramaphosa, many conscientious operatives within these sectors – clubbed into submission by Zuma-aligned bosses – are now fighting back.

Talking about the changes he wants to see, Ramaphosa said in March: “It was like praying, praying to our God, saying please come down and heal South Africa, come and heal our land. South Africa is being healed ’cause there’s a new dawn, a new spirit flowing.”

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The moment South Africans were waiting for: Hawks swoop on the Gupta residence on 14 February

in November 2017. But they only got the go-ahead for the raids from NPA head Shaun Abrahams, a Zuma ally, in February 2018. That shows how hard this particular tanker will be to turn around.

However, Ramaphosa has racked up some early successes by placing officials with staunch anti-corruption credentials in charge of the key ministries of finance, police and state-owned enterprises.

Reshuffling his cabinet in February, Ramaphosa sacked Fikile Mbalula as police minister and appointed former police commissioner Bheki Cele. He also replaced state security minister Bongani Bongo with Dipuo Letsatsi-Duba.

KIM LUDBROOK/EPA/MAXPPP

SARS: THE ROT WITHIN

prosecutions and enthusiastically moving on cases that had long gathered dust.

The Hawks have certainly been busier than usual. The arrests in Saxonwold were of suspects in the Vrede dairy scandal, in which government funding for black farmers was said to have been funnelled away to pay for the wedding of a Gupta family member.

The Hawks later raided the offices of the Free State premier, then occupied by Ace Magashule, the ANC’s new secretary general. It was under his watch that the Vrede money was disbursed. They moved on to the provincial department of agriculture, the former tenure of THE AFRICA REPORT

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Mosebenzi Zwane. Both men are close allies of Zuma and the Guptas.

The depth to which the various security services have been penetrated will limit the speed with which Ramaphosa can act. In both the raid on the Guptas’ Saxonwold compound and the Vrede scandal, suspects were tipped off. Police officers said they found “a warm bed” in Saxonwold, and Gupta brother Ajay is still on the run.

In the Vrede case, acting Hawks boss Yolisa Matakata told parliament’s police portfolio committee that the Hawks had referred their investigation to the National Prosecuting Authority (NPA)

Almost immediately after Ramaphosa reappointed finance minister Nhlanhla Nene, head of tax and financial policy Ismail Momoniat – unprecedentedly for a civil servant – said that there are “massive” corruption and governance failures in the South African Revenue Service (SARS). As Zuma put his placemen into key institutions to wear down the teeth of South Africa’s justice system, SARS remained the last bastion to retain any bite. Its investigative service is believed to have incriminating evidence against Zuma and his acolytes.

Pravin Gordhan set up SARS, and many of its top staff worked under him for a decade before he became finance minister and eventually Zuma’s most heavyweight critic within the ANC and government. But SARS is now led by Zuma ally Tom Moyane. Critics from inside and outside the ANC say SARS has been ignoring tax irregularities and allowing Zuma allies to channel money abroad. Furthermore, Moyane has been accused of purging perceived anti-Zuma SARS officials. In this financial year, South Africa reported a tax revenue shortfall of R50bn ($4.2bn).

Nene told the Federation of Unions of South Africa conference on 8 March that he is interested in reappointing former SARS senior staffers Ivan Pillay, Johann van Loggerenberg and Andries Janse van Rensburg, who had been pushed out under Moyane. Interestingly, just a day after Nene’s comments, the Hawks recharged those three over claims they spied on the NPA’s Scorpions unit. The three are due to appear in court

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Cops too close to criminals Of all the things to fix in the South African Police Service, the Crime e Intelligence (CI) division is the most urgent. It has been overly focused on political activities, with CI boss Richard Mdluli tasked by Jacob Zuma with finding compromising intelligence on Zuma’s enemies. As a result, criminal gangs have been able to operate with impunity, increasingly in cahoots with officials. The sacking of Mdluli in January – after six years on paid suspension – is a step forward. One difficulty in terms of reform is that police commissioner Khehla Sitole was appointed only recently, and will be hard to dislodge. “If Zuma says ‘jump’”, Zakhele Mbhele, a member of the portfolio committee on police, told media, “Sitole would ask ‘How high?’”

Shaking up the spooks It is not just the police who have been politicised. The intelligence services were a battleground between Thabo Mbeki and Jacob Zuma in their political tussles. These problems deepened under Zuma. Last year, for example, parliament was told that the intelligence services were used to spy on public sector employees who appeared to be opposed to Zuma.

In 2016, Thebe Maswabi, founder of the Workers Association Union, claimed the intelligence services had asked him to spy on the radical Association of Mineworkers and Construction Union. The fact that the new pick for state security minister Dipuo Letsatsi-Duba worked with Zuma in intelligence during the 1980s makes her a gamble for President Ramaphosa.

The case against the prosecution

ALDRIC RODRÍGUEZ; YU LUCK; LUIS PRADO/ THE NOUN PROJECT

There are some obvious targets for reform at the National Prosecuting Authority (NPA). Clearly, the repeated decision by NPA boss Shaun Abrahams to not prosecute President Zuma for the more than 700 cases of corruption he faces is problematic. He is likely to be sacked by Ramaphosa in the not too distant future. But it goes beyond just changing the personnel: the NPA needs an independent oversight body, wrote Gareth Newham at the Institute for Security Studies in Pretoria: “This is particularly important in a country like South Africa where officials have considerable public authority to decide who to arrest, prosecute, convict or imprison, or to award contracts worth millions to some but not others.”

Tax, the glue twixt citizen and state Nothing better illustrates the damage that Zuma has done to South h Africa than the state in which he left the South African Revenue Service (SARS). When the first SARS chief Pravin Gordhan left in 2009, Portuguese tax officials were being trained by South Africans. The investigatory services within SARS provided the last line of defence against many criminal interests in South Africa, with several mobsters being jailed for failing to pay taxes. Now, it is charged with helping mobsters hide cash. Tom Moyane, Zuma’s placeman at SARS, is under pressure over re-instating his ally Jonas Makwakwa who was accused of money laundering, and who has since resigned. Moyane is also being forced by parliament to hand over two reports used as political intelligence against Zuma’s enemies.

on 9 April. This is most likely a pre-emptive strike by the Zuma people in SARS and the Hawks.

GordhanwillbecrucialtoRamaphosa’s anti-corruption fight. He is the new public enterprises minister, and many Zuma associates used parastatals for patronage while the police – especially its intelligence services – the tax authorities and the NPA looked the other way.

Michael Masutha hasremained justice minister and thus has oversight over the country’s prosecuting authorities. He is also in charge of constituting all the commissions of inquiry into corruption – making him a powerful pillar of the anti-corruption fight. Masutha is a recent convert to the Ramaphosa cause, and retaining him is a gamble.

Masutha is not the only one to have changed his vest in a hurry when the wind started blowing in Ramaphosa’s direction. Hawks acting boss Matakata previously worked for 15 years in the Crime Intelligence (CI) division, which was controlled either by apartheid-era agents or Zuma subordinates from his days as head of the ANC’s military intelligence in exile. These included Richard Mdluli, who was suspended on corruption and murder charges in 2012.

State security minister LetsatsiDuba is another unknown quantity for Ramaphosa. She is also a late convert who worked with Zuma in the ANC intelligence structures in the 1980s. No doubt knowing that she would be scrutinised, Letsatsi-Duba told the Mail & Guardian newspaper in her first official interview that her two Zuma-ally predecessors – David Mahlobo and Bongani Bongo – were ineffective as ministers.

But beyond the thin ice of shifting loyalties, there are more substantial roadblocks to reform. They come in the shape of die-hard Zuma loyalists still in their positions and able to help shield their patron from investigations.

LEAVE IT TO THE LAWYERS

Because Zuma himself represents the pinnacle of any corruption investigation, Ramaphosa is leaving the ex-president’s fate to the state capture inquiry that is about to start. But there will be hurdles.

First on the list of roadblocks to both a Zuma conviction and broader reform is Abrahams,theNPAhead.Hehasdelayed, blocked and tried to stop the prosecution of more than 700 charges of corruption Zuma faces related to multibillion-dollar arms deals signed in the mid-1990s.

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But here, Ramaphosa is in limbo. The courts are about to set a date to hear an appeal against a December 2017 ruling that set aside Abrahams’ appointment.

And, in a twist, justice minister Masutha told parliamentarians in March: “The competence, skill, experience that [Abrahams] exudes and displays in his work [...] gives me confidence that he is the man for the job.”

AsecondkeyroadblockisStateSecurity Agency (SSA) director-general Arthur Fraser. When Zuma came to power, he immediately reorganised the intelligence sector by merging the domestic, foreign and electronic intelligence agencies into

the SSA. The SSA is a powerful agency because it vets and can block key government appointments.

But while many are clamouring for a more vigorous and visible anti-corruption drive, it may be that Ramaphosa’s strategy is that of the boa constrictor.

If so, he is not going to take on corrupt Zuma allies on the ANC’s powerful executive committee directly but instead push the police and prosecuting authorities from behind to open stalled or closed investigations, going for smaller fry to get them to implicate their bosses.

The Vrede dairy corruption arrests are a case in point. The idea is that the

lower-level arrestees will settle for plea bargains and inform on the political heavyweights. In March, the Hawks conducted a similar search and seizure at the offices of North West premier Supra Mahumapelo related to allegations of procurement corruption by officials in the office. It is very likely that in the near future cold cases involving deputy president David Mabuza – of which there are many – will be reopened. The strategy, it appears, is to lock these Zuma allies into endless legal battles, reducing their political power in the ANC and government, and giving Ramaphosa more space to govern.

Treasurer general, African National Congress, South Africa

We must lead by example One of the ANC’s top officials, Mashatile talks to The Africa Report about the need to eliminate the rot in government and corruption in the party ahead of elections planned for next year

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ormer United States president Woodrow Wilson said: “The man who is swimming against the stream knows the strength of it.” African National Congress (ANC) treasurer Paul Mashatile certainly knows the chill of being outside the mainstream of his party. He was once the premier of Gauteng Province, the minister for art and culture and a rising star in the ANC firmament, going from youth leader to party senior. But with his repeated criticism of corruption in the Jacob Zuma administration, he found himself kicked to the back benches of parliament in May 2014. Fortunately for him, THE AFRICA REPORT

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J. HOFFMANN/FOTO24/GALLO IMAGES/GETTY IMAGES

Paul Mashatile

his Gauteng connections acted as a safety net. The tight-knit band of ANC activists who emerged from Alexandra township of Johannesburg are informally known as the ‘Alex Mafia’.

And in 2014 Mashatile eventually rose to the position of chair of the appropriations committee in the national assembly, a technical committee that focuses on provinces and their budgets. It is there that he began to reach out for allies. Along with Jackson Mthembu, now the ANC’s chief whip, and Mondli Gungubele, now deputy finance minister, they started plotting President Cyril Ramaphosa’s presidential campaign plan as far back as 2016.

Not surprisingly, Mashatile was one of the first provincial

leaders to come out in support of Ramaphosa ahead of the tough and contested ANC leadership battle in December. Ramaphosa won by a mere 179 votes against NkosazanaDlamini-Zuma,Zuma’s ex-wife and preferred successor.

The Africa Report understands that Mashatile was also one of the key figures that negotiated with current deputy president and Mpumalanga politician David Mabuza to switch his support away from Dlamini-Zuma. That flip is said to have won it for Ramaphosa in December 2017.

The bruising campaign was worth it: At the ANC’s 106th anniversarygaladinnerinEastLondon, Mashatile and Ramaphosa were given a standing ovation as they entered the venue for the

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RODGER BOSCH/AFP

adds. But, in an election year, the announcement of the increase in value-added tax (VAT) drew anger from the poorest, who are often the ANC’s support base. For the first time since 1993, the country raised its VAT – up by 1% to 15% .

Mashatile argues that countermeasures will be in place. “We have zero-rated food goods for the poor and will increase social grants. But the good thing here is it will increase revenue by R36bn ($3bn) and that will enable us to have some money to fund some programmes, including free higher education,” he explains.

LIFESTYLE AUDITS

party’s fundraising dinner.

It was evident that the two were more than political comrades.

They share a long history of activism since their days in the United Democratic Front, fighting for liberation from within the country.

It is another sign of the change in the guard within the ANC, which for many years had been run at its pinnacle by members who had fought apartheid from outside the country – the so-called “exiles”, who include former presidents Thabo Mbeki and Zuma.

THE MAN WHO PUSHED JZ

Now, Mashatile is part of the inner circle of “inziles”. He occupies one of the most important positions in the party, managing the ANC’s finances. His proximity to Ramaphosa and ANC chairman Gwede Mantashe – another “inzile” – gives Mashatile heft in policy-making. He accompanied Ramaphosa and team South Africa to the World Economic Forum in Davos in January.

In an exclusive interview with The Africa Report, Mashatile describes his first two months since being elected as treasurer general as “busy” but “very exciting”.

Mashatile doesn’t have much time to spend pondering his change in fortunes,however.Nowinfromthe cold, there is work to do.

The first task was to dislodge Zuma, who attempted to cling

The “inzile” crowd: Mashatile (C) with Cyril Ramaphosa (L) and Gwede Mantashe (R)

TOWNSHIP TO TREASURER October 1961 Born in Gerhardsville, Pretoria 1983 Co-founded Alexandra Youth Congress 2008-2009 Premier of Gauteng Province 2010-2014 Minister of arts & culture for South Africa December 2017 Elected as treasurer general of the ANC

Mashatile also wants the state to manage the resources it has better.

Thatmeansimprovinggovernance at the state-owned enterprises –theelectricityutility,Eskom,arms manufacturer Denel and South African Airways. “That might even mean equity finance to stop them being bailed out by the government,” he says. The government also plans to sell off state-owned properties worth R40bn.

And beyond the technocratic rebuild, Mashatile urges an ethical rebuild too. “Gone are the days where ministers will appoint friends to boards,” he adds. “Lifestyle audits are very important if we are going to deal decisively with corruption. We as leaders must lead by example.”

Mashatile is not without his detractors. The opposition

on in an attempt to protect his posterior for as long as possible.

It was Mashatile, visibly angry at Zuma’s stubbornness and refusal to step down as president, who led the charge for him to resign earlier this year.

“Our view is that there should be a change of guard. You need to transfer power, you can’t have two centres of power. We want to see a situation where there is one centre with no tension. And the best possible way is if the state president exits,” he told a local TV station in February, just days before Zuma finally resigned.

A few hours prior to this announcement, in a very unusual move, Mashatile addressed ANC members of parliament in the national “There is a feeling of assembly building and renewed hope – they can announced that the party caucus would see the ANC is active” support a vote of noDemocratic Alliance, for example, confidence against Zuma. It was has accused him of protecting only after this threat that Zuma corrupt municipalities in Gauteng. eventually conceded.

He will hope to put those days Next on Mashatile’s to-do list behind him, in the same way that was helping to pass a budget he says the Zuma days are behind that tries to fix the government’s South Africa: “There is a feeling of finances as the country heads renewed hope because they can towards an election in 2019. see the ANC is active.” Elections With an anticipated growth rate in early 2019 will be the key test of of just 1.5% in 2018, Mashatile whetherpeoplebelieveinwhatthe says the 2018 budget was tough new ANC leadership is saying. but credible. “It was not an easy Interview by Crystal Orderson budget, but we had to stabilise in Cape Town public finances and debt,” he THE AFRICA REPORT

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Mohamed Ould Abdel Aziz President, Mauritania

I won’t change the constitution Without mincing his words, the head of state reviews some of the country’s issues, including his succession, relations with neighbouring countries and the Bouamatou saga

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ver the years, this private man had multiple public personas. At first he was known as the austere military man who seized power in a 2008 coup, but the general soon traded his combat fatigues for a presidential suit and tie when he was elected president in July 2009. He won re-election in June 2014. Omnipresent, he has laid the foundation stones for numerous projects, while keeping a close eye on the terrorist threat in the region. After having ignored the opposition’s appeals for dialogue, he ended up organising several national conferences that were unsuccessful. The opposition, which accuses him of trying to hold on to power beyond 2019, has grown weaker since its boycott of the 2013 legislative elections, leaving the door wide open for the Islamist party Tawassoul, which is growing in strength. But President Mohamed Ould Abdel Aziz’s biggest enemy remains his exiled cousin Mohamed Ould Bouamatou, who has been the subject of an arrest warrant for corruption since August 2017.

The organiser behind the G5 Sahel

regional anti-terrorism force, Abdel Aziz is also focused on the international front. He will host France’s President Emmanuel Macron on the eve of the African Union summit taking place in July.

You said you were not going to run for a third term in 2019. Are you going to keep this promise?

MOHAMED OULD ABDEL AZIZ: People are bound to always have doubts! I respect and adhere to the constitution’s two-term presidential term limit. Obviously, we revised the constitution, but that particular article was not changed, and I won’t change it either.

Do you have a successor?

I haven’t made my choice yet, but time will tell. Each one of the 3.5 million people in Mauritania is free to stand as a candidate.

The highly anticipated November 2017 release of blogger Cheikh Ould Mohamed Ould Mkheitir, who was sentenced to death for apostasy, was met with mixed reactions. In this tense climate, why would the government choose to enforce sanctions against apostasy?

POWER POLITICS 20 December 1956 Born in Akjoujt 1977 Joined the military

The people wanted it that way, and the laws are made by the people. There were many demonstrations. I would even say 90% of Nouakchott took to the streets to seek justice. We responded to this popular request.

We are not obliged to imitate what goes on in other places if it undermines the stability and interests of our country.

2005 Led a coup to unseat Maaouya Ould Sid'Ahmed Taya 2008 Promoted to general and later overthrew then-president Sidi Ould Cheikh Abdallahi 5 August 2009 Became president of Mauritania 10 January 2014 Elected president of the African Union for a one-year term

Are we not witnessing a re-Islamisation of Mauritania?

We are 100% Muslims, and we practise a moderate Islam where we apply the precepts exactly as they have been taught. Extremism hasnoplaceamongus.Killingpeople, blowing yourself up, pointing accusing fingers: that isn’t religion, and it’s very far from Islam.

Is establishing dialogue with the opposition still a possibility?

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WATT ABDEL JELIL

than 25 years under the former regime? Our aim was not to cause him any concern, especially since he supported us. But we have an obligation towards our electors […] Ever since we started to see his dealings more clearly, especially in terms of taxation, he immediately left the country. There were actually businessmen financing and equipping our army. When we were the target of an attack in 2005, these same businessmen who were bringing the country to the brink of collapse offered logistical support. That is not normal.

At a certain point, the state no longer existed. This explains the two military coups that followed.

It is neither planned nor feasible. We are not closing the door, but I am not going to organise an umpteenth, and I say umpteenth, dialogue. I don’t want to spend my two terms engaging in dialogues. I need to work, to build the country andto implement my programme.

SenatorMohamedOuldGhadda, whowasarrestedinAugust2017, is accused of buying the vote of senators who opposed your constitutional referendum. Aside from the opposition, countless associationsandeventheUnited Nations (UN) have denounced it as an arbitrary detention.

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happening there. This former senator behaved in an irresponsible manner and he is now facing the justice system, which has enough evidence to continue to detain him. The state did not fabricate the evidence. The UN sent us a message and we provided all these details in our reply.

