governance Archives - African Financial & Economic Data

22 Aug

Mozambique: Gas-Fired Power Station Plans to Triple Production

Maputo — The company Gigawatt-Mocambique plans to expand the electricity generation from its gas-fired power station at Ressano Garcia, on the border with South Africa from the current 120 to 350 megawatts.

Cited by the Maputo daily “Noticias”, the Gigawatt director of operations, Nazario Meguigy, said that an additional 60 megawatts of generating capacity will be added in 2018, with an investment of about 120 million US dollars.

The project to almost triple production, to 350 megawatts, will require a further 700 million dollars, and Meguigy, who was speaking during a visit to the power station by Deputy Labour Minister Osvaldo Petersburgo, said this sum is under negotiation with several financial institutions.

For his part, the Chief Executive Officer of Gigawatt-Mocambique, Bruno Morgado, said the company intends to transfer knowledge from foreign technical staff to their Mozambican colleagues, so that Mozambicans can guarantee the company’s production.

“When the company began its operations, we drew up a plan to reduce the number of foreign workers”, said Morgado. “We are in the second year of the plan and we think that within the next three years the company’s operations will be 100 per cent managed by Mozambicans”.

He added that, whenever necessary, specialists will be hired to support the Mozambican workers in such sensitive questions as the maintenance of equipment. Currently the Ressano Garcia power station employs 112 workers, of whom 102 are Mozambican.

“We have no doubt that, within the next three years, the company will be run by Mozambican workers”, he stressed.

source allAfrica

22 Aug

Nigeria: Government Joins 71 Countries to Combat Tax Evasion

Lagos — Nigeria has joined 71 other countries to combat tax evasion as the Federal Inland Revenue Service has signed two major multilateral instruments.

These instruments are the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) and the Common Reporting Standard (CRS) Multilateral Competent Authority Agreement‎ (CRS MCAA).

Chairman, Mr. Tunde Fowler, Executive Fowler signed the agreements on behalf of Nigeria in Paris, with Mr. Ben Dickinson, head of global relations and development division of the Organisation for Economic Cooperation and Development (OECD), in attendance.

A statement issued by Pascal Saint-Amans, director of the OECD Centre for Tax Policy and Administration (CTPA), said the signing of the agreements makes Nigeria the 71st jurisdiction to sign the MLI and the 94th jurisdiction to join the CRS MCAA.

The agreements will give Nigeria automatic exchange of tax and financial information among 101 tax jurisdictions and enhance the country’s ability and those of the other countries to contain tax avoidance and evasion as well as share financial data.

The MLI is a legal instrument designed to prevent Base Erosion and Profit Shifting (BEPS) by multinational enterprises. It allows jurisdictions to transpose results from the OECD/G20 BEPS Project, including minimum standards to implement in tax treaties to prevent treaty abuse and “treaty shopping”, into their existing networks of bilateral tax treaties in a quick and efficient manner.

The text of the MLI, the explanatory statement and background information are available on OECD website along with the list of the 71 jurisdictions participating in the MLI and the position of each signatory under the MLI.

The CRS MCAA is a multilateral competent authority agreement based on Article 6 of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which aims to implement the automatic exchange of financial account information pursuant to the OECD/G20 Common Reporting Standard (CRS) and to deliver the automatic exchange of CRS information between 101 jurisdictions by 2018.

The text of the CRS MCAA, background information and the list of the 94 signatories are available on OECD website. Saint-Amans explained that the agreements will provide “automatic exchange of tax and financial information among 101 tax jurisdictions and enhance the ability of countries to contain tax avoidance and evasion.

It would be recalled that Fowler has said with the introduction of Voluntary Assets and Income Declaration Scheme (VAIDS), no Nigerian can evade tax payment.

According to him, the board has received positive response so far on the scheme. To improve tax compliance, the Federal Government said tax offenders stand to enjoy 29 per cent waiver on overdue taxes if they take advantage of VAIDS. The VAIDS programme is aimed at reducing tax payers’ liability and creates more awareness on the statutory function of every working citizen to pay tax.

The scheme which started July 1, offers a window for those who, before now, have not complied with extant tax regulations to remedy their positions by providing them limited amnesty to enable voluntary declaration and payment of liabilities.

source from allAfrica

22 Aug

West Africa: Morocco’s Controversial Plan to Strengthen Ties With West Africa

Morocco is launching a charm offensive as the kingdom seeks to expand its influence in West Africa by joining the economic union ECOWAS. But Nigeria is reluctant to see Morocco join as it stands to lose power.

