People to watch, key data and analysis to guide you through the political and economic year ahead
w w w.t he a f r ic a r ep or t .c om
54
country reports
N ° 9 6 • D E C E M B E R 2 017 - J A N U A R Y 2 018
Double issue
Africa in
2018 INTERNATIONAL EDITION
Algeria 550 DA • Belgium €5.90 • Canada CA$ 7.95 • DR Congo US$ 9 • Denmark 60 DK • DOM 8 € • Ethiopia 90 Birr • France €5.90 • Germany €5.90 • Ghana GH¢ 10 • Italy €5.90 • Kenya KES 410 • Morocco 40 DH • Netherlands €5.90 • Nigeria 800 NGN • Norway NK 70 • Portugal €5.90 • Rwanda RWF 6,000 • Sierra Leone LE 15,000 • South Africa R40 (tax incl.) • Spain €5.90 • Sweden SEK 70 • Switzerland 9.90 FS Tanzania TZS 10,000 • Tunisia 5.4 DT • Uganda UGX 10,000 • UK £4.50 • United States US$ 6.95 • Zambia 48 ZMW • Zimbabwe US$ 4 • CFA Countries 3,500 F CFA • Euro Zone €5.90
JEUNE AFRIQUE MEDIA GROUP
116
COUNTRYY PROFILES The arrival of 2018 brings with it hopes of improved economic performances together with political uncertainty. Here we look at Africa’s trajectories – from the countries that are steadily rising to those that are in free-fall and all those in between
By Nicholas Norbrook
177 WEST AFRICA
COUNTR RY REPORT EDITOR Marshall Van Valen
COUNTR RY REPORT CONTRIBUTORS
202 ALGERIA
148 ETHIOPIA
193 NIGERIA
124 ANGOLA
173 GABON
152 RWANDA
180 BENIN
185 GAMBIA
174 REP. OF CONGO
126 BOTSWANA
186 GHANA
181 BURKINA FASO
188 GUINEA
175 SÃO TOMÉ E PRINCIPÉ
144 BURUNDI
189 GUINEABISSAU
164 CAMEROON 182 CABO VERDE 166 CENTRAL AFRICAN REPUBLIC
150 KENYA 127 LESOTHO 190 LIBERIA 205 LIBYA
195 SENEGAL 153 SEYCHELLES 196 SIERRA LEONE 154 SOMALIA 133 SOUTH AFRICA 155 SOUTH SUDAN
167 CHAD
128 MADAGASCAR
145 COMOROS
129 MALAWI
183 CÔTE D’IVOIRE
191 MALI
146 DJIBOUTI
206 MAURITANIA
168 DRC
130 MAURITIUS
197 TOGO
203 EGYPT
207 MOROCCO
209 TUNISIA
172 EQUATORIAL GUINEA
131 MOZAMBIQUE
158 UGANDA
132 NAMIBIA
136 ZAMBIA
147 ERITREA
192 NIGER
138 ZIMBABWE
208 SUDAN 135 SWAZILAND 156 TANZANIA
Arteh Abdourahim Abdillahi, Nicolas Akouete Agbossou, Mark And derson, Léonce Bitariho, Nuno Andrade Ferreira, Mathieu Bonkoungou, Joseph Burite, Frank Chikowore, Robert Cllarke, Frida Dahmani, Kissima Diagana, Hippolytee Donossio, Emilie Filou, Ilya Gridneff, Celeste Hicks, Joohn Hamilton, Charles Idem, Frank Jomo, Reinnier Kazé, Jon Marks, Douglas Mason, Jeff Mbanga, Billie Adw woa McTernan, Paul Melly, Marafaele Antonia Mohloboli, Olivier Monnier, Madjiasra Nako, Samuel Obiang Mbana, M Roger Murray, Oheneba Ama Nti Osei, Crystal Orderson, O Bram Posthumus, Louise Redvers, Amira Sa alah-Ahmed, Gerhard Seibert, Kervin Victor
DATA SOURCES
Populatio on (2017), population growth (2016) – United Nations Populationn Division. Life expectancy at birth (2015), position on the Hu uman Development Index (2015), adult literacy (2005-20115) – United Nations Development Programme. GDP per capita c (2017 estimate), inflation (2017 estimate), current aaccount as % of GDP (2017 estimate), GDP (20155-2018), GDP growth (2015-2018) – IMF World Economic Outlook Database. Foreign direct investment (2016, inflows) – United Nations Conference on Trade and Development. Mobile ph hone penetration (2016, mobile cellular subscriptions per 100 inhabitants) nhabitants) – International Telecommunications Union. Union Key export (2015) – AfDB African Economic Outlook. Last change of leader – The Africa Report research.
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S
199 NORTH AFRICA
141 EAST AFRICA
161 CENTRAL AFRICA
ome economic breathing space is opening up for many African countries, with mineral exporters in particular emboldened by the return to cautiious growth in commodity prices. Much of the recovery is coming from South h Africa and Nigeria, as Africa’s two giantt economies stumbled meekly out of reccession in 2017. The International Mon netary Fund (IMF) predicts that grow wth in sub-Saharan Africa will hit 3.4% % next year, up from 2.6% in 2017. Bu ut, as Africa strides into 2018, it is unclear that the political will to maintain a steady hand on the tiller is there, certaainly in a South Africa that risks total state capture under the clique around the Guptta family, and a Nigeria that will increassingly see politicians manoeuvring, aheaad of elections in early 2019. So ome governments exercised self-ccontrol during the commodity boom and bust – Senegal and Ethiopia, for exam mple – but 2018 will be a tough year for Africa’s A unreformed oil exporters and would-be resource dynamos like Mozaambique. Those countries are back in th he IMF’s bad books and rolling out austeerity programmes in the hope that all sid des have learned from the damage caussed by the structural adjustment proggrammes of earlier decades. EXAMINING TRAJECTORIES
121 SOUTHERN AFRICA
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Alertt and progressive leadership is need ded more than ever, because the continen nt – in the words of the Mo Ibrahim Foun ndation – is at a tipping point. While the fiirst decade of the century was characterrised by a marked improvement in macrroeconomic management and great sociaal and political leaps forward, all buttrressed by strong commodity price grow wth, the second decade has been a moree mixed picture. An n innovation in this year’s Ibrahim Indeex of African Governance (IIAG), whicch has been creating a granular pictu ure of the continent for more than a deccade, is a categorisation of countries into six different ‘trajectories’. From acceelerating improvement at the top throu ugh increasing deterioration at the botto om, it tracks progress over the past decaade and the past five years, to give a sen nse of what direction a country is heading in. So, for example, Mauritius, which traditionally heads up the index
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COUNTRY PROFILES because of its stellar performances in political, social and economic indices, finds itself now in the third tier. Mauritius is in the ‘warning signs’ group because of concerns over corruption and a lack of political leadership. Eighteen countries, representing 56% of the continent’s population, are accelerating in their progress according to the IIAG. Nevertheless, at the continental level,progress appearsto beslowing,says Nathalie Delapalme, executive director of research and policy at the Mo Ibrahim Foundation. “In education, for example, progress has almost come to a halt over the past five years,” says Delapalme. “And this is happening at just the wrong time, when 46% of the population of the continent is under 15 years of age.” To an extent, she argues that this is a case of demography outstripping supply. But it also raises questions of political will to face up to Africa’s greatest challenges. AGRICULTURE CRUCIAL
Another warning sign has been a degradation in Africa’s rural sector, says Delapalme. It is a critical sector for the continental’s development “and even its political balance”, she adds. Some noticeable exceptions include Côte d’Ivoire, which has been working hard to improve life for farmers. And, outside an honourable mention for the African Development Bank, none of Africa’s partners or leaders appear engaged on the question of agriculture. Some poster boys of previous rankings also suffer when their trajectories are examined.Ghana,forexample,isfetedfor its democratic leadership, but finds itself at the bottom of its class, with increasing deterioration.Botswana,anothergrade-A student in recent years, sits alongside it. But drilling down into the details reveals two different stories. While Ghana is particularly down in a couple of indicators – notably around corruption – it is making progress elsewhere. Botswana, however, is doing slightly worse across the board, meaning that its problems are more entrenched. The end of Ian Khama’s regime next year may help provide a fresh framework for renewal. And with the late 2017 events in Togo and Zimbabwe, the future looks ever more uncertain for sit-tight leaders who do not deliver on their promises of development. Eyes will be turning to Malabo, Yaoundé and Kampala to see if those events are one-offs or signs of something bigger.
2017 Ibrahim Index of African Governance 2016 RANK/54
2 5 7 10 12 13 17 19 20 22 26 31 35 40 43 48 50 54 9 11 14 21 23 28 29 30 34 36 39 46 47 1 4 15 16 18 26 37 38 42 45 6 25 32 52 3 8 23 33 41 44 49 51 53
COUNTRY
Seychelles Namibia Tunisia Senegal Morocco Kenya Tanzania Uganda Côte d'Ivoire Algeria Togo Egypt Nigeria Zimbabwe Guinea-Bissau DRC Sudan Somalia Rwanda São Tomé & Príncipe Benin Burkina Faso Gabon Liberia Niger Comoros Swaziland Ethiopia Guinea Equatorial Guinea Chad Mauritius Cabo Verde Lesotho Zambia Malawi Sierra Leone Cameroon Djibouti Congo Angola South Africa Mali Madagascar Eritrea Botswana Ghana Mozambique Gambia Mauritania Burundi Libya CAR South Sudan
Increasing Improvement Bouncing Back
2016 SCORE/100
10-YEAR TREND (2007-2016)
73.4 71.2 65.5 61.6 60.1 59.3 57.5 56.5 54.2 53.6 51.7 49.4 48.1 45.4 41.3 35.0 32.5 11.6 63.9 61.0 59.0 53.7 52.2 51.4 50.1 50.0 48.9 47.7 45.5 36.8 35.2 81.4 72.2 58.2 57.7 57.0 51.7 46.9 46.4 42.8 39.4 70.1 51.9 49.3 29.2 72.7 65.0 52.2 49.2 44.5 39.9 33.3 30.5 20.2
+5.4 +3.8 +5.5 +5.4 +5.9 +6.5 +0.2 +3.0 +12.6 +0.4 +10.0 +1.5 +3.4 +9.5 +1.2 +0.5 +1.0 +0.7 +8.7 +2.1 +1.4 +1.1 +3.3 +6.5 +5.2 +5.4 +1.1 +5.3 +4.9 +3.2 +3.5 +3.1 +0.7 +0.4 +2.9 0.0 +3.4 +0.5 +1.5 +3.3 +3.8 -1.3 -2.4 -6.6 -4.3 -0.8 -1.5 -1.2 -2.1 -2.5 -6.5 -13.3 -1.3 N/A
+3.4 +4.0 +3.6 +3.0 +4.9 +4.9 +2.2 +2.3 +8.2 +0.3 +5.1 +2.2 +3.3 +5.8 +3.2 +0.9 +1.3 +1.4 +3.0 +0.5 +0.2 +0.3 +0.1 +0.7 +0.5 +1.8 +0.3 +1.8 +0.7 +1.4 +0.6 -0.5 -1.2 -0.4 -1.4 -0.9 -0.9 -0.6 -0.6 -0.2 -1.2 +0.6 +0.1 +3.3 -0.6 -2.5 -2.8 -1.8 -3.5 -1.6 -6.0 -11.8 -3.9 -8.5
Slowing Improvement Slowing Deterioration
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5-YEAR TREND (2012-2016)
SUB-GROUPS
N/A
Warning Signs Increasing Deterioration •
D E C E M B E R 2 017- J A N UA R Y 2 018
COUNTRY PROFILES Average scores for regional integration (regional economic communities)
Doing business 2017-2018 Biggest risers and fallers (global rank)
EAC
76.1
ECOWAS
65
ECCAS
61.8
SADC
57.8
Biggest jump
CEN-SAD 56.8 COMESA
56.7
AMU
50
IGAD
46.9
169 145
49 25
133 110
Nigeria
Mauritius
Malawi
Ghana
Sierra Leone Botswana
108 120
148 160
71 156
56
41
Rwanda Algeria
81 166
Education provision average score (2007-2016) 100 60 58 56 54 52 50 48 46 44 0
58.8
58.1
57.4
57.2
57
55.8
Increasing deterioration
Annual average trend (2007-2016)
Biggest drop
52.8 48.4
47.3
47.5
Annual average trend (2012-2016)
-2.8 -1.26
Best and worst performers in Africa (Real GDP growth, projected 2018)
Côte d’Ivoire
Health average score (2007-2016)
Djibouti
100 72 70 68 66 64
63.5
Slowing improvement 67.7 66.6 65.7 64.8
68.7
69.1
69.8
70.9
71.5
Guinea Libya Ghana Burkina Faso
62 0
Annual average trend (2007-2016)
Annual average trend (2012-2016)
Infrastructure average score (2007-2016)
SOURCES: 2017 IIAG REPORT, WORLD BANK, EIU
100 42 41 40 39 38 37 36 35 34 0
63.5
66.6
65.7
67.7
Angola South Africa
Increasing improvement 64.8
Tanzania
+0.70 +0.89
68.7
69.1
69.8
70.9
71.5
Algeria Lesotho Burundi DRC
2007
2008
2009
2010
2011
Annual average trend (2007-2016)
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2012
2013
2014
2015
2016
Annual average trend (2012-2016)
D E C E M B E R 2 017- J A N UA R Y 2 018
+0.65 +0.65
Eq. Guinea -3
-1
1
3
5
7
119
25 - 26 January 2018
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OFFICIAL SUPPORTERS
COUNTRY PROFILES
SOUTHERN AFRICA CABINDA
LUANDA
CONTENTS
TANZANIA
DEMOCRATIC REPUBLIC OF CONGO
124 PEOPLE TO WATCH 126 ANGOLA
Huambo
MALAWI
LILONGWE
ZAMBIA
ANGOLA
LUSAKA
128 BOTSWANA Nampula
Blantyre
HARARE
Antananarivo
WINDHOEK
GABORONE
Atlantic Ocean
SWAZILAND MASERU
LESOTHO
Indian Ocean
$588.3bn 58.5%
2.8% Botswana 0.5% Lesotho 1.8% Madagascar 1.1% Malawi 2.1% Mauritius 2.1% Mozambique 2.1% Namibia
271.8 208.5
2030
2018
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2050
SOURCE: UN WORLD POPULATION DIVISION (THE 2017 REVISION)
SOUTHERN AFRICA POPULATION (millions) 379
138 ZAMBIA 140 ZIMBABWE
300 km SOURCE: GDP CURRENT PRICES – IMF WORLD ECONOMIC OUTLOOK DATABASE, OCT. 2017
21.1% Angola
TOTAL
THE AFRICA REPORT
137 SWAZILAND
Durban
SOUTHERN AFRICA 2017 GDP (% of regional total)
South Africa
135 SOUTH AFRICA
MBABANE
Port Elizabeth
Zimbabwe 2.9% Zambia 4.4% Swaziland 0.7%
132 MAURITIUS
134 NAMIBIA MAPUTO
PRETORIA
Kimberley
CAPE TOWN
131 MALAWI
133 MOZAMBIQUE
MOZAMBIQUE
Johannesburg
SOUTH AFRICA
MADAGASCAR
Bulawayo
BOTSWANA
130 MADAGASCAR
Beira
ZIMBABWE
NAMIBIA
129 LESOTHO
D E C E M B E R 2 017 - J A N UA R Y 2 018
190 million
Number of people in the Southern African Development Community region who are living without electricity
FEBRUARY SOUTH AFRICA Investing in African Mining Indaba
JUNE ZAMBIA Zambia International Mining & Energy Conference
JULY/AUGUST ZIMBABWE Presidential elections
DECEMBER MADAGASCAR Presidential elections
121
122 COUNTRY PROFILES
SOUTHERN AFRICA
PEOPLE TO WATCH MOZAMBIQUE
Rogerio Lucas Zandamela
RYAN BROWN/UN WOMEN
Zandamela was plucked from the IMF by President Filipe Nyusi in September 2016 and appointed as central bank governor with a mandate to restore international credibility for a government that had badly misled donors. The economy’s dire challenges have included collapsing foreign reserves, a balance of payments crunch, a sovereign default and cleaning up bad loans in the domestic banking sector. Zandamela has let an overvalued exchange rate float, tightened monetary policy and brought in higher capital requirements that are driving a wave of consolidation among banks. One year on, the exchange rate and inflation have stabilised, foreign reserves are recovering and the governor is continuing to hold on to his job amid much squawking from the ruling elite.
