Africa News blog
African business, politics and lifestyle
The acknowledgement by Zimbabwe’s central bank governor that it raided the private bank accounts of companies and donors to fund President Robert Mugabe’s government during the economic crisis has increased speculation over his fate under the new national unity government.
Central Bank Governor Gideon Gono said the central bank took foreign currency from private accounts to help pay for some $2 billion in loans to state-owned companies and utilities and for power and grain imports. He said the government still had to repay about $1.2 billion, so the bank could repay the money it owes.
Heading the central bank at a time Zimbabwe was suffering economic collapse and hyperinflation that touched at least 231 million percent a year (according to official figures) was never going to be a badge of honour for the governor, but as he made clear in his statement, Zimbabwe’s problems went beyond economics.
“It was a political problem and not an economic one that drove us into the difficulties this nation experienced, and quasi-fiscal operations were a response to those political challenges we have now resolved through the inclusive government,” the statement said. “Our call is to let bygones be bygones and for everyone and every entity to start anew and open a new page.”
Earlier this month, Zambian economist Dambisa Moyo argued that Africa needs Western countries to cut long term aid that has brought dependency, distorted economies and fuelled bureaucracy and corruption. The comments on the blog posting suggested that many readers agreed. In a response, Savio Carvalho, Uganda country director for aid agency Oxfam GB, says that aid can help the continent escape poverty – if done in the right way:
In early January, I travelled to war-ravaged northern Uganda to a dusty village in Pobura and Kal parish in Kitgum District. We were there to see the completion of a 16km dirt road constructed by the community with support from Oxfam under an EU-funded programme.
Tsvangirai vowed to rescue the stricken economy and called on the international community to help salvage the economy of Zimbabwe where unemployment is above 90 percent, prices double every day and half the 12 million population need food aid.
Far from being all bad news for Africa, the global financial crisis is a chance to break a dependence on development aid that has kept it in poverty, argues Zambian economist Dambisa Moyo, who has just published a new book “Dead Aid”.
Moyo’s book, her first, comes out at a time when Western campaigners, financial institutions and some African governments have been warning of the danger posed to Africa by the crisis and calling for more money from developed countries as a result. The former World Bank and Goldman Sachs economist spoke to Reuters in London.
In the relative political calm of the Indian Ocean, Madagascar has long been a centre of turbulence.
Now another political crisis is brewing as the opposition accuses President Marc Ravalomanana of abuse of power and threatening democracy. Tens of thousands of opposition protesters demonstrated in Antananarivo on Wednesday, two days after an earlier rally descended into violence that left nearly 40 people dead.
President Mwai Kibaki’s naming of a key ally, Uhuru Kenyatta, as his new finance minister to replace another supporter, Amos Kimunya, does not come as a surprise to some.
Kimunya, who stepped down last July after he was accused of corruption in the handling of the sale of a luxury hotel, has also returned to parliament — replacing Kenyatta as trade minister.
Kimunya was not reinstated even after he was cleared by an official enquiry into the controversial sale of the luxury Grand Regency Hotel in the capital.
The long wait for someone to fill the finance position suggested to some that Kibaki was not comfortable bringing his ally back, given his tainted name.
His appointment to the trade ministry could mean Kibaki did not want to lose him from the cabinet altogether, although some analysts say it was a move to save face.
Pundits also say Kibaki did not have much room to manoeuvre in picking Kenyatta. Many MPs who support the president are parliamentary neophytes without much experience in running a powerful ministry like the treasury.
Good news and bad news for Africa from the latest take on global risks from the World Economic Forum. Not much danger for most of the continent, it says, from an asset bubble burst. That’s the good. The bad, of course, is that this is because there are not many financial assets to bubble. In fact, it deems the overall exposure even to economic risks is small because African economies are not particularly tied in to global markets.
Actually, the report shows that there are two Africas. Mapped by their susceptibility for economic and asset bubble trouble, most African countries are bunched together in a low risk range. But another, smaller cluster, including Nigeria and South Africa, finds itself in much more peril and shares space on the WEF risk map with Western and Eastern Europe.
It was not the most encouraging message after a year that had few silver linings for the country of 36 million, still recovering from a bout of post-election violence early last year.
If you lived on an archipelago that defined paradise with palm-fringed white sand beaches and emerald green waters, you would expect a relaxed, lazy pace of life.
Lazy would be a generous description of the Seychellois soldier’s wave at the entrance to State House as I arrived with my local colleague George Thande – who is admittedly a regular visitor here.
African officials meeting in Tunis this week to discuss the impact of the crisis argued that the continent needed better representation, given the effects that the turmoil is having in Africa as well as the continent’s growing financial importance. The complaint could apply equally to other developing countries.