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May 11th, 2009

How will the Zuma team do?

Posted by: Agnieszka Flak

Thousands of South Africans danced, cheered and sang hymns to celebrate President Jacob Zuma's swearing in. Zuma, they said, as a man of the people, would give them houses and electricity, fight AIDS and crime, and ensure prosperity even as South Africa is on the brink of its first recession in 17 years.

But appointments to key ministries have raised questions over how well the new government will function.

Economic policy is seen intact after largely expected changes at finance-related ministries, but appointments to some other key sectors, including mining, energy and telecommunications left more doubts.

Siphiwe Nyanda, the newly appointed minister of communications, has been a military man, yet outside the African National Congress (ANC) and defence he is something of a mystery. He now takes over communications, a crucial ministry with oversight of Telkom, Africa's biggest telecoms firm.

Dipuo Peters qualified in social work, but has been chosen to lead the energy ministry and help tackle the country’s power shortages that have led to a five-day shutdown of South Africa’s mining industry and crippled the country’s investor-friendly image.

“It appears this is South Africa's tradition to appoint a minister who has no technical qualifications whatsoever,” said independent analyst Andrew Kenny.

Barbara Hogan, who has led the health ministry for the past six months, has been moved to oversee the public enterprise department, also in charge of sorting out structural problems at state-owned utility Eskom, which now supplies some 95 percent of the country’s power.

Analysts welcomed the split of the energy and mining ministry into two entities, saying it would allow for better focus on the challenges at hand, especially in view of the economic slowdown. They say that while political motives could have motivated individual appointments, the eventual success of each entity will depend on the ministers’ leadership skills and ability to appoint the right people around them.

Zuma appointed Susan Shabangu, who has only held deputy ministerial positions before, as mining minister in the world's top source of platinum and No. 3 gold producer. She came to prominence as deputy security minister last year when she advised police dealing with criminals: "You must kill the bastards if they threaten you or the community. You must not worry about the regulations."

Some say it is too soon to speculate on how the ministers will do. The ministers need to be given the benefit of the doubt for now, they say. The first 100 days in office may indicate whether or not they will push for change and deliver on the promises made. What do you expect?

March 19th, 2009

Time to drop Zuma charges?

Posted by: Rebecca Harrison

South African prosecutors are considering a legal request by ruling ANC leader Jacob Zuma to drop the graft charges against the man who is expected to be the next president after the elections in April. Zuma has always denied any wrongdoing and his followers say the charges were politically motivated.

A decision to drop the charges would give the African National Congress a big boost ahead of what is expected to be the most closely-contested poll since apartheid ended in 1994. It would also remove a major distraction for Zuma in office and the prospect of court appearances that could tarnish South Africa’s standing abroad.

In the short term, investors might also welcome such a step that removes a source of uncertainty and eases political risk.

Long-term, however, dropping the charges could damage South Africa's image.

South Africa often boasts about its constitution, but faces rising disquiet about the independence of its judiciary.

A victory for Zuma could add to that sentiment, eroding confidence in the rule of law and stoking fears South Africa is sliding away from the democratic ideals it sought to promote after the end of apartheid. Some foreign investors even worry it could give the impression South Africa is heading in the direction of neighbouring Zimbabwe.

Opposition party COPE said dropping the charges would add weight to perceptions that South Africa is becoming a "banana republic".

Better to drop the charges or let them stand? What do you think?

March 18th, 2009

Africa back to the old ways?

Posted by: Alistair Thomson

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.

"Although I don't think these instances of instability in Africa are related to each other or part of a pattern, I think there's no doubt external constituents and businesspeople around the world will assume there is a pattern," said Tom Cargill, Africa Programme Coordinator at London thinktank Chatham House.

The fact that coup makers have succeeded without being forced to step down or even face major censure could also embolden those who might be tempted to take power in bigger countries, where falling growth is encouraging disaffection.

"Look at ... other African countries, so-called pivotal states: Nigeria is in a terrible state, so is Egypt, so is Kenya, all these so-called big countries," said Hussein Solomon, a political science professor at the University of Pretoria.

Although there can be a tendency to group very diverse African states together, the picture is far from uniform - Ghana's presidential election two months ago was one of Africa's closest, but avoided major violence, reassuring investors despite an acute fiscal crisis.

But social pressures are growing across Africa as a result of the world economic crisis.

The dramatic U-turn by rich countries as they bail out or buy up failing industries is also prompting a reassessment of the model sold to Africa by Western donors since the Cold War -- a combination of market capitalism and multiparty democracy.

Cargill said factors were both the financial crisis and the rise of one-party state China, an increasingly important source of investment and trade for Africa.

