Africa News blog

from Breakingviews:

Euro zone crisis may be close to resolution

By Hugo Dixon
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

DAVOS, Switzerland -- The euro zone crisis may be close to resolution. There is certainly optimism among policymakers at the World Economic Forum in Davos that a comprehensive deal -- involving more discipline by peripheral nations and more help from rich nations -- could be put together in coming weeks. If so, the hot phase of the crisis could be over and even Greece would have a fighting chance of getting out of the woods.

There is still no deal. But the stars seem to be coming into alignment. Germany, the zone's paymaster, clearly realises that it has a strong interest in the single currency holding together -- and will do what is needed to make that happen. Peripheral nations also seem to be willing to go an extra mile to give Berlin enough air cover to sell further help to the German people.

The basic bargain would involve more generous terms for loans to indebted countries, especially Greece, balanced by hard-and-fast promises not to run up debts in the future. The countries are discussing some form of "debt brake", a provision embedded in the German constitution which forces it to balance its budget in the medium term. Such self-denial could, indeed, be a healthy mechanism for all countries to adopt.

Dancing to the last beats of a united Sudan

Half way through the evening you felt this is what a united Sudan could have been like.

It was an engagement party thrown by a beaming, white-robed Khartoum patriarch with pulsing music provided by Orupaap, a group of mostly southern musicians and dancers.

Drought threatens return of good times in Kenya

“Trying to forecast the macro-economic fundamentals of the Kenyan economy requires a good dose of meteorological skills,” a Kenyan economic analyst once told me.

He was referring to the agriculture sector’s outsized influence on east Africa’s largest economy. Farming, including coffee and tea growing, accounts for a quarter of output and employs nearly two-thirds of the population.

Over a third of electricity is generated from dams which are fed by rainfall, with drought leading to outages, which affect manufacturers and other firms.

Cameroon: Discrimination and corruption taint state aid to farmers

Some of Cameroon’s state aid to farmers does not reach those it is meant for.  The agriculture ministry last April handed 20 million francs CFA to 20 young representatives of  Community Farmers Groups (CFG) in  the country’s central region.
 Some of those had not even started work on a farm.
 Among them was Armand Ondobo Mbida, 19, from Mefou Akono. He received a cheque of one million francs CFA for the New Generation CFG, although he is a mere member of the group and does not run it.
 Ondobo Mbida works as a technician apprentice in a Yaounde electronic appliances repair workshop.
 Yet, the government says that farmers must be actually producing before claiming state aid. “We do not support those who intend to produce.  We help those who are producing, ” said Martial Nkoulou, the coordinator of the state plan to help young farmers.
 Asked what he intended to do with the money, Ondobo Mbida said: “I’m going to start  working and encourage (CFG) colleagues to follow suit…I’ll plant cocoa, rice and cassava.”
 The New Generation CFG was not created by young people but by Helene Missili, aka Mama Douala, a woman believed to have close contacts with ministry officials who can help in obtaining subsidies.
 Ondobo Mbida regards her as his mother, and says she and her husband actually run the CFG.
 But a visit to Ngoumou, a few dozen  kms (miles) from Yaounde,  exposed doubts about the very existence of the CFG.
 ”I do  not know the CFG called New Generation,” said Sebastien Felix Noah, the head of farmers, breeders and craftsmen organisations in Ngoumou.
 ”We have about 35 active CFGs. Many are not working. Some CFG were created when subsidies were mentioned. If there are no subsidies, they only exist in suitcases,” he said.
 He added he did not know either the Jca Nkong Agog CFG, from Mefou Akono, which also received one million CFA francs.
 How CFGs are picked out for state aid and subsidy opportunities is not being clearly explained to genuine farmers, Felix Noah said.
 One may suspect that only a  small part of 116 million CFA francs to be distributed among Cameroon’s CFGs this year will effectively go to develop farming.
 In August 2009, the National Anti-Corruption Committee accused 47 agriculture ministry officials of corruption and embezzlement. Among the charges was granting subsidies to fictitious CFGs.

Beaugas-Orain Djoyum is a guest writer who took part in the Reuters Foundation  Financial and Business course.

Sub-Saharan Africa’s growth prospects mixed

Experts forecast healthy 2011 economic growth for sub-Sahara Africa, but growth is fragile as it  depends on developments both at home and abroad, an IMF official said.
 Valeria Fischera, representative of the International Monetary Fund (IMF) in Senegal said 2011 growth forecast ranged from two to seven percent for the region’s various countries.
 ”But forecasts are risky as several world factors can affect regional trends,” she cautioned.
 Recovery in Europe and the United States was important as it has major consequences on economic activity in Africa.
 She was optimistic as Asian countries were expected to keep growing rapidly and step up trade with Africa, thus protecting the continent from possible deterioration in Europe and the United States.
 But budget cuts in Western economies could lead to a drastic fall in development aid badly hurting poor countries.
 Fischera said there was a real risk that Europe and the United States would not be able to fulfill pledges to take aid to 0.7 percent of GDP. She mentioned crisis budget cuts in Spain, Ireland and Greece.
 She said that political developments within sub-Sahara Africa could also weigh heavily on the economy. Presidential and general elections are due in some 20 countries by the end of next year and could have major consequences as governments would be tempted to announce lax budgets to attract voters, she said.
 Recent events showed that election periods were fraught with danger in a region still in the process of building democracy, and investors would watch closely any deterioration of the situation.
 Yet, Fischera said, things looked good for sub-Saharan Africa as no country was expected to suffer negative growth.