Morocco’s King Mohammed VI is making his country’s membership application to the Economic Community of West African States (ECOWAS) a top priority. Earlier this year, he visited Ghana, Ivory Coast, Guinea and Mali to promote his cause.

At its June summit in Monrovia, ECOWAS confirmed that Morocco’s membership was possible, at least in principle.

Back in January, Morocco had rejoined the African Union after 33 years. Since then, the king has been busy signing dozens of bilateral trade agreements with other African countries.

In recent years, at least 85 percent of Morocco’s direct foreign investment went to African countries. In 2016, it was the largest African investor on the continent, to the tune of $8 billion (6.8 billion euros). Of this, $2.7 million went to Ivory Coast alone.

However, trade with Africa overall is stagnating: In 2015, just 1.4 percent of Morocco’s imports and 7 percent of its exports were traded with sub-Saharan Africa. If Morocco were to join ECOWAS as a full member, it would have access to the 15-member free market.

A ‘win-win’ situation

From an economic standpoint, there is nothing preventing Morocco from achieving ECOWAS membership – the country is far better off than most other members in this regard. According to the economic community’s constitution, geography is also not a criterion to exclude the North African country.

Christoph Kannengießer, the chief executive officer of the German-African Business Association, says it’s a win-win situation: “ECOWAS will not be weakened by an economically strong country such as Morocco, and as an ECOWAS member, Morocco would be better able to fulfill its desired role as a bridge between Africa and Europe.”

However, before Morocco can formally join ECOWAS, the organization says the political, economic and social implications should be thoroughly considered. Although it is primarily considered an economic-based group, members of ECOWAS also aim for political integration. Morocco and ECOWAS already have opposing views on important issues: ECOWAS recognizes Western Sahara as an autonomous state, while Morocco believes the annexed region is a legitimate province of its kingdom. Although the June summit openly discussed the possible membership of Morocco, King Mohammed VI did not attend due to the presence of Israel’s Prime Minister, Benjamin Netanyahu. The Moroccan government explained the monarch’s absence by saying that Morocco had no official diplomatic relations with Israel.

Searching for new allies

Morocco is currently a member of the Arab Maghreb Union (AMU). However, economic and political disagreements – especially between Morocco and Algeria – have prevented the group from making any real progress. No major meetings have taken place since 2008.

In addition, the economy of Morocco’s most important trading partner, the European Union (EU), is faltering. New allies and new markets for Moroccan products are needed – and with a combined population of 350 million, ECOWAS could turn out to be the perfect partner.

“The Moroccans are pursuing a double-edged political strategy,” Kannengießer told DW. On the one hand, the country is seeking a privileged relationship with Europe. On the other hand, it is also trying to strengthen its integration with other countries on the African continent.

“The Moroccans know that the African continent, especially West Africa, is an important region of growth, not only from an economic perspective, but in terms of political influence as well,” he says. He says it is necessary to discuss whether economic intergration necessarily leads to political integration.

‘An attack on Nigeria’

However Nigeria, the strongest economic player in ECOWAS, is reluctant to see Morocco receive membership. A number of interest groups have already lobbied the government in Abuja, calling on it to try and stop the North African country’s admission.

Nigeria currently makes up more than two-thirds of ECOWAS’ economic power. If Morocco were to join, it would become the second-strongest member, with more economic clout than Ghana, Ivory Coast, Senegal and Mali combined.

“Morocco’s accession to ECOWAS is clearly an attack on Nigeria and its strategic position in West Africa,” says former Nigerian Foreign Minister Bolaji Akinyemi. He argues that supporters of Morocco’s candidacy want to weaken Nigeria’s influence in the region and that in the event of its accession, Nigeria should leave ECOWAS.

“I don’t think ECOWAS would survive that,” says Akinyemi. In order not to jeopardize economic cooperation, he instead recommends the development of bilateral agreements between Nigeria and Morocco.

“I think that economic pragmatism will play an important role in Nigeria as well,” says Kannengießer.

He says he can imagine several possible outcomes of Morocco’s application to ECOWAS, including full membership, privileged integration status or even simply observer status as an interim solution.

“But perhaps the whole thing could fail in the event of Nigeria’s veto,” he added.

Source from allAfrica

14 Aug

Africa’s Working-Age Population to Grow By 450 Million in 20 Years

The working-age population in Africa is projected to grow by about 70 per cent or 450 million over a period of 20 years, spanning 2015 to 2035, said the Africa Competitiveness Report 2017. To date, Africa, which has Nigeria as one of the most populated, is inhabited by 1.246 billion people. The population had grown by about 550 million, nearly doubled to 1.2 billion over 30 years, from 1985 to 2015, and now to the current level.