“I don’t want to spend two terms engaging in dialogues.

I need to build the country” Exiled businessman Mohamed Ould Bouamatou, who says he is the target of a witch hunt, claims to have generously sponsored your close allies, even funding your2009presidentialcampaign.

Yes, he was generous enough to finance part of my 2009 campaign.

But why did he leave if he was doing legitimate business for more

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You’ve always maintained a neutral position with regard to Western Sahara. But what is your take on this matter?

As long as we are not able to deal with the issue, we will lag behind other African regions that are working together. There will have to be a lot of sacrifices on both sides and above all, there has to be the political will to solve the problem that goes beyond the rivalries between countries and has a global vision of the Maghreb region in mind.

Will the Arab Maghreb Union ever take off?

We remain hopeful. If we don’t create it ourselves, we would have failed a big part of our mission.

But I’m sure future generations will see it through.

You spearheaded the creation of the G5 force for the Sahel, a framework that appeared largely dormant before several funding rounds and financial pledges these past few months.

What is it lacking in order to become fully operational?

You always need to have a longterm vision, bearing in mind that we will not achieve everything on our own. We are therefore working to create an airline and the feasibility study has already been completed. We are going to pool our resources together.

Interview by Justine Spiegel in Nouakchott for Jeune Afrique

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SEYLLOU/AFP

Buhari has been losing support in the Middle Belt and south-west on security and the economy

NIGERIA

Back to the drawing board

Constitutional reform is suddenly top of the agenda again, with distribution of oil revenues and security the burning issues ahead of elections next year

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or so many, it is the main question in Nigerian politics; for some, it is the only question. It comes down to the organisation of Nigeria: how can some 180 million people share political power and the income from an economy that generates $500bn per year?

Few like the status quo. For tens of millions of Nigerians living on $2 per day, the current system is corrupt, unfair and run by remote politicians in Abuja. For much of the business elite, the centralised government, with its massive equity stakes in the economy,

is holding back growth and trade. And for the political elite, arguments turn around the mooted solution to these problems: ‘national restructuring’. It has been a perennial issue, one debated even before independence in 1960. “In some countries, patriotism is the last refuge of the scoundrel,” jokes a local politician in a Lagos bar. “In Nigeria, it’s the constitutional conference.”

His scepticism is widely shared. Every administration – civil or military – tries to concoct its own answer to the constitutional conundrum. Sometimes,

it is just a matter of political convenience. Hard-pressed leaders know that promises to create more states, viable or otherwise, can win votes.

Bishop of Sokoto Matthew Hassan Kukah, who served as secretary to the last government’s National Political Reform Conference, argues its conclusions merit serious consideration. The formula adopted by that conference – more powers to the state governments on security and social policy, and allocating states in the Delta most of the revenue from oil production – was frozen after then president Goodluck Jonathan lost elections in 2015. According to Kukah, this is part of the problem: the exploitation of the constitutional issues by partisan politicians. “Our situation in Nigeria […] has been that a new government comes and wants to do everything afresh. With this government, the report of the national conference has become a political football,” he adds.

Initially, President Muhammadu Buhari’s government and the ruling All Progressives Congress (APC) showed little interest in reforming the constitution.

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Some of this is coming from the Buharri government’s big investment planss, vice-president Yemi Osinbajo told a news conference on 9 March: “We aree building the Lagos-Kano rail, doing thee Lagos-Calabar rail, the second Nigerr Bridge and the Mambilla hydro project […], we are improving capacities in power, in things that will create an economy that can support a large number of graduates.” Apart from arguing that its team of ministers and heads of state companies is much more inclusive than critics claim, Buhari’s government now acknowledges that constitutional reform is topping the political agenda again.

Atiku Abubakar, a former vicepresident now vying for the presidential nomination in the opposition People’s Democratic Party, says giving more powers to the country’s 36 state governments is a top priority. Partly for economic and security reasons, according to Atiku.

Others see it as a matter of votes.

From Adamawa State in the northeast, Atiku criticised what he regards as the government’s slow response to herder-farmer clashes in the Middle

Atiku Abubakar criticised the government on policing after the February abduction of another 110 schoolgirls in Yobe State.

MORTENFAUERBY.DK

MORE POWER TO THE REGIONS

“We […] encourage girls to go to school only to allow them to be abducted ”

Belt, which are reckoned to have killed some 2,500 people last year. He condemns some politicians’ explanation of the violence as a fight between Fulani herders and Christian minority groups: “Whenkidnapperskidnap,” Atikutoldthe Lagos daily This Day, “we do not identify them by their ethnicity. We identify them as kidnappers, pure and simple. There may be fringe elements with criminal tendencies. Some may be Fulani, some may not.” On that, but not much else, Atiku and the Buhari government agree.

Radical groups such as Afenifere in the south-west and Ohanaeze Ndigbo from the south-east, along with groups from the Niger Delta and the Middle Belt, held a convocation in January entitled ‘A Handshake Across the Niger’ to push for more powers to the regions and states.

But sharp differences remain.

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Some demand secession, others want the loosest of federations, and some moderates call for a rebalancing of state revenue. At the heart of the matter is the carve-up of the $100bn a year the country earns from oil exports, between the federal government in Abuja, the 36 states and the 774 local governments.

States in the Delta want a bigger share.

Currently, they get an extra 13% of the revenue as the oil comes from their territory. Their claims seem to have won some recognition from the government’s Committee on True Federalism, jointly led by Kaduna State governor Nasir ElRufaiandJohnOdigieOyegun,chairman of the governing APC. The committee has agreed , according to Odigie Oyegun (see page 40), to devolving control over on-shore oil and gas assets to state governments. Such revenue-sharing proposals go down well in the Delta and the south-east, two regions where the APC did badly in the 2015 elections. It will be a matter of faith for the voters, as that new formula would take months, maybe years, of negotiation to reach an agreement in the national assembly. Traditionally, politicians from the north oppose more concessions to the Delta states.

FOR AND AGAINST STATE POLICE

AMINU ABUBAKAR/AFP

Critics said this reflected the dominant view in Buhari’s northern support base that no further concessions should be made on allocating revenue and administrative powers to states in the south.

Three years on, much has changed.

Although Buhari’s support has held up in the north, his party has been losing out in the Middle Belt and the southwest on security and economic issues.

At the same time, the APC has been winning over people in the south-east and south-south.

More immediately, security – and the local control of police – looms large as another area for constitutional change.

Chief of defence staff General Abayomi Olonisakin says the military is fighting at least 14 separate challenges across the country: from the smouldering Boko Haram insurgency in the northeast, herder-farmer clashes in the Middle Belt, sporadic militancy in the oil-producing zones and a new wave of separatism in the south-east.

On this, President Buhari signalled another policy change at a security conference in Abuja in February. “We cannot realistically police a country the size of Nigeria centrally from Abuja. State police and other community policing methods are the way to go.” Buhari’s speech was read by vice-president Osinbajo, but that did nothing to dull its political impact.

On the face of it, this is an abrupt reversal. Some, such as former military leader Yakubu Gowon, adamantly oppose it: “The states have all the powers they need. This restructuring is costing the nation too much,” he tells The Africa Report. Gowon goes back to the civil war and Emeka Ojukwu’s attempt to lead

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the south-east – Biafra – out of Nigeria.

“If they [the states] take responsibility for defence, then what happened to us during my time would happen again.” He continues: “That would be disastrous.

In fact one of the reasons that Ojukwu defected was that he wanted to have control of the security and police in his region. I said no, I won’t allow that to be the responsibility of the state. So he decided to break away. That is what really brought about the civil war.”

Others oppose giving states the power to run police forces, mainly because of the poor standards of governance in many state capitals. Some claim it would be setting up state governments to fail: giving them the responsibility without the resources to run effective state and community police forces.

FEDERAL FORCE AND ARMY

In practice, the establishment of state police forces will take long and careful negotiations. The federal capital in Abuja controls a federal force, as Washington does in the US system, and it will retain absolute control over the military. So the spectre of state governors becoming ‘warlords’ is a little overdone.

State governments already have some powers over policing, such as oversight on the federal police commission. And they also have a vote in the appointment of the national police chief. State governors already have access to “security votes”, which allow them to set up what are essentially mini-police forces with little public scrutiny.

Better-financed states such as Lagos have already set up public-private partnerships with commercial security companies, which operate as a local police force. Out of the country’s 36 states, only four – Lagos, Rivers, Katsina and Kano – are able to finance their budgets from their own revenue. Lagos State accounts for over 30% of the tax revenue collected at state level across the federation.

Despite Gowon’s concerns, the arguments over state police forces will be less hard-fought than agreeing a new national revenue-sharing formula. But at least two national leaders from the north – Buhari and his likely challenger Atiku – have committed themselves to fundamental constitutional change on security and oil money. And that will change the stakes in the election campaign over the next year.

Eromo Egbejule and Patrick Smith in Abuja

John Odigie Oyegun

Chairman, All Progressives Congress, Nigeria

What the people want

A

pro-democracy activist and former governor of Edo State in the oil-producing Niger Delta, John Odigie Oyegun is chairman of the ruling All Progressives Congress. In that capacity, he led a committee to produce policy proposals to reform the constitution.

How will this resource policy work in practice?

The proposal is for onshore oil and gas sites to be vested in the state [governments] while offshore locations will be vested in the federal government. This is an eminently sensible proposition, but it will have to be implemented after extensive surveys and planning […] We depend on all patriotic politicians to cooperate with us, just as the governor of Bayelsa State Seriake Dickson recently pledged in a meeting with his Edo State counterpart Godwin Obaseki.

TAR: Why did your party set up the Committee on True Federalism?

JOHN ODIGIE OYEGUN: It is an issue of popular concern. There were calls for some kind of return to the regional structure of Nigeria. But no one was certain whether we should return to four regions or whether the six geopolitical Will any major parts of the zones should become the federating report come into force before units – or, if eight new regions would the 2019 elections? be carved out, with the South-South Our intention is that this should and the Middle Belt being split into occur. We are going to try to carry additional regions. Everybody was up the party along with us and carry in arms about restructuring, but nobody the nation across party lines. We could say what it meant. We wanted are going to approach stakeholders to find out exactly what people want in the hope that people will buy into out of government rather than what the real advances in governance government should impose on the people.

“All states in Nigeria are

not equal: some are marginally others are buoyant”

Which issues will viable, take priority?

The overwhelming support for state police and community policing will have to be put in context of the existing system. The relations that will exist between the state police and the federal police force will have to be worked out in watertight regulatory codes. Some states might commence before others. All states in Nigeria are not equal: some are marginally viable, while others are very buoyant.

Our recommendations will lead to a massive rethinking of government funding. Our attitude towards the control and management of resources, especially mineral resources, will be radically transformed and the formula of sharing revenue from these resources will be reformed, with increased shares for regional authorities and reduced shares for federal authorities.

and public empowerment that these recommendations represent […]

The implementation of True Federalism will be one of the major subjects of the campaigns.

How does your report reflect people’s aspirations?

The recommendations are especially reflective of the wishes of the youth and other special interest groups. We used social media extensively, and the response from women was intense.

Our committee sat with panels of ordinary people in two locations in each of the six zones, and we think we have done a thorough job of distilling the public mood towards governance and the responsibility of political leadership.

Interview by Lindsay Barrett in Abuja THE AFRICA REPORT

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42 POLITICS

Matthew Hassan Kukah

it’s got nothing to do with the personalities running the show.

Nigerians have every reason to be afraid about a process [in which] they suspect the key actors to not be independent minded.

Bishop of Sokoto, Nigeria

Tension could boil over in almost any state

With his long commitment to interfaith dialogue and social justice, Bishop Matthew Hassan Kukah of the Catholic diocese of Sokoto sounds some warnings about threats to Nigeria’s national cohesion TAR:Youtalkaboutthemarriage of faith and the state. How does this tie in with the drive by the churches to get people to register to vote?

MATTHEW HASSAN KUKAH: This has always been our civic duty. For any political process – I don’t think it’s peculiar to us in Africa – faith spaces have been very useful because of the moral authority of the teachers themselves, and the fact that our patriotism has to draw inspiration from our moral convictions.

You have the Catholic church trying to stay politically neutral. Should priests intervene

on matters of ideology and moral values?

First of all, every citizen has to exercise their political rights. As religious leaders, our responsibility is to clarify the choices that our people make. Yes, I’ll vote for the party of my choice, but we don’t have a right to direct how people should vote.

Ho w in dep en dent is th e Independent National Electoral Commission (INEC)?

INEC as it is presently constituted has to do extraordinarily hard work to convince Nigerians about its readiness to be as neutral as Nigerians expect. So far,

Do the security crises in the country justify the calls for the creation of state police forces?

When I think of state police – and we have governors so visibly partisan in how they perceive particular conflicts – you can only imagine the consequences.

Which governors are the worst offenders?

I’m not prepared to name names. Everybody who lives in this country must be clear how people feel. It’s interesting that the governor of Kaduna State [Nasir el-Rufai] will cross into Katsina State and that he’ll receive traditional rulers from Zamfara about a crisis when I have not seen the same governor receive traditional rulers from other parts of Kaduna State.

As a Christian living in northern Nigeria, I would not contemplate anything like state police. Northern Nigeria has shown very clearly its reluctance to imbibe the instruments and institutions of modernisation. I shudder to think what the consequences will be.

Are the c ountr y’s herdsmen-farmers

Coming together in Abuja IN THE HANDS OF BISHOP MATTHEW HASSAN KUKAH, a debate about democracy and development was going to make Nigerians take notice. It did.

In walked vice-president Yemi Osinbajo, Ghana’s President Nana Akufo-Addo and former military leader of Nigeria General (retired) Yakubu Gowon to speak at the inaugural debate at the Kukah Centre, a couple of kilometres from

the national assembly in Abuja in February. All three argued strongly that democratic forms of government and guaranteed political rights were an essential part of national development.

Over two hours, experts and activists such as Dipo Salimonu, Chioma Akwuegbo and Ndi Kato ranged over the policy issues with a commitment rarely seen in parliament.

It was all very much in the spirit of Bishop Kukah. He started his remarks with some wry humour about the use of his name for the centre. “I wanted people who know me to remember it and support us. If Jimmy Carter or Bill Clinton can do it […] I thought why not me?” he added, smiling broadly.

But Kukah’s purpose is deeply serious. His aim for the centre is to build

POLITICS 43

clashes a resource war, ethnic cleansing or both?

Why does Nigeria remain in such a state of volatility? What it suggests is that there are people running the ship of state that have absolutely no idea about how to run a modern state that can deploy the huge resources that this

country has to meet the needs of ordinary citizens, creating an equitable society in which ordinary citizens feel a sense of belonging.

Are the clashes a resource war or ethnic cleansing?

It is a range of issues. Nothing is caused by a single action. These

NORTHERN NIGERIAN PEACEMAKER 31 August 1952 Born in Kaduna State, Nigeria 19 December 1976 Ordained as a Catholic priest 1990 Earned a doctorate from London's School of Oriental and African Studies 2011 Ordained as the bishop of the Sokoto diocese

grievances have been growing in Nigeria over a long period. I don’t think we have ever had a president who can talk about the cultural composition of the country. Do they know how many ethnic groups exist in their state?

Most governors have no idea.

IsPresidentMuhammaduBuhari winning the anti-corruption campaign?

As far as Buhari was concerned, corruption is recovering money that has been stolen by politicians, then putting them in prison. That is the linear view. But recovering money doesn’t necessarily mean you are fighting corruption. You stole my phone, and I managed to get it [back]. But it hasn’t stopped you from being a thief.

ALL RIGHTS RESERVED

What should be done?

Is nepotism corruption? In a plural and complex society such as Nigeria, can you explain how it is that somebody cannot find the moral authority to quarrel with it? How do people steal money?

There’s hardly any day we’re not hearing stories about monies being stolen. The question you may ask is: These allegations, have they followed through to the end? If not, why?

on his work to promote dialogue between faiths, ethnic groups and communities. Since his ordination as a Catholic priest in 1976, Kukah has worked determinedly to build bridges across the cultural, political and economic chasms in Africa’s most populous country.

He has mixed advocacy and public service through his work in many

religious forums internationally but also through his role on commissions in Nigeria on human rights violations and electoral reforms. The purpose of the Kukah Centre is to bring young Africans from all political persuasions and religious faiths to develop policies and initiatives reinforcing a sense of nationhood and social belonging.

Patrick Smith in Abuja

How do you think we will manage the elections next year?

It will be one of the greatest miracles if we pull through this election successfully. I do not see how we are going to conduct these elections if nothing urgently is done to create a sense of national cohesion. It would be difficult to find one single state where you do not have tension that could boil over. If you multiply this by the number of states in Nigeria and the little sense of urgency, it would be difficult to talk about 2019 without a sense of foreboding. I have never felt this way. I prayerfully hope the government will wake up to appreciating how bitter people feel.

Interview by Eromo Egbejule in Abuja

44

President Pompier-Pyromane

I

t was Maréchal Mobutu Sese Seko, after 30 years of Machiavellian and corrupt rule in Congo, whose regime embodied the coinage ‘pompier-pyromane’, meaning a pyromaniac fireman. The Mobutu method was to divide his political rivals, fan the flames of violent dissent and then send in the troops to restore order.

That worked, along with serial pledges of democratisation and the torture of oppositionists, until Rwanda and Uganda backed a rebellion in the east in late 1996. Nine months later, Mobutu fled for his life. That night, Anansi saw the people of Kinshasa pile into the streets for a rumba marathon.

Now the latest candidate for the pompierpyromane title is Joseph Kabila, president of the Democratic Republic of Congo (DRC). He is mixing the tactics and brutality of Mobutu and Burkina Faso’s Blaise Compaoré to stretch out his time in power. But few think he has the staying power of either of them.

The question haunting the Congolese is how Kabila will leave after 17 years of chaotic plunder. Can they avoid another political meltdown, or worse? More than four million people have already been driven from their homes by militia fighters and government soldiers. Some eight million are dependent on food aid.

Rebellions, fired up by Kabila’s local allies, raged last year in the Kasai provinces in the centre of the vast country.

This year, in Ituri, in the north-east, the Hema and Lendu people are engaged in clashes. Far from quelling the fighting, Kabila’s soldiers have joined in, prompting criticism from Uganda’s President Yoweri Museveni, whose country borders Ituri.

As this instability spreads south and westwards, could this represent yet another pretext to delay elections? Absolutely not, Prime Minister Bruno Tshibala tells Anansi.

There are “no circumstances” under which Kabila will stay in power beyond the scheduled elections on 23 December.

Tshibala, a former veteran of the historic Union pour la Démocratie et le Progrès Social (UDPS) opposition party, was speaking at the Chatham House think tank in London.

He assured those present he was personally committed to ensuring the election took

place on time and that the DRC would take its place as “une grande démocratie”. If more proof were needed, he said smilingly, the DRC has 586 political parties for its 80 million people. The electoral commission has already registered 45 million people, he insisted. Yet its operations and budgets are shrouded in mystery.

Tshibala is not a disinterested party in all this. Accompanied by a 20-strong delegation in London, he led a rump of the UDPS into a deal with Kabila, bringing it cash and some political power. Tshibala told us that he is preparing his own campaign for December. Most of the UDPS has remained loyal to the less experienced Félix Tshisekedi, son of the legendary democracy If more proof campaigner Etienne Tshisekedi, were needed, who died last year in Belgium.