 
 Sié Simplice Hien is a guest writer who took part in the Reuters Foundation  Financial and Business course.

Benin support for local goods

As the economic crisis pushes prices up in Benin, the government is urging consumers to turn to local goods.  Local shopkeepers complain that their turnover and profit are falling.
 ”There is no money left in this country,” said food vendor Mariam Kodjo as she headed for the marketplace. “Customers are getting scarce as the price of food rises,” she said.
 Benin is not self-sufficient in food, and as the cost of imports goes up, the government is seeking to both increase local production and keep prices down.
 President Thomas Boni Yayi has granted subsidies to improve low productivity in state-owned farms. He has also organised wide-ranging  talks on the cost of living which have produced recommended prices for staple goods.
 The League for the defence of consumers is also working to get Benin consumers to change their habits and stick to local food.
 ”Most people in Benin believe that imported goods are better quality,” said  statistician Samson Bossou. “This discourages efforts to produce and consume locally,” he said.
 Consumers are urged to buy fresh tomatoes rather than tinned tomatoes, and breakfast on maize or millet porridge rather than tea and croissants.
 The League has also printed leaflets to help consumers save on those goods that have been most affected by price rises — food, transport and electricity.  

Vignissenou A. Gnansounnou is a guest writer who took part in the Reuters Foundation  Financial and Business course.

What odds a Birr devaluation in the next month?

In November, Ethiopian Prime Minister Meles Zenawi told Reuters a sharp devaluation of the birr at the start of September was a “one-off affair”.
The currency’s recent history suggests otherwise.
    Since the middle of 2008, the currency of Africa’s second-most populous nation has tended to trade broadly flat against the dollar for 5-6 months, before devaluing sharply.
    The cycle has held true four times in the last two years, over which time the unit has lost more than 40 percent of its value. It now stands at around 16.6 to the dollar, and the clock is ticking — it’s now 4-1/2 months since the birr last fell out of bed.

Sudan-a tale of two countries

KHARTOUM, Jan 14 (Reuters) – As delighted southern Sudanese vote in a long-awaited referendum on independence, visitors to the north and south could be forgiven for thinking they were already two separate countries. Far from the orange dusty landscape of Khartoum with heavy security, newcomers landing at the airport in south Sudan’s capital Juba wander off the runway to be greeted by a smack of wet, humid heat driven by the surrounding lush tropical forests. Beer adverts and often drunk soldiers adorn the few tarmacked roads in the would-be capital of what is likely to be the world’s newest nation state, a culture shock to anyone coming from the Islamic north where alcohol is banned. Visitors enjoy river Nile-side restaurants where they can sip a glass of wine and eat pork products unavailable up north. The south’s population is mostly Christian or follows traditional religions. African music blares throughout the town’s markets, run by a web of Ugandan and Kenyan traders. Residents shout at each other in an Arabic dialect almost incomprehensible to northerners. But window dressing aside, south Sudan has effectively been operating as a separate nation since it was given a semi-autonomous government under the 2005 peace deal. Juba then set about creating what has become a state within a state. “Is (the south) ready to govern itself? That’s what they’ve been doing for the last six years, doing just that,” Daivd Gressly, the top U.N. official in the south said. It has its own constitution, a separate central government,  10 state governments all answering to Juba, its own parliament and even its own laws. The two regions even have different banking systems – the north operates under Islamic sharia law while the south uses a conventional banking system. Few northern banks operate in the south, dominated by new southern Sudanese or East African banks. Ministries which began in pre-fabricated buildings often with just a minister in a lonely office with a few tea ladies and cleaners for company have become fully functioning institutions, complete with staff. “Frankly, the started with a president and a vice president and built everything from there,” Gressly said. Khartoum’s government was enraged when the south began opening “liaison offices” around the world which local newspaper began to call embassies. And Khartoum complained that Juba was not transferring any of the money it was collecting from customs or immigration. Juba in fact kept an entirely separate immigration system. Sudan visas, notoriously difficult to get, were bypassed by visitors who would get “Government of Southern Sudan” permits in Nairobi, travel to Juba and then fly on a domestic flight to Khartoum. One friend who entered the south overland across the Ugandan border got a “New Sudan” stamp on his passport from immigration. When Khartoum’s interior ministry saw the stamp, they panicked, fined him and stamped his passport with “British infiltrator.” “This is crazy – we are supposed to be one country but we can’t coordinate our immigration!” One Khartoum official grumbled to me as yet another journalist arrived with papers issued in the south, but not recognised in the north. One wonder what will really change once the south becomes independent on July 9.

As delighted southern Sudanese voted in a long-awaited referendum on independence, visitors to the north and south could be forgiven for thinking they were already two separate countries.

Seeing opportunities in South Sudan

The chief executive of Kenya Commercial Bank Martin Oduor-Otieno had an extra-ordinary business trip six years ago.

The then deputy CEO of the bank led a party of five executives to Juba, South Sudan to assess the possibility of opening a branch there to serve the region after a peace deal was signed to end a war between the north and the south, which had lasted more than two decades.

South Sudan’s unlikely hero

Southern Sudanese may not like to admit it but the unlikely hero of their independence is an octogenarian northern lawyer always close to controversy who has pulled off what was touted as a mission impossible. Holding south Sudan’s referendum on secession on time.

Bespectacled Mohamed Ibrahim Khalil, head of the south Sudan Referendum Commission, looks frail and sometimes walks with a stick. But he’s sharper than all of his younger colleagues, can run rings around journalists in Arabic, English and French and handles his own very busy mobile phone traffic.