NAMIBIA
Netumbo NandiNdaitwah Presidential contender
SOUTH AFRICA
Busisiwe Mkhwebane Unpopular public protector As South Africa’s public protector, Mkhwebane heads an institution intended to uphold South Africa’s democracy and investigate misconduct in state affairs without fear or favour. She is instead now part of the struggle over whether South Africa’s state institutions can remain independent and serve the public over powerful interests. Although corruption-busting predecessor Thuli Madonsela was a hard act to follow, Mkhwebane is a controversial and unpopular figure after a year in office. Speculation is growing that 2018 may see her removed.
PHILL MAGAKOE/AFP
Namibia’s personable deputy prime minister, Netumbo NandiNdaitwah, will be in pole position to become the country’s next head of state following her expected election as vice-president of the ruling SWAPO party in November 2017. Every party vice-president has gone on to be SWAPO candidate for national president, including current head of state Hage Geingob, whose second five-year term of office will end in 2024. Popular both within the party and outside, Nandi-Ndaitwah joined the cabinet as minister of women’s affairs and child welfare in 2000. She was appointed foreign affairs minister in 2012 and became deputy prime minister in March 2015.
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ALL RIGHTS RESERVED
Head of the clean-up crew
123
ANGOLA
José Massano A reformer returns ZIMBABWE
Constantino Chiwenga
For the majority of the population in Zimbabwe, who have known nothing but the rule of President Robert Mugabe, the decision by the head of the army, Constantino Chiwenga, to step in and push Mugabe out buys him serious credit. What he does with it will determine the future of the country, making him a pivotal person in the months ahead. Does he put his weight behind a full-blown democratic transition that creates a framework for free and fair elections? Does he back the creation of a truth and reconciliation commission? Given the role the army played in recent decades, that would be a brave and progressive move. If you can be on the right side of history once, perhaps twice is not so hard...
THANDA KUNENE
The army finally steps in
SOUTH AFRICA
Makhosi Khoza ANC rebel
JEKESAI NJIKIZANA/AFP
Having been fired amidst claims that he was too reform-minded for the previous government of José Eduardo Dos Santos, José Massano is now back as head of Angola’s central bank. President João Lourenço reinstated Massano in October, showing with this and several other appointments and announcements that he intends to fight corruption and limit the influence of the Dos Santos family. Massano has a big job on his hands to restore confidence in the financial sector and bring back correspondent banking relationships, many of which have ended over graft fears. Stabilising the exchange rate and stemming inflation are other top priorities.
Khoza dedicated her life to the African National Congress (ANC), believing it was the only party to bring about change in a divided country. But she lost faith in the ANC and was one of Jacob Zuma’s most vocal critics inside the party and parliament. In August she defied the ANC line and publicly called on him to step down. Facing threats against her life and those of her children, she was hauled before a disciplinary hearing by the party. Khoza resigned from the ANC and parliament, and has since called on all South Africans “to exercise their right by voting the ANC out of power”. An articulate and sharp voice, she holds a doctorate in administration and has over two decades of experience in the public and private sectors. Her supporters want her to start her own political party, but Khoza has been tight-lipped on her plans. In the meantime, she is working with civil society to campaign for the improvement of science and maths education.
124 COUNTRY PROFILES
SOUTHERN AFRICA
ANGOLA
Lourenço takes on Dos Santos
The pain caused by the recent oil price downturn is far from over
200 Km
CHALLENGES ON ALL FRONTS
Indeed, Lourenço faces innumerable challenges with a slimmer parliamentary majority, under the eye of an increasingly outspoken civil society. In the 2017 elections, the governing Movimento Popular de Libertação de Angola (MPLA) won a two-thirds majority in parliament, but the two main opposition parties – União Nacional para a Independência Total de Angola (UNITA) and Convergência Ampla de Salvação de Angola-Coligação Eleitoral (CASA-CE) – significantly increased their share of the vote. While the MPLA’s majority means it should still be able to pass any legislation of its choosing, UNITA and CASA-CE have a chance to hold the government to account.
LUANDA
Atlantic Ocean
ANGOLA Lobito
T
he departure of José dos Santos in 2017 after 38 years as Angola’s president marks the beginning of a new era. His hand-picked successor, João Lourenço, (see box) was marketed as the continuity candidate and had been expected to allow the retired statesman to maintain his grip on the national economy. However, within just a few weeks of taking office in September, Lourenço embarked on an unprecedented overhaul, bringing in new management at the centralbank,thestate-ownednewspaper, television and radio and the diamond parastatal Endiama. The most high-profile casualty was his predecessor’s eldest daughter, Isabel dos Santos, the head of the troubled oil company Sonangol. These moves won Lourenço – whom many had written off as a puppet – many plaudits, but the new president will need more than new faces if he is to help repair the country whose oil-dependent economy is weaker than at any time since the end of the civil war in 2002.
DEMOCRATIC REPUBLIC OF CONGO
CABINDA
Huambo ZAMBIA NAMIBIA
Population: 29.8 million Population growth: 3.4% GDP per capita: $4,401 Life expectancy: 52.7 Adult literacy: 71.1 Inflation: 30.9% Human development index (out of 188 countries): 150 Foreign direct investment: $14.4bn Current account as % of GDP: -4.8% Mobile phone penetration: 55% Key export: Petroleum and crude oil Last change of leader: 2017 GDP growth (%)
3
1.5 -0.7
1.6
GDP ($bn)
103
95.3
2015
2016
124
138.2
2017*
2018*
is expected at an annual average of 1.4% between 2017 and 2021. The shrinking of oil revenue over the past two years has led to the reduced availability of foreign exchange. This has dragged down the value of the kwanza and pushed up the price of imports. As a result, consumer prices are soaring, having peaked at more than 40% year-on-year inflation at the end of 2016. Inflation is forecast to drop to around 15% by the end of 2018. Unemployment has risen sharply due to slashed investments and mothballed projects. ENTRENCHED INTERESTS
*Estimation October 2017
Lourenço will have to pick his battles on fighting corruption
Internally, however, the parties have their own problems. UNITA’s long-time leader Isaías Samakuva announced shortly after the election that he would be standing down. This presents an opportunity to bring new blood and energy into the top rungs of the organisation, but risks deepening rivalries. Meanwhile, Abel Chivukuvuku, formerly of UNITA and who formed CASA-CE just months before the 2012 election, will have to work hard to bring together the disparate parties in his coalition if he wants to make an impact in parliament. According to the International Monetary Fund (IMF), Angola’s growth
Meanwhile, as global energy companies scale back their Angolan operations and withdraw expatriate staff, not only has exploration activity slowed, but the demand for secondary services such as catering, transport and accommodation has fallen dramatically. The effects of oil’s low price reinforce the urgent need for the country to diversify its economy, but they also hold back progress towards this goal. Many promising non-oil projects, such as new factories and agri-processing schemes, have struggled to get off the ground due to cash-flow restraints and difficulties in sourcing primary materials. Deeper structural issues, like unreliable electricity supplies, poor skill levels and too much red tape, are similarly hurting Angola’s private sector. Lourenço has, like his predecessor, committed to improve the country’s poor business environment and to open up the economy to foreign investors. He has also pledged to tackle corruption and end impunity. Given the entrenched financial interests of his government and party colleagues, Lourenço may struggle to fulfil these promises. The new president will need to pick his battles carefully to retain the backing of the MPLA’s politburo and the powerful generals, who are among some of the wealthiest business people in the country. Angola’s longer-term outlook is not all negative. The country is rich not just in oil, but also iron, diamonds and gold. A number of major mining projects are due
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BANKS IN BAD SHAPE
After many false starts due to poor planning, rudimentary irrigation and weak supply chains, a number of agricultural projects are finally coming to fruition. These include the Biocom scheme in Malanje Province, which will produce sugar and electricity from ethanol, and plantationsexportingbananasandcoffee.
Total gross public debt (%)
44.3 33.8
65.4
71.6 62.8
40.7 29.5
32.9
*projection 2010 2011 2012 2013 2014 2015 2016 2017*
$1.5bn
State guarantee for the new mega-port to be built at Barra do Dande Thebankingsector,whichisstillreeling from the 2014 collapse of Banco Espírito Santo Angola, is also straining under the weight of bad debt. Consolidation is likely in the year to come. According to the central bank several of the country’s 31 banks are nearing insolvency. Moreover, owing to concerns over weak anti-money-laundering measures, several international banks have ended correspondence relationships in Angola. This has exacerbated difficulties in obtaining foreign exchange and acted as an additional turn-off to would-be overseas investors.
SOURCE: IMF
to be commissioned in 2018, including the Cassinga iron-ore concession, while the Luele kimberlite deposit is reported to be the largest discovered in the world forsome60years,withannualproduction forecast at between 8m and 10m carats. Infrastructure that was damaged during the civil war years is finally being rebuilt, allowing for more efficient movement of goods and people, while new housing developments with mains water and electricity are slowly replacing the sprawling peri-urban slums that encircle the main towns and cities. A new $4bn international airport, which has been under construction since 2007, is due to open in Luanda within the next two years, and in late 2017, the government issued a $1.5bn state guarantee for a new mega-port for the capital at Barra do Dande. This new facility aims to overcome the expensive delays at the capital’s existing port and comes on the back of investments into the country’s other main ports in Lobito, Namibe and Cabinda.
Despite these challenges, many businesses hope that 2018 will be the year for the long-awaited launch of share trading at Luanda’s stock exchange, although few believe it will. The Bolsa de Dívida e Valores de Angola has been trading debt since late 2014, but a reluctance among Angolan firms to open accounts up to public scrutiny has delayed listings for equity trading. In addition to addressing these economic challenges, Lourenço says he will deliver on his election promise to govern for all Angolans and reduce the high levels of poverty and disease. Angola has the highest infant mortality rate in the world and was ranked at 150th of 188 countries in the UN’s 2016 Human Development Index. Finding a way to create jobs, especially for young people, will be key. Angola’s youthful and rapidly growing population is one of its assets, but failure to harness this youth bulge will lead to social tensions. Indeed, younger Angolans, who, unlike generations before them, have no memory of living through conflict, are becoming more demanding. The government has often co-opted its critics through housing schemes and public sector jobs, and used the state security organs to suppress protests. With less cash available to throw at his allies and critics, Lourenço will have to work harder to keep voters on side.
Who is JLo? JOÃO LOURENÇO –known by the nickname JLo – was sworn in as Angola’s third president on 26 September 2017. The 63-year-old Soviet-educated Lourenço said he wants to be remembered as a president who performed an “economic miracle” and in a recent interview likened himself to the late reformist Chinese leader Deng Xiaoping. THE AFRICA REPORT
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Dos Santos handpicked Lourenço to provide continuity. His slogan during the 2017 election was “improve what is good and correct what is bad”, which did not suggest that he would be in a rush to adopt any radical new policies. However, Lourenço wasted no time in overhauling a number of institutions, removing Dos Santos
D E C E M B E R 2 017- J A N UA R Y 2 018
loyalists within the first weeks of taking office and opening corruption cases against some senior officials. His changes came alongside some bold policy pledges – including a new competition law to end sectoral monopolies and the holding of local elections by 2022 – and he appears to be serious about reform. Lourenço will, however, have
to balance this appetite for change with the management of interests within and around the MPLA. Moreover, Dos Santos retains the presidency of the party. A true picture of Lourenço’s power base will take some time to emerge. JLo’s de-facto deputy is tipped to be Edeltrudes da Costa, secretary general of the presidency.
126 COUNTRY PROFILES
SOUTHERN AFRICA
BOTSWANA
A new era begins Diamonds are still the main game in town, but diversification is the goal
N
ext year will bring change as President Ian Khama is due to step down in April, when he will be succeeded by vice-president and chair of the Botswana Democratic Party (BDP) Mokgweetsi Masisi. The next national elections are not due until October 2019, and presidents are not directly elected. The succession is significant in several ways, not least in marking the end for now of the dominant role of the Khama family. Masisi has cabinet experience as a former minister of education and, before that, minister of presidential affairs and public administration. His rise to the presidency also signals a return to civilian politics in Botswana. Relations with neighbours are set to improve. Masisi may be less outspoken than Khama on the issue of Zimbabwe’s instability, but these concerns will persist. Masisi willhave thebenefit, like Khama before him, of 18 months in power before having to face the electors, which will give him time to get the BDP in campaign mode and exercise patronage. Under Masisi, new centres of influence will emerge. It is not yet certain who will be nominated as vice-president, and he may appoint an interim deputy. Leading candidates are immigration minister Edwin Batshu and local government minister Slumber Tsogwane. OPPOSITION DISUNITY
Masisi will benefit also from renewed discord between the main opposition parties, whose electoral alliance, the Umbrella for Democratic Change (UDC), polled strongly in 2014, leaving the BDP with its smallest majority since independence: 17 of the 57 directly-elected members of parliament. The Botswana Movement for Democracy (BMD), one of four parties in the UDC, split into
ANGOLA
employment for the several hundred Batswana who lost their jobs when the BCL Selebi-Phikwe copper-nickel mine was closed at the end of 2016. The economy is set to continue growing, underpinned by increased rough diamond production in response to higher prices and demand on the global market. This will largely offset the loss of copper and nickel exports from Selebi-Phikwe, theclosure of thesmall Australian-owned Lerala diamond mine in mid-2017, and reduced soda ash production. ProductionbyDebswana–a50:50joint venture between the government and De Beers – reached a two-year high of 11.1m carats in the first half of 2017. Annual output is expected to have reached 22m carats, 7% higher than in 2016.