The harsh reality is that the said Tshibala, DRC’s opposition forces are as that the divided today as they were under Mobutu. Launching a new platDRC would form known as Ensemble, Moïse take its place Katumbi, a former governor of copper-rich Katanga Province, as “une insists he will return from exile grande in June. That could work if he démocratie”, can form an alliance with Félix Tshisekedi and the opposition it has 586 veterans. It will require compropoliticial mise and vision.

For now, the boldest group parties for 80 pushing for free elections is the million people Catholic Church. Having mediated the Saint-Sylvestre accord, under which Kabila agreed to hold elections on time, the church activists are organising pro-democracy protests aiming to stop him engineering another term. Initially, soldiers and police tried to suppress the demonstrations, killing tens of protesters.

For many Congolese, the Catholic Church is a parallel state. It runs about half the schools and clinics in the country. That gives it a legitimacy lacked by the opposition and the government. As protestant and evangelical churches join the Catholic campaign for a free vote, faith groups may achieve what the politicians cannot.

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Cameroon

What business

wants The Africa Report talks to bankers and business leaders about what changes are needed to make the Cameroonian economy more dynamic. Topics such as fighting corruption, improving access to finance and strengthening the dialogue between the state and companies are at the top of the list

By Reinnier Kazé in Yaoundé

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The country hopes to be an emerging economy by 2035, but this may be a triumph of optimism

C

ameroon has Central Africa’s most diversified economy, but it remains one of the continent’s most difficult operating environments for businesses due to a range of issues, from poor electricity supplies to generalised corruption. Economic growth is slowing because of the recent drop in oil prices, the weakness of local demand and the security crises in the north and Anglophone regions of the country (see page 60).

Oil is Cameroon’s top export, representing more than half of total

Above: In the port city of Douala, customs officials have created their own system of bribes.

Right: Small and medium-sized enterprises account for about 90% of Cameroon’s companies, but receive only about 15% of bank loans by value, most of which are short term

president (see profile), told local media last year: “Doing Business has shown its usefulness as a knowledge tool, but it is still not able to capture the global business environment and the ease of doing business” in a country like Cameroon.

He complained that the Doing Business rankings do not take intoaccount “critical variables like legal security, corruption levels, macroeconomic stability, the quality of the workforce, the quality of infrastructure and many others”.

There are many problems that give entrepreneurs headaches, but top on that list is finance. “It is a permanent problem,” explains entrepreneur Pius Bissek. Analysts estimate that the private sector would require additional financing of 1trn CFA Number of days ROOM TO IMPROVE francs ($1.9bn) each year to get electricity The World Bank’s 2018 in order for the country in Cameroon, from Doing Business report to become an emerging submitting an ranked Cameroon 163rd market by 2035. application to Eneo out of 190 countries. Even In Cameroon, “banks do to obtaining meter installation and final though it climbed three not finance the economy” connection from Eneo places since the last suras they should, complains Bissek. In a country like vey, Cameroon remains South Africa, banks finance nearly all in the bottom 30 countries in terms of the ease of doing business. The survey is of the private sector’s needs, he adds, based on 10 measures (see graph), from saying: “But in Cameroon, it is maybe how long it takes to create a business to 20-30% at the best of times.” how difficult it is to pay taxes.

Former banker Eric Eloundou exOne area of improvement was in terms plains: “Most of the loans issued by of setting up a business, but there is a banks are for big companies, which is lot of room for improvement in many normal since they are less risky.” He now runs a firm that connects banks and other fields. Célestin Tawamba, GICAM’s SOURCE: WORLD BANK

65

NICOLAS EYIDI FOR JA

exports. To cope with the downturn, the government signed a deal with the International Monetary Fund (IMF) to help it to implement a programme of economic and financial reforms. In 2017, the country’s gross domestic product dropped to 4%, down from 6% in 2015.

Despite the downturn, the government in Yaoundé has big plans for the economy. In 2009, Cameroon launched the Document de Stratégie pour la Croissance et l’Emploi (DSCE), with the goal of making the country an emerging economy by 2035. Analysts and donor governments doubt Cameroon’s ability to meet that target, as economic growth is falling. The DSCE calls for economic growth of at least 5.9% from 2016 to 2020 in order for the economy to create enough jobs and wealth. The government is now forecasting growth of 4.2% for 2018. The IMF predicts that growth will rise from there but still not reach the target of 5.5% until 2021.

Doing business in Cameroon is a headache for many company executives due to several long-standing problems.

The operating environment was worse in 2017, according to to the Groupement Inter-patronal du Cameroun (GICAM), the country’s top business lobby, and it is not due to be any better this year.

Many local small and medium-sized enterprises (SMEs) had been counting on winning contracts and subcontracts for the work needed to prepare for Cameroon’s hosting of the 2019 Africa Cup of Nations football tournament, but most of the projects to build new stadiums and rehabilitate old ones went to foreign firms.

JEAN-PIERRE KEPSEU/PANAPRESS/MAXPPP

48 COUNTRY FOCUS | CAMEROON

companies, and says that SMEs – which account for about 90% of Cameroon’s companies – get about 15% of loans by value. Most of those loans are short term.

“Forty-five per cent of loans to SMEs are not paid back. That is an extremely heavy burden when you know that the maximum ceiling for non-performing loans that banks aim for is 5%,” Eloundou continues. That is why banks are often “wary of SMEs”.

Eight years ago, Olivier Mapouré, a young agronomist, set up a company to grow maize and raise chickens and pigs. He developed a business plan that called for an investment of 350m CFA francs to create an agro-industrial centre on more than 100ha near the centre of THE AFRICA REPORT

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CAMEROON | COUNTRY FOCUS 49

back in the afternoon.” He argues that the regional central bank, the Banque des Etats de l’Afrique Centrale, needs to implement policies that will help national banking systems to issue more medium- and long-term loans.

Ranking on Doing Business topics Starting a business

122

Dealing with construction permits

140

Getting electricity

121

Registering property

176

Getting credit

68

SOURCE: WORLD BANK

Protecting minority investors Paying taxes

183

Trading across borders

186

Enforcing contracts

162

Resolving insolvency

125

190

163

the country. In 2013, he started applying to banks for the start-up capital but has still not managed to get a loan.

Mapoure tells The Africa Report: “I did not get anything yet because I do not meet their criteria. The first thing that they asked me for was the land title, which I did not have. The second thing was collateral, like the title for a car or a house, for example.” He complains that bank procedures generally “take very long” and that interest rates are “quite high”. Microfinance institutions can charge interest of 2.9% per month, while commercial banks can charge 2%.

Mapoure says that banks have not adapted their procedures to the needs of the business community. “Banks do THE AFRICA REPORT

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not take into account the reason why you are asking for a loan. They do not let you have a grace period and insist that repayments start the month after the loan is issued.” He continues: “For example, if you are raising chickens, it is impossible to launch production and sell the first offspring within a month in order to reimburse the loan.” When Mapouré asked financiers to consider the specific risks and details of his business, they told him: “The bank’s model is based on monthly repayments.”

Bissek shares the same point of view about the way that Cameroon’s banks are working: “They should not lend you money in the morning in order to turn around and say that you have to pay it

The many complaints of the SME sector led the government to launch a bank for SMEs, the Banque Camerounaise des Petites et Moyennes Entreprises. An administrator at the bank who requests anonymity says: “The bank has lost its focus on its most important mission.

Instead of lending to SMEs, it is financing governmentprojectsbylendingtopeople who have won government contracts.”

Former banker Eloundou says that he appreciates many measures that the government has rolled out to help that sector of the business community, notably the creation of an agency to promote the activities of SMEs, an office to help small companies with training and the SME-focused bank. But he lambasts the government for failing to create a framework to coordinate the work of all of these institutions in order to be able to provide a holistic package of help for SMEs. He says that the SME bank is “a good instrument but one whose activities do not meet the real needs” of the category of companies. He argues that the bank should “develop a specialised system for the financial analysis of small companies” that could also be shared with other financial institutions.

Cameroonian banks do not have analytical tools focusedon the activities ofSMEs. Eloundou’s company Cabinet Elesyst advises SMEs and is working on a project to create group deposits to address the issue of banks asking for collateral.

Eloundou explains: “The mechanism is based on a security guarantee, with one part coming from the entrepreneurs themselves and another from partners like us or other financial partners that we could mobilise.” SMEs can get collateral worth up to 50% of the value of the loan they are requesting through the project.

As for the agronomist Mapouré, access to finance is not the only problem that he has faced. “It is not at all easy to get access to land. When there are questions of ethnicity, it becomes even more complicated,” he says. The young entrepreneur is from the western part of Cameroon and says that the price doubled once the seller found out that Mapouré was not from central Cameroon. Mapouré

50 COUNTRY FOCUS | CAMEROON

says the government should launch a series of agrarian reforms to identify people who want to put land to good use. “Those who own the land are not producing,” he complains. In Cameroon, ministers, members of parliament and military men own vast swathes of land.

The government has simplified the procedures for getting land titles, but “you have to give lots of cash if you want it done quickly,” Mapoure says.

Many business leaders active in Cameroon and potential investors point to legal insecurity as one of the big obstacles to expanding economic activity.

“What businessmen care about is time.

ButinCameroon,judicialprocedurescan take between 10 and 15 years – like mine.

It is not good,” says Bissek. In 2003, Bissek, owner of the sweetened condensed milk companyCodilait,suedtheCameroonian subsidiary of Swiss agribusiness giant Nestlé for unfair competition. It was only in 2017 that the Cameroonian justice system ruled on the matter, 14 years after the case started. The supreme court found that Nestlé and other companies targeted by the suit were guilty of inappropriate business practices and ordered them to pay damages of 517m CFA francs to Bissek’s company.

‘WIPED ME OUT’

Bissek says that the sum is a pittance when compared to what he lost. “I figured that it is 90bn CFA francs in lost income for these 15 years of lawsuits, seeing as my annual turnover before the devaluation was 3bn CFA francs.” He adds: “This unfair competition forced me to shut down my operations”, costing 200 employees their jobs. “The magistrates wiped me out.” He says that Cameroon’s judges regularly stop cases from going ahead.

As an example, he says: “A magistrate told me that if he is appointed to judge in a case and one of the parties goes to him with a briefcase filled with 100m CFA francs, he would take it. He said that in doing a rapid calculation, his salary would not pay him that much over 30 years of service. He said that even if you live with the Holy Spirit, you will ask the Holy Spirit to take a walk. And after you put the money in your pocket, you will ask the Holy Spirit to come back.”

Bissek’s advice is for the government to impose stiff disciplinary measures for judges who make bad rulings.

Corruption also increases the cost of doing business. The non-governmental organisation Transparency International

conducted a study in 2006 that found that companies in Cameroon on average spent 10% of their turnover on “non-official payments”. Business leaders often face demands for bribes in the judicial system and from the tax and customs authorities, and the police.

A finance ministry study reported in 2017 that the level of corruption was “very high” for clearing goods through customs and picking them up at the port.

Officials in charge of clearing merchandise through customs have created their own system of bribes. In code, they ask businessesfor‘fiveglasses’, witheachglass representing 10,000 CFA francs. Other officials, like those charged with inspecting

documents, ask for bribes ranging from 50,000 to 200,000 CFA francs. And if a business tries to under-report the value of its merchandise, the officials will ask for a payment of a third of the undeclared value.Intermsoftaxation,thestudyfound that taxpayer ID cards – which are officially free – are being sold from anywhere between 5,000 and 35,000 CFA francs. If the government does not invest the time and money in finding solutions to these andCameroon’sinfrastructureproblems, Cameroon’s business environment is likely to dissuade many start-up founders and big multinationals from taking their chances on making investments in Cameroon.

Célestin Tawamba

President, Groupement Inter-patronal du Cameroun

Backing business AT 51 YEARS OLD, industrialist Célestin Tawamba has notched 17 years of experience in business in a hostile environment where failure is more likely than success. Hardworking and ambitious, he was elected head of the business lobby Groupement Interpatronal du Cameroun (GICAM) – which now has more than 1,000 members – in June 2017.

His election was a reversal of fortune, as he had quit the body in 2008 after running for a leadership position and losing. He went off and founded a rival group, Entreprises du Cameroun, with insurance company boss Protais Ayangma.

Tawamba went back to the GICAM fold in 2016 and ran unopposed for the presidency in 2017.

At GICAM, Tawamba is continuing to champion

the development of the Cameroonian private sector, which is politicised and fragmented. “We have to work together based on our shared interests – which are bigger than our differences – which could be linked to the size of the companies, their sectors of activity or the nationality of their shareholdings,” he told local media. Trained at the École des Hautes Etudes Commerciales in Paris, Tawamba started his career as an audit supervisor at Ernst & Young in 1992. He started his own agribusiness firm in 2001 and later launched Cadyst Invest as a conglomerate to hold his various business interests. Cadyst now owns agribusinesses Panzani Cameroun and La Pasta, in addition to shares of health-focused firms Cinpharm and the Société Industrielle

des Produits Pharmaceutiques.

Cinpharm had the most difficulties, and Tawamba sold a majority stake in the firm to Tunisian company Teriak in 2015.

He is pleading the business sector's case to the government. He told local media: “We need tax reform. We need to get away from taxing companies based on their turnover.” He said that GICAM will launch its proposal for a new form of taxation in April.

He added: “My biggest wish is for the dialogue between the government and the private sector to be productive, that there are concrete results […] A strong economy means a strong state.”

Among his top priorities for GICAM is the launch of a guarantee fund backed by donors and government to improve the private sector's R.K. access to credit.

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ADVERTORIAL

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SAD : a market leader in housing estate development The financing, now finalised and approved, is being provided by SAD majority shareholder Communauté Urbaine de Douala (CUD – Douala Urban Community), SAD, Crédit Foncier du Cameroun, FEICOM and local and international banks.

The project is being marketed locally (Douala and Yaoundé) and internationally (Montreal and Paris). To date, 25 % of the apartments have been reserved.

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Mr. Manfred Mbassa, CEO of SAD.

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Construction of the first phase, on two hectares of land, began in November 2016. However, in total, this avant-garde housing complex will be built on 40,000 m². Four 9- to 10-storey buildings are to be built, comprising 525 highend apartments as well as 4,242 m² of office space and 6,922 m² of commercial premises. The complex will also include infrastructure for services (crèches) and leisure (25 m junior Olympic pool). The total investment is 35 billion CFA francs, including taxes.

52 COUNTRY FOCUS | CAMEROON

POLITICS

Rolling out the prizes

President Paul Biya’s government is trying to sway voters ahead of elections planned for later this year as a new face emerges at the largest opposition party

A

gainst the backdrop of security crises, four elections are due in 2018 in Cameroon. The opposition, led by the Social Democratic Front (SDF), hopes that new blood will improve its chances against an opponent that uses the powers of incumbency to its electoral advantage and blurs the line between the ruling party and the state.

Senatorial elections are planned for 25 March, and some 10,000 municipal councillors will elect the country’s 70 senators. The presidency will then get to choose the 30 remaining senators. The ruling Rassemblement Démocratique du Peuple Camerounais (RDPC) is set to take a vast majority of the seats.

The three other elections – municipal, legislative and presidential – will take place later in the year. While the ends of long-standing regimes led by strongmen – like that of Gambia’s former president Yahya Jammeh – are hard to predict, analysts say that they do not expect any major changes in leadership as a result of those three polls.

But Stéphane Akoa, a political scientist and researcher at the Fondation Paul Ango Ela, says the 2018 elections will be important for another reason: “There is

an interesting generational shift taking place […]. The renewal of the political class has begun,” Akoa says. But so far, this is mostly limited to the opposition.

Akoa argues that this will put pressure on the RDPC to “change its plans” and name younger people or new faces as its candidates in the upcoming polls.

Veteran SDF leader John Fru Ndi, 76, will not be facing off against 85-year-old Biya again this year. While Biya has yet to announce if he will run again in 2018, Fru Ndi said on 22 February that he would no longer be a candidate, respecting the promise that the 2011 race would be his last. He told the SDF congress in Bamenda, in the Anglophone North-West Region: “I will not present my candidature for the presidential election. I want you to choose who is best to be the flag-bearer.” Fru Ndi remains the chairman of the party, which he has led since its launch in 1990.

YOUTH TRUMPS EXPERIENCE

The SDF chose Joshua Osih, a 49-yearold member of parliament, to lead the party in the presidential race. Osih’s background and relative youth are winning over new supporters. He is

from South-West Region, which is Anglophone. But unlike Fru Ndi, former party vice-president Osih is comfortable expressing himself in French. An investor in the transport sector, Osih says that his focus is going to be on grassroots mobilisation ahead of the vote, which is likely to take place in October.

Cameroon’s opposition has not yet found a way to work together to present a united front against the RDPC. There are going to be other Anglophone candidates intheracetoo:lawyerAkereMunasayshe is going to run as a member of the opposition. Muna’s father, Salomon Tandeng

A country for old men IN POWER SINCE 1982, 85-year-old President Paul Biya is surrounded by a coterie of trusted old men. He regularly carries out ministerial reshuffles, but most of the faces remain the same. At 83, Marcel Niat Njifenji has been president of the Senate since 2013. The former boss of the Société Nationale des Eaux du Cameroun was in the political wilderness after 2001 but is now first in line for the succession should Biya become incapacitated or die in office. Cavayé Yéguié Djibril, the 78-year-old national assembly president, a post he has held for the past 26 years, is a key Biya ally for his ability to mobilise voters in the Extrême-Nord Region. He was one of the first politicians to call for Biya to run again in 2018.

Clément Atangana, who is 76 and a loyal Biya ally, will play a role in any electoral disputes as head of the new line-up of the Conseil Constitutionnel. On the economic front, Adolphe Moudiki, 78, has been head of the national oil company,

the Société Nationale des Hydrocarbures (SNH), for the past 25 years. Biya has used the SNH to finance key projects, like the controversial purchase of a presidential aircraft in 2001.

Diplomat and former judge Philémon Yang, 71, is Biya’s prime minister. Many had predicted that this discreet former ambassador would not last long in the premiership, but he has held on to it since 2009. He regularly attends regional and international summits on Biya’s behalf and is in charge of the government’s response to the Anglophone crisis in North-West and South-West regions.

Laurent Esso, 75 and a minister since 1986, is one of the most influential members of the Biya administration.

His name has often been mentioned as a potential successor for Biya, but he wants to avoid the painful fates of those who have been seen as Biya’s rivals. Biya has used his anti-corruption campaigns to take out potential political challengers.

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Biya will be praying his usual mix of cash and threats is not derailed by a tougher opposition

are wide open. We are not opposed to alliances or coalitions.”

Political analyst Akoa says: “Osih has an interesting strategy. With him, there is more of an opportunity for cooperation because he has shown that he is much less radical” than many of the hardliners in the SDF. The SDF’s history of being unable to build internal unity led many of its supporters to leave and form their own parties, ones that are unlikely to want to be subsumed by the largest opposition group. Political scientist Mathias Eric Owona Nguini says it is “impossible” for agreement on a single candidate to be reached in the opposition.

Without regular political polling, it is difficult to know voters’ intentions.