The recently released ACR 2017, which was prepared by the Africa Development Bank, World Economic Forum and World Bank, noted that, going by the current trends, only about 100 million of the 450 million increased population would be able to find stable employment opportunities by 2035.

According to the report, “Countries that are able to enact policies conducive to job creation are likely to reap significant benefits from this rapid population growth. Those that fail to implement such policies are likely to suffer demographic vulnerabilities resulting from large numbers of unemployed and/or underemployed youth. New research is providing governments in the region with insights into how they can address the coming rise in the working-age populations.”

In its analysis, the ACR noted: “From 2004 to 2014, employment grew by only 1.7 percent in total–an average of less than 0.2 percent a year. This level of job creation has been barely sufficient to absorb the approximately 100 million additional African workers aged 20-59 who entered the job market in this period, which meant that the formal unemployment rate remained virtually unchanged amid continuing high rates of informal and vulnerable employment.

“Over the next decade, both GDP and the working-age population are expected to increase by about 3 percent per year. If it was possible to increase employment by only 1 per cent in the past decade, when GDP growth was higher, it could be harder to add jobs over the next few years when economic performance is expected to be softer. Looking ahead, the main question for Africa will be how to improve its competitiveness while absorbing a continuously expanding labor force in a scenario of lower growth.”

The report posited that, it was imperative for African countries to find ways to expand aggregate demand for labor and improve supply-side factors at the same time. “Beyond the traditional prescriptions–such as stable macroeconomic policy, a supportive investment climate, and improving the quality of human and physical capital–countries can facilitate more rapid and better job creation as well as accelerate the development of their manufacturing sector by implementing policies suited to their specific circumstances.”

It added: “Since almost all new jobs in Africa today are in agriculture and microenterprises, improving the business environment in these sectors is a high priority. Fragile countries can create jobs as well as promote growth and stability through targeted support to vulnerable regions and/or populations. Open trade policies and developing value chain links to extractive sectors are crucial for encouraging diversification and job creation in resource-rich countries. Finally, policies that foster regional trade and integration can be a major source of new jobs as well as improve firm-level productivity and economic competitiveness.”

Pointing out that this edition of the Africa Competitiveness Report came at a time of reduced enthusiasm about African growth prospects, the ACR expressed regret that, “The robust expansion experienced by the region over the past two decades may not continue over the next few years, reducing expectations about the continent’s employment outlook.”

“Since the publication of the last Africa Competitiveness Report in 2015, the region’s growth prospects have been affected by multiple external shocks: for example, oil exporters such as Nigeria have begun to be affected by lower oil prices over the past few years, and other mineral exporters, such as South Africa, have been hit by the slowdown of emerging economies, especially China,” the report pointed out.

Stating that, “Growth is expected to pick up in 2018 but will most likely remain below 4 per cent over the next few years,” the ACR 2017 recalled that, from 2004 to 2014, the region as a whole averaged a growth above 5 per cent a year, but it is now about 2.2 percent.

“Over that same period, growth of GDP per capita, however–the main indicator of economic development–was well above 5 per cent only between 2004 and 2007. Relatively few jobs have been added to African economies over almost 20 years of strong output expansion, mainly because of an overreliance on the primary sector (mineral extraction and agricultural products), little diversification, and low productivity,” it added.

from allAfrica

11 Aug

The government are targeting retirement funds and pensions to force investment in the state

South Africa is looking to bolster its finances by making prescribed assets a vehicle to fund government-approved institutions. This includes those who are in possession of retirement funds or pensions, who will have no choice but to make contributions to state assets – regardless of their financial situation.

The legislation has certainly flew under the radar, and the ANC really did do their best to hide it: They only announced these plans on the last day of their policy conference in July and it doesn’t feature in any of their proposal documents.

Changes to pensions in South Africa

This decision was only announced after their ill-advised plans to nationalise the Reserve Bank, making it a good day to bury a change that will surely prove divisive amongst its effected audience.

Albert Botha is the fixed income portfolio manager at Ashburton Investments: He firmly believes that applying prescribed assets in pensions will ultimately have a negative effect on our citizens:

“Assume that 50% of assets are prescribed and this leads to a 1% per annum lower return for your pension – this would result in the average pension fund returning 3% above inflation rather than 4%.”

“In real terms, the average person would have to work and save for 2 years and 8 months longer to reach the same retirement goals over 30 years.”

What’s the retirement age in South Africa?

According to Botha, this would result in South Africans having to work until they are 68 rather than 65. Conversely, a worker wanting to stick to the retirement age of 65 may have to be content with a pension that’s 16% less than that of 68-year-old retiree.

It’s not necessarily a bad idea, though. Although it has the potential to hit pensions, Botha claims that similar schemes across the world have helped regenerate failing economies.