ZAMBIA ZIMBABWE
NAMIBIA
Francistown
BOTSWANA GABORONE 200 km
SOUTH AFRICA
Population: 2.3 million Population growth: 1.8% GDP per capita: $7,674 Life expectancy: 64.5 Adult literacy: 88.5% Inflation: 3.7% Human development index (out of 188 countries): 108 Foreign direct investment: $10m Current account as % of GDP: 4.5% Mobile phone penetration: 159% Key export: Diamonds Last change of leader: 2008 GDP growth (%)
COAL FOR DOMESTIC POWER
4.3
4.5
4.8
14.4
15.6
16.7
17.5
2015
2016
2017*
2018*
-1.7 GDP ($bn)
*Estimation October 2017
The BDP’s Masisi will succeed Khama as president in April
two mutually antagonistic factions at its 2017 congress. This could make it more difficult for the UDC to field a single candidate against the BDP, the key to any potentialpollvictoryovertherulingparty. Masisi can be expected to continue Khama’s drive to diversify the economy awayfromover-dependenceondiamond mining in favour of agriculture, manufacturing, downstream processing of raw materials and tourism. A major coup is a recent agreement with a US aviation firm to construct a $140m light-aircraftmanufacturing plant at Selebi-Phikwe near Francistown in the north-east. This would provide a new source of
Expanding coal extraction and developing coal-bed methane (CBM) output for domestic power production should progress in 2018. Power shortages will remain a persistent risk in the nearterm due to the continued underperformance of the Chinese-built 600MW Morupule 2 coal-fired plant. Some of the over-ambitious export capacity targets of the 2012 coal road map, which aims to maximise the potential of Botswana’s estimated 212bn tonnes of bituminous coal reserves, have been scaled back. The focus is now on new collieries for power generation and, only when global conditions are more favourable, large-scale coal exports. These would be shipped via existing rail links through Zimbabwe to Mozambican ports, or, ultimately via a proposed 1,500kmTransKalahari Railway to Namibia’s Atlantic coast port of Walvis Bay. The Sese joint venture between Australia’s First Quantum and African Energy Resources is the coal project closest to development; this is targeting an integrated coal mine/450MW power plant to supply electricity to Zambia’s copper mines. The most advanced CBM project is Lesedi in the south-east, where the 8,300km² licence area contains estimated resources of 3.3trn cubic feet.
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SOUTHERN AFRICA
COUNTRY 127 PROFILES
LESOTHO
Shaky foundations
Diamond mines and water exports to South Africa are helping the economy
T
he instability that has reigned since a failed coup in 2014 is set to continue as Lesotho heads to 2018. Former and current prime minister Thomas Thabane, who returned from exile in 2017 after fleeing in 2014, has headed a four-party coalition government with a small majority since snap elections were held in July, after the previous government of Pakalitha Mosisili collapsed. Against the backdrop of assassinations of high-profile officials, a new round of opposition leaders are fleeing the country out of fear of persecution and prosecution. Thabane leads Lesotho’s third recent coalition government, this one made up of his All Basotho Convention, the Alliance of Democrats, the Basotho National Party and the Reformed Congress of Lesotho. It may not be a stable combination, and it is working on reforms on security, the constitution, the judiciary,thecivilserviceandthepolitical sphere as recommended by the mediatorsoftheSouthernAfricanDevelopment Community (SADC). SADC officials have been leading national reconciliation talks in Lesotho and have increased their role since the assassination of armed forces commander Maaparankoe Mahao on 25 June 2015. SADC was due to begin deploying a small peacekeeping force in November as a means to keep an eye on the current political instability. POLITICIANS FLEE
The atmosphere remains tense. On 29 August, former deputy prime minister Mothetjoa Metsing, who is also leader of the Lesotho Congress for Democracy (LCD), fled the country saying he feared for his life. He also faces corruption charges. Metsing was shortly followed by the leader of opposition in parliament Mathibeli Mokhothu, who is also THE AFRICA REPORT
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commander Khoantle Motsomotso in September in what was described as an attempted mutiny. Constitutional changes being debated relate to protecting the separation of powers, and the safeguards necessary in statutory appointments for the judiciary, the electoral commission and other bodies. Thabane also faces a difficult challenge in seeking to follow up on SADC’s recommendations on prosecutions for the authors of human rights abuses while at the same time running the risk of inflaming political tensions.
30 km
SOUTH AFRICA MASERU
LESOTHO
SOUTH AFRICA
Population: 2.2 million Population growth: 1.3% GDP per capita: $1,413 Life expectancy: 50.1 Adult literacy: 79.4% Inflation: 6.6% Human development index (out of 188 countries): 160 Foreign direct investment: $132m Current account as % of GDP: -8.5% Mobile phone penetration: 107% Key export: Diamonds Last change of leader: 2017 GDP growth (%)
2.5
THE WORLD WANTS DIAMONDS
3.1
2.4
4.6
2.4
2.3
2.7
2.9
2015
2016
2017*
2018*
GDP ($bn)
*Estimation October 2017
The politicisation of the security forces is contributing to instability
deputy leader of the largest opposition party, the Democratic Congress (DC). The security forces remain a source of instability. The Lesotho Defence Force, the police services and the national security agency are politically polarised. The role of Lieutenant General Tlali Kamoli was a point of contention between the government and exiled Thabane. Kamoli’s sacking was a key element of the SADC-backed reconciliation programme. In October, the authorities arrested Kamoli on murder charges relating to the death of a senior police official. That was preceded by the assassination of Lesotho Defence Force
D E C E M B E R 2 017- J A N UA R Y 2 018
An increase in activity in the mining and infrastructure sectors is boosting the economy. A recovery in global demand for diamonds is supporting growth in the diamond mining industry. Firestone Diamonds’ Liqhobong deposit is the star of the sector. It produced more than 500,000 carats between its launch in late 2016 and October 2017. It is aiming to produce 1m carats per annum over the next several years. The smaller Letšeng deposit is estimated to produce around 100,000 carats per annum, while Kao mine produces around 260,000 carats. The country is looking to diversify its mineral resource exploration efforts in shale gas and coal mining, and the government signed exploration agreements with Thaba Naleli Energy and Masemanzi Mining in April. Textiles is another key economic sector and employs some 45,000 people. About 70% of Lesotho-made garments were exported to the United States under the African Growth and Opportunity Act, while 30% went to South Africa in 2015/2016, marking a recent growth in textile exports to Lesotho’s neighbour. The commencement of construction of the second phase of the Lesotho Highlands Water Project is scheduled for January 2018. This phase of the project is estimated to cost at least M23bn ($1.7bn). Local companies should get a boost, as they are supposed to get half of the construction contracts. Works are due to be complete by the end of 2024.
128 COUNTRY PROFILES
SOUTHERN AFRICA
MADAGASCAR
Hery’s work pays off The IMF programme has helped restore donor and investor confidence
M
adagascarhasturnedacorner since early 2017. Despite being struck by cyclone Enawo in March and enduring a severe drought, the country has seen its economy grow strongly thanks to an uptick in investment and tourism, and buoyant exports – notably textiles and agribusiness. However, a plague outbreak in late 2017 worries health officials. This recovery has been long in the making. The election of President Hery Rajaonarimampianina in December 2013 was meant to bring an end to the crisis following the 2009 coup, but it has taken four years of political wrangling to get structural reforms under way. The International Monetary Fund’s decision in July 2016 to grant Madagascar a loan of $304.7mprovedinstrumental.Sincethen, the government has initiated reforms to increaseitstaxbase,improvegovernance, and tackle the financial black holes that are the power and water utility Jirama and national airline Air Madagascar. At Jirama, the government brought in fresh blood with a new board and a new chief executive. The team launched an ambitious business plan in July 2017 that seeks to end public subsidies by 2021 and balance the books through increased tariffs and the use of competitive bidding for contracts. Access to electricity is one of the biggest obstacles to doing business in Madagascar, and the reforms are seen as crucial to facilitate growth. CONFIDENCE BRINGS CASH
As for Air Madagascar, the government agreed in March 2017 to sell a 49% stake to Réunion-based airline Air Austral. As part of the deal, the government will have to pay off the airline’s liabilities to the tune of $88m, but it is set to improve the airline’s competitiveness over the long term and weanitoff government support.
investment has remained small, mainly because of political uncertainty. Low commodity prices have also discouraged investment in mining. In May, Sherritt Internationalannounced it wouldreduce its stake in the Ambatovy nickel and cobalt mine from 40% to 12%; it will continue to operate the facility until 2024. The new public-private partnership law,whichcameintoforceinMarch2017, and reforms to the business environment should attract renewed interest from international investors. The government is also keen to encourage local enterprise with special economic zones (SEZs), and is getting help from the Mauritian government and Mauritian investors seeking to offshore their operations.
COMOROS
ANTANANARIVO
Toamasina
MADAGASCAR 300 km
Indian Ocean MAURITIUS REUNION (France)
Population: 25.6 million Population growth: 2.7% GDP per capita: $412 Life expectancy: 65.5 Adult literacy: 64.7% Inflation: 7.8% Human development index (out of 188 countries): 158 Foreign direct investment: $541m Current account as % of GDP: -4.7% Mobile phone penetration: 42% Key export: Nickel Last change of leader: 2014 GDP growth (%)
ELECTION WRANGLES
4.2
4.3
9.7
10
10.6
11.2
2015
2016
2017*
2018*
3.1
5.3
GDP ($bn)
*Estimation October 2017
Elections are planned for late 2018, and many former leaders plan to run
Confidence amongst donors is on the rise. At the Paris conference in December 2016, Madagascar secured $6.4bn of commitments to finance its national development plan – more than it had sought and on better terms. Priority is being given to key infrastructure for transportation, energy and agriculture – which employs 80% of the population. Other important areas for spending are health and education. Madagascar remains one of the poorest countries in the world, with chronic levels of malnutrition and low levels of education. The government is also keen to promote private investment. Foreign direct
Elections loom on the horizon and could stall progress. Presidential elections are scheduled to be held in December 2018, but debate has raged over the electoral calendar. The government wants to amend the constitution to remove a clause that would force the President to resign 60 days before the polls, and plans to organise a referendum. Civil society has also called for reforms whereby elections would be held at fixed dates outside of the rainy season, with local elections held separately from national ones. Although he is relatively unpopular, Rajaonarimampianina is expected to run under his Hery Vaovao ho an’i Madagasikara party banner. Unofficial campaigning is well under way, with the President and Marc Ravalomanana, a former president and leader of opposition party Tiako i Madagasikara, multiplying public appearances and fighting it out over social media. Other high-profile likely candidates include Jean-Omer Beriziky, prime minister during the post-coup transition, and most probably Andry Rajoelina, the 2009 coup leader and president of the transition. However, he will first need to win the backing of the main opposition platform Mitsangana ry Malagasy and theAlliance Républicaine de Madagascar, to which his MAPAR party belongs.
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SOUTHERN AFRICA
COUNTRY 129 PROFILES
MALAWI
Farming booms and busts The presidential race in 2019 could be a close one
Lake Malawi
Farm production is up, but lower prices are hurting revenue
MALAWI
LILONGWE
A
GRABBING THE YOUTH VOTE
The MCP faces some challenges. Many in the older generation who suffered under its 30-year autocratic rule hate the party. However, the majority of those who will vote in 2019 were born after 1994, when the MCP was ousted from power. With highunemploymentandinstitutionalised corruption, it could be hard for the DPP to convince young voters. The government’s economic priorities include agricultural diversification, promoting mining and tourism, and THE AFRICA REPORT
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MOZAMBIQUE
MOZAMBIQUE
Blantyre
TOBACCO DOWN, MILLET UP
150 km
Population: 18.6 million Population growth: 2.9% GDP per capita: $326 Life expectancy: 63.9 Adult literacy: 65.8% Inflation: 13% Human development index (out of 188 countries): 170 Foreign direct investment: $326m Current account as % of GDP: -9.1% Mobile phone penetration: 40% Key export: Tobacco Last change of leader: 2014 GDP growth (%)
2.9
5
2.3
4.5
5.5
6.3
6.7
2016
2017*
2018*
GDP ($bn)
6.4 2015
*Estimation October 2017
s the economy picks up, President Peter Mutharika’s governmentislimpingtoward national elections planned for 2019. The Cashgate affair involving the fraudulent use of state funds took down the government of Joyce Banda but has also harmed trust in the present government, along with other scandals. The opposition is forming a coalition as the campaigning starts in 2018. In July, Mutharika’s right-hand man George Chaponda – the governing Democratic Progressive Party’s (DPP) vice-president and a former agriculture minister – was arrested on corruption charges. A handful of other ministers were the subject of public inquiries into opaque deals in 2017. The opposition Malawi Congress Party (MCP) is slowly but steadily gaining popularity. It is led by Lazarus Chakwera, the former leader of Malawi’s Assemblies of God churches. He says oppositionunityis key to unseating Mutharika in 2019, and isformingallianceswithformerpresident Banda’s People’s Party, the Alliance for Democracy, the New Labour Party and other parties. The MCP is also courting political heavyweights from the Southern Region as it works to garner support in the DPP stronghold of Blantyre.
ministry say that maize production jumped 35.9% in 2017. In the 2016/2017 season, Malawi produced 3.2m tonnes, which the government says is slightly more than the country’s requirements for human consumption, seed, stock feed and industrial use. Similar levels of rain are expected for the 2017/2018 season.
TANZANIA
ZAMBIA
attracting foreign investment. After years of economic malaise, Malawi is on the path to economic recovery, with significant growth expected in 2017 and 2018. The government is pinning its hopes for meeting energy demand on planned interconnections with the national grids of Mozambique, Tanzania and Zambia. Malawi’s energy utilities say that production levels should be high enough in 2018 to stop the current spate of blackouts. The expansion of the Kapichira Falls power plant will add 100MW to the grid. In 2016,due to the El Niño weather pattern, the country suffered one of its worst famines. Figures from the agriculture
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The government is increasing some subsidies to small-scale farmers. Production of other crops has also rebounded: rice, sweet potatoes, millet and sorghum increased by 41.5%, 27.7%, 118.6% and 79.3%, respectively, in 2017. Overall. Malawi’s agricultural sector is projected to grow by 6.8% in 2017. Malawi’s economy is agro-based and tobacco is the country’s main foreign exchange earner, accounting for about 50% of export earnings. Due to low prices and problems with quality, some farmers are abandoning the crop. Analysts reported that farmers sold 106.5m kilogrammes of tobacco at auction in 2017, down from 195.1m in 2016. Revenue also dropped from $276.4m to $212.4m. The abundance of both cash and food crops means prices for commodities have gone down, hurting farmer revenue. This has also brought good news to the economy, as runaway inflation has started going down. The country’s major donors are showing renewed confidence. In September the World Bank disbursed $84.3m in budget support. On the investment front, companies are promoting the development of a special economic zone at Cape Maclear on Lake Malawi. Weak uranium prices mean that Paladin’s Kayelekera mine continues to be mothballed. Meanwhile, Canada’s Mkango Resources says it will start production from its Songwe Hill mine in 2020. The government says that it will roll out new oil and gas regulations. Lilongwe says that it is taking its dispute with Tanzania over the borders on Lake Malawi to the International Court of Justice at the Hague. Mediation talks have so far failed to achieve any progress.