President Paul Biya’s electoral trajectory 100 SOURCE: ELECTORAL COMMISSION OF CAMEROON

Muna, was a former vice-president, and Akere Muna himself has connections in the presidency. He is making the fight against corruption a centrepiece of his strategy, and he was involved in the trial relating to the controversial 2001 purchase of a presidential airplane.

Another figure likely to split the opposition vote is Maurice Kamto, 64, who helped to resolve Cameroon’s conflict with Nigeria over the Bakassi Peninsula and was a former minister. A year after stepping down from a ministerial post in 2011, he founded the Mouvement pour la Renaissance du Cameroun (MRC).

Kamto is likely to be chosen as the party’s presidential flag-bearer at the MRC congress in April. The MRC wants to challenge the SDF for the dominant position in the opposition, but it has yet to win many positions in government.

Other opposition forces have even smaller support bases. Farmer-focused Bernard Njonga has made agriculture the centrepiece of his campaigning.

Journalist Cabral Libii, 38, wants to be an upstart like France’s President Emmanuel Macron and is very active on social media. Libii has called for the opposition to organise a coalition and hold a common primary to choose a joint candidate, but so far no one is paying him much mind. However, upon his nomination as SDF presidential candidate, Osih said that a single opposition candidate is a possibility: “Our doors

92.6%

80

70.9%

60 40

78%

40%

20 0

1992

1997

2004

2011

The RDPC paints Biya as its ‘natural candidate’. Akoa says: “His staff are already campaigning for him.” A women’s group supporting Biya’s campaign has put out the message: “The artisan of peace, builder-in-chief, uniter: Paul Biya is without equal.” Biya has launched a flurry of programmes to win over voters: a project to give 500,000 free computers – with his name on them – to some of the country’s students (see page 58); the inauguration of a medical school in Garoua, in northern Cameroon; and the setting up of a teachers’ training school in Bertoua, in the east. The government has rolled out massive publicity for the 2019 Africa Cup of Nations football tournament, and most of the posters feature pictures of Biya.

PACKED WITH FRIENDS

In February, he nominated the first members of the Conseil Constitutionnel, a legal body created 22 years ago to handle electoral disputes and announce the winners of the polls. Of the 11 people nominated, most are Biya stalwarts, with just one member of the SDF. Security will be a hot topic during the campaigns. Hans De Marie Heungoup, a researcher at the International Crisis Group think tank, says: “With the problems in the Anglophone regions and the persistent threat of Boko Haram, the 2018 elections will have higher stakes than normal.” Some separatist groups say they will not let the vote take place in SouthWest and North-West regions. Yaoundé has been sending reinforcements to the area, and the security situation has been more tenuous since Nigeria arrested 47 Anglophones, including secessionist leader Sisiku Ayuk Tabe, and sent them back to Cameroon in late January. The government is not allowing them to see their families or their lawyers.

The new interior minister, Paul Atanga Nji, is already unpopular in the marginalised Anglophone regions after proclaiming: “There is no Anglophone problem in Cameroon.” The new decentralisation ministry and the naming of an Anglophone as secondary education minister are unlikely to defuse the crisis.

More Anglophone, and Francophone, voices are calling for federalism.

Yaoundé does not want federalism or the secession of the Anglophone regions, so the structure of the state is set to be another key issue that will shape Cameroon’s four elections this year.

Reinnier Kazé in Yaoundé

CameroonTea Estates (CTE)

Baba Danpullo Group

NDU Tea Plantation •

The BABA AHMADOU GROUP possesses two important tea companies: Cameroon Tea Estates (CTE) and Ndawara Tea Estate (NTE).

With a total surface area of more than 10,000 ha, these two companies are made up of four tea estates (three for CTE and one for NTE) each comprising a tea plantation, administrative block, health centre, school, entertainment club and staff quarters.

T

hese estates are located in three regions of Cameroon (Southwest, West, and Northwest).

We currently produce only black tea. However, considering the increasing demand for green tea around the world, we intend in the near future to start the production of green tea in an effort to satisfy this new customer request.

Our production capacity is 8,000 tons of processed tea per annum with 80 % intended for export (bulk tea of 20kg and 40kg) and 20 % to be sold on the local market (tea bags and loose tea).

The altitude, the soils (volcanic soils) and specially selected clones position our teas to be amongst the best in the world.

Besides the natural endowments, the cream of supervisory staff, comprising Indians, South Africans and Cameroonians, are placed in strategic areas of production to guarantee quality and to give to connoisseurs our most desired grades used by blenders around the world.

CAMEROON TEA ESTATES The three plantations of Cameroon Tea Estates are Tole (Southwestt Region), Djuttitsa (West Region) and Ndu (Northwest Region).

TOLE

Situated at the foot of Mt Cameroon, its climate and soils are appropriate for tea cultivation. Tole tea is famous for its aroma and has always been well appreciated by customers since its creation in 1928.

DJUTTITSA

This plantation is situated about 1,800m above sea level on the eastern flanks of the Bamboutos Mountains in the West Region of Cameroon. It produces some of the best teas in the world. It covers a planted surface area of 44 ha with an annual production of about 1,500 tons. Djuttitsa plantation was created in 1978.

NDU

With an altitude of more than 2,000 m above sea level, this plantation is situated in the heart of the Northwest Region of Cameroon. The factory produces about 1,800 tons annually and was originally established by a British company (Estates and Agency).

ADVERTORIAL

NdawaraTea Estate (NTE)

With a variety of different clones from South Africa, India, Kenya and Cameroon, Ndawara Tea Estates produces a tea of exceptional quality. This plantation covers an area of about 2,000 hectares of cultivated land.

With its modern factory, state of the art machinery, skilled manpower with experts coming from the four corners of the globe, Ndawara Tea Estates produces strong teas with special aromas.

COMPANY PROFILE Moulin Coq Rouge (MCR) is a wheat flour milling company.

DISCOVER OUR VARIETIES OF MCR PRODUCE

DISCOVER OUR VARIETIES OF TEA PRODUCE

Its current capacity is 400T of flour a day for an effective production of 325TPD. The mill produces 2 types of flour:

MILLED FLOUR Which contains 3 ranges:

❖ CTE and Ndwara

sachet tea ◗

Blue and red label

Can be found in 100g, 50g and 25g

◗

Ndawara tin

Can be found in 100g, 250g and 500g

❖ Tea bags (50g) ◗ Ndawara tea (yellow) ◗ Ndawara highland tea (silver) ◗ ◗

Tole tea (CTE Tea) Cameroon tea (CTE Tea)

❖ Loose tea (10kg,

20kg and 40kg)

BENEFITS OF TEA Tea is the second most widely consumed beverage in the world after water.

Tea is an aromatic beverage commonly prepared by pouring boiling water over the leaves of Camellia sinensis (tea tree).

Drinking tea is the best way of supplying anti-oxidants to your system. Black Tea contains flavonoids. These flavonoids have antioxidant abilities and they may help prevent heart disease and some types of cancer.

Tea is a source of vitamin C and E mostly found in fruits and vegetables.

Drinking tea brings down body cholesterols and helps maintain body shape. It is relaxing, regenerating and refreshing, thus its approval as an equilibrium drink.

BREWING TEA Tea should be prepared with pure water and preferably in an earthenware pot. ❖ Sachets and Tin

For two cup tea:

1. Put a teaspoon of tea in boiled water 2. Stir and leave to infuse for five minutes before serving ❖ Tea bags

For two cup tea:

1. Take out your tea bag 2. Put it in your cup of boiled water 3. Let it infuse for two to three minutes before drinking

❖ Red Label The top of the range with a protein content = 12.5% ❖ Blue Label The middle or standard range with a protein content = 12% ❖ Green Label The bottom of the range with a protein content = 11.5% The specificity of our flours is the incorporation of additives.

SPECIAL FLOUR For all purpose use except bread, there is only one range at present. ❖ Sobajo In the medium term, MCR intends to add other varieties to its Special Flour range. This include pastry flour, cake flour, wholewheat bread flour, etc.

Our wheat is imported from Cerealis, in Germany. We use two types: ❖ Hard wheat (protein content = 14.5%) ❖ Soft wheat (protein content = 12.5%) Mixtures are prepared according to strict specificiations based on the desired quality of the commercial flour.

Our technical assistant and additive supplier is Ait Soufflet, France's leading miller and the largest cereal exporter in Europe. AIT SOUFFLET also oversees the shipping of tthe product to delivery at Douala port.

The MCR company also makes by produccts of wheat for animal consumption. It is th he wheat bran and chaff.

These products are mixed with the aim of producing a better quality bran for catttle fodder.

To be able to continuously provide the end consumer with excellent quality flour, we sset up a training centre which ensures staff technical capacity-building to suit our clientèle'ss evolving milling needs.

©DIFCOM - Product photos: D.R. Background photos: Panifuzja - stock.adobe.com

Ndawara has only one plantation located in the famous and welcoming village of Ndawara. Situated in the highlands of the Northwest region of Cameroon, this site is ideal for tea production due to its climate and soils.

Moulin Coq Rouge (MCR)

56 COUNTRY FOCUS | CAMEROON

ADRIENNE SURPRENANT/COLLECTIF ITEM

Yaoundé, which has not hinted at an outcome in the port saga, could recruit a new operator

already in a race to pick up Necotrans’ stake in the joint venture that held the Kribi concession. Even if PAK intends to manage affairs on its own for now, KPMO still hopes that it will eventually take over. The group of local companies is in the process of updating its statutes to include providing handling services.

LEGAL LIMBO

In December 2017, Monaco Resources tried to tip the scale in its favour by sending Fabrice Viguier, chief executive of its subsidiary R-Logitech, to Cameroon. Viguier was helped by Mouctar Hamadama, a Cameroonian PORTS businessman, the board chairman of Necotrans’ Cameroon subsidiary and a close friend of former Necotrans head Grégory Quérel. Hamadama is also chairman of the board for Terminal The government has at least temporarily ended the Polyvalent de Kribi, the company created battle for control of a Kribi port terminal previously

by Necotrans and KPMO to manage the terminal’s infrastructure. Viguier’s mismanaged by a consortium led by France’s Necotrans sion has yet to yield any positive results.

In the meantime, the group of nine ith uncertainty about who local operators was making headway maintenance of the terminal, Necotrans would operate the Kribi had planned to invest €26.2m ($29.6m). with the AIIM group’s African Ports & But in August 2017, the French court Corridor Holdings, which paid $9.4m for multipurpose terminal after system ordered the liquidation of the Necotrans’ stakes in the bulk materials a leading member of the consortium Paris-based operator’s assets as part of ports at Dakar and Kribi. Both KPMO that won the contract to manage the and AIIM officials met with the presiinfrastructure went bankrupt, the state the company’s bankruptcy proceedings. is now taking a leading role. A decision The new developdency in July 2017. The two taken in December 2017 by the Port ments surrounding the parties signed a shareholdAutonome de Kribi (PAK), the stateer agreement in August. port’s management also Now caught in legal limbo, owned company overseeing the port, have a political side. “In the two sides are looking to take over the terminal’s management view of the October 2018 has slowed private investors of the to Yaoundé for the next presidential election, the Necotrans/Kribi Port Multi Operators government is rushing step. The government (KPMO) consortium down in their has, however, decided to to get operations at both focus on its most pressing tracks. “We are gathering all the elements the multipurpose terminal and the Kribi container needs, without hinting at so that this terminal can be operational as quickly as possible, even without an terminal – awarded to a the possible outcome of Amount paid by operator. This is necessary to avoid the Bolloré/CMA-CGM/CHEC the Kribi port saga.

African Ports & obsolescence of the equipment that is consortium and which will There are still a few opCorridors Holdings, already there and has used up a lot of be officially operational tions on the table. Moving about €7.68m, on 1 March – started as forward, prime minister taxpayer money,” says Modeste Ako’o, to acquire Necotrans’ Yang could either start a PAK’s director of operations. soon as possible, before stake in the Dakar and Kribi cargo ports On 17 January, Cameroon’s prime President Paul Biya’s new process to recruit an minister Philémon Yang declared that campaign during which operator or strike a deal French logistics firm Necotrans, partner the ports will be officially inaugurated,” with Philippines-based International of the KPMO group made up of nine says a source familiar with the matter.

Container Terminal Services Inc. local operators, had failed to respect the The Cameroonian government could (ICTSI), which lost to Necotrans in the look for a new operator to replace the 2015 bidding process. On 28 July, ICTSI conditions of the concession awarded in 2015 for the terminal at the new deepsenior vice-president Christian Gonzalez French logistics firm, and bidders are not likely to be in short supply. Both South said the company was willing to invest water Kribi port located in the southern region of the country. Under the 20African investment firm AIIM Capital $25.5m to seal the deal. year contract for the management and and Monaco Resources Group are Omer Mbadi in Yaoundé

Kribi consortium confusion

W

$9.4m

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58 COUNTRY FOCUS | CAMEROON

Fre ed Eboko

Politica al science lecturer, Institut de Recherche pour le Développement, France

In praise of mediocrity

S

ome laugh, others grind their teeth. In Cameroon, social media has come up with some creative gems to mock and satirise a video of Roger Atsa Etoundi, the director of information technology at the higher education ministry.

He delivered an astounding speech during the distribution of some of the first of 500,000 computers promised to students by President Paul Biya.

On the growing criticism about the computers’ storage capacity, the offical responded: “These computers have solid-state drives (SSDs) that are super fast. The SSD disks are 32GB. Initially, when you see that, you may say 32GB is small. But with this technology, 32GB is 500GB with the older technology.”

The formula “500GB=32GB” now accompanies the many effigies of the embarrassed educator. Beyond that anecdote about his mathematics ability and several similar mistakes that he made several days later, Atsa Etoundi’s media events symbolise the ‘Acquired Professional Deficiency Syndrome’ prevalent in Cameroon.

This problem, which is found elsewhere in Central and West Africa, has plagued the country for more than the past two decades. While Cameroon had sometimes been portrayed as a source of well-trained workers, there has been a long and progressive fall in the country’s average skill level.

This situation can be explained by the economic crisis that Cameroon faced – with a rare intensity for a country ‘at peace’ – the implosion of classical models of social and economic mobility and the spread of corruption across every level of Cameroonian society.

In 1978, the failure of one of President Ahmadou Ahidjo’sdaughters–likethatof70%ofthatgeneration– on the Brevet d’Etudes du Premier Cycle exam led to a re-sit for all those who failed. Despite the fact that then-education minister Adamou Ndam Njoya was sacked, Cameroonians still praised him for his courage, impartiality and drive for excellence.

Since the 1990s, a repeat of such an event is inconceivable. The list of graduates from the

top universities are hotly criticised, attesting to what Franco-Cameroonian author Hemley Boum calls “the confiscation of opportunities” by the politico-administrative elite.

In Cameroon, like in many other countries, the combination of loyalty to the current regime and claiming legitimacy based on a diploma – in addition to generalised corruption – have caused professional practices to turn on their heads. Normally, a diploma is the confirmation of knowledge that exercising a profession will turn into professional skills, but that no longer is the case. Acquiring a diploma, in whatever circumstances, is accompanied by social, economic or political costs that entail recruitment or a promotion. Getting appointed to a government position signals the end of work that the training was done for. However, some people mount a resistance in silence by trying to maintain the standards that they learned during their education.

The situation in Cameroon – a generalised air of fin de règne – exacerbates the everyman-for-himself mentality of daily life. This climate weakens the government’s achievements and puts collective life in suspended animation.

Everything, or almost everything, can be bought and everything, or almost everything, is sold: jobs, university places, promotions. Ethics are swept under the carpet, and skills are on the decline. The time devoted to exercising the profession that people were more or less trained for is getting smaller and smaller. Relationships and the overpoliticisation of social security occupy a growing share of professionals’ agendas. The result is that implementing big government projects is penalised by internal rivalries and a desire to stop others from succeeding.

The neutralising governance is producing astonishing results. No Cameroonian universities were in the 2017 ranking of the top 50 African universities.

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60 COUNTRY FOCUS | CAMEROON

ANGLOPHONE CRISIS

Regional ructions Like the Boko Haram conflict, Cameroon’s response to the Anglophone crisis involves cooperation between the governments of Nigeria and Cameroon

SOURCE: UN COMTRADE

$223m

PIUS UTOMI EKPEI/AFP

C

ameroon’s Anglophone crisis, which started with strikes by teachers, students and those in the legal profession in late 2016 and now includes groups calling for secession, is deepening. People from Englishspeaking South-West and North-West regions of Cameroon have long comMany people agree that a fairer plained about their marginalisation system, rather than a separate in the centralised state apparatus in state, would be the best solution Yaoundé and the government’s failure to protect Anglophone heritage. joining Nigeria or joining Cameroon.

Opinion is divided on how to address the Anglophones’ concerns. Victor The North went to Nigeria, and the Mukete, member of the ruling party and South went to Cameroon. the country’s oldest senator, tells sister Since the flare-ups of late 2016, publication Jeune Afrique that a federal the UN estimates that nearly 20,000 system should be created “as soon as Cameroonian refugees have fled to we are capable of financing it.” A fringe Nigeria. Anglophone Cameroon’s group has declared an independent economy, heavily integrated with state of Ambazonia, but Nigeria, has been semany people say that a verely affected as many small towns and villages fairer system rather than a have been abandoned. separate system would be Nigeria Businesses often close the best solution. Yaoundé’s response so far has been down for ‘ghost town’ a security crackdown and protests. Meanwhile creating a weak national big firms with interests Cameroon commission on the isin the region are reportsues of bilingualism and ing reduced profits, and multi-culturalism. President cross-border trade has Paul Biya launched a govslowed to a trickle. ernment reshuffle in early Cameroon’s imports DIFFICULT POSITION March, separating the from Nigeria in 2016 Cameroon and Nigeria decentralisation portfolio were much larger share a long border, from the interior ministry. than its $40.8m with security flashpoints Elanga Obam George, a in exports to Nigeria along the 1,975km frontechnocrat who worked in tier. Nigeria’s north-eastern states of prime minister Philémon Yang’s office, is the new minister of decentralisation.

Borno and Adamawa and Cameroon’s The Anglophone crisis also highlights Far North Region continue to deal with a significant Boko Haram insurgency the often difficult relationship between neighbouring Cameroon and Nigeria. while an escalating pastoral conflict Back in 1961, the United Nations (UN) between Fulani herdsmen and settler organised a referendum in the areas communities is currently raging from colonised by Britain, giving northern Adamawa through Taraba and Benue and southern Cameroon the options of into parts of Cross River, with small

arms proliferation in Akwa Ibom and other states in the Niger Delta.

The crisis highlights Nigeria’s difficult position. Security analyst Chris Ngwodo explains: “Nigeria cannot be seen as aiding a separatist cause and infringing on Cameroon’s sovereignty, having crushed a nascent separatist cause of its own in the south-east just last year.” Journalist Nicholas Ibekwe adds: “Nigeria’s government felt sufficiently compelled to aid Yaoundé by ensuring the arrest and repatriation of prominent separatist leaders resident in its territory in December [...] Not to mention the lack of criticism over reports of incursions into Nigerian territory by Cameroonian gendarmes in pursuit of suspected rebels.” Nigeria’s cooperation with Cameroon, however, has not always been well received at home. Ayo Sogunro, a human rights lawyer, says: “Are they criminals?

