Africa News blog

Angola’s stock phrase

Amid the flurry of changes in African economies and markets over the last 10 years, one of the most enduring constants has been the six-monthly assurance from Angola’s secrecy-obsessed leaders that a stock market will open next year.  

The mantra received an alternative twist on Monday when oil minister Jose Botelho de Vasconcelos told an energy conference in New Delhi that Africa’s most tantalising bourse would now have to wait until inflation hit single digits.

The pronouncement caused more than the usual head-scratching among investors who have seen frustration turn to despair as what should be one of the continent’s most exciting propositions has failed repeatedly to get on to the grid, let alone over the starting line.

To be fair to the minister, he may simply be reproducing the stock ‘open next year’-phrase with a bit of macroeconomic jargon on top — Angola’s latest budget talked about annual inflation easing to 9 percent in 2011 from 13.99 percent in August.

But the remark does seem to make a causal link between inflation and stock market operations that has so far passed most economists by, and casts doubt on the thinking inside the policy cabal that sits around President Jose Eduardo dos Santos, now well into his fourth decade in office.

 ”How long is a piece of string?” said one economist who covers frontier African markets. “I can’t think of a single country in the world where single-digit inflation was one of the precursors to a viable stock exchange.”

Ready for elections in Ivory Coast and Guinea?

Barring last-minute upsets, Ivory Coast will go to the polls on Sunday, marking the end of a five-year limbo in which the incumbent president has ruled without any real mandate and the country stagnated without a sense of identity or direction.

The following weekend, neighbouring Guinea may finally hold the serially delayed second-round of its presidential election, hoped to end nearly two years of military rule whose defining moment was a massacre of pro-democracy marchers by the security forces in a sports stadium.

It can only be a good thing if the elections allow Ivory Coast and Guinea to draw a line under their past and move on. But is either country actually ready for them?

In Guinea any semblance of voting on a candidate’s policy proposals or merits has been jettisoned after June’s first round which, to no great surprise, set the stage for a run-off between Cellou Dallein Diallo and Alpha Conde — representatives of the large Peul and Malinke communities respectively.

Instead of hearing a meaningful political debate before the decisive second round, Guinean voters have watched a struggle for control of the national election commission, with both sides afraid of it falling into the hands of the rival ethnic group.

The stand-off was only solved by appointing a Malian as the temporary president of the body.

Things are only marginally better in Ivory Coast. One candidate, ex-premier and former IMF deputy chief Alassane Ouattara, declared this week there is “no way” that President Laurent Gbagbo could win the election, effectively pre-empting the choice of the Ivorian voter.

Uganda election: Exciting start, what next?

If the potential success of an election could be judged by the excitement generated by its first day of campaigning, then Uganda is set for an excellent poll.

It can’t, of course, but it was heartening to see both ruling party and opposition supporters whooping it around capital Kampala yesterday ahead of a February 18th voting day that most think will be nothing but a foregone conclusion.

Thousands of screaming, singing, stomping supporters danced through town from the Nelson Mandela Stadium where the presidential candidates received their nomination papers to the sites of a couple of huge political rallies.

Hundreds more hurtled about the place on the “boda boda” motorcycles that ferry paying passengers around the city, revving the engines loudly in support.

Such was the excitement that the Reuters team had trouble battling through the crowds of people supporting opposition leader, Kizza Besigye.

Here’s a small snapshot of what we saw out the window:

Ethiopia’s Birtukan free: Why now? What now?

It’s now been 15 days since Ethiopia’s most popular opposition leader, Birtukan Mideksa, was released from prison and she still hasn’t said much at all.

Sure, she was “happy”, “elated” even. Prison was “horrible, really horrible.”

But talk of her political future is “for another time.”

The former judge is leader of Ethiopia’s biggest opposition party, the Unity for Democracy and Justice. The country’s 2005 elections ended in disaster when the opposition disputed a government victory and riots killed 193 protestors and seven policemen. Birtukan and other opposition leaders were jailed accused of sparking the trouble and then pardoned in 2007.

But she was sent back to prison in December 2008 for allegedly violating that pardon with a defiant speech in Sweden, which probably explains her caution now.

Ethiopia’s chattering classes, debating her release and the contents of the new pardon that secured it, have enthusiastically filled  the vacuum created by her tight-lipped stance with their theories.