130 COUNTRY PROFILES
SOUTHERN AFRICA
MAURITIUS Aiming high
the expulsion of families whose houses are on the proposed Metro route has raised many eyebrows. The project consists of 13km of new commuter rail. Work started in September 2017, and the first Metro service is expected to be operational in September 2019. By 2030, the commuter rail network is expected to increase to more than 30km.
Coalitions could shift ahead of elections slated for 2019 The offshore finance sector needs to innovate to adapt to regulatory change
METRO’S MUDDY WATERS
Meanwhile, having defended himself and won on all but one cases of corruption, former prime minister Navin Ramgoolam of the Labour Party is also launching a comeback. There is likely to be a period of intense competition for coalition partners ahead of the 2019 elections, as the Militant Socialist Movement and Muvman Liberater are currently in government together. The Reform Party is the newest party in Mauritius, founded by former financial services minister Roshi Bhadain in 2017 in protest about problems with a key infrastructure project for the capital city (see below). Many of the political debates ahead of the election will be about the economy. The government’s 2017 budget focused on social spending and measures to fight
Indian Ocean
MAURITIUS
SUGARING THE PILL
Indian Ocean
10 km
Population: 1.3 million Population growth: 0.1% GDP per capita: $9,672 Life expectancy: 74.6 Adult literacy: 90.6% Inflation: 4.2% Human development index (out of 188 countries): 64 Foreign direct investment: $349m Current account as % of GDP: -5.8% Mobile phone penetration: 144% Key export: Tuna Last change of leader: 2015 GDP growth (%)
6.6
4.7
5.3
11.3
12.3
14.8
2016
2017*
3.8
GDP ($bn)
14.8 2015
*Estimation October 2017
A
s the Alliance Lepep government enters its fourth year in 2018, it is struggling to deliver on the economic miracle and 5% growth that it had promised on the campaign trail. That has not stopped it from promising to turn the economy into a high-income one within the next decade thanks to public investment and business-friendly reforms. Meanwhile, members of the opposition, led by Parti Mauricien Social Démocrate boss Xavier-Luc Duval, continue to call for new general elections, saying the people were not consulted when Prime Minister Anerood Jugnauth, 86, handed over power to his son Pravind in early 2017. The next round of legislative elections are due to take place in 2019. Paul Bérenger, leader of the Mauritian Militant Movement, remains one of the government’s most vocal critics. A government reshuffle and a rejigging of the governing coalition could be on the cards in the months to come.
PORT-LOUIS
2018*
poverty. Prime Minister Jugnauth’s goal is to make Mauritius a high-income country – with a gross national income of more than $12,736 per capita – by 2030 through investing in education, the ‘blue economy’ and upgrading infrastructure. The government wants to spur growth with its spending, but public debt was already 66% of gross domestic product in June 2017. The management of the Metro Express project in Port Louis, costing Rs18bn ($528m) and financially backed by India, is hurting the government’s support in the short term. The opposition claims there is corruption, and
The end of the sugar protocol in Europe and the depreciation of the dollar are challenges faced by Mauritian exporters. The government promised help to exporters in late 2017 in order to deal with the impact of the strengthening rupee. Poor weather meant that the sugar crop was expected to drop 7% in 2017 to 360,000tn. But 5%-plus growth is expected for the financial services and tourism industries. The government predicted that the country would receive 1.3m visitors in 2017. In late 2017, airline KLM launched a new service linking Amsterdam to Port Louis. Discussions are under way about the construction of a second passenger terminal at Port Louis airport. Changes to the provisions of the double taxation avoidance agreement with India, and stricter transparency rulesfromtheOrganisationforEconomic Cooperation and Development, mean that the offshore financial sector will have to offer more substantial services if it is going to survive. Like other Mauritian companies, those in financial services are looking to the African continent to expand their operations. State Bank of Mauritius, for example, launched into the Kenyan market in 2017. The Mauritian government is also looking to help expand the number of African special economic zones, including one in the works in Senegal. Onthe diplomatic front,Mauritius may soon be able to regain sovereignty over the Chagos Islands, about which it has been in dispute with Britain. In June, the United Nations gave Port Louis the goahead to take its case to the International Court of Justice in the Hague.
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SOUTHERN AFRICA
COUNTRY 131 PROFILES
MOZAMBIQUE
The long shadow of bad debt
The government is struggling with its finances but pins hopes on gas and coal
M
ozambique enters a further year of economic and political crises in 2018. There is not a clear resolution in sight to the damaging scandals around secret loans that have rocked President Filipe Nyusi’s presidency. Meanwhile, a definitive peace with the armed opposition Resistência Nacional de Moçambicana (Renamo) party remains outstanding. Momentum in the governing Frente de Libertação de Moçambique (Frelimo) party shifted toward Nyusi following the September 2017 party congress, where his status as party leader and presidential candidate for a second term in 2019 was settled. Nyusi’s presidency is likely to remain weakened, and decisive action is not expected in curbing the influence of former president Armando Guebuza and his hardline allies. Peace with Renamo remains elusive, although a return to conflict is not expected. Talks are due to continue, but Renamo’s goals of decentralisation, security sector reform and power sharing are opposed by Frelimo’s hardliners. Legislation to change the constitution to allow provincial governors to be elected directly is expected to be introduced to parliament soon. Municipal elections in October 2018 will focus minds in Frelimo. The party faces losses but will benefit from vote splitting between the MovimentoDemocráticodeMoçambique (MDM) and Renamo. The MDM is likely to experience electoral setbacks at the hands of a rejuvenated Renamo. OPACITY OBSTRUCTS AID
Mozambique will endure a continued rupture in international assistance, which was suspended over $2bn in loans and related arms deals that had been hidden from donors and the legislature. Government efforts to restore THE AFRICA REPORT
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exchange – privileged access to which has been an elite perk – will continue. Tough and politically unpopular reforms are on the agenda, including monetary tightening, a reduction in wasteful subsidy programmes and the sale or closure of loss-making state-owned corporations. Otherwise, austerity will be unpalatable to an elite accustomed to state patronage. Mozambique’s sovereign debt default is likely to drag on without agreement with creditor groups. A debt restructuring is on the cards, but it will face delays due to the government’s refusal to repudiate the debts, which expose members of the elite to personal liability, as well as infighting among creditors, bondholders and underwriting banks.
TANZANIA MALAWI
MOZAMBIQUE
ZAMBIA
Nampula ZIMBABWE
MADAGASCAR
Beira Indian Ocean
SOUTH AFRICA
MAPUTO
300 km
SWAZ.
Population: 29.7 million Population growth: 2.9% GDP per capita: $418 Life expectancy: 55.5 Adult literacy: 58.8% Inflation: 17.5% Human development index (out of 188 countries): 181 Foreign direct investment: $3.1bn Current account as % of GDP: -25.6% Mobile phone penetration: 66% Key export: Aluminium Last change of leader: 2015 GDP growth (%)
6.6
4.7
5.3
11.3
12.3
14.8
2016
2017*
3.8
GDP ($bn)
14.8 2015
FRAGILE BANKS
*Estimation October 2017
Local elections in 2018 will test the popularity of the troubled Frelimo party
2018*
trust with donors and the International Monetary Fund (IMF) are in ruins after an independent audit of those loans, ordered by the IMF as a condition for aid to be restored, was obstructed by the intelligence services and Frelimo hardliners. It is unlikely that demands for gaps in the audit to be closed can be met and a new IMF lending programme agreed before the end of 2018. The absence of foreign support is set to prolong severe fiscal and balance of payments problems, leaving the government struggling to pay recurrent costs, including the wage bill. Arrears to suppliers and a scarcity of foreign
D E C E M B E R 2 017- J A N UA R Y 2 018
Four local banks collapsed in 2017. Banks are under pressure from bad loans andnewminimumcapitalrequirements. Only five of 19 domestic banks meet the new capital requirements – they have three years to do so – and this will be driving a wave of consolidation. Energydevelopmentwillgetunderway through Eni’s Coral South floating liquefied natural gas (LNG) project, the first of several energy mega-projects, but the era of hydrocarbon revenue riches is still years away. Eni and Anadarko’s onshore LNGplants,whicharebiggerthantheone at Coral South, still have more obstacles to clear before construction begins. Coal is emerging from what has been an investment disaster. Companies at one point were losing money, had gone bankrupt,disposedoftheirMozambique holdings or had put operations on care and maintenance. Of three surviving operational companies, Jindal and International Coal Ventures resumed operations this year, and Vale – which accounts for 90% of production – raised output by 50%. Coal overtook aluminium as the largest export sector in the first quarter of 2017. Vale’s opening of the Nacala Logistics Corridor in May 2017 is a game changer and removed the transport bottlenecks that had kept output at a fraction of available capacity.
132 COUNTRY PROFILES
SOUTHERN AFRICA
NAMIBIA
Geingob gets a grip BEE and land reform are two key and controversial topics for the year ahead
P
residentHageGeingobshouldbe in a stronger position politically than since he became Namibia’s thirdheadofstateinMarch2015, having been formally elected president of the ruling SWAPO Party of Namibia at its November 2017 elective congress. Prior to this, former president Hifikepunye Pohamba remained party president. Geingob will continue to face internal opposition from those loyal to former presidentSamNujoma.Theydistrusthim partly because he is the first head of state not from the Oshivambo, the northern ethnic group that is Namibia’s largest and forms the majority in SWAPO. Geingob’s commitment to eradicating poverty and pushing ahead with South African-style blackeconomicempowerment(BEE)has secured him the backing of the radically inclined SWAPO Youth League. After extensive consultations, a revised BEE bill will be tabled in 2018. To ensure foreign investment in priority infrastructure, the more controversial aspects, including mandatory 25% BEE equity stakes in all businesses, are expected to be modified or dropped altogether. Geingob’s choice of deputy prime minister Netumbo Nandi-Ndaitwah as the new SWAPO vice-president should pave the way for Namibia’s first female head of state. That is assuming she faces down a challenge from another female politician, home affairs minister Pendukeni Iivula-Ithana, a leading Nujomaist. The next national election will take place in November 2019. A NEW GENERATION
Although Geingob is eligible to run for a second five-year term, as he is now 76 he might step aside in two years’ time. Failing that, the SWAPO vice-president would be in pole position to succeed him in 2024. However, Geingob said in
300 km
ANGOLA
Walvis Bay WINDHOEK
Usutuaije Maamberua, will remain SWAPO’s most effective opponents. Land-reform disputes and ongoing fiscal consolidation could stoke political disputes. A second national land conference scheduled for November 2017 has been postponed to 2018. The reason for the delay was widespread disagreements on how best to recalibrate land resettlement, which threatened to cause polarisation along ethnic lines. Successive overshoots of budget deficit and public debt targets will require the government to continue fiscal consolidation into 2018. This has made it more challenging to grow the economy.
ZAMBIA
BOTSWANA
NAMIBIA Atlantic Ocean
SOUTH AFRICA
Population: 2.5 million Population growth: 2.2% GDP per capita: $5,358 Life expectancy: 65.1 Adult literacy: 81.9% Inflation: 6% Human development index (out of 188 countries): 125 Foreign direct investment: $275m Current account as % of GDP: -7.3% Mobile phone penetration: 109% Key export: Diamonds Last change of leader: 2015 GDP growth (%)
6
MINING YIELDS UP
2.5
1.1
0.8
11.6
10.9
12.6
13.3
2015
2016
2017*
2018*
GDP ($bn)
*Estimation October 2017
Geingob will run again in 2019, and SWAPO is preparing for the succession
September 2017 that the old political guard would transfer power to a new generation “very soon”. Prime minister Saara Kuugongelwa-Amadhila, who is only 50 and a relative of Nujoma’s, is also a contender for the presidency. In any event, SWAPO will easily win the 2019 presidential and legislative elections, retaining its two-thirds majority in parliament, as opposition parties remain too weak and divided to mount an effective challenge. DTA of Namibia leader McHenry Venaani, whose right-wing party is the official opposition, and the left-wing South West Africa National Union leader
Growth in 2018 will be boosted by further loosening of monetary policy by the Bank of Namibia. An ongoing recovery in agriculture and higher mining output – diamonds, gold and uranium – have spurred an economic revival after a slowdown in 2016. In 2018, the Husab mine, which began operating at the end of 2016, is due to reach full capacity of some 6,800tn of uranium oxide annually. This would almost treble Namibia’s uranium output to 11,000tn per year. The weak prevailing spot price of around $20 per pound is not expected to increase significantly in the near term. Diamond and gold production will also continue on an upward path in 2018. Having recovered to 1.8m carats in 2017, a further increase to 1.9 million carats is in line for 2018 due to a continued expansion of marine recoveries. Thanks to the new, majority Canadian-owned open-pit Otjikoto mine near Tsumeb in north-east Namibia, gold production has steadily risen, and was expected to reach some 180,000oz in 2017, with further expansion from planned mining of the adjoining Wolfshag deposit. Other growth drivers include more processing of diamonds by local cutting and polishing factories under the 10year diamond marketing agreement signed between the government and De Beers in mid-2016.
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SOUTHERN AFRICA
COUNTRY 133 PROFILES
SOUTH AFRICA
The Zuma cliffhanger
S
outh Africa’s political prospects in 2018 are entwined with those of the governing African National Congress (ANC), which in December 2017 elects a new leader. The outcome of the ANC leadership contest at its national conference in Gauteng will impact both party and country, potentially determining whether or not the ANC wins the 2019 national election. The outcome of the conference also matters a great deal to President Jacob Zuma, who wants his ex-wife, Nkosazana Dlamini-Zuma, to win, and is desperate for his deputy president, Cyril Ramaphosa, to lose. Unusually for an ANC national conference, there are several other candidates for the party presidency, including housing minister Lindiwe Sisulu and party treasurer Zweli Mkhize. They seem unlikely to win and will probably end up trading their branches for positions with either Dlamini-Zuma or Ramaphosa. Dlamini-Zuma, or NDZ as she’s often called, has sought to challenge the widespread perception that she is the ‘business as usual’ candidate who will allow rampant looting of state resources to continue. Zuma himself appears to be betting that if NDZ scoops the ANC presidency she will not go after him and might even allow him to remain as state presidentuntiltheendofhistermin2019. RAMAPHOSA’S RECKONING
Ramaphosa is campaigning on an ’antistate-capture’ ticket, seeking to make the most out of ongoing revelations from #Guptaleaks and promising to crack down on corruption. #Guptaleaks is a trove of leaked emails curated by investigative journalists, who have drawn on them to churn out story after story exposing in detail the theft of public money arising from the relationships THE AFRICA REPORT
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ZIMBABWE BOTSWANA
Johannesburg
NAMIBIA
Atl. Ocean
PRETORIA
SOUTH AFRICA
SWAZ.