What are the grounds for arresting the Cameroonians in Nigeria? […] This goes against international law.”

The stakes are getting higher, as Cameroon will hold elections in 2018, and President Muhammadu Buhari will be up for re-election in 2019. A wider expansion of the anti-separatist crackdown could lead to increased tensions between the governments in Abuja and Yaoundé, a state of affairs not unheard of as both countries have clashed over territory, access to resources and political interference in the past.

Cheta Nwanze in Lagos

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62

OIL & GAS

ExxonMobil makes its

comeback Having successfully managed the drop in the oil price, ExxonMobil now has the means to reinvest and regain market share in Africa. Alone or in collaboration with other major players, the Texas-based giant is capitalising on recent discoveries and launching new projects

E

xxonMobil, the third-largest crude oil and natural gas producer in the world with an average of 4.2m barrels produced daily, is back on the offensive in Africa. In early December 2017, the Texasbased supermajor acquired three exploration blocks in Mauritania, a new oil Eldorado pioneered by US-based firm Kosmos Energy.

Around that same time, Egypt’s petroleum minister Tarek ElMolla announced that discussions were being held with the

oil company for permits off the coast of Alexandria, a region that has regained explorer interest due to the gas discovery made in the supergiant Zohr field – the largest ever in Egypt and the Mediterranean Sea – by Italian multinational Eni in August 2015.

ExxonMobil, also the world’s largest listed oil producer, has recently dealt with Eni, having acquired a 25% interest at a cost of $2.8bn in Mozambique’s gas-rich Area 4 block from the Rome-based company in mid-December. Earlier

BUSINESS WIRE

By Christophe Le Bec for Jeune Afrique

ExxonMobil is seeking to increase its reserves and boost its production

64 BUSINESS | COMPANIES & MARKETS

groups, the US oil giant made drastic cuts to its expenditure after prices dropped in mid-2014.

The former chief executive of ExxonMobil and current US secretary of state, Rex Tillerson, spearheaded a relentless and effective cost-cutting campaign that contributed to an increase in net revenue from $3.5bn in the first quarter of 2016 to a record $7.1bn in the first quarter of 2017.

This figure largely surpassed the revenues of all other oil industry heavyweights, including Shell, Total, Chevron and BP. Rising prices have also helped the industry. The oil price rose to more than $70 per barrel on 9 January of this year, the highest in three years.

Known for his in-depth portfolio analysis, Tillerson had stopped Exxon from exploring and developing new projects, particularly in

this year, Exxon launched its latest venture, signing a deal on 18 January with the government of Ghana to explore the Deepwater Cape Three Point (DCTP) offshore oil block. As the operator, the US firm holds an 80% stake; the state-run Ghana National Petroleum Corporation controls a 15% shareholding.

These huge investments made outside its two biggest sub-Saharan Africa bases of operation – Nigeria and Angola, where it produced an average of 253,000 and 169,000 barrels per day (bpd) in 2016, respectively – show that Exxon is spreading its wings and preparing for the future. It wants to stem the decline in its African production, from 594,000bpd in 2016 to a predicted 523,000bpd in 2018 (see map).

More responsive to the recent price swings than other major

Africa, due to regional operating costs that were deemed too expensive. Jean-Baptiste Bouzard, a sub-Saharan Africa oil and gas analyst at Wood Mackenzie, explains: “Across the continent, Exxon chose to focus its attention on completing projects that had already been decided in 2014, as well as exploiting what are now old fields. This explains the drop in production over the past three years – 12% between 2016 and 2017 in Africa and 4% at the global level.”

REACT TO COMPETITORS

EXXONMOBIL’S 2016 OIL PRODUCTION

Mauritania

21,000 barrels/day

Chad

Nigeria

Côte Ghana d’Ivoire 253,000 barrels/day

Equatorial Guinea

Owowo

Congo

Bosi

523,000

551,000

594,000

(barrels/day)

2016 2017 2018*

31,000 barrels/day

Angola

Kaombo with Total

Country with Exxon projects in development and fields in production Country with Exxon blocks in exploration

Block 2 with Statoil

Mozambique

Corral

South Africa

Zone 4 with ENI

Major projects being developed: Exxon has a majority stake

Oil

Exxon has a minority stake

Gas

SOURCE: JEUNE AFRIQUE

Decreasing African production

Tanzania

21,000 barrels/day

SOURCE: WOOD MACKENZIE * PREDICTION

Bonga with Total

With Exxon’s excellent cash flow, Darren Woods, the successor to Tillerson appointed on 1 January 2017, is now capitalising on the rebound in prices to seek out new ventures that will increase ExxonMobil’s reserves and boost its production. Bouzard adds: “The company wants to reinvest in Africa, partly to compete against Eni and Total and to not leave them to dominate the continent.”

Francis Perrin, a research associate at both Morocco’s OCP Policy Center and France’s thinktank the Institut de Recherche et d’Informations Socio-économiques, says: “ExxonMobil is the world number one, so neglecting any zone is out of the question, especially sub-Saharan Africa, a region representing about 12% of its hydrocarbon production and where it has maintained a historical presence.” Perrin adds: “ExxonMobil looks at everything and everywhere, from Egypt to Mauritania through South Africa, but that doesn’t mean it will buy all the blocks it is studying or start producing from all the fields it is exploring.”

Named 2017 explorer of the year by the World Oil and Gas Council, the US giant is not seeking to be a global pioneer in the exploration field. Its strategy is usually to react to investments made by competitors. ExxonMobil often seeks to acquire exploration blocks next to newly discovered fields, where its teams of geologists suggest the presence of other big fields are in close proximity. This was the case in Mauritania and at

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DCTP in Ghana, which is close to Tullow’s Jubilee field. The US supermajor also invests in projects with proven reserves that are led by other major firms, such as the Area 4 Block agreement signed with Eni in Mozambique, its deal with Norway’s Statoil on the Block 2 offshore gas field in Tanzania and its partnership with France’s Total on the ultradeep offshore Kaombo project in Angola. Exxon owns 35% and 15% of the Tanzania and Angola projects, respectively.

Additionally, the company is seeking to optimise the end of life of its wells and to use its infrastructure to help in the search for more reserves in surrounding areas.

Following a decades-long presence in Equatorial Guinea marked by criticisms in the United States for its links to the regime of President Teodoro Obiang Nguema Mbasogo, Exxon announced a new oil find in December 2017. The discovery is in Block EG-06, located next to its depleting Zafiro field, a once prolific oilfield from which it extracted more than 1bn barrels over 20 years.

A North Africa expansion might also be in the works. “The foray into Egypt’s offshore oil and THE AFRICA REPORT

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ExxonMobil often invests in offshore projects with proven reserves led by other major firms

$7.1bn

ExxonMobil’s net revenue in the first quarter of 2017, up from the $3.5bn generated in the first quarter of 2016 SOURCE: EXXONMOBIL

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gas it is currently considering can be linked to a desire to combine recent gas discoveries in Cyprus with new Egyptian fields and also to find business opportunities for its gas in the highly populated – close to 100 million people – and top energy-consuming country in the region,” notes Stephen Fullerton, Wood Mackenzie’s upstream Egypt analyst. “Finally, the only notable exploration risk taken by ExxonMobil is in the Tugela South exploration area off South Africa’s east coast, where no one has yet made any significant discoveries,” adds the OCP Policy Center’s Perrin.

NEW TERRITORIES

As for Chad, ExxonMobil led the development of the Doba project, and the company is trying to improve its often rocky relations with the government after N’djamena attempted to impose a huge fine for unpaid taxes in 2017. The two sides reached a compromise that included a $200m payment from Exxon in exchange for a 25-year extension to its licence.

Based on its recent activities, Wood Mackenzie estimates that the US firm has some 3bn barrels of oil reserves in sub-Saharan

Africa – more than two-thirds of this is in Nigeria – and 32bn cubic feet of natural gas. This might suggest an important shift towards gas production in the future, particularly projects to export liquefied natural gas.

As a leading producer of hydrocarbons from unconventional sources in the US, ExxonMobil could have other long-term projects that involve exploiting shale oil and gas. Even though activity relating to these non-conventional energy resources is currently high in North America, where laws permit their extraction, ExxonMobil is looking at new territories where it can leverage its expertise. Last year, the company began discussions with Algeria – it has the third-biggest shale gas deposits in the world – provoking a massive public outcry due to the negative environmental impact the drilling could have.

According to Perrin, “non-conventional resources can be found in Morocco, Algeria, Tunisia, Libya and in South Africa, even though a lot of work is required upfront to ensure the possibility of exploiting them.” And Perrin argues that ExxonMobil will be looking at those opportunities.

66 BUSINESS | LEADERS

Emmanuel Nnorom Chief executive, Heirs Holdings

Engineering Transcorp’s turnaround

TAR: When Transcorp was launched in 2004, it seemed like the era of the chaebol – these big Korean-styleconglomeratesthat ignited industrialisation – was finally upon Nigeria. I think it’s fair to say that many were left disappointed. What has changed?

EMMANUEL NNOROM: At inception Transcorp had many top executives in the country as board members. At this stage, the direction was not very clear.

There were competing interests. But in 2010, Tony Elumelu bought the controlling interest in the company and since then has refocusedthecompany.Transcorp as a conglomerate has Transcorp Hotels, which has the largest hotel in Abuja, a 670-room hotel. And in the last four to five years, the hotel has done quite a lot in terms of improving the facilities, and more recently doing a proper upgrade for the first time in 30 years of the life of the hotel. All the rooms have been upgraded completely. That was a project of $100m to do the upgrade. Also, within the same

period, Transcorp has a space in Lagos where some piling work has been done. The other superstructure works are yet to start.

Another is in the power sector.

Transcorp acquired a controlling interest in the Ughelli power plant, rated as Nigeria’s best station [...]

Over the last 18 months, we have invested over $30m to get new turbines. Some days we are the largest [single] producer of power in Nigeria. We have a capacity now of 702MW and are producing almost 90% of that most days. We are investing more in that sector by bringing more turbines onstream, hopefully before the end of year, to have about 850MW. So all these redevelopments going on are an example of the turnaround that Heirs Holdings has been engineering for Transcorp since 2010. Of course, many other things are in the pipeline [...] One of them is the oil block which is currently being explored. After that, it goes into commercial production. We see quite a lot of more positive direction towards having

ALL RIGHTS RESERVED

A buoyant oil price and its renewed focus on the power sector and hotel projects have helped Heirs Holdings navigate Nigeria's economic recession ON THE HEIRS THRONE 7 April 1958 Born in Nigeria 1982 Qualified as an accountant January 2013 Became managing director of United Bank for Africa 2014 Became chief executive of Transcorp 1 June 2017 Appointed chief executive of Heirs Holdings

a better result, and shareholders are now beginning to have returns on their investments. Three years ago, dividends were paid for the first time, bonus issues done. And the yet-to-be-released results for 2017 are positive.

How much of Heirs Holdings does Transcorp represent, given that the other major part of the company is United Bank for Africa (UBA)?

It’s actually more than half. It’s one of our biggest investments because Transcorp has these two subsidiaries: Transcorp Power and Transcorp Hotels. And then also you have Transcorp Energy and so on. So it’s quite significant to our operations.

Is Nigeria’s economic turnaround something that will stick, and how much of a part will oil play in that?

The economic recovery in Nigeria is quite a positive one, as we saw in the first-quarter reports from both the International THE AFRICA REPORT

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And you have an investment in Tenoil as well.

It’s a subsidiary, so they are the ones that actually operate the oil block. They do all the oil work, including getting the contractors, supervising them, the exploratory part of the job, testing and then of course commercialisation.

The local content act provided a boost for indigenous oil companies. Did Tenoil benefit from that policy framework?

Generally, the content law allows for a lot of local entrepreneurs to be involved in the oil sector, of which Tenoil is one. We have presently these two oil blocks.

We have a lot of work to do and so while working with other local suppliers, contractors and so on we believe we’ll be able to achieve our results. But it’s not like we’ve grown into, let’s say, oil servicing or perhaps maybe procurement – we are not going into that.

Heirs Holdings has some heavyweight investments in Nigeria’s financial sector. We’re almost a decade beyond the toxic-asset crisis of 2008/2009 and Nigerian banks appear a lot more robust.

Do you feel there’s a more mature skills base in the industry now? Are they able to lend more ‘accurately’ to various sectors?

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are very well equipped. If you look at when there was a whole lot of privatisation in the power sector, it was largely supported by Nigerian banks.Ifyoulookatoildivestments that took place some three to four years ago, they were largely supported by Nigerian banks.

I think the issue is that with more capital [...] and being able to also manage risk better, Nigerian banks are actually very strong and resilient in terms of any shocks.

And even when the oil price was low – early last year and so on – it didn’t really cause any crashes [...]

But the key thing is that you now have very strong banks in Nigeria. They are better managed.

Governance levels have improved significantly. Just last week the Nigerian Stock Exchange gave awards to many banks. UBA, for example, was one of the banks that got an award for governance.

Delays from court action appear to have improved, so that banks can take some decisions quickly, [for example] if you need to recover your assets that you’ve lent out.

Some banks are also now taking some very hard decisions.

You’ve seen banks pulling out of Africa because they didn’t understand the business very well; they couldn’t cope with it.

Some years back, some others would have held on.

The key is that you now have very strong banks in Nigeria.

They are better managed Where are we on the access to foreign exchange?

For us as users of banking services there has been a lot of improvement from last year in terms of availability of foreign exchange. Of course there may be a little concern sometimes, but it’s improving.

The central bank – almost every week – intervenes in the markets, and the period when the rates were abituncontrollablearenowoverin my view: we see that we have more stability, the foreign exchange reserves are up and negative factors are now under control.

Interview by Nicholas Norbrook

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Daúdo Vali Vali was promoted to the position of DHL Global Forwarding’s country manager for Mozambique in February after previously serving as the firm's head of sales.

He brings experience in logistics in Angola and as a strategic analyst.

Samira Khamlichi In late January, the Moroccan banker became the chief executive of Wafacash, leading bank Attijariwafa’s mobilemoney service. Trained in finance at Université d’Aix-Marseille III, Khamlichi has been with Wafacash since 2006 and with the bank since 2003.

Seddiq Hassani Kenya’s Bamburi Cement got a new managing director in February. Hassani has spent the majority of his career at cement maker LafargeHolcim, with his most recent post as head of innovation and growth for the Middle East and Africa.

ALL RIGHTS RESERVED; LAFARGEHOLCIM

Monetary Fund and from our federal official statistics. It’s expected to continue in 2018. Our investment generally for 2018 is on course. We are investing more in the oil and gas sector, and you can see also from the recovery of the oil price that that’s a good sign that the investments we’re channelling will yield positive results. We have an oil block in our group that’s directly under Heirs Holdings on which we are doing extensive work in terms of the commercialisation process. We also have an oil block that’s under Transcorp which also will come onstream. For this year, these are the plans that, as I said, are looking positive – especially with the increase in the price of oil on international markets.

68

TELECOMS

Ethiotel strives for better signal

Ethiopia’s state-run telecoms firm, lambasted by consumers for poor performance, hopes to shake up that reputation with new infrastructure and expansion plans

S

tandingintheheart ofAddis Ababa, the rough-edged Ethiopian capital, is the Tiglachin ‘Red Star’ Monument: a recently refurbished war memorial gifted in 1984 by North Korea to the Derg, the communist regime that ruled the country with an iron fist between 1974 and 1991. The statue is a rare relic from Ethiopia’s communist past, but it is not the only one. Across the road in a drab, Soviet-style tower block is Ethio Telecom, Africa’s largest telecoms monopoly and perhaps Ethiopia’s most controversial state-owned enterprise.

The company, known as the Ethiopian Telecommunications Corporation (ETC) until a substantial overhaul in 2010, has long been the target of stinging criticism from Ethiopians and

foreigners alike. A Facebook group called “ETC sucks” is replete with complaints from customers who for years have joked that the company’s slogan should be “disconnecting Ethiopia from the future”.

But today, more than a decade after its first major expansion project, the company is positively bullish about its future. Its leaders boast that Ethio Telecom is Africa’s largest single-country telecoms company based on subscriber numbers while talking up the pace of its expansion. “We’re not afraid of any of the African telecoms operators. We are the giant of Africa,” Ethio Telecom’s chief executive officer Andualem Admassie Abate tells The Africa Report (see box).

Esayas Dagnew, the company’s chief operating officer, adds: “Since 2006, Ethio Telecom has

8.3% Ethiopia’s mobile penetration: less than a tenth of the population in December 2010 SOURCE: TELEGEOGRAPHY

been the fastest-growing telecoms company in the world – in all aspects.” It now plans to invest abroad, with operations in South Sudan and Somalia expected to be rolled out over the next few years.

It also has big plans at home.

By 2020, the company hopes to have achieved up to 80% mobile penetration in Ethiopia’s rural areas. It plans to have 90% of the country covered by 3G, with 4G in all major cities. Today, this is found only in Addis Ababa. Chief executive Andualem says he is fighting for Ethio Telecom to take the lead in developing mobile money in Ethiopia (see box). And he wants to overcome Ethiopia’s landlocked isolation by entering into a consortium with neighbouring countries in order to purchase a submarine communications

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DIDIER RUEF/COSMOS

The Pew Research Center found in 2016 that just 8% of Ethiopians reported using the internet

cable and a landing station. But analysts are sceptical about such vaulting ambitions.

“Given its monopoly position, it would be frankly surprising if its growth wasn’t meteoric,” says Russell Southwood, chief executive officer of Balancing Act, an Africa-focused telecoms consultancy. “What would it look like if it had any competitors?”

In some respects, Andualem and Esayas have good reason to be confident: their company’s transformation over the past decade has been nothing short of spectacular. In 2006, the company operated in only a handful of cities, and the countryside was entirely unconnected, giving ETC a subscriber base of less than two million in a country of more than 80 million. At that time, a SIM card cost around $10, making it “the most expensive in Africa”, according to Danson Njue of Ovum, an industry research firm.

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expected turnover of more than $1.3bn this year represents a more than tenfold increase from the $120m recorded a decade ago. For the 2016/2017 financial year, the company posted a $783m profit.

Today,EthioTelecomhas57million wireless customers, in part because prices are now comparable to more-developed markets in the region. In the year to September 2017, the company added 7.5 million new subscribers, more than any other African telecoms operator over the same period.

The African operator with the next largest figure was Vodacom South Africa, which attracted around 4.3 million new customers.

RichardFaberofTeleGeography, another research firm, says: “Such growth has cemented [Ethio Telecom’s] place as Africa’s largest [single-country] mobile company by subscribers [...] We’re not aware of any other African telecom provider that grew revenues by so much in absolute terms.”

The quality of the service has undoubtedly improved. “If you’d come to this country four years ago, you’d go mad,” says Alemayehu Geda, an economist at Addis Ababa University. “Calls would just drop, and internet was unthinkable.”

PAPER-BASED

Two years under the management of France Telecom between 2010 and 2012 made Ethio Telecom more efficient. One veteran technician, who requested anonymity because he is not authorised to speak to the press, recalls that before France Telecom helped manage the company, it had been entirely paper-based. Employees were often expected to take on a roster of sprawling and unrelated responsibilities. “You weren’t just a technician. You were customer service too,” he says. “But now, even if the service may not be up to everyone’s expectations, at least you know who to ask if you have a complaint.”