"I think in future the whole idea of the democratic capitalist system will be tested and questioned, and there will be some who take advantage of its being questioned for their own private ends to launch their own bids for power," he said.

That debate is already taking place at the African Union, whose rules ban unconstitutional seizures of power but whose chairman for the next year, Libya's Muammar Gaddafi, opposes what he says are foreign democratic structures imposed on Africa.

The AU has told Madagascar that any seizure of power by unconstitutional means would be considered a coup d'etat, punishable by AU sanctions or suspension.

But that sits uneasily with Gaddafi's rebuke last week of Mauritania's first democratically elected leader, largely confined to his village after being deposed in a coup last year.

"He must accept the fact,” said Gaddafi, who seized power in 1969 “He is not the first head of state to be overthrown.”

Is Africa returning to the old ways or did it never really leave them behind? Will a reassessment of the financial model pushed by Western donors also mean a new look at the multiparty democracy?

March 10th, 2009

Sign of change in Zimbabwe?

Posted by: Matthew Tostevin

President Robert Mugabe joined the mourning for Prime Minister Morgan Tsvangirai's wife on Tuesday and called on Zimbabweans to end violence and support his old rival to help rebuild the country.

The death of Susan Tsvangirai in a road crash in which her husband was also injured has, at least on the surface, brought about a show of unity between Zimbabwe’s bitterest foes that might never have looked possible.

"This is a difficult moment for our colleague. He has lost a partner and we must all rally to support him and lessen his burden,” Mugabe told mourners at the service for the woman who supported Tsvangirai through years of political struggle against him.

"To our supporters, we want to say violence should stop. That's what (Mrs) Tsvangirai would have wanted, for us to co-exist peacefully. We have just started a new life after years of fighting each other and insulting each other. We have said let's give peace and harmony a chance and work together."

Many Zimbabweans were suspicious of the cause of Friday’s crash, the month after Mugabe and Tsvangirai had formed a unity government that has been mired in disagreements over appointments, economic policy and the detention of activists and supporters of long time opposition leader Tsvangirai.

Tsvangirai himself, however, has ruled out foul play in the car crash - putting it down to an accident on one of Zimbabwe’s dangerously potholed roads.

Tsvangirai's oldest son Edwin thanked Mugabe for his speech.

"I want to thank His Excellency the president for words that changed my understanding of him," he told the crowd.

Has the picture in Zimbabwe now changed? Will Mugabe and Tsvangirai be able to work together to pull the country out of crisis?

March 4th, 2009

Will Bashir warrant worsen war?

Posted by: Andrew Heavens

Sudan’s President Omar Hassan al-Bashir has seen off other challenges in almost 20 years in power and there is no sign that he is going to give in to the arrest warrant issued by the International Criminal Court for war crimes and crimes against humanity in Darfur.

Some supporters of the court's move hope it will eventually persuade Sudan's politicians to hand over their leader in a palace coup, end the festering conflict in Darfur and do more to repair relations with the West.

But many signs point in the other direction, turning Bashir further towards allies such as Russia and China as he strengthens his hold on power.

Some believe the court’s decision could worsen the fighting in Darfur because rebel movements will be emboldened and because Khartoum will feel that there is no longer any point in trying to pander to the West.

There are also concerns over what it could mean for the 2005 peace deal that ended the two-decade north-south war - although officials from the semi-autonomous south have been quick to say, in public at least, that they are standing behind Bashir.

While Bashir remains in power, the arrest warrant means the West has lost one of its strongest negotiating cards with Sudan -- the offer to normalise relations.

The new U.S. administration could still offer Sudan the carrot of removing the country from its list of state sponsors of terrorism. But early statements from President Barack Obama and his team suggest they plan a tougher stance on Sudan.

Some of the 30 African countries who signed the founding statute of the International Criminal Court may start reconsidering their involvement. Many states already feel the court's investigations to date have unfairly targeted the continent.

And there is no sign that Bashir will be arrested. Despite the call from the ICC for all countries to implement the warrant, he plans to go to an upcoming Arab summit in Qatar and intends to join future African summits. While Qatar has not signed up to the statute, if Bashir were to get away with visiting a country that has done so it might seriously challenge the court’s authority.

Was it right for the court to issue the warrant against Bashir? Will it improve the situation in Sudan or make it worse? Could it end up undermining the court? What do you think?

March 2nd, 2009

Drugs fuel turmoil in West Africa

Posted by: Matthew Tostevin

“Nino” Vieira’s past as an old soldier was never far from the surface. It can have surprised few in Guinea-Bissau that the old coup maker’s death came at the hands of troops who turned against him in a country perpetually on the edge of failure because of military squabbles driven by centuries-old ethnic rivalries and the newer influence of drug smuggling cartels.