LESOTHO Durban
Cape Town
Indian Ocean
Population: 56.7 million Population growth: 1.6% GDP per capita: $6,089 Life expectancy: 57.7 Adult literacy: 94.3% Inflation: 5.4% Human development index (out of 188 countries): 119 Foreign direct investment: $2.3bn Current account as % of GDP: -2.9% Mobile phone penetration: 142% Key export: Gold Last change of leader: 2009 GDP growth (%)
1.3
0.3
0.7
1.1
GDP ($bn)
317.6
294.9
344.1
361.2
2015
2016
2017*
2018*
between the powerful Gupta family, President Zuma, Zuma’s cronies, and state-owned enterprises (SOEs, see box). The power parastatal Eskom and the transport behemoth Transnet figure prominently. If Ramaphosa wins, Zuma and his fellow travellers fear an uncomfortable reckoning. In addition, a new chief prosecutor could reinstate the hundreds of corruption charges against Zuma relating to his role in the infamous arms deal scandal of the late 1990s. WithtwomonthsbeforetheDecember conference, Zuma reshuffled his cabinet, reminding his enemies that he is still in
D E C E M B E R 2 017- J A N UA R Y 2 018
power and removing his former close ally and South African Communist Party leader Blade Nzimande. Zuma is increasingly acting alone when he makes the cabinet changes, not consulting the top six leaders of the ANC. A looming worry is that the respected Independent Electoral Commission (IEC) will not be ready to hold a credible election in 2019. Two commissioners’ terms come to an end in 2018, and the opposition says new commissioners needs at least 18-24 months to get accustomed to the workings of the IEC. The opposition also worries that the ANC will stack it with pro-Zuma supporters and that the new tender for an information and communications system might be awarded to the Guptas. BAPTISM BY FIRE
*Estimation October 2017
Scandals and low commodity prices have weakened the economy
300 km
MOZ.
The governing ANC picks a new leader in December 2017
The Democratic Alliance (DA), which performed the best out of the opposition parties in the 2016 local and municipal elections, says that forming an electoral alliance for 2019 is its best chance of unseating the ANC. It has been a baptism by fire for the DA-run metros in Johannesburg, Tshwane and Nelson Mandela Bay, with infighting, personality clashes and difficulties governing in partnership with smaller parties like the United Democratic Movement. The coalition governments are on the brink of collapse and might see the ANC come back into power via the back door if the DA is unable to find a coalition partner. South Africa has been in or close to recession for so long that millions of its citizens have known nothing else. Since 2008, real annual GDP growth has dipped negative and has never exceeded 3%, while the National Development Plan says sustained growth of 5% is necessary to lift the country out of poverty. A recent government report found that 30.4 million South Africans – 55.5% of the population – lived in poverty in 2016, up from 27.3 million five years earlier. The number in extreme poverty had gone up too, from 11 million to 13.7 million. The government is pursuing some policies to help workers, and one
SOUTHERN AFRICA
SOUTH AFRICA
The Zuma cliffhanger
important one is the introduction of a national minimum wage, planned for 2018. With the poor performance of the educational system often cited as an obstacle to economic growth, the ANC has also mooted making university education free for poorer students. One economic bright spot is the re surgent maize harvest. Maize produc tion was devastated by the 2015/2016 drought across much of the country. The rains have since returned: there was a bumper harvest in 2017 and another good season is anticipated for 2018. But with unemployment still at a record high, slow economic growth and spiralling government debt, the lower food prices are not likely to change the political mood in the country. The Western Cape, meanwhile, is ex periencing its worst drought in a century, with Cape Town anticipated to run out of water in February 2018. This will hit agriculture in the province, including the wheat, fruit and wine sectors, and will also probably impact on tourism. PLATINUM LOSES ITS SHINE
The mining sector seems set to bene fit from rising metal prices in 2018. However, there is a looming crisis for platinum mining companies. Most of them operated at a loss during 2017, and the world is starting to switch from petrol and diesel to electric cars. International demand for platinum
Volume of electricity, South Africa (GWh) Jan-Jul :
147,194
148,221
Total generated by all producers
2016
133,607
2017
134,044
Distributed in South Africa
50,000
vehicles a year by 2022 are promised by BAIC at its new Port Elizabeth plant may steadily collapse as about 40% of annual platinum consumption is for catalysts to reduce emissions. Mines minister Mosebenzi Zwane was repeatedly exposed in the #Guptaleaks correspondence. He has also introduced farreaching new ‘empowerment’ rules with little sector consultation and no buyin. Most new mining investment is on hold, and overall foreign direct investmenthadbeenonthedeclinesince 2015. Mining production, however, has been on the rise. Statistics SA reported 3.6% yearonyear production growth in May 2017. Companies have been cutting
SOURCE: STATISTICS SOUTH AFRICA
134 COUNTRY PROFILES
costs, and they are in for a new round of labour negotiations over wages. Electricity provision has been another obstacle to growth, and controversies surrounding a proposed huge nuclear deal suggest that it may be slow to pro gress. Eskom is supposed to choose a contractor for the 9,600MW project in the first half of 2018. South Africa’s banks and retailers continue to turn to the African continent for growth, with limited prospects for expansion at home due to a relative ly saturated market and rent market troubles. Despite the competition, the South African banking sector continues to attract new entrants, and financial services company Discovery received a banking licence in October 2017. The Post Office, and mogul Patrice Motsepe’s startup Tyme, are also seeking to enter the banking market and take market share from the big banks in 2018. The National Association of Automobile Manufacturers of South Africa predicts that local production will rise slightly in 2018 to 342,000 vehicles, which is slightly lower than production in 2015. Chinese manufacturer BAIC is due to begin operations at its $826m Port Elizabeth plant in 2018. BAIC is targeting the export market and says that it expects production to reach 50,000 vehicles per year by 2022. The sector is attracting more investmentandFordannounceditsplans to spend $221m to boost production.
Squeeze on the SOEs SOUTH AFRICA’S STATEOWNED ENTERPRISES (SOEs) have played a starring role in the ‘state capture’ drama exposed by #Guptaleaks. Repeatedly people have been catapulted by ‘captured’ politicians into senior management roles and then used their positions to steer contracts worth billions of rand the way of Gupta companies.
South African government debt relative to gross domestic product was 51.7% in 2016, up from 31.3% when Zuma took power. South African Airways (SAA) alone has more than R6bn ($439.5m) in debt, and the government says it will be forced to sell assets to pay its debts during 2018, after a 2017 decision by several of its commercial
lenders to refuse to roll over loans. One option the government is considering is to offload the state’s remaining stake in telecoms company Telkom. Another – to the horror of state employees – is to use the Public Investment Corporation, which invests their retirement funds. Eskom’s finances are in better shape than SAA’s, THE AFRICA REPORT
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but remain a source of concern. The parastatal has been awarding massive, untendered contracts to Gupta-connected companies. Still, Eskom revenues rose an annual 7.9% in the year ending 31 March 2017, in part due to increased energy exports. The company was due to get a new leadership in November. •
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SOUTHERN AFRICA
COUNTRY 135 PROFILES
SWAZILAND On his throne SOUTH AFRICA
MBABANE
S
waziland yet again finds itself in critical economic difficulties. The economy is not growing as quickly as it could and a host of challenges that have plagued the country in recent years will continue to slow economic growth in 2018. In addition, there are no signs that the autocratic King Mswati III will open up the country’s political sphere and respond favourably tocampaigners’callsfordemocratisation. The Kingdom remains heavily dependent on Southern Africa Customs Union (SACU) revenue –South Africa is the main contributor – which accounts for at least 49% of the national budget. In the 2017 Budget Speech, finance minister Martin Dlamini attributed the drop in government revenue mainly to the E5.3bn ($371.7m) received in SACU receipts for 2016/2017, a 24% decrease from 2015/2016. With tariff rates declining, SACU revenue is expected to continue dropping over the next few years. Meanwhile, the devaluation of the South African rand, to which the local lilangeni currency is pegged, will likely worsen the already challenging economic situation. The Interational Monetary Fund (IMF) is pushing the government to cut spending, as well as implement structural reforms to manage the rising risks that have contributed to elevated income inequality. GETTING RICHER
Despite its middle-income status, nearly 63% of Swaziland’s population live below the poverty line. The small country has the world’s highest HIV/AIDS prevalence rate, and life expectancy has dropped to 49 years from 59 years in the 1990s. King Mswati III, Africa’s last absolute monarch, is subject to constant criticism for getting richer and doing little to fight poverty. THE AFRICA REPORT
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MOZAMBIQUE
SACU receipts continue to drop, but rail lines give hope for diversification
30 km
SWAZILAND
Population: 1.4 million Population growth: 1.8% GDP per capita: $3,513 Life expectancy: 48.9 Adult literacy: 87.5% Inflation: 7% Human development index (out of 188 countries): 148 Foreign direct investment: -$11m Current account as % of GDP: -1.1% Mobile phone penetration: 76.4% Key export: Odoriferous substances Last change of leader: 1986 GDP growth (%)
0
0.3
3,9
3,8
4
4
2015
2016
2017*
2018*
1.1
-0.9
GDP ($bn)
The landlocked kingdom is beginning to recover from a drought that began in 2016 and has hampered growth in the agricultural sector, the mainstay of the economy. In May, the World Food programme ended its El-Niñoinduced emergency operation, after the country had declared a national state of emergency in February 2016 due to a decline in agricultural production and rising food prices. According to the IMF, inflation is projected to return to below 6%, from the current 7%, by 2018 as food prices normalise. Swaziland is also looking to again participate in the African Growth
D E C E M B E R 2 017- J A N UA R Y 2 018
and Opportunity Act (AGOA). Two key export sectors, textiles and sugar, which depended on AGOA’s duty-free access provisions, have taken a hard hit since concerns over serious labour violations led to the country’s suspension in January 2015. With reports that Washington is going to make a decision on the country’s eligibility before the end of the year, Mswati III gave assent to the revised Public Order Bill and the Suppression of Terrorism Amendment Act in August to demonstrate measurable progress toward the protection of workers’ rights and the freedom to associate and assemble without police or government interference. These two bills still need to be signed into law. ‘SHAM’ ELECTIONS
*Estimation October 2017
Mswati refuses to engage in reforms that would allow democratic activities
The largest opposition party, the People’s United Democratic Movement, says that it will boycott local elections due to be held in 2018. It says the elections are a sham and that it will not take part until Mswati III is ready to dilute his political power and organise a free and fair vote. Swaziland ranks as one of the lowest countries in the region in the World Bank’s Doing Business index, but in a major move for the telecoms sector, a second mobile network was launched earlier this year. Swazi Mobile, which has now broken the monopoly of MTN – Swaziland’s sole provider since 1998 – launched services in July and is gearing up to sell a 33.3% stake via an initial public offering in the coming months. In July a pilot phase of the 150km Swaziland Railway project, to link the Mpumalanga Province in eastern South Africa to Sidvokodvo in Swaziland, was completed. The rail line promises business opportunities and jobs for the struggling economy. The neighbouring countries signed the project’s memorandum of understanding in 2012, which also includes the revamping of two existing lines in both countries. In addition, anticipated business opportunities and indirect jobs are currently estimated at R1.7bn ($119m) and R89m, in Swaziland and South Africa respectively.
136 COUNTRY PROFILES
SOUTHERN AFRICA
ZAMBIA
Fighting for 2021 The courts are due to rule on whether Lungu can run for the presidency
Lungu and his supporters have kicked their campaigning into high gear and are trying to get rid of internal PF opposition. The first casualty was former information minister Chishimba Kambwili, a party co-founder who Lungu accused of destabilising the PF. Kambwili has not hidden his presidential ambitions and was seen as effectively campaigning against Lungu’s third-term bid. Before he was expelled from the PF in July, he also said that Lungu had strayed from the founding vision of the PF and sidelined members from the Bembaspeaking north. This PF infighting is likely to remain pronounced in the coming year unless the constitutional court rules in favour of Lungu. The opposition says that the government is becoming ever more intolerant
ZAMBIA LUSAKA
MOZAMBIQUE
incarcerationseeminglygrowninstature, he can be sure that Lungu and the PF will continue to attack him at every turn.The reconciliation process brokered by the Commonwealth is unlikely to bear fruit, largely because Lungu does not want to enter into discussion on too much of an equal footing with the opposition leader. UNBRIDLED SPENDING
NAM. BOTSWANA
ZIMBABWE
200 km
Population: 17.1 million Population growth: 3% GDP per capita: $1,484 Life expectancy: 60.8 Adult literacy: 63.4% Inflation: 6.8% Human development index (out of 188 countries): 139 Foreign direct investment: $469m Current account as % of GDP: -3.6% Mobile phone penetration: 75% Key export: Cathodes Last change of leader: 2015 GDP growth (%)
2.9
3.4
4 4.5
GDP ($bn)
21.2
21
2015
2016
25.6
27.3
2017*
2018*
*Estimation October 2017
KAMBWILI EXPELLED
Ndola ANGOLA
Z
MALAWI
Talks around an IMF bailout have been tense amidst low copper prices ambia’s President Edgar Lungu has won two presidential elections in the space of 18 months, but with each victory his fight for survival intensifies. There is a battle within his Patriotic Front (PF) for the right to represent the party in the next presidential election in 2021. The economy remains another obstacle, with the possibility of an International Monetary Fund (IMF) bailout and doubts swirling about the government’s indebtedness. Lungu’s government rushed through a hasty new constitution before the 2016 election and it is now not clear if he can run for another term, having replaced the late president Michael Sata. A group of opposition parties has asked the constitutional court to pronounce on whether Lungu is indeed eligible for the 2021 elections. They, however, complain that the court is favourable to Lungu and point to a rise in political violence and stifling of dissent.
