Africa News blog

African business, politics and lifestyle

S.Africa must reform white-dominated economy

South Africa’s economy is still largely under the control of whites who held power under apartheid, President Jacob Zuma has said calling  for a “dramatic shift” to redress the wealth balance more evenly in favour of the black majority.

Zuma, speaking at the start of a major policy meeting of his ruling African National Congress, said the challenges of poverty, unemployment and inequality posed long-term risks for Africa’s richest country 18 years after the end of apartheid.

Without giving details, he called for a “dramatic shift and giant leap” in coming years to spread the country’s wealth more equitably, mentioning the distribution of mineral resources and land ownership as areas which needed to be overhauled. Zuma said the proposed “second transition” was necessary to complement the negotiated end of apartheid in 1994, when he said “certain compromises” over economic ownership had been made to ensure a smooth political transition from white minority rule.

The ANC has drafted a raft of policy documents that call on mining firms to pay more to the state to help finance welfare spending.The proposals also advocate relying on state-owned enterprises to be engines of job creation and growth. Zuma said the debate over how the country’s mining wealth should be used must go beyond simply the question of “to nationalise or not to nationalise.” Calls for nationalisation from some sectors of the ruling ANC have stirred investor concerns in the world’s No. 1 platinum producer.

Is Zuma home and dry after Malema’s expulsion?

By Cosmas Butunyi

South Africa’s ruling African National Congress may have expelled the rubble-rousing youth league president, Julius Malema, but challenges still remain for President Jacob Zuma, who is seeking a second term in a race that he is considered the frontrunner.

Observers say that Malema, who is considered one of the most prominent members of the party to openly break from Zuma, still can be a thorn in his side even though he is permanently barred from party-related events. He may use his expulsion to sharpen his criticism against Zuma’s government.

Turkcell’s dubious case against MTN

 By Alison Frankel
NEW YORK (Reuters) – On February 28, during oral arguments at the U.S. Supreme Court in an Alien Tort Statute suit by a group of Nigerians who accused Shell of complicity in state-sponsored torture in their country, Justice Samuel Alito interrupted the Nigerians’ lawyer, Paul Hoffman of Schonbrun DeSimone Seplow Harris Hoffman & Harrison. “What business does a case like this have in the courts of the United States?” Alito said.

Enough justices agreed with Alito that days after the argument in the case, called Kiobel v. Royal Dutch Petroleum, the Supreme Court decided it was more interested in the extraterritorial application of the Alien Tort Statute than in the nominal issue in Kiobel, which concerned corporate liability under the ATS. In an extraordinary post-argument order, the justices called for additional briefing from both sides on the question of “whether and under what circumstances the Alien Tort Statute allows courts to recognize a cause of action for violations of the law occurring within the territory of a sovereign other than the United States.”

Australia worse than Africa for mining? Yikes!: Clyde

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.

100 years and going strong; But has the ANC-led government done enough for its people?

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.

Was South Africa right to deny Dalai Lama a visa?

By Isaac Esipisu

Given that China is South Africa’s biggest trading partner and given the close relationship between Beijing and the ruling African National Congress, it didn’t come as a huge surprise that South Africa was in no hurry to issue a visa to the Dalai Lama.

Tibet’s spiritual leader will end up missing the 80th birthday party of Archbishop Desmond Tutu, a fellow Nobel peace prize winner. He said his application for a visa had not come through on time despite having been made to Pretoria several weeks earlier. (Although South Africa’s government said a visa hadn’t actually been denied, the Dalai Lama’s office said it appeared to find the prospect inconvenient).
Desmond Tutu said the government’s action was a national disgrace and warned the President and ruling party that one day he will start praying for the defeat of the ANC government.

Banking on Africa

CHINA/Mining companies are looking more cautiously at South Africa after a brouhaha over  shady deals. Media and diplomats are nervous of measures they fear could curtail press freedom. South Africans in general are wondering how much damage an ongoing public sector strike will do and whether it is a sign of worse labour unrest to come.