Despite the gains that Ethio Telecom made over the past decade, the company still faces an uphill battle to get its lofty plans off the ground. Ethiopia’s

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wireless penetration rate of 61% is still below that of neighbouring Somalia. In 2017, the International TelecommunicationUnionranked Ethiopia 170th out of 176 countries in its information and communications technology development index. The Pew Research Centre, meanwhile, found in 2016 that just 8% of Ethiopians reported using the internet, compared with 40% of Kenyans and 39% of Nigerians.

Two Chinese firms, ZTE and Huawei, were hired to carry out previous expansion projects – and both are slated to win bids for the next stage, not least because they have come with plenty of financing in the past. The contracting process has also been problematic, with Ethio Telecom having cancelled deals with ZTE

Dreaming of mobile money DUE TO UNUSUALLY PROTECTIVE REGULATIONS, Ethiopia has so far missed out on one of Africa’s big ‘leap-frogging’ stories of the past decade: the growth of mobile money. Across the border in Kenya, the stunning success of Safaricom’s mobile money service M-Pesa has contributed to the company’s meteoric rise to become the biggest company by turnover in the region.

Ethio Telecom’s chief executive officer, Andualem Admassie Abate, is targeting growth in the firm’s mobile-money services. But there is a long way to go. In 2012, the National Bank of Ethiopia announced a series of regulations for the industry, and one of their cornerstones is that mobile accounts must be based at an Ethiopian financial institution. The European Investment Bank estimates that just 22% of the population has bank accounts in the formal banking sector.

HelloCash, the country’s largest mobile-money service, today has around 2 million users – just about 2% of the population. By contrast, 66% of the total adult population of Kenya, Rwanda, Tanzania and Uganda regularly use mobile money. HelloCash is managed

by Netherlands-based BelCash, which launched the product in 2015. Its main rival, M-Birr, is a product of Ireland's MOSS ICT. Rumours in Kenya and Ethiopia are swirling about a possible deal between Safaricom and Ethio Telecom that could see the Kenyan operator buy a stake in the state-run Ethiopian firm. There are also reports that Safaricom itself may be looking into a mobile-money partnership with an Ethiopian bank as part T.G. of its own regional expansion effort.

70 BUSINESS | COMPANIES & MARKETS

and Swedish company Ericsson over their performance.

But many worry that the deals with Huawei and ZTE have left Ethio Telecom excessively dependent on China and on Chinese technology. “The system is not ours – it’s Chinese,” says the technician. “All the nitty-gritty: they know it, we don’t. So we always need their support.”

Th is wa s c o n f i r m e d by Alemayehu Geda, the Addis Ababa University economist, when he studied Chinese involvement in the telecoms sector back in 2010. “What we found was there was literally no technological or knowledge transfer,” he says.

This makes expansion abroad a difficult, possibly fanciful, proposition. Across Africa the telecoms industry has been experiencing slowing revenue growth since the start of the decade, leading to a degree of market consolidation.

In such a fiercely competitive environment, it is unclear how Ethio Telecom could prosper.

“I can’t think of one African incumbent telecom – let alone a monopoly telecom – that has successfully invested abroad,” says Balancing Act’s Southwood, noting in particular a series of recent failures in West Africa by Sudatel, Sudan’s majority government-owned provider. “They just don’t have the skill sets.”

and undertake its latest expansion projects. It has had to curb or delay capital expenditure. Despite Ethio Telecom enjoying priority on the Commercial Bank of Ethiopia’s foreign exchange waiting list, chief executive Andualem still has to wait at least ten months to receive his share, making it especiallyhardtoplanahead.

But the problems that Ethio Telecom faces go deeper. Addis Ababa University’s Alemayehu notes that with such large profits, there should be plenty of financial room for cheaper internet: “It’s nothing to do with cost. They could afford to run a deficit.” In fact, security concerns colour the government’s attitude to the telecommunications sector.

“We generally tried to benchmark our prices to other countries,” recalls Meried Bekele, chief executive of IE Network Solutions and a former consultant to Ethio Telecom. But “there was resistance” when it came to the idea of cheap internet. “They were scared and didn’t understand it.”

In the past, the Addis government justified maintaining state ownership and monopoly on all telecoms services on the grounds that only it could guarantee access to the entire population. It argued

In late 2017, Ethio Telecom surpassed MTN Nigeria, which has 53.1 million, to become the largest operator by subscribers in a single African market SOURCE: ETHIO TELECOM AND MTN NIGERIA

Ethio Telecom now has 57 million subscribers, adding 7.5 million in the year to September 2017

ERIC LAFFORGUE/ART IN ALL OF US/CORBIS VIA GETTY IMAGES

CURBING EXPENDITURE

TeleGeography’s Faber adds: “Despite the fact that the likes of South Sudan boast enticingly low levels of penetration – less than 16% in 2017 – I’d question the viability of such plans given the higher degree of competition Ethio Telecom could face in some of these markets [...] Add to this that there are three mobile operators already present in the country – two of which are backed by sizeable international groups, MTN and Zain. I’d wonder where Ethio Telecom feels it might fit into the mix.”

Like most companies in Ethiopia, Ethio Telecom also suffers from a severe hard-currency shortage, making it hard to pay its debts, buy equipment from abroad

57m

that private companies would neglect them for urban areas.

Today, as Ethio Telecom approaches the goal of universal access, this argument looks less and less convincing. It is evident that security – and a deep-seated fear that a better-connected citizenry means more political instability – is instead the overriding concern. The government enjoys virtually unlimited access to the call records of all phone users and to logs of internet traffic. As political unrest has swept across the country in recent months, the government has blocked 3G internet in all areas outside of Addis Ababa.

Such concerns impede the kind of structural reforms the company needs if it is to continue expanding. Unlike Ethiopian Airlines, a state-owned behemoth that also happens to be Africa’s most profitable airline, Ethio Telecom lacks real independence. “Every decision is politicised,” says the technician who requested anonymity. “We don’t work as an independent company. We work as a political institution.”

There has been talk in recent months – denied by chief executive Andualem – of the government selling a stake in the

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company, perhaps to Kenya’s Safaricom or another foreign firm.

This is unlikely for now, though if Ethiopia’s government becomes more cash-strapped in the future, it could be a tempting prospect.

VIRTUAL ISPS

Minyahel Desta, a researcher at the Ethiopian Development Research Institute, suggests the government establish another state-owned company that could share the infrastructure or take on a portion of the responsibilities, such as internet or fixed-line networks. “Then there would be a benchmark for evaluating the performance of the company itself. This could serve as a way for Ethio Telecom to test itself,” Minyahel argues.

Meried of IE Network Solutions agrees, suggesting that Ethiopia follow China and break the monopoly up into at least partially state-owned enterprises.

“So then, even if they are state companies, there is at least some competition,” he says.

In the short term, radical change looks unlikely. The government is still grappling with political instability after the shock resignation of Prime Minister Hailemariam Desalegn on 15 February. Protests began in 2016 about the heavy-handedness of the ruling Ethiopian People’s Revolutionary Democratic Front government, which tightly controls the country’s political sphere.

Andualem says Ethio Telecom has hired a consultancy to look closely at the company’s difficulties and propose solutions, though he suggests full privatisation or liberalisation remains far off. For now, the most significant change may be the recent decision to outsource some of its own internet distribution to private Ethiopian firms which can act as virtual internet service providers.

Beyond that, the road ahead is paved with obstacles. “If there was any stability in the Ethiopian government, you might see some kind of sensible process,” says Southwood. “But it’s stuck, like Ethiopian politics has got stuck.”

Tom Gardner in Addis Ababa

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Andualem Admassie Abate Chief executive officer, Ethio Telecom

The second transformation TAR: How do you see the future of Ethio Telecom?

ANDUALEM ADMASSIE ABATE: Now we are preparing for what we call the second transformation. If you look at the world telecoms, operators are under pressure. So you need to bring in new ways of doing business: you cannot sit in a comfort zone. We are preparing ourselves to see where the telecoms industry is and where we are as Ethio Telecom. We would like to compare and come up with a new transformation. And this transformation may lead us in different directions.

So what is on the table?

We have a plan to invest abroad. We are looking at the weaknesses and strengths of our neighbours. It’s about working together, as partners, because we don’t have any international experience. So we need to find companies who can work with us in co-branding and co-partnership.

per year. And our liquidity is also another area: whatever cracks and nagging are coming, we can weather [them].

Is Ethio Telecom planning to diversify into other products and services like, say, mobile money?

I am fighting for mobile money here in Ethiopia to be telecom-led, not banking-led. If you look at Safaricom, 30% of its revenue is M-Pesa. I want that to be the case for Ethio Telecom.

To what extent is financing going to hinder your expansion plans?

Finance is not an issue for us. We are minting money. Of course, we don’t have any liquidity problems. And we are the one financing most of the infrastructure, including the new railway [...] The only thing sometimes is the foreign currency issue – balancing between the foreign and local currency.

Even the loans we got from ZTE/Huawei/ Ericsson: there is no sovereign guarantee.

It’s not even a concessional loan.

Can you see yourself competing in Kenya, for example, a regional leader in telecoms?

We’re not afraid We are establishing our own of any African telecoms telecoms excellence academy operators. We are the and producing a lot of engineers giant of Africa. If we come up with a different product and services then we’re in a good Compared to some countries position. We’re not afraid of competition. in the region, internet penetration But I don’t think we’ll start in Kenya. Maybe in particular still lags. What’s we’ll start with South Sudan or Somalia. your explanation for that?

Of course, you’re right. One issue And what do you think is Ethio is the number of operators. If you have five Telecom’s competitive advantage? operators people may have five SIM cards One is the question of size. We are big [...] For us, very few people come up with enough; we have enough infrastructure a double SIM card effect. Of course I’m not within the country; we are establishing saying we’re in a good position in terms our own telecoms excellence academy of penetration – I’m not justifying in such and we’re producing a lot of engineers a way. But these are contributing factors. currently. Our engineers are now in the position to work in the West. In fact, At the moment there is no mobile one of the biggest problems that I have internet outside of Addis. How does is that the crème are moving to Europe, that affect your business? to America, to the rest of Africa; [...]

That is a government decision; it is And another thing is the financial strength not our mandate. For sure it is a difficulty of Ethio Telecom. Currently, our revenue for us. But it’s a question of choice between T.G. is near to Birr40bn, which is almost $1.3bn the security and the revenue.

ANTENEH AKLILU

COMPANIES & MARKETS | BUSINESS 71

72 BUSINESS | FINANCE

ZB Bank has not done too badly, with a 35.7% increase in profit post-sanctions

ALL RIGHTS RESERVED

bank) through a nostro account permitting access to products and services in foreign markets.

Correspondent banking plays an important role in the global payments system by facilitating cross-border transactions and trade. But lately, banks around the world are revising their correspondent banking relationships through derisking, aprocesswhere a correspondent bank cuts ties with a respondent bank due to perceived financial risks. According to the Reserve Bank of Zimbabwe, at least 102 correspondent banking relationships have been ended over the past 10 years because of the high country-risk due to economic sanctions.

FINANCE Mombondiani continues: “The sanctions increase country risk, and a negative country risk affects everyone. As a nation, we can’t attract foreign direct investment In a climate of derisking, many international banks do not […]. Institutions like us can’t access want to do business with their counterparts in Zimbabwe, bankingtransactionsorcreditlines to boost our business growth and raising costs throughout the economy we can’t trade with the US market.

We have had to trade via third-tier estern countries say financial institutions, who charge Steward Bank, a subsidiary of busithat their sanctions on us huge premiums, and we pass nessman Strive Masiyiwa’s Econet Wireless family. Steward Bank’s on that cost to our customers.”

Zimbabwe are targeted chief executive officer, Lance soastonothurttheaveragecitizen, Busisa Moyo, an industrialist, but their impact on the financial and the immediate past president Mambondiani, tells The Africa sector is raising costs across the of the Confederation of Zimbabwe Report that all banks have been Industries, argues that sanctions board as the economy continues to struggling to open correspondent banking accounts with foreign have caused as much suffering to struggle. Sanctions were imposed many Zimbabweans as economic during the regime of former presbanks for all types of international ident Robert Mugabe to protest mismanagement and corruption. paymentsbecauseofWashington’s at human rights abuses, political Zimbabwe Democracy and “They have trebled the suffering Economic Recovery Act of 2001. of ordinary people, and we raised strong-arming and controversial this with the US government on land reforms. TheEuropean Union “Our nostro account with Nu N u umber of correspondent o removed most of its sanctions in an outward private-sector mission Commerce Bank was closed last b banking 2014, while the United States reto Washington in 2015,” he tells year. Most international banks are relationships tains its travel and economic emcutting correspondent banking The Africa Report. lost to bargo on several Zanu-PF officials, ties with local banks because of the Zimbabwe STIGMA REMAINS senior members of the military increased scrutiny over US dollar over the and state-owned companies.

Moyo says many rural farmers still transactions from Zimbabwe. No past 10 years cannot access cheap funding to correspondent bank wants to risk Bankers says the sanctions have because support their businesses because their reputation and the hefty fine caused the loss of correspondent of derisking banks like ZB Bank, state-owned that comes with assisting an errant banking relationships, hindering and the Agribank and fertiliser company theflowofremittancesandmaking transaction,” Mambondiani says. reputational facilitation of international trade Correspondent banking is an Chemplex were under sanctions. damage very difficult.

The US delisted both these banks arrangement between two banks of economic in October 2016, along with the Evidenceonthegroundsuggests where one bank (the correspondsanctions ent bank) provides services to Infrastructure Development themeasureshaveaffectedcitizens another bank (the respondent and untargeted businesses such as Bank of Zimbabwe (IDBZ), but SOURCE: RBZ

Corresponding damage

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the stigma of having been under sanctions remains.

Agribank chief executive Sam Malaba says the reputational damage caused by the sanctions means the bank has struggled to find an equity partner and has lost a $98m line of credit. Malaba says Agribank is finding it challenging to open new correspondent bank relationships as many international banks are derisking.

“Derisking has become a major issue affecting trade for Third World countries. International trade has become tightened.

One must invest a lot now in anti-money-laundering toolkits to monitor transactions and to know your customer. It’s much more difficult because many international banks are cutting back correspondent banking services. There is much stricter monitoring now. In the past we could use third-party banks, but it’s no longer simple because of close monitoring on transactions.”

Moyo adds: “Private sector companies have had funds held for long periods in the US clearing system leading to inefficiencies and sometimes losses. While this has improved, it is still a concern to the private sector.”

Anotherprominentindustrialist, who leads an influential company in the agricultural value chain, says: “No trader and bank want to do business with a company that was once on the sanction list.”

To compensate for the loss of nostro accounts and to alleviate the impact of sanctions, Zimbabwe’s banks are making payments through other, friendlier regional and international banks, and trading in alternative currencies like the euro.

Tonderayi Mukeredzi in Harare

Grounding the Guptas The courts in South Africa are the best place to take in the sights and sounds of a young democracy hard at work righting wrongs. And in South Africa, there are plenty of wrongs to go around.

Someone has switched off the tracking device on the Gupta family’s Bombardier Global 6000 private jet. Quite sensibly too, given that fugitive Ajay Gupta needs to stay ahead of the law, which has questions about various holes in South Africa’s fiscus. But this is causing concern to Canadian state-owned bank Export Development Canada (EDC), which provided the finance for the aircraft. Hannibal is keen to see all property returned to its rightful owner but wonders whether EDC knew anything about the Gupta family empire before the loan. It would pay to be mindful of the scrutiny that blew up PR company Bell Pottinger and was so damaging to McKinsey and software-maker SAP.

Sky-high inflation hounds Nigeria Beyond jets, another thing is failing to prepare for landing: Nigeria’s much-hoped-for interest rate cuts. The central bank’s main interest rate is stuck at an eye-watering 14%.

This makes it hard for budding businessmen and prospective house-buyers to approach banks for loans. But with inflation still galloping along at 15%, it is hard for the central bank to lower rates. Hikes in the price of petrol are largely to blame, with angry motorists railing against the shortages that plague the country. The cost of filling up a car or truck has risen 27% since November 2017 – and food prices, dependent on those lorries, are taking off in tandem.

Floating clouds of steam from the tops of nuclear reactors While a lot of noise has been made by Hannibal’s tricksy colleague Anansi about Russian nuclear deals being stymied in South Africa (TAR98), he may want to watch what is happening elsewhere on the continent. On 10 March Russia’s foreign minister Sergey Lavrov announced a new era of cooperation with Ethiopia to create a nuclear research facility based on Russian reactor designs. Russian reactors are also being sold to Egypt, which signed a $30bn deal in December 2017, while in October 2017 Russia announced it was to build some in Nigeria, for around $20bn. This could make up for Russia’s losses in South Africa….

EXPERTISE IN AFRICAN RAILWAY MANAGEMENT www.vecturis.com

Abdelaziz Souissi, Director Infrastructure Works Dpt, SNCC / DR CONGO

74

Innovation is the Only 1% of the Nigerian population is insured, but research suggests that to be successful in this market demands a whole new approach. As an influx of foreign players changes the landscape, indigenous players are being forced to think on their feet

By Charles Idem in Lagos

L

aunched in 2014

by Kola Oyeneyin, AutoG enius is an online platform that allows retail customers in Nigeria to compare prices and buy insurance policies from partner insurers. It was one of the pioneer platforms that leveraged technology to disrupt the traditional brick-and-mortar approach of selling car insurance

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A nation of risk-takers, Nigeria needs insurance tailored to specific trades

specific trades or circumstances,” says Oyeneyin. After extensive discussions with existing and prospective customers – which revealed that most would rather take out forms of insurance that they deem relevant to their specific circumstances – the company is poised to rebrand itself as a provider of a range of lifestyle insurance products.

SVEN TORFINN/PANOS-REA

WHO WILL INVEST?

best policy – a mandatory class of insurance in Nigeria – and was born out of Oyeneyin’s frustration at the difficulty of following up on a claim after a road accident.

Since its launch, AutoGenius has facilitated transactions for almost 100,000 customers, according to Oyeneyin. Six months ago, the company, in conjunction with AIICO Insurance, launched a product called Taxify Cover for the THE AFRICA REPORT

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taxi-hailing service of the same name. The policy insures drivers and customers alike against the loss of items, or incidents that may occur on trips. “We realised that for consumers in Nigeria, insurance is not necessarily going to be your typical vertical [framework] of home insurance, life insurance, etc., but a lifestyle [platform] that requires special kinds of products to cover them in

Currently only 1% of Nigeria’s population is insured. It is therefore a huge prospective market.

The idea that new models of insurance would attract more takers has long been mooted in industry circles. However, the fact that few insurers develop products that target distinct customer segments shows a lack of commitment to invest in developing the market.

Rotimi Okpaise, a partner at business services company EY, notes that the expansion of Nigeria’s insurance industry hinges on the desire of the insurers to invest in stimulating demand. “If we continue as we are now, I don’t think much will change in terms of [the insurance sector’s] production and its contribution to gross domestic product [GDP]. I don’t see much changing,” says Okpaise.

Okpaise says he is optimistic that the increasing participation of international insurers in the market could lead to innovation and competition. The low penetration rate in the country offers sufficient incentive for them, Okpaise says.