Covering the campaign for Guinea-Bissau’s first multiparty election in 1994, I found President Joao Bernardo Vieira far from being the most talkative of politicians. Sometimes actions said more. After one campaign stop, and in view of attendant dignitaries, Nino grabbed a military aide by the ear after he had caused offence and twisted it until he squealed in pain.

President Vieira emerged in the 1960s and 70s as one of the leaders of the fight to drive Portuguese colonialists from Guinea-Bissau, a country of swampy inlets, a scattering of islands and a scrubby interior that sent little to the outside world but cashew nuts - before the coming of drug traffickers in recent years made cocaine a more lucrative export for the few involved.

Vieira seized power in a bloodless coup in 1980, took Guinea-Bissau away from a Marxist path and was elected in 1994 when donors started demanding democratic reforms across Africa. Trouble came when he fell out with an army chief in the late 1990s, prompting a rebellion that forced him from power.

He returned in 2005 and was elected president, but there was no end to the instability. In November last year, he came close to being killed by renegade soldiers. In January, Vieira’s militia was accused of trying to assassinate army chief General Batista Tagme Na Wai. Na Wai was killed on Sunday, hours before Vieira’s death in an apparent revenge attack.

Na Wai was among the soldiers who toppled Vieira in 1999, but their differences went back to the struggle against the Portuguese. At least part of the animosity appeared to be ethnic. Na Wai was from the Balante, Guinea-Bissau’s biggest group, from the rice growing lands of the interior. Vieira was from the Pepel, a small coastal tribe.

The arrival of Latin American drug cartels has been another cause for tussles within Guinea-Bissau’s hierarchy. The weak state, unpatrolled coastline and proximity to Europe have made it an ideal staging point. Whether or not any faction has tried seriously to stop the trade is unclear, but it has certainly fuelled the power struggle.

The question now is whether Guinea-Bissau has a chance for a new start or risks plunging back into turmoil? Will the international community care enough to do something about the troubles in a country with few resources to interest the world? What will it mean for the drug cartels?

January 22nd, 2009

Keeping pirates at bay

Posted by: Jeremy Gaunt

There are some expectations that piracy in the Gulf of Aden is about to tail off for a bit. It appears that pirates don't like rough weather any more than anyone else does.

Exclusive Analysis, a political risk consultancy, has conducted a detailed study of incidences of maritime hijacking in order to give its insurer clients the heads up about when and under what circumstances piracy is most likely to occur. It has told the International Underwriting Association of London that the arrival of the monsoon in the Gulf of Aden about now usually keeps pirates on shore. Not so for Somalia, where the waters are generally calmer at the moment. Technically, it is when the Sea Scale hits 5 or 6, that is, rough to very rough.

Weather was not the only factor thrown up by the study when it comes to keeping pirates at bay. Among an array of conditions, it found that ships that have freeboards -- the distance from waterline to deck -- of six metres or more have a lesser chance of being hijacked.

One pirate ship, apparently, was found with a five metre ladder on board -- a hint as to how far they are prepared to go, or at least climb.

January 12th, 2009

What next for Jacob Zuma?

Posted by: Gordon Bell

A court ruling that effectively reinstates corruption charges against African National Congress leader Jacob Zuma could hardly have come at a worse moment for him and the party that has dominated South Africa since the end of apartheid.

There appears little doubt that Zuma will be the party's presidential candidate ahead of elections expected around April, but the ANC now faces its toughest electoral test yet with hefty graft charges hanging over its man.

Prosecutors say the ruling means Zuma remains charged with corruption, fraud and money laundering. This might severely hurt his image, internationally and at home, during a battle to fend off a challenge from the new party of ANC dissidents called COPE. The ANC is still expected to win, but maybe without such a sweeping parliamentary majority to be able to shape laws as it wishes.

The news brought renewed concerns of political instability and the rand fell to a one-month low.

Zuma's lawyers may appeal to the Constitutional Court, the highest in the country, which will drag out the case further. Zuma has said before he will only step down as president if found guilty of the corruption and fraud charges.

Prosecutors and Zuma may try to secure a deal that will end the long-running saga over charges that Zuma’s supporters see as politically motivated.

A settlement may suit Zuma if it looks as though he will face new charges and a trial that will either coincide with the election, or punctuate the first years of his presidency.

The appeals court ruling is good news for former President Thabo Mbeki, helping to repair his image after being ousted by the ANC in September, following the high court judgement that suggested he interfered to secure charges against Zuma. He cannot be expected to return to government, however.

What should Zuma and the ANC do next? Even if no charges are brought by then, would the case be likely to have an impact on the elections? Would COPE stand to benefit?