Donors’ aid squeeze to up Africa debts

   Budget crunches in rich countries are bringing cuts in aid spending and may mean a switch from grants to cheaper loans, sowing the seeds of future debt crises in Africa and other poor corners of the globe.     Most African states’ budget deficits ballooned as growth sputtered in 2009, even though they entered the financial crisis in relatively robust fiscal health due to a major round of debt forgiveness in 2005 and gradually improving economic policies.     Growth has picked up well this year — the IMF is forecasting 5 percent for sub-Saharan Africa — leading many governments to unveil double digit increases in spending at the same time as assuring donors and investors that deficits will fall to more manageable levels in a couple of years.     The as-yet-unquantified aid squeeze likely to hit this year is not going to help this cause, but in their budget sums, major recipients such as Zambia, Uganda and Tanzania have factored in cuts in the overseas assistance that has sometimes accounted for as much as half of state revenue.     Tanzania’s budget reflects a reduction in foreign aid from $840 million in 2009/10 to $534 million this year, a figure that still represents 25 percent of the east African country’s projected takings.     Similarly, donors are underwriting a quarter of Uganda’s current budget, although a group of them said in August that next year’s contribution would be down by at least 10 percent, ostensibly due to concerns about corruption.     And in Zambia, Africa’s largest copper producer, the proportion of overseas support for the 2011 budget is 7.7 percent, half the previous year, because of donor worries about graft.     But experts say an overall reduction in bilateral aid — of major donors, only Britain has pledged to ring-fence development spending, at 0.7 percent of GDP by 2013 — is only one worrying aspect of Africa’s financing equation.     Just as alarming is the potential for donors to inflate their aid figures by switching assistance from grants, which are in effect a gift, to concessionary loans, which have to be repaid albeit at cheap rates.     “You’ve got the double-whammy of African countries struggling because of the crisis, and then donors potentially switching more to loans than to grants,” said Daniel Coppard, an aid analyst at Development Initiatives, a UK-based consultancy.      In 2005, donors at the G8 summit in Gleneagles, Scotland promised to double aid by up to $50 billion in five years — an ambitious promise that has not been matched by reality.     Furthermore, a trend since then towards more aid delivered via grants risks going into reverse as cash-strapped rich-country finance ministers seek out cunning ways to make their development budgets go further.     For instance, by most definitions a bilateral loan qualifies as “aid” if a quarter of it is a grant, meaning donors can cut today’s cost of their aid bill by 75 percent, and then swallow the cost of a low lending rate over the duration of the loan.     “In 2009, France’s proportions of aid going in loans just rocketed,” Coppard said. “This theoretically will need to be paid back.”     The implications of such a switch by other donors would be dire, burying many African states  under the same mountain of obligations that triggered the 2005 Heavily Indebted Poor Countries (HIPC) debt forgiveness initiative.     For example, if all its overseas grants became loans tomorrow, Tanzania would be running a budget deficit of a staggering 25 percent of GDP — a ratio that would leave its plans for a $500 million Eurobond dead in the water.     Similarly, 23 percent of the budget in Zambia, which also has ambitions to tap overseas capital markets, would be financed by debt rather than the 15.5 percent of domestic and external borrowing now in the finance ministry’s spreadsheets.     Overall, aid to sub-Saharan Africa was $38 billion or 5 percent of output in 2008, according to the World Bank, although this ratio jumps to 7.5 percent if South Africa, its biggest economy, is excluded.     The signs that donors’ austere response to their own financial problems may end up exacerbating Africa’s are already there. According to an IMF study, total public debt for low-income countries rose to 35 percent of GDP in 2010 from 30 percent in 2008.     “There is a feeling in the development world that somehow debt has been dealt with. But it really, really hasn’t,” said Jonathan Glennie, a researcher at Britain’s Overseas Development Institute.     “During the crisis, there was a lot of talk of getting the money out there to poor countries quickly, which is understandable. But it’s always relatively easy to get money out, and much harder to cancel debts.”