TANZANIA
DEMOCRATIC REPUBLIC OF CONGO
of differing opinions. After a fire at a main market in Lusaka, President Lungu declared a state of ‘threatened public emergency’ – not an actual state of emergency – in July. The move had very shaky legal foundations and the period ended in October. Critics said there were no threats to national stability and that the government used the decision to ban public political activity. UnitedPartyforNationalDevelopment (UPND) leader Hakainde Hichilema is convinced the last election was stolen from him, and he was arrested for treason for blocking a presidential motorcade in 2017. Having come out of his four-month
Politics aside, Lungu faces an enormous challenge with the economy, which has been struggling with lower levels of growth since the commodity downturn of 2014. Though the plan was to curb infrastructure spending in 2016, construction and building roads became a campaign issue and there was unbridled and unbudgeted spending, which left the coffers empty and ballooned the national debt. The government is wary of engaging the opposition in a debate about public debt levels, which the Movement for Multiparty Democracy says remain opaque. In an October report, the IMF said that public debt stood at 60.5% of gross domestic productin 2016 and it was set to reach just 60% in 2018 and continue rising. It says that current debt levels are not sustainable. The government is having trouble reining in spending and has promised to control rises in the civil service wage bill by limiting new hires. Economic policy inconsistency and poor budget execution are hurting economic growth. The 2018 national budget largely focuses on enhancing domestic resource mobilisation through better revenue collection. The removal of subsidies on electricity has also been a means of curtailing expenditure. But the pledged sinking fund for the sovereign bonds which mature in the next few years has not been established. Despite the positive economic outlook, however, the government asked for an IMF aid package of $1.6bn in 2016 and was trying to finalise the agreement by the end of 2017. The worst of the economic downturn may be over, and inflation dropped from 23% in February 2016 to 6.3% in August 2017.
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Agriculture – a key sector for diversification – has been booming due to good weather, and the country produced 3.6m tonnes of maize in the 2016/2017 season. With good rains predicted for next year, too, maize prices will stay low, and this has caused farmers to plant other crops in the season that began towards the end of 2017. In order to improve governance in the state-run input programmes for small-scale farmers, the government plans to roll out an e-voucher scheme to one million farmers in 2018. Fuel and farmer subsidies are, however, due to be reduced as part of austerity measures. Lusaka is also planning on using a $40m loan from the Export Import Bank of India to expand mechanisation and irrigation. Polish tractor company Ursus is in talks about setting up a manufacturing plant. The government says it wants to attract more investment from large-scale agribusinesses and plans to offer large tracts of land in Copperbelt, Muchinga and Northern provinces next year. That also coincides with the launch of a national land-titling programme that is set to take off in 2018. POWERING UPWARDS
Better weather has also helped electricity production in 2017, as much of the country’s generation capacity is from hydroelectric dams. Average production reached 1,610MW for the first eight months of 2017. Low levels of electricity
Zambia quarterly copper production and price, 2015-2017 Copper Production, 000’ tonnes London Metal Exchange price per tonne, $bn 10
200
8
150
6
100
4
50
2
0
0 2015
2016
2017
3,450MW
Combined contribution to the grid of a trio of power projects due before 2023 production have been an obstacle to economic growth and the utility company Copperbelt Energy Corporation is investing $51.3m in two solar power projects – one at Kitwe and one at Ndola – that should generate 51MW from 2018. The government is planning a round of new laws for the energy sector, including one on a feed-in tariff, that will help to increase production by renewables by 200W. Meanwhile, Maamba Collieries is due to add a further 300MW of capacity to its coal-fired plant in 2018. The biggest planned additions to the grid over the next several years are
SOURCE: CSO, INDUSTRIAL PRODUCTION STATISTICS, 2017
137
EMCOZambia’s300MW coal-firedplant, due to begin production in 2019; the 750MW Kafue Gorge expansion, due for completion in 2019; and the massive 2,400MW Batoka Gorge dam, slated to be finished in 2022. After a study was completed in 2017, works could begin soon on the 2,300km power line to connect Kenya, Tanzania and Zambia. The country’s over-reliance on the copper sector is apparent, and Lungu’s administration argues that other mining activities could help to strengthen the economy. It is planning to launch mining surveys in North-Western, Copperbelt and Luapula provinces in the hopes of finding commercially viable deposits of clay, gemstones and limestone. A proposed railway that would link the city of Chingola to the Angolan port of Benguela has been under discussion for the past few years as a means to ease some of the mining sector’s transportation headaches. NorthWest Rail Company wants to build the line, and the government bought a 30% stake in the firm in 2016. However, the company does not seem yet to have found the financing for the multibillion-dollar project. The banking sector has mirrored the downturn in copper prices (see box), and is faced with high levels of non-performing loans (NPL). The NPL ratio hit 12% in 2017, up from 9.7% in 2016. Banks continue to cut back on their lending amidst high interest rates.
Mining on their minds COPPER MINING ACCOUNTS for about 12% of Zambia’s gross domestic product and 70% of exports, making the sector a significant source of government revenue and formal employment. But the relationship between the miners and the government is fraught, with disputes over taxes, VAT refunds, and, more recently, power tariffs. THE AFRICA REPORT
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Since 2014, negotiations over a power tariff increase for the mines – which account for more than half of Zambia’s electricity consumption – have remained contentious and unresolved. As a result of the standoff, Kansanshi mine (First Quantum) has not had power from the state-owned Copperbelt Energy Corporation, while
D E C E M B E R 2 017- J A N UA R Y 2 018
Mopani (Glencore) refused to pay higher electricity prices and threatened to fire nearly 5,000 workers, but eventually caved in and agreed to pay more. In mid-2017, the government launched a study to come up with a cost-effective power tariff. The miners want to secure long-term and irrevocable power contracts.
With the rise in copper prices in 2017 and a possible resolution on the power tariffs, miners are cautiously optimistic. Analysts expected copper production to rise 10% in 2017 to about 850,000tn. The government says it is now committed to providing policy stability and has not planned any major changes in regulations for the year ahead.
138 COUNTRY PROFILES
SOUTHERN AFRICA
ZIMBABWE President Mugabe resigned under pressure from the military in November
ZAMBIA
The government continues to spend, exacerbating the liquidity crisis
FALL FROM GRACE
Prior to his resignation, Mugabe was clearing the way for his wife and her allies in the Generation 40 alliance to take power. This was taking place against the backdrop of heightened infighting and a grinding economic crisis – marked by stolen state funds and high unemployment. While a diplomatic deal was said to be agreed to allow Mugabe to leave the country, it was not clear if Grace and her allies would face trial for their enrichment when in office or other possible crimes. ZANU-PF also kicked out former information minister Jonathan Moyo and former indigenisation minister Saviour Kasukuwere,
HARARE
Bulawayo
BOTSWANA
MOZAMB.
SOUTH AFRICA
200 km
Indian Ocean
ZIMBABWE
Population: 16.5 million Population growth: 2.3% GDP per capita: $1,150 Life expectancy: 59.2 Adult literacy: 86.5% Inflation: 2.5% Human development index (out of 188 countries): 154 Foreign direct investment: $319m Current account as % of GDP: -3.6% Mobile phone penetration: 83% Key export: Tobacco Last change of leader: 1980 GDP growth (%)
1.4
0.7
2.8
0.8
16.1
16.1
17.1
18.9
2015
2016
2017*
2018*
GDP ($bn)
*Estimation October 2017
T
he sacking of vice-president Emmerson Mnangagwa, who has close allies in the security services, provoked an unprecendented crisis and the downfall of 93-year-old Robert Mugabe. As The Africa Report went to press, Mnangagwa was sworn in as president, and will oversee a transitional period before elections could be held – as planned before the upheaveal – in July or August 2018. In November, army chief Constantino Chiwenga stepped in and put Mugabe under house arrest. The move was met with jubilation in the streets of Harare and other major cities across the country. Chiwenga and his allies insisted that the move against Mugabe was not a coup, in order to smooth the way for the government that would replace Mugabe. After being expelled from the ruling Zimbabwe African National Union-Patriotic Front (ZANU-PF) government and threatened withimpeachmentproceedingsinparliament,Mugabetenderedhisresignationon 22 November. Mugabe ruled the country for 37 years, and it is not possible for the country to shift gears overnight.
MALAWI
A new dawn
two of Grace’s allies. Similar shake-ups are expected in the police and other security services as leaders seek to weed out those who are not loyal to the new leaders of the regime. The opposition, led by ailing Morgan Tsvangirai of the Movement for Democratic change, mobilised its supporters to call for Mugabe to step down and now want a say in how the transition to a new government will take place. So far the ruling party has not been receptive to dialogue. Other key opposition leaders, like Joice Mujuru of the National People’s Party, are also calling for a unified transitional government
rather than one headed by the ZANU-PF. Mugabe had a long history of using the security forces to repress the political opposition, and Mnangagwa was a key part of that, having served as defence minister and head of the government’s spy agency. While analysts say that Mnangagwa – known by the nickname ‘The Crocodile’ – is a canny and pragmatic politician, his role in the Gukurahundi massacres of the 1980s casts doubt on his willingness to lead the country in a vastly different direction. A South African-style Truth and Reconciliation Commission would help Amonst Mnangagwa’s key allies are former finance minister Patrick Chinamasa, former environment minister Oppah Muchinguri and former minister of state in the presidency Chris Mushohwe. Tsvangirai served as Mugabe’s prime minister in a government of national unity after the disputed 2008 election, and says that he does not trust ZANU-PF. Before the November events, Tsvangirai had been campaigning for major electoral reforms ahead of the 2018 vote. VIOLENCE ON THE RISE
The Zimbabwe Electoral Commission had already begun registering voters using the new biometric voter registration system that the opposition hopes will weed out ‘ghost voters’. However, the opposition remains worried that the electoral commission, led by former high court judge Rita Makarau, will not be able to deliver a free, fair and credible poll. Humanrightsorganisationsreportthat politically motivated violence was on the rise as the 2018 plebiscite drew nearer. Journalists and activists are often on the receiving end when the police clash with protesters, mainly in the capital. Land reforms are now on hold. Mugabe had ordered fresh invasions of the remaining white-owned farms – rekindling his “land to the people” slogan that he used ahead of the 2002 elections. His call was popular and resulted in several white commercial farmers losing their land without compensation. Some
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PAYBACK NOT ANY TIME SOON
The government’s near bankruptcy has also triggered protests over unpaid civil service wages and a continuing economic crisis, with police regularly shutting down all recent marches. The country’s partisan police have, however, allowed ZANU-PF demonstrations and rallies to go ahead without interference. The country’s financial system continues to suffer from repeated crises. The
25
Debt and deficit (percentage of GDP) domestic debt fiscal deficit
20 15 10 5 0
SOURCE: IMF
of the farmers were violently evicted, bringing back memories of the chaotic land seizures of 2000 when more than a dozen white farmers were killed by Mugabe’s loyalists. Some economists argue that the new land seizures will further sink the ailing economy that has seen most companies closing shop since Mugabe’s controversial re-election in 2013. The country’s umbrella labour body, the Zimbabwe Congress of Trade Unions, says unemployment levels have surpassed 85%. The late 2017 upheaval is likely to hurt the economy, at least in the short term. The economy is volatile due in part to government interference and mismanagement. Massive corruption and disastrous economic policies have plunged Zimbabweans further into poverty. Mugabe has always spoken against corruption within his government, but no senior officials have been taken to task over it.
-5 -10
2012
2013
2014
2015
2016
85%
of Zimbabweans are unemployed after most companies closed shop lingering effects of years of hyperinflation have crippled entrepreneurial activity, severely undermining macroeconomic stability. The government has used the central bank to finance deficit spending and provide loans to state-owned enterprises. Recent budget deficits have averaged 1.5% of gross domestic product (GDP), and the government is struggling to attract investment. In 2017, public debt was equivalent to 53% of GDP. A big push to settle the country’s arrears to international financial institutions has fizzled out, dashing hopes that lending could resume any time soon.
The liquidity crunch has led to United States dollars, one of the country’s official currencies, being sold on the parallel market. A surrogate currency called bond notes introduced by the central bank at a rate of 1:1 against the dollar is also in short supply, with most traders now charging an extra percentage – up to 50% – if consumers pay for goods and services electronically. The problem of cash shortages is one of the key areas that new finance minister Ignatius Chombo has to grapple with. Despite a bumper harvest in 2017 thanks to high rainfall, the economy continues to record weak levels of growth. The Tobacco Industry and Marketing Board reported in September that exports for the 2017 season rose by 31.3% to 92.2m kilogrammes. The government is subsidising inputs, which helped maize production to hit 2.1m tonnes in 2017. Harare’s economic interventions continue to spook investors. A new law to come into effect in January 2018 forces platinum miners to build local refineries or pay a 15% export levy. The government says there may be some leeway in that time frame after Implats said in September that it would have to close down some of its operations because of the costs of respecting the new regulations. The implementation of the government’swiderindigenisationpolicy has also suffered from similar hiccups.
Neighbourly quarrels PRIOR TO ROBERT MUGABE’S NOVEMBER RESIGNATION, relations with South Africa were poor. However, South African mediators were amongst the first on the scene during the political turmoil. Ties are set to improve now that Pretoria no longer has to deal with the prickly nonagenarian, and should the situation in Zimbabwe degenerate, South THE AFRICA REPORT
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Africa will remain a destination of choice for those fleeing the country. In 2017, there was talk of Zimbabwe using the South African rand more in order to cope with the US dollar cash crunch. That seemed unlikely due to a chill wind in relations. President Robert Mugabe’s public attack on South Africa’s late former president Nelson Mandela in
D E C E M B E R 2 017- J A N UA R Y 2 018
September triggered a tiff between Harare and Pretoria. Gwede Mantashe, secretary general of South Africa’s African National Congress, ridiculed Mugabe after he said Mandela had failed on black empowerment. The situation was already tense after Mugabe’s wife Grace assaulted a 20-year-old South African model who she found with one of her two
sons at a Johannesburg hotel in August. Grace was granted diplomatic immunity despite protests by rights groups. Analysts had predicted that the bad blood would probably not last too long, as South Africa benefits from cheap Zimbabwean labour and its presidents – from Thabo Mbeki to Jacob Zuma – have played a role in supporting the Mugabe regime.
