Africa News blog

Driving Sudan towards paradise

Back in1978, Sudanese statesman Abel Alier decided he had had enough of negotiating with troublesome locals over a controversial development project. Exasperated at the endless obstacles, he vowed to force it through without an agreement.

“If we have to drive our people to paradise with sticks we will do so for their own good and the good of those who come after us,” he infamously said.

Something similar must have been going through the minds of mediators in recent weeks as they tried to push for an agreement between Sudan’s intractable northern and southern politicians.

Sudan is now just 48 days away from the scheduled start of two referendums — the first on whether the oil-producing south should declare independence, the second on whether the disputed central Abyei region should join north or south.

Breaking down the walls – Sudan’s oil transparency push

It was a just another seminar on transparency in the oil sector. Seemingly banal. But this was being held in Khartoum, involving live debates between northern and southern Sudanese officials, a minerals watchdog and the international media, who were allowed free access to publicly grill those who administer what has for years been an absolutely opaque oil industry. What emerged was surprisingly positive and all walked away feeling that — at least until the Jan. 9, 2011 referendum on southern independence — this was the first step towards finally unpicking all the stitches that have sewn the sector tightly shut to outsiders. We are “PR stupid” said the newly appointed Minister for Energy from the former southern rebel Sudan People’s Liberation Movement Lual Deng who instigated the forum. He said this to explain the discrepancies in oil production and oil prices uncovered by the Global Witness NGO whose report “Fuelling Mistrust — the need for transparency in Sudan’s oil sector” provoked the discussion. These include figures published by the ministry of finance web site of oil revenues with little clarification of how they had been calculated, even citing barrels of Sudanese black gold selling for as little as 15 cents a barrel. It also found discrepancies between China’s CNPC who dominates Sudan’s oil sector dogged by U.S. sanctions, and Sudan’s energy ministry output figures. Those figures were easily explained as the difference between gross production and net of water, gas and solids on Wednesday. But the fact an international giant like CNPC is publishing undefined production figures in an annual report provoked concern even from Sudanese officials. And why did it require such an elaborate showcase to provide such a simple response? Minister Deng’s answer was the “PR stupid” line. After months of chasing and waiting in vain for a reply from The government or CNPC to the discrepancies in oil output, including having the phone hung up on them by the Chinese, Global Witness went ahead and published their work. “Next time you should just call us to verify the figures,” was CNPC’s ironic response, with the presenter who had flown in from Beijing for the forum, flashing on a PowerPoint screen the email and mobile number of CNPC’s country manager in Sudan. Just five minutes earlier that same manager had declined my request for a meeting or to share his contacts “in the interests of transparency.” One of dozens of attempts I have made over the years to extract any information from the state-owned firm. I wonder how long he will keep that mobile number. But if you sifted through the barbed comments by Sudanese officials directed at the Global Witness reps and the attempts by CNPC to ridicule the figures, important progress was made. Sudan said it would commit to the Extractive Industry Transparency Initiative, to which CNPC gave its support. It also agreed to a full audit back to 2005 and the ministry said it would publish daily production figures. It also gave French oil giant Total a public guarantee that whether or not the south votes to secede in just five months, its oil concession contract would be honoured. If all this happens, it will be a massive step towards opening up Sudan’s taboo oil sector which could convince those elusive big European companies who left during Sudan during the north-south civil war to come back and invest. Do you see European companies investing in Sudanese oil and gas? If Europeans come back in should U.S. sanctions be lifted to allow American firms to compete for the spoils? Is Sudan – likely to split into two countries in five months –worth the risk for investors?

It was a just another seminar on transparency in the oil sector. Seemingly banal.

But this was being held in Khartoum, involving live debates between northern and southern Sudanese officials, a minerals watchdog and the international media, who were allowed free access to publicly grill those who administer what has for years been an incredibly opaque oil industry.

Britain on Sudan: Selling out or cashing in?