Since 2014, the likes of Axa, Sanlam, Old Mutual and Swiss Re have entered the Nigerian market by acquiring partial or full stakes in indigenous insurers. Last year, the trend continued as two more international giants – Prudential and Allianz – acquired indigenous insurers, Zenith Life Insurance and Ensure Insurance, respectively. These recent acquisitions brings the total number of insurance companies owned or

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partly controlled by international insurers to 12 out of 56 insurance providers. The industry regulator estimated that insurers collected gross premiums of N326bn ($903m) in 2016.

Local industry leaders such as AIICO Insurance and Custodian and Allied Insurance have invested in new products and partnerships over the past few years. Custodian has sought to leverage digital technology to reach an increasingly connected client base, having launched a mobile app in 2014 that customers can use to file claims and access other services.

Meanwhile, foreign counterparts such as AXA Mansard and

the likes of Leadway Assurance, which is part owned by Swiss Re, have also launched new products and sought to leverage the benefits of technology. Two years ago, AXA Mansard launched Autoflex, a customisable car insurance product that allows customers to choose comprehensive insurance covers to fit their specific needs.

It followed this up last year by launching She Drives, a product aimed at women. AXA Mansard also launched an app in January, targeting existing consumers to enable them to access services via their phones.

Other international firms, like Prudential, have only just entered the market. Matt Lilley, chief

16.7%

Leadway’s market share in 2016, nearly twice the share of its closest competitor, AIICO SOURCE: NAICOM

Matt Lilley

Chief executive, Prudential Africa

Long-term game TAR: What was attractive about the Nigerian market given your existing Africa footprint?

It was always clear right from the very start of our investment in Africa that we wanted to be very successful in Nigeria and that Nigeria is a huge opportunity for life insurance. Obviously it’s a big population, enormous economy in African terms, but also it’s very underpenetrated in terms of insurance […]. We knew right from the start that Zenith was the partner that we wanted to work with, and so [all it needed] was the time it took to build that relationship with the Zenith team.

It’s quite a competitive market, so what is Prudential’s strategy for growth?

We want to be successful over the long term, which is the only way to do it in life insurance – it’s a long-term product.

And we think the long-term prospects of Nigeria are really strong. Economic cycles are a fact of life, and Nigeria is at a different point in the economic cycle than it was four or five years ago.

What initiatives do you plan in order to grow the business?

Life insurance, in particular, is a product that is sold to people rather than bought by people.

Your success in growing a life-insurance business is usually a measure of how successful you’ve been at building your distribution channels. And so our energies in Nigeria are going to be focused very heavily on working with our partners at Zenith Bank

to build our distribution over the hundreds of branches across the country, and recruiting and training hundreds of advisers to work alongside the bank branches and advise the Zenith customers on ways in which our products could help them.

It’s probably very early at this stage but do you foresee consolidation at some point given the number of insurers in the industry?

We are very happy with the business that we have and with the organic growth prospects that our business has because of the partnership.

Consolidation can happen through mergers, but consolidation can also happen naturally by the winners taking more and more of the market.

Interview by C.I.

executive of Prudential Africa, notes that Nigeria, and Africa by extension, offers a similar opportunity to that of Asia several decades ago: it has an emerging middle class, a young population and families who have more money than their parents did.

ENTERING A NEW PHASE

Lilley says he is convinced the Nigerian market offers an enormous opportunity: “In Nigeria, life insurance is less than 0.1% of GDP. In Kenya, it’s close to 1%, and so there’s no reason why the life-insurance industry in Nigeria couldn’t be 10 times bigger than it is. And even that would just be a start,” Lilley tells The Africa Report.

Prudential has a bancassurance partnership with Zenith Bank, the largest Nigerian bank by assets.

The recent influx of international insurers, coupled with progressive regulatory policies, such as the ones enacted in April 2017 that permit bancassurance partnerships, show that the market is entering a new phase of development. The National Insurance Commission (NAICOM), the industry regulator, is stepping up efforts to deepen the market. It recently unveiled revised guidelines for the operation of microinsurance policies, setting a minimum capital base of N600m for acquiring a licence to provide microinsurance. NAICOM chairman Mohammed Kari has also advised small insurers who have struggled to pay claims to merge with larger ones, with the expectation that minimum capital requirements could be raised in the short to medium term.

Given these developments and the intensification of competition in the industry, what impact will this will have on the market and customers? EY’s Okpaise expects the effects to manifest in a more dynamic approach to serving customers. “The customer experience will change. And that customer experience comprises the selling, the way the products are brought to that person, the way pricing is conducted. There will be much more information available to customers.”

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78 DOSSIER | INSURANCE

FRANCOPHONE AFRICA

Reassuring the reinsurers

Protectionist measures to strengthen francophone African reinsurance markets are beginning to pay off for local firms and are also attracting more international players

T

oday, African insurers’ capital bases are so small that they cannot cover large power plants, ports, oil platforms or local airline fleets.

And if there was a catastrophe in a francophone African country, local reinsurers – who buy a share of insurance companies’ risks – would not necessarily have the resources to withstand it. But how can they cover risk if they do not have the means to pay up? That is the big conundrum.

Denis Chemillier-Gendreau, president of the consultancy Finactu and an insurance expert, says: “Insurers turn more to reinsurance when they do not have much capital.” Until April 2016, insurance companies in francophone West and Central Africa mostly worked with reinsurers based outside of the continent. Amongst the 14 West and Central African countries in the Conference Interafricaine des Marchés d’Assurance (CIMA), it was estimated in 2015 that 66% of business went to reinsurers outside of the zone, while 34% was with local companies.

But since April 2016, the governments of CIMA countries have taken action, spurred on

by Adama Ndiaye, deputy general manager of the Senegalese R e i n s u ra n c e C o r p o ra t i o n (Sen-Re) and president of the Fédération des Sociétés d’Assurances de Droit National Africaines (FANAF). The reforms in CIMA’s Article 308 have the goal of helping local firms to grow and to control as big a share of the premiums collected as possible.

Several measures have been put

in place, chief among them a stipulation that all accident, health, automobile and life insurance must be reinsured locally. Before the reform, 75% of those businesses could be reinsured outside of the zone. The ceiling for foreign reinsurance for medium-sized projects, like oil platforms, has dropped from 75% to 50%. But, due to the lack of strong enough reinsurers, the most costly risks – for large ships, trains, airplanes, etc. – can all still be reinsured outside of the CIMA zone.

While it is still too early to see the impact of these reforms on the francophone reinsurance space, there are certainly profits to be made. According to a July 2017 report from Finactu, the CIMA reforms will bring in 68bn CFA francs ($127.8m) in additional business in the short term. The report adds: “That is two times the turnover of Cica-Re, four times that of Aveni-Re and five times that of the Société Commerciale Gabonaise de Réassurance (SCGRe). If it were shared out only by the six reinsurers in the CIMA area, that total would mean a 65% rise in their total turnover.”

Some analysts say that the CIMA reforms are a much-needed bit of protectionism. “It was necessary to limit the outflow of reinsurance capital, as the CIMA balance of payments is not good,” says Chemillier-Gendreau. It also helps to finance local economies.

FUND-RAISING

Almost two years after the implementation of the reforms, reinsurers are growing. Of the six that have their headquarters

in the CIMA zone, two companies have increased their capital base 39% and are ready to benefit from AFRICA RE the strengthening of the sector.

In February 2017, Lomé-based Cica-Re raised its capital base from 20bn to 50bn CFA francs.

Meanwhile Aveni-Re’s rose from 10bn to 16bn CFA francs in GLOBUS RE 2 % 2016. Aveni-Re’s chief executive, SCG-RE 14 % Seybatou Aw, says that the comNCA RE 7 % pany’s growth will continue: “A SEN RE 10 % third fundraising operation has AVENI-RE 9 % already begun to bring it to 22bn CICA-RE 19 % CFA francs in the first half of 2018.”

SCG-Re, which is part of the Fonds Gabonais d’Investissements Stratégiques, has more modest Africa RE had goals. It announced in January 39% of the that it plans to double its capital insurance from 5bn to 10bn CFA francs market share by 2022. “The challenge is to in the CIMA convince shareholders that the zone in 2015, company will be able to make ahead of Cicaenough profits from the new RE (19%) and SCG-RE (14%). funds,” says Finactu’s ChemillierGendreau. He adds: “The reforms are going to accelerate the process SOURCE: FINACTU

39%

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In February, Lomé-based Cica-Re managed to raise its capital from 20bn to 50bn CFA francs to benefit from new opportunities in the sector

Kenya-Re has plans to open up a subsidiary in Côte d’Ivoire. Active in Africa for about three decades through its French subsidiary, Germany’s Hannover Re – which is the third-largest reinsurer in the world–openedanofficeinAbidjan in December. It is targeting health and life insurance, “which cannot be covered by reinsurers that do not have operations in the CIMA zone,” says Marthe Ekani Combet, the director of the Abidjan office.

Hannover Re is just getting started, but its goal is “to work hand-inhand with local insurers. The help given to companies will stimulate life-insurance activity,” she adds.

LOUIS VINCENT

CALCULATING RISKS

of ‘creative’ destruction. The best ones are going to mature, and the weakest ones will disappear.

You have to be big to succeed, to absorb the fixed costs.”

Another recent development is that international companies, including African ones from outside the CIMA zone, are opening up subsidiaries or representative offices, which are useful for small markets because they are less costly to manage. After getting approval for non-life insurance

in November 2017, British firm One Re – which specialises in reinsurance for manufacturing, commercial real estate and major infrastructure projects – set up operations in Libreville. With an office in Abidjan, the Société Centrale de Réassurance–asubsidiary of Morocco’sCaisse de Dépôt et de Gestion – got its authorisation to operate in January 2018. Its goal is to work with Moroccan companies that are expanding their activities in West and Central Africa.

While the foreign reinsurers that are setting up operations have well-developed technology systems and risk-measurement tools, local actors will have to adapt to international standards and demonstrate their technical capacity in order to identify and understand clients better. Finactu’s Chemillier-Gendreau concludes: “They have to learn to choose their risks. African reinsurers often take any comers, seeking to grow their market share. They have to understand that all risks do not have the same cost.”

Seybatou Aw, chief executive of Aveni-Re, says that means having workers with strong qualifications. Attracting good employees should become easier as the sector grows. It now represents just 1.2% and 1.4%, respectively, of the turnover of Munich Re and Swiss Re, the top two goal reinsurers, and risks continue to grow in tandem with economic growth.

Rémy Darras for Jeune Afrique

An Africa Re of light AFRICA RE IS THE LEADER in the Conférence Interafricaine des Marchés d’Assurances, controlling 15% of the market before the Article 308 reforms were implemented in 2016.

The pan-African reinsurer has shareholders that include 41 governments and institutions like the African Development Bank, French insurance company Axa and local insurers.

Africa Re is already profiting from the recent reforms. Olivier Nguessan-Amon, the West and Central Africa director for Africa Re, says: “We are receiving a lot more premiums in branches that used to be, for the most part, reinsured THE AFRICA REPORT

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abroad – especially in the maritime transport of raw materials like coffee, cocoa and rice, as well as manufactured goods.”

Analysts estimate that Africa Re’s turnover could rise by 10-15% per annum. It already has a solid capital base of $300m, so Africa Re is not planning on raising funds anytime soon. Africa Re’s chief executive, Corneille Karekezi, says he supports state-backed measures to bolster the insurance sector, telling media in February: “We need to have strong mandatory laws that encourage the population to buy different insurance products.”

R.D.

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Julius Kipng’etich

Regional chief executive officer, Jubilee Holdings

Penetration rates are low in East Africa, and Jubilee Holdings is betting on tech to cut costs and reach out to the masses

J

ulius Kipng’etich sits in his office on the eighth floor of a skyscraper in downtown Nairobi. He is only a few weeks into his new job as the regional chief executive officer (CEO) of Jubilee Holdings – which is East Africa’s largest insurer by customer base and which collected KSh13.8bn ($135.9m) in premiums in 2016 – but he has no shortage of ideas for the insurer’s regional expansion. Jubilee has subsidiaries in Burundi, Kenya, Mauritius, Uganda and Tanzania. “We are looking at using our presence in Burundi to move into Rwanda and the Democratic Republic of Congo,” he tells The Africa Report.

Rolling out new customerfriendly technology is another part of Kipng’etich’s strategy. In his shorttimeinofficesinceDecember 2017, Jubilee has already launched an automated messaging service and three mobile apps. “What the insurance sector needs is a proper disruption because we are too comfortable with where we are now,” Kipng’etich says.

Kenya’s insurance sector must innovate if it is to meet a target of doubling insurance penetration in the next few years, he argues.

Currently, insurance penetration

JUBILEE HOLDINGS

The insurance sector needs a proper disruption stands at 2.75% and has in fact fallen from a high of 2.9% in 2014, according to Insurance Regulatory Authority figures. Kenyan insurers have set themselves a target of 6% penetration by 2020.

“It’s possible for us to [meet this target], but we need to get moving,” Kipng’etich says. His short-term plans include integrating artificial intelligence, cloud computing, mobile products and blockchain technology into Jubilee’s insurance products. His goal is to drive mass customisation and individual assessment of risk.

“Banks have moved to credit scores [using technology], and we insurers need to go the same way,” Kipng’etich says. “By measuring behaviourelectronicallyandbuild-

“Banks have moved to credit scores [using technology] and we need to go the same way” ing sufficient data sets, we can customise insurance products.”

Changing to a demand-driven model, although difficult, seems to be the future of the sector. This could help attract new customers in East Africa, where people hardly ever seek insurance outside of the legally mandated products like motor vehicle insurance.

Kipng’etich says the biggest hurdles to growth prospects in the sector are an outdated business model and a general lack of trust in insurance companies.

But if insurers can offer cheaper policies with shorter commitments, more people might get on board. “There are many ways of mitigating risk in our social fabric, and insurance needs to understand these and evolve,” Kipng’etich adds. Across the region, people tend to turn to churches and friends and family, rather than insurance companies, to protect against risks.

360-DEGREE VIEW

Kipng’etich has had a storied career as a turnaround manager in the public and private sectors.

As the former CEO of troubled retail chain Uchumi, he helped to stave off bankruptcy for years but the company risked collapse in late 2017. He has also worked as the head of Kenya’s Wildlife Service and as the CEO of Equity Bank. “I have a 360-degree view of the economy because of these experiences,” he says.

At home, Kipng’etich is troubled byKenya’smacroeconomicperformance. The government’s interest rate cap on loans has reduced the allocation of capital, especially to small and medium-sized enterprises, he says. But he is optimistic that the economy has turned the corner from last year’s fraught election period and re-run. “This [election] was unique because it was prolonged,” he says, “but we are already bouncing back.”

Interview by Morris Kiruga in Nairobi

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INTERVIEW

King

Sunny Adé “Long live the King” Heir to a Yoruba tradition of praisesinging with infectious drumming, he brought Juju music to an international audience and experimented with the far reaches of synthesised sound before returning to his roots. And he has no intention of stopping

By Dami Ajayi in Ondo

T

wo photographs of King Sunny Adé hang on the reception wall of M&C 106.5 FM radio station in Ondo town. One is a recent portrait identifying him as Dr. Sunday Adeniyi Adegeye, M.F.R. (Member of the Federal Republic of Nigeria, an official honour), the chairman of the station. The second, a more dated and life-sized image of the maestro strumming a guitar, carries no identification: what would be the need?

It is past noon when King Sunny Adé saunters into the radio station.

He sports a boyish grin emphasising his long-drawn vertical Ondo facial marks. Dressed in maroon aso-oke with a matching shawl and cap, he glides like a warrior, not like a 71-year-old monarch of music. He walks straight into the star-struck faces of the coterie of guests who have been awaiting his arrival. Shaking the hands of everyone in the room, he radiates a warmth that makes the endless wait gratifying.

King Sunny Adé is a legend of Juju music – a variant of palm-wine music

that blends praise-singing with Yoruba drumming.Itsprimordialrootsaretraced back to West African griot traditions and forebearslikeIrewoleDenge,TundeKing, Tunde Nightingale, Ojoge Daniel and I.K. Dairo, who popularised this sound in south-west Nigeria from the 1920s.

Born in Osogbo, a two-hour drive from his native Ondo town, Adé quit formal education when his musical urge became irresistible. His apprenticeship began as an equipment-carrying band boy, moved through his short romance with drums, and ended when he began to play the guitar for semi-pro highlife bands in Lagos in the ’60s. His parents were oblivious of his foray into music – he had conveniently misinformed them that he was a student.

Fame and acclaim came to Adé in the ’70s, often remembered in Nigerian history as a watershed period in music, arts and culture in general.

Nigeria’s head of state at the time, Yakubu Gowon, is famously quoted to have said: “Money is not

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RES IGHTS

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our problem, but how to spend it.” The Yoruba, known for their vivacity, patronised Juju musicians like Dele Abiodun, Thony Adex, Kayode Fashola and Emperor Pick Peters, but Sunny Adé and Ebenezer Obey were reserved for the richest Yoruba elites.

King Sunny Adé, crowned by the monarch of Oyo town in the late ’70s, shaped the genre with his lyrical indulgence in deep Yoruba traditions while energising the music with foreign equipment like the Hawaiian guitar, which he borrowed from American country music.

A self-taught guitarist, Adé was ranked

by Spin magazine as one of the 100 Greatest Guitarists in 2012. His 1974 album E Kilo F’omo Ode and his 1977 Sunny Adé and his African Beats in London LP will reassure listeners of his virtuosity. E Kilo F’omo Ode, an early classic, dwells on Adé’s existential angst about his artistic future, while the latter is a self-assured album steeped in expansive guitar rhythms that ushers in his illustrious mid-career exploits.

After the death of Jamaican reggae legend Bob Marley, Island Records turned to Africa to find a new voice they could raise to global superstardom.

Martin Meissonnier, a French journalist,

Selected discography E Kilo F’omo Ode (1974) An early classic armed with an artist’s existential angst and a battery of acoustic guitars.

Sunny Ade and his African Beats in London (1977) Joyous guitar rhythms, Yoruba thanksgiving, and the second outing of the steel pedal guitar in Juju music.

Juju Music (1982) A catalogue of early classic songs introducing Juju music to a worldwide audience.

Synchro System (1983) Second international album featuring a long spool of Adé’s mid-career synchromatic sound.

Having sold his guitar for N52.1m he could take it easy… but he won’t

Aura (1984) Juju’s wildest studio experimentation with vibraphones, synthesisers and the Linn drum machine.

The Return of the Juju King (1987) A return to familiar terrain with songs from his locally acclaimed Sweet Banana and My Dear albums.

NOT A WEDDING BAND

Odu (1998)

Arguably Adé’s finest Juju outing, meditative, mellow and melodious, named for Lagos.

WWW.SAMURAHH.COM

Masterful and up-tempo Juju music featuring incantations from the Ifa literary corpus.

Seven Degrees North (2000)

music producer and scout for Island, heard the wail of Demola Adepoju’s Hawaiian guitar on a Sunny Adé song in a traffic jam in Lagos and he was hooked. A few years later, Adé released his first international album, with the definitive title Juju Music, on the label.