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COUNTRY PROFILES
EAST AFRICA ERITREA
SUDAN
CHAD
CONTENTS
SAUDI ARABIA
Red Sea
Massawa
ASMARA Gondar
YEMEN
DJIBOUTI
Gulf of Aden
SOUTH SUDAN
CENTRAL AFRICAN REPUBLIC
Jima
KAMPALA Kisumu
DEMOCRATIC REPUBLIC OF CONGO
Obbia
MOGADISHU
KENYA
Lake Victoria RWANDA KIGALI
149 ERITREA 150 ETHIOPIA
SOMALIA
UGANDA
148 DJIBOUTI
ETHIOPIA
Juba
BUJUMBURA
Indian Ocean Mombasa
BURUNDI
DODOMA
TANZANIA
152 KENYA 154 RWANDA 155 SEYCHELLES
Kismayo NAIROBI
146 BURUNDI 147 COMOROS
DJIBOUTI Berbera Hargeisa Harar
Dire Dawa ADDIS ABABA
144 PEOPLE TO WATCH
Zanzibar
Dar es Salaam
156 SOMALIA 157 SOUTH SUDAN 158 TANZANIA 160 UGANDA
Mbeya ZAMBIA
300 km
EAST AFRICA 2017 GDP (% of regional total) Burundi 1.3%
0.3% Comores 0.8% Djibouti 2.3% Eritrea
Uganda 9.8%
Ethiopia
Tanzania 19.2%
29.7% TOTAL
$268.2bn
South Sudan 1.1% Somalia 3.3% Seychelles 0.6% Rwanda 3.3%
Kenya
29.2% 58.5%
SOURCE: GDP CURRENT PRICES – IMF WORLD ECONOMIC OUTLOOK DATABASE, OCT. 2017
MOZAMBIQUE
433.7
651.5
320.8
2030
2018
THE AFRICA REPORT
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2050
SOURCE: UN WORLD POPULATION DIVISION (THE 2017 REVISION)
EAST AFRICA POPULATION (millions)
D E C E M B E R 2 017- J A N UA R Y 2 018
$110.1 million
The annual budget for the East African Community for the 2017/2018 financial year, up from $101.4m the year before
JANUARY ETHIOPIA African Union summit
FEBRUARY DJIBOUTI Parliamentary elections
APRIL RWANDA Mo Ibrahim Annual Governance Weekend
JULY SOUTH SUDAN Presidential elections
141
142 COUNTRY PROFILES
EAST AFRICA
PEOPLE TO WATCH BURUNDI
Francine Niyonsaba The 24-year-old runner is Burundi’s top world-class athlete. Her breakout performance was when she won the African championships in the 800m race at the age of 19 in 2012. She was the first Burundian athlete to win an Olympic medal, taking a silver medal at the Rio games in 2016. She also won the IAAF Diamond League 800m race in Lausanne in July of this year. Born in an isolated region of eastern Burundi, she is cheered as a national champion and has supporters from across the political divide in spite of the country’s recent conflicts. Her big rival on the global stage is Caster Semenya of South Africa.
KENYA
UGANDA
Dreaming of State House
Museveni’s might
Mike Sonko
David Muhoozi
Nairobi’s newly-elected governor Mike Sonko is one of the country's fastest-rising political stars. Sonko rose to prominence on his rags-to-riches story. Although Kenya's parliament accused Sonko of dealing drugs in 2010, that has not stopped him from climbing the political ladder. His popularity is particularly high in the city’s densely-populated slums where he has for years run a free ambulance service and given out cash to those in need. Since his election in August, Sonko has turned his attention to the city’s biggest landfill site in Dandora. He has announced plans to build a recycling plant and has met with Chinese investors. Although he has said he will back deputy president William Ruto’s presidential bid in 2022, there are many who suspect Sonko might fancy his own chances.
THOMAS MUKOYA/REUTERS
TIM IRELAND/AP/SIPA
Speedy sprinter
The army has been taking a more active role on the domestic front in Uganda under David Muhoozi, who was appointed chief of defence forces of the Uganda People’s Defence Force in 2017, the highest rank in the country’s military. The army stormed parliament during the heated conflict over the bill to remove presidential term limits from the constitution in late 2017. President Yoweri Museveni is also using the Special Forces Command to deal with high levels of domestic discontent. With Somalia looking unstable yet again and uncertainty in South Sudan, Uganda’s army is preparing for a busy 2018.
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143
RWANDA
Valentine Rugwabiza
Former Deputy Director General of the World Trade Organisation, Valentine Rugwabiza is representing Rwanda at the United Nations headquarters in New York. She took up the post in 2016 and has been calling for more international support for African conflict resolution mechanisms. She explained to reporters: “The UN–African Union partnership could be a collaboration framework through which conflict prevention in Africa can be discussed.” The former head of the Rwanda Development Board is set to continue rising up the ranks of the East African country’s leadership.
JACK VARTOOGIAN/GETTY IMAGES
A partnership for conflict prevention
ETHIOPIA
Teddy Afro The return of a star Pop music sensation Teddy Afro has kept away from the limelight since his controversial arrest and imprisonment a decade ago. On an album he released to coincide with the 2005 general election, several of his songs scolded the government for dividing people along ethnic lines in an effort to control the country. Although they are still popular on the streets of Addis Ababa, the songs are banned by public radio and television stations. But the artist, whose real name is Tewodros Kassahun, is back in the limelight with the release of his new album, Ethiopia, which reached the top of Billboard’s world music chart. Government censors have not forgotten about him, however. Police stormed his album launch party on 3 September. The government is busy trying to quash several ethnic-based uprisings around the country, and has no time for critics.
TANZANIA
Tundu Lissu
PAUL KAGAME
/FLICKR
He is arguably one of President John Magufuli’s fiercest critics. The September 2017 shooting of Tundu Lissu, the opposition CHADEMA member of parliament for Singida East, at his home in the capital may forever change the country, as attempts at political assassinations have been virtually unheard of. The opposition has called for an international investigation into the attack out of fear that the governing Chama Cha Mapinduzi party is not an independent party, and the incident has already hurt the Tanzanian government’s reputation. The 49-yearold trained lawyer, who worked at the Lawyers’ Environmental Action Team on human and land rights issues, is also the opposition’s chief whip in parliament. Lissu was arrested several times in 2017 for his steady criticism of the government and corruption, and the opposition has a lot riding on his fate.
CHASSAN IMAGES
Fierce critic
144 COUNTRY PROFILES
EAST AFRICA
BURUNDI
Back to the brink
Nkurunziza’s designs for staying in power risk a return to civil conflict
THREATS BY REBEL GROUPS
Thegovernmentfacesanarmedrebellion due to its attempts to dominate the political space. A group of disaffected officers led by General Godefroid Niyombare launched a coup attempt in May 2015. When it failed, they formed the Forces Républicaines du Burundi(Forebu) rebellion. Niyombare has since disappeared from the public eye. Amidst uncertainty aboutForebu’sleadership,MajorGeneral Jérémie Ntiranyibagira asserted himself at the top and renamed the rebel group the Forces Populaires du Burundi. Former
TANZANIA
BURUNDI BUJUMBURA
Lake Tanganyika
100 km
Population: 10.9 million Population growth: 3.1% GDP per capita: $343 Life expectancy: 57.1 Adult literacy: 85.6% Inflation: 18% Human development index (out of 188 countries): 184 Foreign direct investment: $0.1m Current account as % of GDP: -12.4% Mobile phone penetration: 48% Key export: Gold Last change of leader: 2005 GDP growth (%)
-4
-1
0
0.1
GDP ($bn)
3
3.1
3.4
3.8
2015
2016
2017*
2018*
FOOD AND FUEL SHORTAGES
*Estimation October 2017
T
he year ahead is set to be shapedbyadeepeningpolitical crisis, with President Pierre Nkurunziza trying to remain in power for as long as possible, even at the risk of taking the country back into civil conflict. This is taking place against the backdrop of a weakening economy, with inflation in the double digits throughout 2017 and big cuts to donor aid programmes. Burundi has been in political crisis since Nkurunziza ran for another term in 2015 amidst debates about the constitutionality of such a move. Hundreds of thousands of people fled the country, and grenade attacks on politicians have become a regular occurrence. As of late 2017, the government was working on a constitutional amendment that would remove term limits and allow Nkurunziza the possibility to remain in power until 2034. This would tear up the Arusha accords that ended the country’s civil war, as these allow for a president to serve just 10 years in office. The government could hold a referendum on the constitutional changes in 2018 and has the strength to push the move through. The next presidential elections are not due until 2020.
RWANDA
R.D.CONGO
Poor rains and withdrawal of aid by donors have hit the economy hard
possibly at the International Criminal Court (ICC). African countries at the UN sought to stymie those efforts in September,andaskedforthegovernment to engage in dialogue with the UN. In October 2017, Burundi became the first country in the world to withdraw from the ICC, which opened a Burundi probe in November. Burundi’s domestic political problems are also hurting its foreign policy. In 2017, the European Union announced it would no longer pay the salaries of some 5,500 Burundi peacekeepers in Somalia through Bujumbura’s coffers. As a result, President Nkurunziza announced his plans to withdraw the soldiers.
Lake Kivu
rebel leader Agathon Rwasa of the Forces Nationales de Libération has given up the armed struggle and is urging the government to agree a political solution to the impasse. Meanwhile, CNARED remains the strongest opposition group among those in exile. Burundi is on the international radar, but mediation efforts have failed as the government refuses to talk with anyone involved in the 2015 violence. A 2017 United Nations (UN) Commission of Inquiry said it believed the government had committed crimes against humanity since 2015 and that high-ranking Burundian officials should face justice,
Spurred by poor harvests, inflation hit a 2017 peak of 21.1% year on year in March 2017. With European aid cuts and sanctions on some senior officials, the government has increased its spending levels beyond a sustainable level and raised taxes on consumer staples. In 2017, nearly 3 million people were in need of food aid. Cash crops such as coffee and tea are essential to the economy and account for the majority of its foreign exchange. Coffee bean production rose in 2017 to 71,000tn from 67,000tn in 2016, according to government statistics. In early 2017, tea production replaced coffee as the country’s chief export, with 3,495tn produced in the first four months of the year. A lack of foreign exchange led to regular fuel shortages in the country in the early parts of 2017. The country needs investment to increase electricity provision and spur growth, but little new investor money is going into Burundi due to political uncertainty.Theminingsectoralsoneeds more power to allow several projects to go ahead. In the meantime, some small projects are being launched. In July, a rare earths mine was commissioned at Gakara, near Bujumbura, by LondonlistedRainbowRareEarths.Thecompany says they will be able to produce 5,000tn per annum for the next 25 years.
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EAST AFRICA
COUNTRY 145 PROFILES
COMOROS
Assoumani the negotiator Electricity and other infrastructure deficits are holding back the economy
P
resident Azali Assoumani plans to put huge issues up for discussion at a forthcoming national conference. The conference’s goal is to analyse the successes and troubles of the coup-prone Comoros islands’ 42 years of independence. Including members of civil society and political parties, the conference will make recommendations on improving governance and will discuss the rotating presidency and other elements of the 2001 constitution that brought more stability to the country. That national conference process is a fraught one due to the country’s politics. Assoumani, who was elected in 2016 for a five-year term, has fallen out with former ally and former president Ahmed Sambi. There were fisticuffs between Azali and Sambi supporters in parliament in April 2017. In July, Sambi was critical of the government’s handling of the conflict between Qatar and Saudi Arabia, as Sambi had sought to bring the Comoros closer to countries in the Gulf during his presidency from 2006 to 2011, and Assoumani cut off diplomatic ties with Qatar in June. The two leaders had formed an alliance for the 2016 elections, and Assoumani sacked the members of Sambi’s Juwa party from his government in July. The parliament is currently investigating a programme launchedunderSambithatallowspeople to pay for Comorian citizenship amidst worries that the programme may have helped international terrorist networks. FRANCE AND MAYOTTE
Assoumani has had other difficulties with his own allies. The presidential majority temporarily blocked the 2017 budget in December 2016 over concerns about relations between the federal government and those of the country’s islands. THE AFRICA REPORT
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MORONI
Indian Ocean
COMOROS Mutsamudu
NDZUANI (ANJOUAN)
MWALI (MOHELI)
Dzaoudzi
ELECTRICITY AND ROADS
MAORE (MAYOTTE) (France)
30 km
Population: 0.8 million Population growth: 2.3% GDP per capita: $777 Life expectancy: 63.6 Adult literacy: 77.8 Inflation: 2% Human development index (out of 188 countries): 160 Foreign direct investment: $8m Current account as % of GDP: -9.5% Mobile phone penetration: 57.7% Key export: Cloves Last change of leader: 2016 GDP growth (%)
2.2 1
3.3
4
GDP ($bn)
0.6
0.6
0.7
0.7
2015
2016
2017*
2018*
*Estimation October 2017
A national conference will debate key issues like the rotating presidency
weak electricity generation capacity continue to limit economic growth. The government says it is going after ghost workers and other forms of corruption in order to reduce costs. The impact of the government’s poor finances spilled over into the field of education in 2017, with teachers’ strikes over salary arrears.
NGAZIDJA (GRANDE COMORE)
Relations with France remain tense over the Mayotte archipelago’s 2009 decision to become an overseas department of France. However, recent talks in 2017 sought to improve ties. In late 2017, Paris was due to begin issuing free visas for Comorians seeking to go to Mayotte, in large part to fight against people-trafficking. The authorities in Mayotte have been opposed to such a move, saying that it will encourage massive flows of immigrants. The French government delayed the launch of the programme indefinitely in September. The poor management of government spending and the country’s
D E C E M B E R 2 017- J A N UA R Y 2 018
The government inaugurated a 14MW power plant in February 2017 on Grande Comore that should put an end to regular blackouts. India’s Bharat Heavy Electricals is also building a 18MW plant at Grande Comore’s capital of Moroni. Only about half of the population has access to electricity, and the government is now looking into projects that could generate up to 50MW from geothermal sources. Aid from the government of Abu Dhabi is to be used to improve the management of state utility, MA-MWE. While the government made electricity a priority in 2016, it focused on roads in 2017. It targeted construction and rehabilitation projects covering some 900km of roads. The World Bank has promised to deliver a programme of $80m in aid to the government over the next four years targeting agriculture, energy, health, tourism and transport. Comoros joined the Southern African Development Community in August of 2017 and hopes to attract more investment from countries in the region. Tanzanian company Vigor signed deals in the tourism and retail sectors with the government in 2017. A second telecoms operator, Telma, launched its operators in the country in December 2016, injecting new activity into the sector and competing with Comores Telecom. An agreement was finally reached on network interconnections in 2017, and the decision will give consumers more choice between operators. The government in Moroni also hopes that oil could be a big boost to the economy, but the current price environment means that companies remain conservative with their exploration budgets.