He cites the USA (tax exempt bonds for states/cities) and the European Union (first-loss guarantees for investors) for getting their prescribed assets strategies right.

Botha’s Ashburton Investments worked with the Treasury’s Job Fund to create over 9,000 jobs using 90% non-state finances. So there are methods that can benefit the average worker and the economy in tandem.

source from The South African

11 Aug

Zimbabwe: ‘$300m Bond Notes Also Destined for Black Hole’

Barclays Bank of Zimbabwe managing director, George Guvamatanga, says the $300 million new set of bond notes to be introduced by the central bank will not help reduce the current cash shortages.

“I think the reality of it is that if we don’t address the fundamental problems in the economy, the new bond notes will just disappear to where the other $200 million went,” he said.

“Even if we have $1 billion in United States dollars and $1 billion in bond notes, they will still continue to disappear if we don’t address the economic fundamentals and people’s rent-seeking behaviour,” Guvamatanga told delegates attending a mobile money and digital conference held in the capital last week.

His comments came a day after the Reserve Bank of Zimbabwe announced that the central bank would soon release $300 million in bond notes, under a facility funded by Egypt-based lender the African Export-Import Bank (Afreximbank), bringing the total value of bond notes in circulation to $500 million.

Market experts, however, say the increase would bring the amount of bond notes in circulation to more than half the physical United States dollars left in the country, raising fears that the bond notes are paving the way for the return of the Zimbabwe dollar, which was withdrawn in 2009 after hyperinflation rendered the local currency useless.

According to central bank statistics, Zimbabwe has about $800 million in physical United States dollars and other foreign currencies in circulation, but the International Monetary Fund estimates that the number of United States dollar notes could be as low as $600 million.

The country has been losing the greenback at an alarming rate since May 2016 to imports, illicit financial outflows and general hoarding of the currency due to its strength against depreciating regional currencies.

In an effort to stimulate production and encourage exports, the central bank late last year introduced the bond notes. The currency — pegged at par with the United States dollar — is now circulating and trading in neighbouring Botswana, Mozambique, Malawi and South Africa’s black markets.

Guvamatanga said the bond notes are “foreign currency” due to their artificial value which is equitable to the greenback and people in neighbouring countries were using them as a store of value.

“Until such a time when we can export more and have the correct pricing or valuation of money, we will continue to have cash crisis,” he added.

An NMB Bank executive, Lloyd Kazunga, concurred with Guvamatanga and said Zimbabwe is suffering a confidence crisis.

“The value of what we are purporting to be money has to be stable. The real value of bond notes must be proven in terms of how they behave when buying in the shops,” he said, giving reference to the current three-tier pricing system of real time gross settlement (RTGS) credit cards and cash.

According to the central bank, the discrepancy or mismatch between the supply and demand for foreign exchange is causing cash shortages, resulting in a thriving parallel market.

“The scarcity premiums or discounts are thus a symptom of excess demand for foreign exchange. It is, therefore, not the mediums of exchange — Unites States dollar cash, bond notes, plastic money or the RTGS — that cause premiums in the parallel markets or the multi-pricing system,” RBZ governor John Mangudya said.

“It is the disequilibrium or mismatch between the domestic quantity of money (local dollars) and the supply of foreign exchange (foreign dollars) that cause cash shortages and, resultantly, the scarcity premiums and the multi-pricing system.

“This means that the market views the intrinsic value of the dollar in Zimbabwe being lower than the foreign dollar. In coming up with solutions to cash shortages, focus should therefore be on the sources of money creation and its utilisation and not on the mediums of exchange,” the central bank chief said.

A CABS executive Godwin Kanongovere said the country’s academia must develop permanent cash solutions that are relevant to the current situation.

“The present cash crisis presents opportunities for us as a nation to utilise technology and find ways to develop appropriate applications to meet our needs,” Kanongovere said.

via allafrica

10 Aug

Why European companies need a long-term strategy in Africa

The history of Europe in Africa goes far back in time when the Roman Empire annihilated the ancient Carthaginian civilisation that is now Tunis, Tunisia. During the modern period, the African continent has been colonised and controlled by all major European countries like Britain, Belgium, France, Germany, Italy, Netherlands, Portugal and Spain. It wasn’t until the 1950s that the former colonial powers started to let go of their grip on Africa by giving independence to their former colonies.

Today, it is with a mixture of fear and awe that Europe is facing a rising Africa. In this current interconnected and globalised world, Europe is constantly increasing its interactions with its hinterland, Africa. As a result, its own future may eventually be determined by how its partnership with Africa benefits both continents.