But global banking giant HSBC certainly seems to be taking a positive long term view of Africa’s biggest economy with its talks to buy up to 70 percent of South Africa’s Nedbank in a deal that could be worth more than $8 billion.

from Photographers' Blog:

No turning back as Africa’s hour arrives

A local child carries a ball while playing soccer at a dirt field in Soweto, Johannesburg June 7, 2010. The 2010 FIFA Soccer World Cup kicks off on June 11.          REUTERS/Siphiwe Sibeko

The 2010 World Cup has been a memorable and momentous occasion not only for me, but for South Africa, the African continent and the rest of the world.

It has indeed been incredible. It has been a unifying factor, with people beginning to appreciate the importance of their national symbols such as flags.

Will bandages mend broken ties in the DRC?

CONGO-DEMOCRATIC/EXPLOSIONThe relations between First Quantum and the Democratic Republic of Congo have gone from bad to worse in recent months, after the country expropriated the miner’s $765 million Kolwezi copper tailings project in September.  

A recent court ruling in the DRC has also cast a cloud over the future of the company’s Frontier and Lonshi mines, located in the south of the country. The widely covered dispute has led the DRC to accuse First Quantum of running a smear campaign against the country, the feud nearly foiled the DRC’s efforts to secure a $8 billion debt relief deal from the World Bank.   

Searching for it — not quite feeling it — in Polokwane

Photo
Searching for it — not quite feeling it — in Polokwane The fan fest sounded like a wild party with the vuvuzela horns booming through the empty streets of Polokwane town, one of the smallest of 10 venues for the first World Cup on African soil. Everyone must be there, we thought as there was little going on for a Saturday night in the northern South African town. Even the local Nandos restaurant on the main street shut by 8 p.m. But on closer inspection the soccer fan fest — loud as it was — was also pretty deserted. Soccer fever has yet to reach Polokwane. A sleepy town of just 500,000 people, it was hard to imagine Polokwane, which means place of safety, would host its first World Cup soccer match in less than 24 hours. In Johannesburg or Cape Town you could definitely “feel it”. Here we weren’t so sure. Driving through the town’s eerily deserted streets searching for a restaurant where we could eat and watch the soccer, we discovered that was not an easy find. It was also hard to imagine what long-term benefit the town would see from being a host city. While for the four matches to be played in Polokwane the few hotels on offer for tourists were full, in between there were plenty of rooms at the inn. No team was staying nearby which would bring with it the paraphenalia of adoring fans or news-hungry media and the associated business. Those playing were flown in for pre-match training, again the day of the match and ferried back straight after. Police closed down the roads near the stadium on the edge of town the night before. But those fearing traffic similar to the four-hour long queues witnessed in Johannesburg trying to get to Soocer City need not have bothered. The streets were empty, the car parks empty and — just 30 minutes before kick-off — the stadium was half empty. By the second half, the stands were just about three-quarters full, though the blasts of the vuvuzelas compensated for the missing supporters. The Peter Mokaba stadium almost looked like they hadn’t had time to finish painting it, with the stark grey concrete of the outer wall in direct contrast with Soccer City in Johannesburg’s brightly coloured exterior. The inside was still coated in construction dust and most of the refreshment stands remained shuttered and closed during the match. Just two hours after the players left we found ourselves the lone figures in a dark stadium struggling to see the keyboard as we tapped out the finishing touches to our stories. Even the name of the stadium was controversial. Mokaba was the African National Congress (ANC)’s youth league leader who, like his current counterpart Julius Malema, was fond of the phrase “Kill The Boer,” which upset many Afrikaners. Ironically there’s not even a local soccer team to make use of the sparkling pitch. Residents said the Rai Stars disbanded long ago and the nearby promising Black Leopards team are based more than 150 kilometres away in a less than World Cup standard stadium. <http://www.blackleopardsfc.com/10_stadium_info.htm> The Dynamos train 100 kilometres away. Neither team play in the country’s top league. “You can’t help thinking this huge stadium will just be derelict and empty in a few years time,” said one hotel worker.

Polokwane StadiumThe soccer fan fest sounded like a wild party with the vuvuzela horns booming through the empty streets of Polokwane town, one of the smallest of 10 venues for the first World Cup on African soil.

Everyone must be there, we thought as there was little happening on a Saturday night in the northern South African town centre.

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