Anger in deadlocked Guinea

Bursts of gunfire in the street, stone-throwing and roadblocks have marked a shift from hope to anger in Guinea, where a historic transition to civilian rule through elections risks falling apart.     Political deadlock over the leadership of the West African state’s electoral commission has put an October 24 presidential run-off in doubt, and has raised the spectre of ethnic violence and prolonged military rule in the bauxite producer.     “Going into an election under these circumstances will lead to total chaos,” said Mohamed Jalloh, Guinean expert at International Crisis Group.     “In the current scenario, no one would accept the results. The electoral body has lost all credibility and needs to be rebuilt.”     The stakes are high for the impoverished state nestled on the coast between Senegal and the civil war-scarred nations of Sierra Leone, Liberia and Ivory Coast.     Its rich natural resources have drawn billions of dollars in planned mining investments from the likes of Rio Tinto and Vale     and its 10 million citizens are eager to close the book on decades of harsh authoritarian rule.     A first-round vote passed on June 27 in relative calm despite accusations of vote-rigging that prompted the Supreme Court to annul some ballots before validating the result.     But hopes of completing the first free elections in the history of the former French colony have turned to frustration and street violence amid repeated delays to the decisive run-off vote and growing signs the latest target date of October 24 will not hold either.     Presidential contender Cellou Dallein Diallo has accused the current head of the CENI electoral commission, Louceny Camara, of bias against him and has said he will not take part in the run-off unless Camara is replaced.     Rival Alpha Conde has said he is prepared to stand for elections under the current CENI leadership.     “Bi-partisan backing of CENI’s role in managing the presidential run-off election is urgently needed,” said John Stremlau, vice president of the Carter Center elections watchdog in Atlanta. He said the signs of escalating conflict in Guinea were alarming.      Guinea’s junta-led government on Monday warned of a security crackdown after a day of unrest marked by sounds of gunshots and traffic jams caused by angry youths setting up impromptu roadblocks in and around the capital Conakry.     “People continued this morning to occupy the big roads in our country to halt the circulation of cars, to threaten passengers, to destroy vehicles, to attack people. This cannot continue,” said Prime Minister Jean Marie Dore in a televised address late on Monday.     He said he had ordered police and national guard to secure the peace “by all means”.     Gunshots were heard in the Hamdallaye neighbourhood of Conakry late on Monday, a witness said. Earlier in the day, youths called out insults to junta leader General Sekouba Konate as he toured a neighbourhood, accusing him of failing to end the deadlock over the electoral body’s leadership.     Guinea has been controlled by the military since a December 2008 coup, but Konate won support from the United States and former colonial power France for pushing for elections that would transfer power back to civilians.     Analysts said the risk of ethnically driven violence was high given that Diallo and Conde represent the nation’s two largest ethnic groups, the Peul and the Malinke respectively. But they said clashes were unlikely to spill across borders despite Peul and Malinke in neighbouring countries.     “Conflict is a key economic opportunity for the unemployed youth, of which there are many in neighbouring Liberia, Sierra Leone and Ivory Coast,” said Corinne Dufka of Human Rights Watch. “But the risk of spillover could be contained somewhat by the fact that you have increasingly professional armies in Sierra Leone and Liberia, along with a very large UN peacekeeping force in Liberia.”     Diallo and Conde pledged earlier this month to involve the other in government regardless of who wins, in a move that could ease ethnic divisions. But analysts said the accord was uncertain given rising animosity between the two camps.

Nigeria’s leader fights propaganda war

Less than a month after launching his election campaign in a blaze of optimism, Nigerian President Goodluck Jonathan has found himself fighting a potentially damaging propaganda war over last week’s car bombs.     Jonathan’s assertion that rebels from his Niger Delta home region were not responsible for the twin bomb attacks near an independence day parade last Friday has laid him open to a barrage of criticism from rivals who accuse him of partisanship.

    As the first head of state from the southern Niger Delta, Jonathan already faced a tough battle convincing some in the ruling party to back his election bid and jettison a gentleman’s agreement that means the next president should be a northerner.     The unwritten pact in the People’s Democratic Party (PDP) is meant to prevent tribalism and regional rivalries becoming a factor in federal politics by ensuring power rotates every two terms between north and south.     Jonathan’s comments that the Movement for the Emancipation of the Niger Delta (MEND), which claimed the blasts, was not responsible and suggestions from the authorities that associates of his main rival, former military ruler Ibrahim Babangida, may be involved have infuriated and united his northern opponents.     “The man … who only a few weeks ago moved us with lofty words of hope and a vision of transformation, shot himself in the foot and then put the bloody foot in his mouth,” wrote Tolu Ogunlesi, a journalist on Nigeria’s Next newspaper.     “The incident momentarily stripped him of his presidential garb and wrapped him in the gaudy garments of a tribal chieftain,” he said.     Babangida and three other northerners running against him in the primaries issued a joint statement slamming Jonathan for “exonerating” MEND and accusing him of using the bomb blasts as a pretext to intimidate his opponents.     A separate group of northern politicians led by ex-finance minister and founding PDP member Adamu Ciroma described it as a “rude shock to the nation” and called on Jonathan to resign.     Their fury was piqued by the brief detention of Babangida’s campaign director Raymond Dokpesi for questioning over the blasts by the secret service on Monday.     The presidency said the investigations were being carried out on the back of U.S. and British as well as Nigerian intelligence and that anybody could be invited for questioning.     “It is unfortunate that an unprecedented national tragedy of this nature has been politicised by people whose only interest is what they can get from the country and not what the country can get from them,” Jonathan said on his Facebook page.     “They specialise in playing one part of the country against the other and riding on sectional sentiments to promote their narrow ambitions,” he said.      Jonathan started his election campaign almost three weeks ago on a high, having unveiled plans to privatise the power sector and end chronic power shortages, better manage the country’s oil savings and fight criminality.     He pledged a new era of leadership “uncontaminated by the prejudices of the past” and his campaign team hoped the momentum would carry him into the primaries, originally due this month.     But the timetable was revised to allow the electoral authorities to overhaul voter lists, handing his northern rivals more time to steel themselves.     The bomb blasts were another blow to his strategy.     Beneath all the finger pointing and rhetoric, none of Nigeria’s political class emerge well from the episode.     Jonathan was vice president when Henry Okah, a senior militant figure charged in Johannesburg this week with conspiring to carry out the attacks, had treason and gun-running charges against him dropped under an amnesty deal.     Aliyu Gusau, another northern presidential candidate who has criticised Jonathan, was the country’s national security adviser until three weeks ago. Security experts say Friday’s attacks would have been months in the planning.     Babangida’s opponents say his assertion that Jonathan does not have a firm grip on national security is rich coming from a man largely remembered for his 1993 cancellation of an election generally regarded as fair which led to civil unrest and a bloody crackdown by the security forces.     “Politicians in Nigeria are very good at arguing with each other,” said Antony Goldman, a Nigeria expert and head of London-based PM Consulting.     “But the temptation to try to extract political advantage from a national emergency reveals the deeper issue that ten years after the end of military rule, the whole political class struggles to make itself relevant to the people.”     The propaganda war will rumble on and it is unclear what impact, if any, it will have on the candidates’ fortunes. But it bodes ill for any hopes that the elections will be based on real issues rather than scaremongering and personality clashes.     “The bomb blast is a shame because it could have been prevented, but you know in Nigeria we don’t pay attention to the things that really matter,” said Kehinde Osho, 24, a graphic artist in the commercial hub Lagos.     “Elections are next year and the voters are not even registered yet. We are fighting a lost battle — we won’t have a credible election with this kind of preparation.”