Demographics in Europe and Africa

According to the latest 2017 United Nations review of the world population, the current European population of 742 million is on a decline and will drop to 716 and 653 million by 2050 and 2100 respectively. As for Africa, its population is now at about 1.26 billion, nearly 1.7 times larger than that of Europe. By 2050 and 2100, the African population will increase massively to reach 2.53 and 4.47 billion, a rise of 101.2% and 255.6% respectively, and eventually represent 40% of the world population. Therefore, Africa will grow to become 6.8 times bigger than Europe by 2100, creating a future market that Europe cannot afford to ignore now.

Africa is still very young with about 60% of its population under the age of 25, while in Europe, this population segment is only about 27%. As for the elderly who are above 60 years old, one in four Europeans are in this segment, while for Africa, it is only one in 20. In terms of life expectancy, in Europe it is about 77.9 years, while in Africa, it is about 60.2 years. This means that not only is Europe facing a fast aging population, but also retired Europeans are living longer and longer.

These major demographic trends show that there are tremendous opportunities for both Europe and Africa to leverage on their respective competitive advantages for greater value creation. On the one hand, the young African population provides an opportunity for Europe to boost its aging population through migration. This will not only help to boost the declining European workforce, but will also expand the overall economy through higher consumer spending from the young migrants in the long run. On the other hand, European companies can tap into the growing Africa to commercialise their products and services; thereby increasing their bottom line.

European Union-Africa trade relationship

According to Eurostat, the European Union (EU) traded about €3.45tn (US$4.06tn) with the world in 2016; with Africa, it traded €261.4bn ($308.1bn), representing about 7.6% of its overall global trade. Since 2002, Europe has constantly increased its exports towards Africa and over the last 15 years, its exports have increased by 105% to reach €144.9bn ($170.5bn) in 2016. During that same period of time, the overall gross domestic product (GDP) of Africa grew by 259%. Hence, as Africa grows, Europe can export more.

As for its imports from Africa, they have increased by a lesser extent, about 41.1%. This is due to the fact that prices of commodities have dropped over the last few years. In 2015 and 2016, with Africa, the EU has maintained a net positive trade balance of €21.7bn ($25.5bn) and €28.4bn ($33.4bn) respectively. In fact, for last year, out of EU’s net positive trade balance of €37.7 bn ($44.4bn) with the world, Africa provided 75.3% of it. Trade with Africa is indeed proving to be very lucrative for Europe over the last two years.

Germany, France and Italy – the top three economies in the Eurozone – traded €118.2bn ($139.1bn) with Africa, representing about 45.2% of the EU-Africa trade. For their combined trade, the top five African partners are Algeria(€20.6bn/$24.2bn), South Africa (€19.7bn/$23.2bn), Tunisia (€15.3bn/$18bn), Morocco (€13.3bn/$15.7bn) and Egypt (€13.2bn/$15.5bn). All three Eurozone economies have a positive trade balance with Africa and have accumulated a net balance of €19.2bn ($22.6bn) in 2016. And it is Germany that has reaped the biggest trade benefits with €10.4bn ($12.2bn) in positive trade.

The EU is aiming to enhance its trade relationship with Africa by negotiating Economic Partnership Agreements (EPAs) with the various African countries. With a fast-growing economy and a demographic boom, Africa is and will continue providing major opportunities to the EU. As a result, it is in the interest of the EU to continue supporting Africa’s economic development, as well as fostering the rise of Africa.

Europe manufacturing in Africa

Manufacturing companies in Europe are facing high operational costs due to the cost of labour. Thus, a cost optimisation strategy with the delocalisation of some of the lower value-added activities to Africa will keep them competitive, while tapping into the huge pool of young and less expensive labour. By manufacturing locally and by being near the huge and attractive potential markets, companies will indeed have a cost advantage. Consequently, by making their products more affordable, not only can a bigger market be captured, but with local costs of production, a more sizable profit margin may be churned out.

Morocco has been promoting its aviation and aerospace sector in Casablanca and has been successful in attracting many European companies. To support the production of its aircrafts, Stelia Aerospace, a subsidiary of the Airbus Group, moved some production there. In doing so, other European aerospace companies like Dassault Aviation, Daher Aerospace, Nexans, Safran, as well as others eventually followed and delocalised some manufacturing as well. For Airbus, it aims to capture a bigger share of the African markets and sell 1,000 aircraft within the next 20 years.