Britain’s new coalition government made its priorities on Sudan very clear as Henry Bellingham, the minister for Africa, used 90 percent of his opening remarks at his first press conference in Khartoum to outline how Britain could increase trade with Sudan. The other 10 percent dealing with the run-up to the south’s referendum on secession which is likely to create Africa’s newest nation state and the International Criminal Court arrest warrant for President Omar Hassan al-Bashir for genocide all seemed like just an after thought. On first glance many would say Britain was selling out — engaging economically with a government whose head is a wanted man would destroy the global divestment campaign’s years of efforts to make investing in Sudan a poisoned chalice no one wants to touch in the hope of isolating Khartoum to pressure it to stop rights abuses and allow democratic freedoms. Many Darfuris and rights activists who have been victims of torture and harassment will be dismayed by the move which clearly extends a hand of friendship to Khartoum who had until now been reduced to almost pariah status since the ICC warrant for Bashir last year which propelled him to international fame — for all the wrong reasons. Is Britain selling out? In fact many ordinary Sudanese say no. They say U.S. sanctions, imposed since 1997 has had little effect on the government who took control in a 1989 bloodless coup and was elected in expensive and heavily disputed April elections. The economy has grown on average eight percent a year, Khartoum extracted the oil pretty much without Western companies, built hundreds of miles of tarmac roads, and erected high-rise government buildings which sparkle so much in the sun the rays mock the Americans even far out of town in their heavily secured embassy compound. But sanctions have made life almost impossible for any normal Sudanese to do business abroad or at home. It’s those struggling to become an emerging middle class who welcome initiatives Bellingham suggested to use the 35,000 Sudanese living in the UK to facilitate small and medium sized businesses investments in Sudan bringing much-desired jobs and training with them. Britain is the former coloniser of Sudan and many families have close links with the country often visiting to shop and visit family there. They would welcome British products instead of the often cheap and poorer quality Chinese goods flooding the market here in Khartoum. It would certainly lessen their excess baggage bills. But Bellingham went one step further saying British companies were lagging behind Chinese companies and missing out on great investment returns in Sudan, emerging from decades of civil war. He also mentioned the unmentionable. Oil. Most Western oil companies pulled out of Sudan citing rights abuses during the north-south civil war which ended in 2005 with a shaky peace deal which has just about held if only partially and reluctantly implemented. Some firms were even implicated by rights activists in those rights abuses. But for example a battered British Petroleum, a move into an oil industry in a country whose government has historically shown scant regard for its population or the environmental effects of exploration might be a silver lining to the clouds gathered over its HQ of late. So is Britain cashing in? Only if they can make it happen. Western oil companies have been reluctant to enter to a post-war Sudan. Oil exploration is a long-term and costly venture and the stability of the country is far from guaranteed. Many are waiting to see what will happen after the southern referendum on independence in five months because the oil lies mainly in the south. They worry contracts signed with a united Sudan may not be honoured post secession by a new nation fighting to survive as a country in its own right. British banks in the past five years all but stopped transactions to/from or those with any mention of Sudan, no matter what the currency and no matter who the recipient. Sudanese abroad had their bank accounts closed down regardless of who they were, foreigners working in Sudan received similar treatment and mortgage companies turned down anyone whose work brought them to the war-torn nation. Lloyds TSB, which also owns Halifax and Bank of Scotland, last year paid a massive $350 million fine to the United States for fraudulent transactions to U.S.-sanctioned Sudan, Libya and Iran. So how will Whitehall convince them it’s a good idea to facilitate investment in an opaque Sudanese economy dominated by companies many of which have been hijacked by government organs or ruling party officials? They will need considerable help from Sudan’s government to increase transparency and allow private businesses to flourish free from government interference. The jury is not only out on the moral implications of Britain’s new policy but also on whether London can convince UK businesses and banks to invest in a country which regularly ranks in the top five of failed states indices.

Britain’s new coalition government made its priorities on Sudan very clear as Henry Bellingham, the minister for Africa, used 90 percent of his opening remarks at his first press conference in Khartoum to outline how Britain could increase trade with Sudan.

The other 10 percent dealing with the run-up to the south’s referendum on secession, which is likely to create Africa’s newest nation state, and the International Criminal Court arrest warrant for President Omar Hassan al-Bashir for genocide all seemed like just an afterthought.

Libya: the son also rises?

 

 

 

 

 

 

 

 

 

Since the end of international sanctions against Libya, leader Muammar Gaddafi’s son Saif al-Islam has symbolized hope in the West that a secretive, authoritarian oil and gas exporter can reform itself from within.

The sharp-suited, western-educated Islam has called for a new constitution, a freer press and an independent judiciary, music to the ears of the U.S. and of European governments all desperate to give a moral basis to their re-engagement with the oil-rich north African state.

Africa back to the old ways?

The overthrow of Madagascar’s leader may have had nothing to do with events elsewhere in Africa, but after four violent changes of power within eight months the question is bound to arise as to whether the continent is returning to old ways.

Three years without coups between 2005 and last year had appeared to some, including foreign investors, to have indicated a fundamental change from the first turbulent decades after independence. This spate of violent overthrows could now be another reason for investors to tread more warily again, particularly as Africa feels the impact of the global financial crisis.

Is Zimbabwe back to square one after AU summit?

Can President Robert Mugabe be trusted to implement the resolution of the African Union summit calling for dialogue and a government of national unity to end Zimbabwe’s long-running crisis? According to Mugabe’s camp, he can. “The AU resolution is in conformity to what President Mugabe said at his inauguration, when he said we are prepared to talk in order to resolve our problems,” his Information Minister Sikhanyiso Ndlovu told Reuters a day after the AU passed the resolution on July 1.

While opposition leader Morgan Tsvangirai and his Movement for Demoratic Change (MDC) say they have kept the door open for negotiations, he says conditions are not yet right for talks. The MDC also makes clear its objective is a transitional arrangement leading to fresh elections rather than a unity government.  The crisis could conceivably be stuck on that difference.