Shopping in Africa

A few weeks back it was HSBC announcing news of its talks for South Africa’s Nedbank. Now it is the world’s biggest retailer, Wal-Mart, seeking a foothold on the continent with a plan to buy South Africa’s Massmart for more than $4 billion.

The idea of Wal-Mart bidding for one of South Africa’s retailers had been around for a while as it focuses on international growth.

“South Africa presents a compelling growth opportunity for Wal-Mart and offers a platform for growth and expansion in other African countries,” said Andy Bond, executive vice president with responsibility for Wal-Mart’s operations in the region, including the UK and Africa.

The expansion in the rest of Africa is key. Massmart doesn’t only have a presence in South Africa, it also has stores in 13 other countries in sub-Saharan Africa.

It could be a hugely significant deal from an African perspective.

While there have been plenty of acquisitions in mining and energy and while multinational telecoms firms and brewers have their footholds, chains of shops are different.- and much more a bet on a class with a bigger disposable income.

Some have questioned the price Wal-Mart is offering for Massmart – even if it’s not much for a company with a market capitalization approaching $200 billion.

Al Qaeda and France raise the stakes in the Sahara

Al Qaeda’s North African wing has been creeping up the radar with an increase in attacks in the Sahara. But some have still sought to play down any strategic threat, citing the lack of key interests in the desert.

Westerners were at risk – a couple have also died in the hands of the Islamists – but incidents had mostly ended with in some sort of agreement involving a mix of prisoner swaps and, say experts, cash being passed to the right people.

There has also been intense debate over how loyal to al Qaeda-central the fighters are, as opposed to a bunch of bandits taking advantage of little government control.

Then five French nationals and two other foreigners – all of whom worked in Niger’s uranium mines where French nuclear giant Areva has vast investments – were plucked from their houses as they slept.

Despite the efforts of Nigerien and Malian security forces, it appears the hostages are now safely stashed in an Islamist hideout in the Malian mountains. Al Qaeda has claimed responsibility for the attack and vowed to issue demands soon. 

France, in reaction, also seems to have torn up the rules books.

Like the United States and other allies fretting about an Islamist threat in the Sahara, Paris has long advocated a more discreet approach, supporting local armies and encouraging regional collaboration. But President Nicolas  Sarkozy has now embarked on a more direct approach. French commandos took part in a botched raid to free a previous hostage in July and officials in Niger say French troops have been dispatched there.

Calling young African journalists

If you are an African journalist or aspirant journalist under 30 and would relish the chance to study on the continent’s premier Journalism Programme and then join the Reuters news team for 6 months work experience, read on.

With the FitzGerald Prize, Thomson Reuters is offering a scholarship to do a post graduate BA hons degree at the University of The Witwatersrand ’s Journalism Programme in Johannesburg followed by a stint in a newsroom in Africa.

Candidates must have an undergraduate degree or at least 3 years professional experience in journalism and must be nominated by a senior journalist, publisher or academic.  They must be fluent in English.  The scholarship will cover fees, accommodation and a modest living allowance.

Past winners of the prize have come from Malawi and Nigeria.

Candidates should submit a motivation letter, a CV, writing samples and at least 2 letters of nomination/reference by October 15, 2010  to fitzgeraldprize@thomsonreuters.com. Candidates will have to make themselves available for a written test and interview.