French car manufacturers Renault and PSA Peugeot Citroën have production facilities in Morocco and Algeria. As for Germany’s Volkswagen, its main production is in South Africa and it has recently opened another plant in Kenya to target the East African region. For consumer goods, Dutch-British Unilever is present in 19 African countries, but it sells its products throughout the continent. To better capture the African markets, it manufactures many of its brands in Egypt, Ethiopia, Kenya, Nigeria, South Africa and others. All these European companies are therefore tapping into the local and regional markets to support their local production, as well as enhance their overall sales.

Europe’s biggest companies in Africa

With Africa having an enormous amount of natural resources, all the major European companies in
mining, as well as oil and gas, are active in the continent. Major companies like British Petroleum, Anglo-Dutch Shell, French Total, Norwegian Statoil, Italian Eni and Spanish Repsol are present all over Africa. They are tapping into the many recent oil and gas discoveries made in Africa. For instance, Eni discovered major gas reserves in Mozambique and Egypt; and in the coming years, it is planning to invest €20bn ($23.5bn) in Africa.

As for mining companies, Anglo American, BHP Billiton and Rio Tinto are mainly in South Africa, while Glencore has spread out over Africa with major copper mining operations in Zambia and Democratic Republic of the Congo. Moreover, Anglo American, BHP Billiton and Glencore have dual listings with the London Stock Exchange and the Johannesburg Stock Exchange. To trade all these commodities from Africa, major Swiss-based traders Mercuria, Trafigura and Vitol buy and sell across the world.

Other large companies are seizing opportunities with the economic development of Africa by participating and building infrastructure-related projects. For instance, Italian Enel is now operating 520 megawatts (MW) of wind and solar power in South Africa and it aims to have 5,000 MW of renewable energy capacity in Africa. German Siemens worked on the largest wind project with a capacity of 310 MW at Lake Turkhana in Kenya. In Egypt, it has just delivered the first of three 4.8 gigawatts (GW) natural gas power plants in a deal worth €8bn ($9.4bn). As for Schneider Electric, not only does it have manufacturing facilities in Egypt, Kenya and South Africa, but it has also participated in many electrification projects.

In services, British banking giant Standard Chartered is present in 15 African countries. Similarly, for the French banks, BNP Paribas and Société Générale are present in 10 and 18 African countries respectively, mainly in the francophone region. All these banks are banking the activities of the European companies in Africa as well as capturing the growing local affluent consumer banking market.

Synergies between Europe and Africa

By 2100, Europe will be standing next to an African giant with its 4.47 billion people. Europe can choose to build walls against Africa, but in the end, it will be to its own detriment. With or without Europe, Africa will move, especially when it can choose nowadays to partner with Asian countries like China and India. Consequently, for its own future prosperity, Europe must not only remain open to its African neighbours, but also be receptive to the many opportunities that Africa can offer.

As it is, Africa is providing Europe and all its major European companies great opportunities. Their growing footprint in Africa will eventually generate bigger future returns. Hence, Europe cannot afford to be myopic and keep a short-term outlook with Africa. It is in the long-term interest of Europe to support the African development process and build on the synergies that both continents can tap in. In the end, Europe will definitely benefit from Africa rising.

Richard Li is a Singapore-based Partner with Steel Advisory Partners, a management consulting firm that serves clients across industries. Having spent his working career in strategy consulting, he worked with various global clients and covers themes such as Corporate Strategy, Transformation, Digital Innovation and Risk Management. He can be contacted via the Steel Advisory Partners site. This article was specifically written for the NTU-SBF Centre for African Studies.

VIA HowWeMadeItInAfrica

09 Aug

No confidence vote: a victory for Zuma, but a defeat for the ANC

Jacob Zuma is a natural born political survivor. Yesterday South Africa’s president, Jacob Zuma, overcame an eighth no confidence vote, despite the mountain of evidence of corrupt conduct that has emerged in recent months.

But it may prove to be a Pyrrhic victory – for him and most certainly for his party, the African National Congress (ANC). “Hollow” was the word that one opposition leader, Bantu Holomisa, used afterwards, while the Economic Freedom Fighter’s leader Julius Malema employed a well-known Africa proverb: “When you want to eat an elephant you do it bit by bit”.

Zuma’s political death is proving to be a protracted affair. There was an air of expectation yesterday that recent allegations of “state capture” – attested to by a welter of evidence from the so-called #guptaleaks – would be enough to persuade a sufficient number of the members of the ruling ANC to support an opposition-sponsored no confidence vote.

In the event, after a fractious two-hour debate scarred by ugly banter across the floor of the National Assembly, the motion fell short of the 201 votes required to remove Zuma and his cabinet. But yesterday was remarkably different. On the previous seven occasions that the opposition have tabled no confidence votes since Zuma’s power began in 2009, the ANC has remained steadfast in its support for its beleaguered president. Yesterday’s vote was a watershed for the liberation movement that brought an end to apartheid in 1994: around 30 of the 223 ANC MPs who voted yesterday sided with the opposition.