Adé released two other international albums within three years: Synchro System (1983), nominated for a Grammy in the Best World Music Album category, and Aura (1984), an experimental record replete with synthesisers and a Linn drum machine. But, despite featuring Afrobeat drummer Tony Allen and American musician Stevie Wonder, Aura failed to chart. Soon afterwards Island Records pulled the plug.

Sitting in an off-air studio booth in his radio station 30 years after parting ways with Island Records, a pensive Adé reminisces: “I believe I still had my fans all over the world. It is only that we left Island (Records). But you know we went to Mango (Records) as well. In this case, I see myself as a freelance. I can record with any company in the whole world as long as I don’t have a contract with another person.”

Adé’s departure from Island Records seemed like the end of a failed experiment at globalising Juju music. But even if Juju music did not have the pop tendencies of reggae, Adé’s attempt paved the way for the music of Youssou N’Dour, Ali Farka Touré, Salif Keita and Papa Wemba to reach a global audience.

While Adé was busy touring the world with his 22-man African Beats band and incurring the large managerial costs of popularising a new sound in a different clime, his Juju musician counterparts were also touring abroad, playing small venues hosted by Yoruba associations in the diaspora.

Of course, Adé’s courtship of the international scene had consequences on his local fan base. Even though he continued to release albums in Nigeria at a prolific rate, his most revered competitor, Chief Commander Ebenezer Obey, older by five years, made albums that catered to the whole gamut of Yoruba social functions – weddings, children’s christenings and birthday celebrations – thus expanding his fan base and local popularity.

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Odu (1998), was ambitiously named for the Ifa literary corpus, a system of divination popular in Yorubaland, south-west Nigeria as well as in Afro-Cuban and Afro-Brazilian religions.

Further blending the essence of Yoruba history with guitar licks, steel pedal guitar wails and fast-paced percussion brought Adé much-deserved critical recognition and another Grammy nomination in the World Music Category for Odu. When asked about how this achievement made him feel, Adé reclines in his seat and smiles.

OLD SOUNDS MADE NEW

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In 2000, he released Seven Degrees North, named after the approximate distance of Lagos from the Equator. One of the longer numbers on this LP, ‘Solution’, begins with calypso influences before devolving into a remake of one of his ’80s tunes, ‘Isu J’oba L’oriyan’, the song he recorded, produced and arranged in the aftermath of the mutiny of some of his band members.

Adé’s contribution to Nigeria has been recognised with the national honour of Member of the Order of the Federal Republic (MFR), awarded by Goodluck Jonathan, as well as an honorary doctorate from Obafemi Awolowo University, Ile-Ife, where he is also a visiting lecturer.

In 2016, Adé was honoured at the finale of a year-long roster of events to mark his 70th birthday and 50 years on stage. The event, at the Federal Palace Hotel, Lagos, reached its climax when his vintage Fender Rhodes guitar, adorned with Promoting his 70th birthday concert beautiful drawings by Victor in 2016 with a stylish photoshoot, Ehikhamenor, was auctioned Sunny, his guitar and his tour bus for the whopping price of 52.1 million naira ($145,000). look at the trend of how popular some Today, Juju music is effectively a songs in my previous albums were. And quaint genre, but Adé remains an influagain, through my fans and fan clubs ential icon to younger artists – his masworldwide, I ask them what songs they sive 1986 hit ‘Sweet Banana’ incarnated would prefer me to pick.” a phallic metaphor still very much in use Adé sees himself as a custodian of in Nigerian popular culture. Musicians Yoruba history. “I am African. Anything like Wizkid, Adekunle Gold, Niniola and African, people want to know more Iyanya fondly acknowledge him as the about it. Incantations have [existed popstar whose stage presence could rival, if not outshine, Michael Jackson’s. since] before my forefathers. How did At 71, the King of juju music has they relay it? Incantation is history.” not retired; you will not be surprised Adé paid particular attention to the to hear that his live performances are titles of his international albums. His his most consistent exercise routines, 1987 PolyGram Records release, The Return of the Juju King, announced the playing shows with the stamina of a man half his age. resurgence of his Juju music evangelism.

While the ’80s brought him fame, it was not entirely without struggles.

Adé had to reform his band following a mutiny of some members at a recording session in 1986. At this time, his band endured a brief name change from African Beats to Golden Mercury. But Adé seemed to turn his creative turmoil into memorable hits.

If Adé’s locally released albums were a minefield of artistic experimentation, his international albums, often a compilation of his best tunes over a period of time, were more deliberate and assured.

“I always want to make something new. At home, they prefer medleys rather than three- or five-minute tracks for international albums,” he says, reflecting on the process of making his international albums. “Sometimes I THE AFRICA REPORT

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86 ART & LIFE

LES POÈTES DE LA TERRE Until 15 April

FESTIVAL FIM DO CAMINHO

MARRAKECH | MOROCCO Memory and matter are explored through soil, metallurgy, and poetry in M’Barek Bouhchichi’s conceptual exhibition. voicegallery.net

FOUR WOMEN Until 28 April LAGOS | NIGERIA Adejoke Tugbiyele, Bunmi Oyesanya Ayaoge, Stacey Ravvero and Kehinde Awofeso present work that queries the agency and representation of female artists at this alternative space on Victoria Island. revolvingartincubator.com

Literature Powering the word In Mozambique poets, authors, journalists and activists are pushing to develop a new generation of Lusophone writing

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DAVID GOLDBLATT Until 7 May

DAVID GOLDBLATT

PARIS | FRANCE Paris’s Centre Pompidou presents its first retrospective of the South African photographer noted for his images of the apartheid years. centrepompidou.fr

UMTHAMO Until 18 May CAPE TOWN | SOUTH AFRICA An immersive installation made from copper pipes by Nicholas Hlobo and Cinga Samson. maitlandinstitute.com

Eduardo Quive, Maputo’s literary dynamo

duardo Quive, poet, journalist and Kuphaluxa’s goal is to “impart Mozambican literary activist, is shaking up the literature and its creators,” Quive tells The Mozambican literary scene. For too Africa Report. The members have organised long, he says, the country’s writers have been book fairs in barrios in and around Maputo isolated: “No one will publish an unknown since 2011, the same year the movement writer,” he says. “It’s almost impossible to see began publishing Literatas. a book published as a [first] project.” At 27 In 2015 Quive was elected president of years old, Quive is president of Mozambique’s Kuphaluxa, and in October of the same year leading literary movement, Kuphaluxa, launched the Literatas festival, of which he founder of the Literatas book festival – and is director. “It’s a celebration of reading and editor-in-chief of the Literatas review. He has writing books,” says Quive of the festival, also published his own collection of poetry which has now held three editions and at home and abroad. hosted 150 local and international guests, The Kuphaluxa movement was founded in 2009 by what at the time “Our works are not translated was “merely a group of readers who into the major languages of wanted to learn more about books”.

African countries,” says Quive Kuphaluxa means ‘to divulge’ in the local language Changana (xichangana) and it has launched the careers of more including artists from Zimbabwe, Angola, than two dozen local writers, including Brazil, Portugal and Italy. The programme Mbate Pedro, Japone Arijuane, Nelson Lineu includes “Q&As on literature, music and and Mélio Tinga. the arts, as well as workshops, readings, film The movement – most Mozambican writers screenings, theatre shows, live music and of each generation have been part of one – is dance, a gastronomy fair, and more,” he says.

The last free edition of Literatas was pubblossoming, yet challenges remain. “We don’t have the domestic conditions, as a nation, to lished in early February 2018. A website will truly integrate ourselves into the Portuguese- soon offer some content for free, while the speaking world, let alone the African context,” magazine will be behind a paywall. “The says Quive. “Our works are not translated into website will be a reference within the national the major languages of African countries, cultural journalism sector,” says Quive. “It will such as Swahili, French or English. The few make quality content which addresses the key translated authors are mainly published cultural issues of the country, accessible to in Europe, so everything remains there, it everyone, everywhere, at all times.”

Alex Macbeth doesn’t return to the continent.”

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Transportation Electric avenue From a trip of several days to one lasting a matter of hours, the Horn of Africa just got better connected thanks to the continent’s first cross-border electric train line

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The station’s proximity to the airport, a new university campus and a planned free-trade zone means its passengers will soon include soldiers leaving any of the city’s five military bases for a weekend of partying;foreignstudentsreturninghome to or via Addis Ababa; Chinese and East African businessmen and their cargo.

Unlike my travelling companions – mostly Chinese businessmen with the right of way across both Horn of Africa countries – my visa only takes me as far as

Ali Sabieh, 10km north of the border. As weapproachthecountry’ssecond-biggest city, camels stride gracefully across the landscape, stretching as if inviting me to return to Djibouti on their backs. It is an honour I have to respectfully decline.

The train’s next stop is the border town of Dire Dawa, then Adama and finally it will reach Labu in Addis Ababa later that day – a journey of many days by road or the narrow gauge.

Eromo Egbejule in Djibouti

The Djibouti-Addis Ababa trip takes just under 12 hours

LI BAISHUN/XINHUA-REA

he road to Nagad Railway Station – Djibouti’s first and only passenger train station and terminus of the new 754km Addis Ababa-Djibouti electric rail – skips past the old rail tracks laid in 1917 and tapers just a few metres after the police academy, ending at a T-junction. To the left is the route towards Loyada at the Somali border, and to the right is the dusty path to the station, flanked by colourful flags with Chinese inscriptions – testament to the Chinese loans that funded the project.

A handful of people get onto the shiny new red-and-white train when it pulls up right on schedule at 7:55am then departs a few minutes later. The manager of the station is Chinese; the hostess and some other staff are locals. Launched in January, the trains leave Nagad every other day at 8am and reach the Ethiopian capital by early evening; the return trip follows the same pattern the next day.

“My friends say they are waiting for others to take the train first so they can see if it is safe,” says 25-year old Ali Farah, an accounts clerk at a shipping company, as he slides onto a first-class sleeper soft couch. “They can’t wait to take it soon.”

Tickets cost between 400 and 9,000 francs for soft, hard and bunk-bed sections in the spick-and-span coaches.

For those seeking to refuel during the journey, a refreshments coach awaits.

Watu Wote (All of us)

Director: Katja Benrath

Katja Benrath’s graduation project from Hamburg Media School, filmed in Nairobi with other crew members from Nairobi’s Africa Digital Media Institute, Watu Wote was nominated for a 2018 Oscar in the Live Action Short Film category.

It didn’t scoop the big prize but has already garnered over 35 other international festival awards – not bad for a student production. The 22-minute film fictionalises the true story of a 2015 bus attack by Al-Shabaab militants in Kenya in which the Muslims aboard protected their fellow Christian passengers. It is told through the eyes of embittered Catholic traveller Jua (Adelyne Wairimu) as she interacts with other passengers, chiefly a Muslim teacher, Salah Farah (Abdiwali Farrah).

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Opening in a back alley in downtown Nairobi, a luggage-laden Jua comes upon a police raid of Muslim youth. She hovers momentarily but moves on. Her destination, Mandera, is a gruelling 31-hour drive away and as the journey progresses the city quickly gives way to small towns then a wide, barren expanse where a promised police escort doesn’t materialise. The film presents a timely lesson in empathy and the skewed perceptions held against those too easily dismissed as “other”. Jua’s snappish demeanour is contrasted with the kind, selfless acts of those around her.

Farrah shines with his portrayal of Salah Farah and Wairimu embodies Jua’s transformation from stoic to soft with grace.

Wanjeri Gakuru

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Market-fresh and hassle-free

Terry Pheto

OZOZ SOKOH

The South African actor who became a household name with her compelling performance in Tsotsi is working on a short film that will be out this year TREND HUNTER PREMIUM PRODUCE ON YOUR DOORSTEP

What do you enjoy most about acting?

Being able to be anything and anyone. To put yourself in another person’s shoes and life and body. I think actors are God’s favourite people.

Who was your biggest inspiration growing up?

My mum – that sounds so cheesy – and my grandmother. Both of them are hard workers and very entrepreneurial. I’m grateful that I grew up being surrounded by strong women. Even though they didn’t have much, they were superheroes. Then Leleti Khumalo in terms of acting, and Oprah Winfrey in terms of what a black girl can be.

Favourite movie?

For obvious reasons I would say Tsotsi, because it was my first movie – and I was the lead – and it’s the only movie that has won an Oscar for the country and the continent.

What are you reading?

What I Know for Sure by Oprah Winfrey.

What is your favourite hangout spot?

My kitchen, because I love to cook.

My celebrity crush right now is Issa Rae [actress on HBO, and promoter of work by people of colour].

What is your biggest guilty pleasure?

Shopping.

What’s your favourite African city?

Johannesburg. There’s no place like Joburg!

If you could co-star with any actor in the world, who would it be?

I’d love to work with Lupita [Nyong’o].

Interview by Shingai Darangwa

ALL RIGHTS RESERVED

Who’s your celebrity crush?

On a Saturday morning in the heart and relative calm of Lekki, a Lagos suburb, groups of men and women – shopping bags in tow – are sizing and picking fresh tomatoes, leafy greens, tubers of yam, potatoes and fish of varying kinds, under tarpaulin canopies. The welcome banners read: “Prince Ebeano supermarket […] Bringing Mile 12 closer to you.” Welcome to the village market 3.0.

The huge, 30-year old Mile 12 Market is the source of 80% of food consumed in the state. It is, however, 45km from Lekki, with throngs of people to navigate through, parking woes and traffic gridlocks.

Around five years ago things started to change. This was village market 1.0: small bags of amala (a ground flour of dried yams or plantains), packs of ground red peppers and crayfish, thickeners like egusi melon seeds and ogbono local mango seeds began to line supermarket shelves. A step in a less chaotic direction for Nigerian shoppers.

In version 2.0, as demand for more rural products increased, supermarkets set up small, retail outfits next to the main store with most of the food products typically found in open markets. They were a bit pricier, but customers were willing to pay for the convenience.

Now we are in version 3.0. Local supermarkets are opening up smaller versions of traditional markets with wholesale and large-quantity sections for meat, seafood, fruit and vegetables, this time with market-style prices.

As food trends in Nigeria change, the voices – or pockets – calling for food in the sweet spot between market freshness and supermarket convenience might just be loud enough to bring Mile 12 to your doorstep.

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TRAVEL SOUTH AFRICA

As adrenalin-packed leisure pursuits go, cage-diving with sharks could be the biggest challenge of them all.

But these predators are also a wonder to behold

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he marine biologist stands in front of an empty cage on the veranda for the safety briefing and demonstration that all shark-cage diving trips must start with.

“Okay folks. Please listen to the safety instructions very carefully. The first thing we will do is get into the cage.

You must always stand upright, and only support your hands with the bar in front of the cage. If you are tall, there is a bar at the back of the cage where you can put your feet so you don’t float in the cage,” she says, before adding that we shouldn’t move around the cage or remove our hands from the bar in the front of the cage.

We are still on land, in Gansbaai in the Western Cape, and I’m already in trouble.

I’m five feet tall and can’t be still for more than a few seconds, especially my hands – it’s as if they were made to fidget.

“Right,” she continues. “Now that we all know how not to act in the cage, we’ll get to the fun part. We are going to go to Dyer Island, where the sharks usually are, and hook a bait so they come to the cage.”

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I have walked with lions as if they are puppies, and petted cheetah the way I would my cats in the morning.

I’ve thrown myself over a bridge at the world’s largest bungee jump and cooled down rafting Grade 5 rapids. Yet my taste for fun – which often starts with signing an indemnity form – has never been enough to makeme facemyultimate adrenalin high. I will be catching waves with a species that has teeth South Cape Atlantic that can bite through Town Ocean steel and intentionFalse ally dislocates its Bay jaw to accommodate 20 km larger prey. Then again, what’s steel and self-harm to an animal that starts its life by eating its weaker siblings?

We walk across the street to the pier, where our boat has been loaded with water, wetsuits, snacks and lollipops – suitable for a sugar high that gets our heartbeats racing. The 15-minute cruise to the island is pleasant, even with the choppy water and a few rough waves.

HARRY STONE

The great white When the boat stops, the crew put bait on the hook. “The sharks should be here soon,” one of the crew members says to our group. We are divided into two groups of six. I’m in the second group, which gives me enough time to eat my anxiety. It’s not too late for me to change my mind for the third time this year. However, the money has been paid and, most importantly, the pre-diving tweets were sent out – it’s now or never.

I get into my wetsuit, wear my goggles, and climb into the cage.

Minutes later, four sharks circle around the cage before chasing the bait that’s being pulled in Haweqwa our direction, bringJonkershoek ing us face to face with the sharks. In an instant, one of the Kogelberg sharks swims directly towards me, and for a few seconds, I come right in front of it. I almost want to reach out my hand to touch it. I don’t, and I can’t, but it’s a beautiful moment that’s worth the mental anguish I put myself through to get over my fear of being underwater. Despite our initial nerves, the close encounter with sharks was quite exhilarating.

Lerato Mogoatlhe in Cape Town

ESTHER MBABAZI FOR TAR

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Camp crusader At 14, Joseph Munyambanza co-founded an organisation (CIYOTA) that provides education and vocations to those, who like him, have been refugees

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or most of my 27 years I have lived in the Kyangwali settlement in Uganda. I’m the second of five children. My family fled the Democratic Republic of Congo [DRC] due to war when I was six.

Going from a stable life to one without certainty was tough. As a refugee, I came to know deprivation. In my village in the DRC, I ate to my satisfaction, played with friends and went to school. But all these simple acts became a luxury in the settlement. For a year, I didn’t see the walls of a classroom. Hunger became a close companion and football and friendships took a backseat to survival. My elder sister died while giving birth because we couldn’t afford her medical bills.

I was seven when I started attending primary school again. Before class, I would work on the farmland the office of the prime minister had allocated to my family. My hands developed blisters from hoeing, and occasionally I went to school on an empty stomach, sometimes two days in a row. When there was no money for paraffin, my mum would sit with me under the moonlight to provide protection as I studied.

Although my parents never attended school, they saw formal education as a gateway out of poverty.

In school I excelled, despite having one teacher for a class of over 150 pupils. The United Nations High Commission for Refugees (UNHCR) noticed my academic achievement and offered to sponsor my secondary education. It was there the idea of building a school that provided free meals to students materialised.

When the UNHCR could no longer support my education, a friend through his NGO, Educate!, took up the responsibility. He encouraged me to apply to the African Leadership Academy (ALA), a programme in South Africa that mentors and offers leadership training to young Africans developing their communities.

ALA opened up a world of possibilities. There, I heard about the MasterCard Foundation, which eventually sponsored my tertiary education in the US. I now have a BSc in biochemistry and hope to obtain an MBA from Stanford once CIYOTA [Coburwas International Youth Organisation to Transform Africa] is on a stable footing.

I’ve always been passionate about girls’ education.

This is why CIYOTA supports teenage girls at risk of dropping out of school by providing sanitary products, paying tuition fees for those who can’t afford them, and speaking to them about the importance of getting an education. We also meet with parents to ensure they understand the ramifications of withdrawing their daughters from school. So far, we’ve managed to retain a sizeable student population.

Someday, I’ll go back to the DRC with my wife and two children, who currently reside in the US. That’s my dream. But right now, helping refugee children access quality education is my top priority.

Interview by Shayera Dark THE AFRICA REPORT

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debates Tough talk on development

KIGALI, RWANDA 27th April 2018

Is the African Union a necessity?

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