January 11th, 2009

How far will South Africa’s ANC shift?

Posted by: Matthew Tostevin

Given that the leaders of the world's most firmly capitalist countries are splashing around unprecedented billions to nationalise banks, prop up industry and try to get economies moving, it might seem churlish for anyone to question South Africa's ruling ANC for planning to spend a bit more freely.

This weekend, the African National Congress set out its election manifesto priorities of creating jobs and improving education and health - promises interpreted by many as marking a generally leftward shift under the leadership of president in waiting Jacob Zuma.

But the plan raises the questions of how the spending will be paid for and how dramatic a shift to the left there will be - of major interest to investors as well as South Africans.

"Zuma did not attach a price tag to the manifesto, but ANC leaders privately admit, to allay fears of a tax hike, that it would be too costly to implement," said this article in the Sunday Independent.

Africa's biggest economy has grown significantly since the end of apartheid in 1994, although the dynamism had started to falter even before the global financial crisis spread gloom around the world.

South Africa's poor and its workers had long complained that the benefits were not being shared around fairly and that only those in a new elite were thriving. The leadership under Zuma, widely expected to become president this year, was always going to be under pressure for more social spending from the ANC grassroots and the party's union and Communist Party allies.

The pressure may have increased further with the emergence of the new COPE party after the ousting of President Thabo Mbeki. Although COPE's electoral impact is uncertain and it has not yet spelled out its policies clearly, the fact that close allies of Mbeki are behind it has suggested it is likely to align more with the former president's stance, seen as 'pro-business'.

Zuma has always been at great pains to spell out to business leaders and foreign investors that there would be no dramatic changes under his rule. Flight of investment could further weaken the rand, mean job losses just at the moment when the ANC wants to create more and force up government borrowing costs.

That could make it even harder to finance populist pledges without resorting to measures that might create even more financial instability.

This article in South Africa's Times raised questions over the ANC's plans for the central bank and whether that would damage its standing as a pillar of macroeconomic stability seen as vital for growth.

It is certainly going to be a very tricky time. How substantial do you think any shift to the left is and would it be for the best? If conflicting promises have been made to different interest groups then which are going to be met? Can they all? If not, then what will be the reaction of those who feel disappointed?

(Picture: President of the ruling African National Congress Jacob Zuma dances on stage at his party's election campaign launch. Reuters)

January 10th, 2009

Forgiveness in paradise?

Posted by: Richard Lough

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.

The Seychelles were ruled by the French before the British and State House in the capital Victoria is every bit the luxurious colonial mansion: a lush garden exploding with tropical colours; an oil painting of Britain's Queen Victoria hangs in the wood-panelled reception room close to a portrait of Castor, a runaway slave from the 19th century with a fearsome reputation; a Daimler and Rolls Royce are parked on the forecourt.

But President James Alix Michel, cannot afford to be relaxed. This is an exotic destination at the sharp end of the global financial crisis.

The Indian Ocean archipelago may lie thousands of miles from the financial hubs of the world, but the bankers on Wall Street and in the City of London, not to mention the celebrity visitors, help keep the Seychelles’ tourism-dependent economy afloat.

On Friday, however, Michel told Reuters he thought visitor numbers might drop by as much as 25 percent, a painful blow for a heavily indebted economy --  its $800 million debt is somewhat more than 2007 gross domestic product according to World Bank figures. The country, with only 85,000 people, is in desperate need of foreign currency to replenish severely depleted reserves.

When the Seychelles failed to service an interest payment on a $230 million bond late last year, it called in the International Monetary Fund, which pledged a 2-year $26 million rescue package. Now negotiations are underway with creditors over how to re-structure the debts.

On Friday, Michel called on creditors to forgive fifty percent of the country’s debts.

But should they be forgiven or was the previous government reckless in the way it borrowed heavily to invest in social projects such as free education, free healthcare and housing over more than two decades?

Or does the fault lie with the creditors who issued loans they perhaps knew were ultimately unsustainable? The government might well argue that while it had borrowed irresponsibly - if it felt for good reason - but there had been no shortage of people willing to stump up the cash.

President Michel is holding out for an oil strike under the Seychelles’ offshore plateau. Seismic surveys suggested there could be reserves of oil and gas amounting to billions of barrels. But that’s not for years to come.

The Seychelles can’t wait that long.

(Picture 1: Miss New Zealand, Lauralee Martinovich, poses for photographs after taking the 2nd Princess title in the 1997 Miss World Pageant in the Seychelles. Reuters/Mike Hutchings)

(Picture 2: Seychelles' President James Michel poses for a photograph during an interview with Reuters in Victoria. Reuters/Richard Lough)