As the ANC’s chief whip, Jackson Mthembu, ruefully observed afterwards, this is true pause for reflection for the ruling party. Never before has such a significant number of the parliamentary caucus rebelled and defied the party whip.

Zuma’s streetwise political skills are well-known. So too is his adeptness at using executive patronage to secure the loyalty of party members as has been made clear in the revelations arising from his links to the Gupta family.

The secret ballot saga

But the back story to the unprecedented rebellion within his own party was the method of voting as much as Zuma’s political skullduggery. For the first time, parliament was compelled to allow MPs to vote in secret. This followed a legal challenge to the rules by Holomisa’s United Democratic Movement.

In its 22 June judgment, the Constitutional Court – an institutional beacon of excellence and integrity in the context of the “capture” of other state bodies – had held that the speaker of the National Assembly had the discretion to order a secret ballot in exceptional circumstances.

Since the ruling, a number of ANC MPs have gone public with testimony of intimidation and even death threats in the case of Makhosi Khoza. In turn, the ANC shot itself in the foot when one region of Zuma’s home province, KwaZulu-Natal, demanded that disciplinary proceedings be brought against Khoza after she had called for Zuma to go. The intervention served to underline the need to depart from the generally established principle of open voting.

Accordingly, speaker Baleka Mbete had little legal choice but to opt for a secret ballot, even though it would encourage dissenting voices among the ranks of the ANC caucus. Politically, she had probably done the political mathematics and, as the national chairperson of the ANC, was confident that regardless of the shield that she said was necessary to protect ANC MPs so that they could vote with their conscience, the numbers would still work out in Zuma’s favour.

And so it proved: 177 MPs voted for the motion, and 198 against (with 9 abstentions). Since the opposition has 151 MPs, at least three of whom were absent through illness, it means that that at least 29 and possibly as many as 35 ANC MPs jumped ship.

Win-win for the opposition

But it was a win-win situation for the opposition. Afterwards, in the unseasonably balmy winter’s evening outside the parliament in Cape Town, one after another of the leaders of the opposition spoke cheerfully about the political future and of the health of South Africa’s democracy.

They may have lost the battle, but they feel confident that they will win the war. After all, it is clear that Zuma is now their greatest electoral asset, with several polls (including the respected Afrobarometer), showing that across race and class, trust in Zuma has collapsed since he was returned to power for a second term in 2014.

Last year, the ANC suffered its first major electoral setbacks since the advent of democracy in 1994 when it lost control of three major city governments in Pretoria, Johannesburg and Port Elizabeth. Now, its political management skills appear to be in disarray as factionalism and deep, painful divisions dominate internal party politics. This is all unfolding in the run-up to what is likely to be a bloody five-yearly national elective conference in December, at which the ANC will elect a new President of the party to succeed Zuma.

That may or may not mark the start of a new era of renewal for the ANC. But Zuma’s term as President of the country is only due to end in 2019. A lot more damage could be done to the country’s economy and its prospects for growth.

The consequence of that, however, is that the ANC will face the prospect of losing its majority at the national polls for the first time since Nelson Mandela’s historic victory in 1994.

Yesterday may have been a victory for Zuma. But in the longer term it is likely to come to be seen as a major defeat for the ANC.

Source from The Conversation

08 Aug

Nigerians Bound to Impact Global Arena, Says Osinbajo

Abuja — Acting President Yemi Osinbajo has declared that Nigeria will impact the global arena in various ways if the citizens continue to do what is right in public service.

A statement signed by his Senior Special Assistant on media and publicity, Laolu Akande yesterday said Osinbajo made the declaration at the Presidential Villa, Abuja when he received Dr. Oluyinka Olutoye, a U.S.-based Nigerian doctor who successfully led a medical team that operated on a foetus, winning U.S. and global acclaim for the feat.

Olutoye had also been an active member of another medical team that had separated a set of conjoined twins successfully in the U.S.

That team included two other Nigerian female doctors including his wife, Dr. Toyin Olutoye, an anesthesiologist, and Dr. Oluyemisi Adeyemi-Fowode, a paediatric gynecology fellow.

Osinbajo told Olutoye who was accompanied to the Villa by members of his family that “our country continues to shine in various ways, your achievement is remarkable in every sense.”

Olutoye attributed his medical successes to his Nigerian training and education up till the university. He is a graduate of Medicine from the then University of Ife.

