Africa News blog
African business, politics and lifestyle
By Clyde Russell
The idea that Australia is a more dangerous place for mining investment than Mali might seem strange to most observers, but that’s exactly the view of the boss of the world’s third-biggest gold producer.
Mark Cutifani, the chief executive officer of AngloGold Ashanti, said last week he was more concerned about government policies toward mining in Australia than about nationalism in Africa.
On the face of it, this is an extraordinary comment that has gone largely unreported by both the Australian and international media.
How can it possibly be that Australia, a stable Western democracy with rule of law, independent courts and a culture of vigorous debate, is a more risky place than countries like Mali, which had a military coup last month and is battling an insurgency by Tuareg separatists?
Of course, it may be that Cutifani, an Australian-born mining engineer who has headed the Johannesburg-based company since October 2007, was ramping up the rhetoric to make a point when he talked to reporters on March 27 in Perth, capital of the resource-rich state of Western Australia.
But this would appear to be at odds with his previous record of speaking sensibly about the gold-mining industry while remaining an advocate of the interests of his global company.
The point Cutifani was probably trying to drive home is that the debate in Australia over its vast mineral resources appears to have veered off-track and descended into political point-scoring.
“The politicians and we as industry leaders are missing each other,” the Australian Associated Press quoted him as saying. “Somehow, we’ve got to land this discussion and stop the class warfare-type conversations and turn the conversations into constructive dialogue about the future of the country and the industry.”
To be fair, Cutifani has also lobbied against proposals for a resource rent tax in South Africa and moves to raise taxes in other African countries where AngloGold operates, such as Ghana and Mali.
But for Australia, the background to his comments is an intensifying war of words between Wayne Swan, the treasurer in the Labor Party-led minority government, and mining magnates over the new Mineral Resource Rent Tax (MRRT) and the carbon tax.
Both these taxes are due to start on July 1 and have raised the ire of many industries and the opposition Liberal Party.
The MRRT will impose a 30 percent levy on so-called super profits of large coal and iron ore, and doesn’t yet include other producers such as gold miners.
The carbon tax will impose a price of A$23 on the emissions of the top 500 polluters, to be phased in, while reducing income taxes for poorer households in order to offset the expected increase in energy costs.
The Labor Party, which has slumped in opinion polls partly over public disquiet over the new taxes and a broken promise not to introduce a carbon tax by Prime Minister Julia Gillard, appears to be following the tactic of stoking the politics of envy as a distraction method.
Since the financial crisis that sparked the global recession in 2008 it has been easy for politicians to attack the rich and blame untrammeled greed for the economic carnage.
In Australia, the target is billionaire mining barons and Swan attacked iron ore magnates Gina Rinehart and Andrew Forrest as well as coal developer Clive Palmer in an essay published last month.
Interestingly enough, Swan didn’t attack BHP Billiton and Rio Tinto, the two global miners that led initial opposition to a stiffer resource tax that was watered down after Gillard deposed former prime minister Kevin Rudd in a party-room coup.
Swan accused the billionaires of trying to use their wealth to “distort public policy,” apparently without any sense of irony, given that he was using his position as the second-most powerful politician in Australia to do the same.
It seems to me that Australia would benefit from a more sensible debate on how to ensure the mineral wealth is developed in a way that rewards the owners of capital that take the risks of developing projects as well the overall economy and citizens in general.
Debate in Australia appears to be driven by short-term political cycles, with federal elections every three years leading politicians to focus more on spin than sound policies.
Is the MRRT the best design that could have been implemented?
Will it raise sufficient revenue without leading to less investment, and will it help ensure the long-term viability of mining?
Should the revenue it raises be used to fund a one percentage point cut in the company tax rate, as Labor proposes, or would it be better put toward building a sovereign wealth fund?
These are all valid points for debate, but aren’t getting a hearing in Australia currently.
Instead, as AngloGold’s Cutifani pointed out, there is an unedifying mud-slinging match that does little to enhance the reputations of either Swan or his targets.
By Isaac Esipisu
Kenya is set to hold in December of this year its first elections since the 2007 vote that was marred by deadly violence. The east African country’s election will come under intense scrutiny because it will be the first under a new constitution and the first since the 2007 poll in which more than 1,220 people were killed, mostly in post-election violence.
The bloodshed and property destruction were unprecedented. Many Kenyans were rendered homeless as well; many as I write are still leaving as internally displaced persons (IDPs)
By Isaac Esipisu
Although the role of political parties in Africa has changed dramatically since the sweeping reintroduction of multi-party politics in the early 1990s, Africa’s political parties remain deficient in many ways, particularly their organizational capacity, programmatic profiles and inner-party democracy.
The third wave of democratization that hit the shores of Africa 20 years ago has undoubtedly produced mixed results as regards to the democratic quality of the over 48 countries south of the Sahara. However, one finding can hardly be denied: the role of political parties has evidently changed dramatically.
By Isaac Esipisu
There are many reasons for being angry with Africa ’s strong men, whose autocratic ways have thrust some African countries back into the eye of the storm and threatened to undo the democratic gains in other parts of the continent of the past decades.
For those who made ultimate political capital from opposing strongman rule in their respective countries, it is a chilling commentary of African politics that several leaders now seek to cement their places and refusing to retire and watch the upcoming elections from the sidelines, or refusing to hand over power after losing presidential elections.
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.
On July 7, 1990, fear spread around Kenya. It stretched from the capital, where the opposition had called demonstrations to press for a multi-party system and constitutional changes, right into rural areas.
When a lorry carrying packed milk, under a now long-discarded school-feeding scheme, approached a rural schoolyard during a break, schoolchildren ran into their classrooms because the black stacked crates looked suspiciously like the helmets of armed police.
Would you order three new jets just so your successor could use them?
President Goodluck Jonathan is keeping Nigerians guessing as to whether he plans to stand in elections due next January, but suspicions are growing that he will eventually decide to contest.
Plans he has set out range from boosting power supply – perhaps Nigeria’s most critical need – to improving roads. Those are certainly not projects that anyone could complete quickly. On Wednesday, cabinet approved the purchase of three presidential jets at a cost of $150 million – adding to the suspicions he sees himself making use of them.
It is exactly one hundred years today since the formation of the Union of South Africa, but there are no signs of celebration over that. What exactly is the Union, you might ask? On May 31 1910, the southern part of Africa that is today known as the Republic of South Africa became a unitary state under British dominion in pretty much the geographical shape which exists to this day.
Given that for most South Africans, history from 1910 until the end of white minority rule in 1994 was one of exclusion and oppression there may be understandable reasons why it is not a date to be accompanied by mass celebrations.
One of the few positives of Sudan’s elections, dubbed to be the first open vote in 24 years but marred by opposition boycotts and accusations of fraud, was a tiny opening of democratic freedom in Africa’s largest country.
Direct press censorship was lifted from Sudan’s papers and opposition politicians were given an albeit limited platform to address the population through state media.
The death of Nigerian President Umaru Yar’Adua is unlikely to plunge Africa’s most populous state into crisis, but it intensifies what was already shaping up to be the fiercest succession race since the end of military rule.
Yar’Adua has been absent from the political scene since last November, when he left for medical treatment in Saudi Arabia, and his deputy Goodluck Jonathan has been running the country since February and has since consolidated his position.