08 Aug

Kenya: Tribalism or Regionalism – Factors That Will Determine Kenya Polls Winner

Kenya: Tribalism or Regionalism – Factors That Will Determine Kenya Polls Winner. Kenyans go to the polls today to choose their next crop of leaders for various elective posts.

The presidential election is billed as one of the most tightly contested in the country’s electoral history, with the most recent opinion polls showing a 1-3 percentage gap between the incumbent Uhuru Kenyatta of the Jubilee Party and Raila Odinga of the National Super Alliance.

While the cost of living, unemployment, corruption, security and free public services are key issues having an impact on the lives of Kenyans, the ultimate winner will be determined by a motley of factors.

The EastAfrican’s Peter Munaita lists the top ten.

1. TRIBALISM OR REGIONALISM

Politicians talk of shunning it, at least until an election comes around.

Alliances are primarily informed by it and top leaders in them, principals in Kenya parlance, picked depending on their potential to rally their communities behind the coalition. That includes the choice of running mates too for presidential and gubernatorial positions.

So it is that the Jubilee Party is viewed as a dominion championing the cause of two communities, Kikuyus and Kalenjins, while the National Super Alliance (Nasa) is taken to be rooting for the interests of the Luo, the Kamba and the Luhya.

Predictably, the protagonists deny this and claim to be motivated by a need to unite Kenyans. Practice, however, discounts their word, with candidates in metropolitan areas like Nairobi appealing to tribal sentiment and those in rural areas exploiting the clan factor.

The recognition of Asians as Kenya’s 44th tribe recently — forget their diverse cultural and religious background — falls under this matrix.

So tribal is Kenya that opinion polls show a polarisation on key issues by region and by dominant community. On matters like worsening cost of living which affects all voters, Central, North Eastern and Rift Valley — home to the president, leader of government business and deputy president respectively, led in approval of the government.

In contrast, Nyanza, Eastern, Western and Coast — homes to Nasa presidential candidate Raila Odinga, running mate Kalonzo Musyoka, two principals Musalia Mudavadi and Moses Wetang’ula and Mombasa Governor Ali Hassan Joho — led in disapproval of the government.

Overall, 85 per cent of Jubilee supporters in a poll by Ipsos approved of the president while 74 per cent of Nasa supporters disapproved of him.

In a poll by Infotrak, five per cent of those who said the country was going in the right direction boldly said it was because “my candidate is in power” while nine per cent blamed tribalism for the country going in the wrong direction.

Asked about tribalism trampling on issues in Kenyan elections during the presidential debate, Mr Odinga referred to the homeboy mentality in the US to explain why Nyanza voters were more likely to support him than Mr Kenyatta, with the vice versa obtaining in Central.

Outside the home areas, however, Mr Odinga said that the support of each would be more inclined to issues. While the homeboy factor holds going by opinion polls, it is unlikely that issues explain why Jubilee is also the most popular party in Eastern, Rift Valley and North Eastern, while Nasa holds more sway in Nairobi, Coast and Western.

Voters identifying with a candidate’s issues outside the home region would be expected to be more evenly spread. Of note was a finding in the Ipsos poll that less than a half of respondents (46 per cent) believed any political party “genuinely represents the interests of ordinary Kenyans.”

A winning presidential candidate is by law required to garner more than a half of the votes cast (50+1) and win at least a quarter of the votes in 24 of the 47 counties.

All opinion polls show the leading candidates will meet the second condition but the regions present quite a tight race with regard to the first.

2. MONEY AND SOURCES

Running an election is an expensive affair, with regard to logistics and mobilisation of supporters. Upwards of Ksh5 billion ($500 million) has been floated the amount required to run an affective presidential campaign.

It is reported that in 2013, in the choice of Musalia Mudavadi as a fallback candidate should Mr Kenyatta and Mr Ruto be barred from running because of crimes against humanity charges that were facing them, money became a dealbreaker.

“We cannot support you and give you money for the campaigns” is said to have been one of the home truths uttered to Mr Mudavadi’s face.

Until recently, elections were won by the candidate who would lobby rivals and their supporters to step down in their favour; something that is still believed to be key in determining which alliance top leaders choose.

The mudslinging between Jubilee and Nasa on the role of businessman Jimi Wanjigi in the current and previous campaigns is understood to revolve around a deal gone sour for the tapping of one principal to shift alliances.

Nowhere is the influence of money more evident than in political rallies where followers are bedecked in party attire, helicopters fly from one venue to another and party mobilisers are compensated for a day’s work. Crowds are also hired to participate in rallies and other campaign activities.

With the campaign financing regulations in limbo and funding of political parties by the State inadequate, resources are mobilised through fundraisers where a dinner plate goes for more than $10,000.

Source from allAfrica