146 COUNTRY PROFILES
EAST AFRICA
DJIBOUTI
Geostrategic calculations
A Chinese naval base and huge loans show the growing closeness with Beijing
P
resident Ismail Omar Guelleh’s government is pushing the country’s infrastructure development at breakneck speed to coincide with Ethiopia’s industrialisation, but in doing so has racked up debts that the economy will struggle to pay back. And despite previous pronouncements about loosening his authoritarian hold on the country and preparing his retirement, Guelleh shows no sign of intending to do either. He has again said that this current term will be his last. Having removed presidential term limits in 2010 and won the 2016 presidential election, Guelleh sees few threats to his longevity on the political front. He has outmanoeuvred the Union pour le Salut National (USN) and his government is regularly criticised by local and international human rights groups for arbitrary arrests and limiting political freedoms. USN leader Ahmed Youssouf died in September 2017, and so the opposition is searching for new leaders. The opposition has been divided and talks are ongoing about how best to organise for legislative elections planned for 2018. Islamist parties put in a strong showing in the 2013 elections, and since then the government has tightly controlled the religious sphere, paying imams and choosing messages to be delivered. ETHIOPIA LINKS
The year 2017 was one for ribbon cutting ceremonies and 2018 will be a year of consolidating gains. The government launched an expansion of the Doraleh port to rival the one at Djibouti in May, and that was followed by the opening of a port for the export of Ethiopian potash and another for the salt trade. The new rail line linking Djibouti to the Ethiopian capital of Addis was due to begin commercial operations in late
ETHIOPIA
DJIBOUTI
Gulf of Aden
DJIBOUTI SOMALIA
30 km
Population: 1 million Population growth: 1.6% GDP per capita: $2,040 Life expectancy: 62.3 Adult literacy: ND Inflation: 3% Human development index (out of 187 countries): 172 Foreign direct investment: $160m Current account as % of GDP: -21% Mobile phone penetration: 38% Key export: Gold Last change of leader: 1999 GDP growth (%)
6.5
6.5
JOBS FOR THE MASSES
7
7
GDP ($bn)
1.7
1.9
2.1
2.3
2015
2016
2017*
2018*
*Estimation October 2017
New ports were opened in 2017, but unemployment remains a big challenge
city, which accounts for the majority of the population and economic activity. Much of the investment in new transport projects is coming from China, which opened its first foreign naval base in Djibouti in July 2017. The closeness is set to continue as the government backs new road projects, a desalination plant and the construction of housing units. China Civil Engineering Construction Corporation was due to build new airports at Ali Sabieh and Seven Brothers Islands, but the government announced in October that it is seeking new contractors for the projects. Chinese contractors also launched work on a 48km² free trade zone in January 2017 that is part of China’s ‘One Belt, One Road’ programme to build up trade ties.
YEMEN
ERITREA
2017, and ties between the two countries were strengthened with the June start of a $327m project to transport drinking water from Ethiopia to Djibouti. Despite Djibouti’s desire to become an East African logistics hub, it is ranked 154th out of 190 countries in the World Bank’s2018DoingBusinessrankings.The government wants to encourage more investment and help more companies become legally established, as the majority of the country’s companies are said to operate informally. On the government’s agenda is a decentralisation programme that is intended to spread development and take some pressure off of the capital
Growth levels continue to be high, but Djibouti’s debt levels have skyrocketed since 2014, with the government having sourced Chinese loans to build the rail line and other projects. The International Monetary Fund (IMF) warns that Djibouti is at a high risk for debt troubles. Government debt now stands at more than 85% of gross domestic product. Debt levels are predicted to remain at about the same level at least until 2021. While investment in transport infrastructure boosts headline growth, it is not transforming the economic base, bringing people out of poverty or creating jobs for the masses. As a result, the government has made issues like social housing and employment the centre of its platform for this term. The government is counting on Ethiopia, which plans to become a major electricity exporter to the region. The state utility currently sources 80MW from Ethiopia. The government’s plans for the nascent free trade zone include a 3,700MW power plant. In September, the government signed a deal for a 60MW solar plant with the Africa Finance Corporation to be built at Goubet. Elsewhere, a drilling programme is due to determine if a geothermal plant with 100MW capacity can be developed.
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EAST AFRICA
COUNTRY 147 PROFILES
ERITREA
Regional ructions Red Sea
SUDAN
ERITREA
Mining and health are bright spots for the politically isolated country
FEWER OPTIONS FOR MIGRANTS
Eritrea’s migration crisis continues to attract attention from the European Union (EU), which is searching for new ways to limit migrant flows from Africa. The controversial Khartoum Process, which sees the EU give funding to countries including Sudan and Eritrea, has been met with strong opposition from human rights activists. The EU named Josep Coll i Carbó as the new head of its delegation to Eritrea in August. He will have a tough job to balance human rights concerns with demands THE AFRICA REPORT
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YEMEN
ASMARA
W
ith the regime seeking to maintain the domestic status quo for as long as possible, Asmara is looking to make more gains on the international stage in 2018. Eritrea is ratcheting up its role in Saudi Arabia’s onslaught on Houthi rebels in Yemen. President Isaias Afwerki is proving to be a useful ally by providing naval and air bases. Over the next year, Eritrea’s involvement in the conflict is set to win the country, which is one of the most isolated in the world, the favour of powerful allies. Neighbouring Ethiopia is wary of Eritrea and is reported to be lobbying Saudi Arabia for closer military cooperation withDjibouti andSomaliland,which are closely aligned with Addis Ababa. Relations with Ethiopia will continue to be strained over territorial issues. Elsewhere in the region, tensions between Eritrea are Djibouti hit fever pitch in June 2017 when Qatar withdrew peacekeepers from the borderlands that had been in place since a brief 2010 border conflict. After the peacekeepers left, Asmara sent troops to occupy the peacekeepers’ positions. An African Union team went to the area, and is expected to issue a report by the end of the year.
mining projects are going ahead. The Asmara gold project, owned by China’s Sichuan Road and Bridge Group, is unlikely to have begun production by the end of 2017, as originally planned. New phosphate mines are expected to come online in 2018, with interest from Australian, British and Chinese firms in further exploration. The Colluli potash project, operated by Australian company Danakali, is set to begin production as a joint venture with the state company in 2019. Overall, though, the economic outlook is bleak with high budget deficits resulting mainly from large military expenditure and a large social safety net. The government hopes to attract more tourists to the capital, Asmara, after it was named a UNESCO World Heritage Site in 2017. Currently, very few tourists visit the country.
SAUDI ARABIA
Assab ETHIOPIA DJIBOUTI
200 km
Population: 5.1 million Population growth: ND GDP per capita: $901 Life expectancy: 64.2 Adult literacy: 73.8% Inflation: 9% Human development index (out of 188 countries): 179 Foreign direct investment: $52m Current account as % of GDP: 0.7% Mobile phone penetration: 7% Key export: Copper ore Last change of leader: 1993 GDP growth (%)
4.8
3.7
3.3
TIGHT GRIP AT THE TOP
3.6
GDP ($bn)
4.7
5.4
6.1
6.9
2015
2016
2017*
2018*
*Estimation October 2017
Isaias seeks to profit from disputes to maintain the domestic status quo
from Brussels that migration flows be reduced. With the civil war in Libya and searing anti-immigrant rhetoric in Israel, there are fewer options for those fleeing indefinite military service in Eritrea. With the economy stalled by the migration crisis and sanctions, the mining sector has thrown the ruling People’s Front for Democracy and Justice a lifeline. Canadian company Nevsun Resources continues to operate the only active mine in the country, which exports copper ore, but a Canadian trial began in 2016 against Nevsun, as several Eritreans have complained of forced labour at its Bisha mine. Other
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There remains no significant domestic opposition to Isaias, and the President’s grip over the country is as tight as ever. Members of the diaspora are ratcheting up tensions. Isaias’s right-hand man and key political adviser, Yemane Gebreab, was assaulted on the streets of Rome in July by the family of a migrant who died in a shipwreck. Isaias’s inner circle is thought to include Abraha Kassa, the head of national security; Colonel Tesfalidet Habteselassié, the head of the presidential body guard; chief of staff Major General Philipos Woldeyohannes; and Brigadier General Tekle Kifle. Rumours of Isaias’s ill health continue to swirl but remain difficult to substantiate. The country is facing a severe drought, with long queues for water and fuel and food shortages reported. However, slightly better rains have improved the agricultural production outlook. The government invests in health programmes, and Eritrea has made major progress on infant and maternal mortality. In August, the World Bank named Eritrea as one of only two African countries that are prepared to deal with a global pandemic.
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EAST AFRICA
ETHIOPIA
EPRDF under pressure
E
thiopia continues toexperience unprecedented changes both economically and politically since widespread anti-government protests engulfed much of the restive Oromia and Amhara regions, which also spread to some other locations in the south later on, in November 2015. The protests that started in Oromia originally as a call for an end to the government’s encroachment of farmers’ lands later evolved into a much wider demand that included a call for respect for political freedoms, the release of opposition figures held in prison and in some cases the establishment of a transitional government. The central government has struggled to quell local conflicts. Violent clashes continued in Oromia in October 2017, after a border conflict between Oromia and Somali regional states broke out in September. The conflicts have been localised but suggest a weakening of central authority. Parliamentary speaker Abadula Gemeda, a former president of the Oromia region, resigned from his post in October, saying the Ethiopian People’s Revolutionary Democratic Front (EPRDF) government has disrespected the people of Oromia. CORRUPTION SHOCKWAVE
This has introduced uncertainty into the politics of the ruling party and drawn more attention to the Tigray dominance of the EPRDF through the Tigrayan People’s Liberation Front. The EPRDF is due to hold a national conference in March 2018 in order to plot its way forward for the next few years. The Oromia and Ahmara conflicts had seemed to be easing. The government had declared a state of emergency in October 2016, and it brought calm to many areas. It was lifted at the beginning
DJIBOUTI
ADDIS ABABA
Gulf of Aden SOMALIA
Dire Dawa
ETHIOPIA
SOUTH SUDAN
300 km
The government continues to lock up prominent opposition politicians, and it is one of the major issues the wider public wants the government to address. Merera Gudina, a prominent Oromo politician, was put behind bars under the state of emergency for meeting with individuals labeled as ‘terrorists’ by the government. Meanwhile, Jawar Mohammed, an Oromo online activist, has continued to be a headache for the government after he managed to orchestrate successful campaigns at home from his base in the United States.
YEMEN
SOMALIA
KENYA
Population: 105 million Population growth: 2.5% GDP per capita: $861 Life expectancy: 64.6 Adult literacy: 49.1% Inflation: 8.1% Human development index (out of 188 countries): 174 Foreign direct investment: $3.2bn Current account as % of GDP: -8.3% Mobile phone penetration: 51% Key export: Coffee Last change of leader: 2013 GDP growth (%)
DISCONTENT CONTINUES
10.4 8
8.5
8.5
64.7
72.5
79.7
87.3
2015
2016
2017*
2018*
GDP ($bn)
*Estimation October 2017
New industrial parks will help boost manufacturing’s share of the economy
Red Sea
SUDAN
The government is struggling to manage a number of local conflicts
of August 2017. The government is discussing a round of reforms in light of the recent unrest (see box). Meanwhile, the government is clamping down on high-level officials in every sector to fight corruption. The measures are expected to expand well into 2018, especially in the regions and within the private sector. This is already sending a shockwave across the business community, and some businessmen have begun fleeing the country. In August, the authorities arrested minister of state for finance Alemayehu Gujo on corruption charges, the most highprofile corruption case recently.
The northern Amhara region has been problematic for the government. The authorities have carried out mass arrests in towns and cities across the region, but discontent continues and calls are increasing for the release of those who have been put behind bars. Reports of grenade attacks have become increasingly common as the security forces struggle to maintain control. Ethiopia, a country of more than 100 million people, is bordered by countries with security challenges: Sudan, South Sudan, Somalia and Eritrea. Tensions are due to remain high between the governments of Addis Ababa and Asmara, as both countries continue to sponsor rival rebel groups in their border areas. Ethiopia has been one of the best performing economies in Africa for the better part of the past decade, and that trend is likely to continue despite pockets of drought. However, in recent demonstrations, protesters have attacked businesses, and some are yet to restart operations. The hotel and tourism sector isnowseekinghelpfromthegovernment. Recently, the government has and will continue to focus on setting up industrial parks, building railway lines and finalising the massive Grand Ethiopian RenaissanceDam(GERD).TheHawassa, Mekelle and Bole Lemi industrial parks are in operation. Hawassa, devoted to textiles and apparel companies, already employed 10,000 people in late 2017 and has the capacity to host 60,000 workers.
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149
HYDROPOWER, WIND PROJECTS
The 6,450MW GERD project, which according to the government was 62% completed in October, is a priority project to boost generation capacity and create electricity for export. Despite Egypt’s complaints that the dam will reduce its share of water from the Nile River, the construction by Italian construction
Manufacturing, value added (% of GDP)
8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0
SOURCE: WORLD BANK
At least seven other parks are expected either to commence operations or start construction in 2018. The government wants these parks to serve as major attractions for world-class manufacturing companies, and also serve as places where agro-industrial processing activities can take place on a much bigger scale. If things go according to plan, the manufacturing sector’s share to the gross domestic product will rise from the current 5.4% to 8% by 2020. The government devalued the birr currency by 15% in 2017 in order to make its manufactures and other exports more competitive. Railway lines stretching across the country are also due to be built within the next five years, and a number of them are currently under construction. The crucial Addis Ababa-Djibouti rail line was due to begin commercial operations in late 2017, and that will be a key component in bringing down the cost of doing business. Several of the new industrial parks are along that transport corridor.
1985 1990 1995 2000 2005 2010 2015
Railway lines stretching across the country are due to be built within the next five years, with a number now under construction firm Salini is progressing. No timeline has yet been provided for its completion. Contractors completed work on a $1.6bn hydroelectric dam on the Omo River in December 2016 that increased Ethiopia’s electricity output to 4,238MW. The government’s goal is to more than triple that by 2020 with geothermal, hydropower and wind projects. A consortium led by Italy’s Enel is due to sign a contract for a 100MW solar project worth $120m at the end of 2017. Mining is an area seeing heightened activity. Circum Minerals is working on developing the Danakil potash
deposit, which is estimated to contain 4.9bn tonnes of potassium, used in fertilisers. The company received its mining licence in March 2017 and neighbouring Djibouti opened up a new port for Ethiopian potash exports at Tadjourah in June. Coffee is a key export earner, and production for the 2017/2018 season is predicted to be stable, at around 393,000tn. The Coffee and Tea Development and Marketing Authority is rolling out more extension activities to help meet the government’s overly ambitious target for production to reach 1m tonnes by 2020. Poor weather is hurting the production of other crops. The government has been investing in new sugar plantations and processing plants, but the Ethiopian Sugar Corporation reported in October that the country missed its target for the 2016/2017 season of 500,000tn and instead produced just 350,000tn, leading to shortages. The government restricts the activities of foreign companies in the economy, preferring to grow local businesses. There have been no recent signs of opening up the telecoms and banking sectors, which hold great interest for the banks and telecoms companies of the continent and beyond but are dominated by state-run companies. Local sources have reported that those sectors may soon be opened somewhat to foreign actors.
Doubts about dialogue OPEN AND FRANK DIALOGUE among opposing political groups in Ethiopia is rare, if not unheard of. However, a glimmer of hope has been emerging after the country experienced massive anti-government protests beginning in November 2015 that left more than 600 people dead. One of the pledges the ruling Ethiopian People’s Revolutionary THE AFRICA REPORT
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Democratic Front (EPRDF) made right after the protests was to conduct a wide range of reforms, set to be in place before the country’s 2020 general election. But challenges remain. Observers say the dialogue is moving at a snail’s pace after disagreement emerged over choosing moderators, which reduced the number of opposition parties taking
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part in the dialogue from 21 to 16. In April, the parties finally agreed on the moderators, but the process which started in January 2017 has gone nowhere. According to the parties involved, governance, economic participation, political space and youth employment are expected to take centre stage, as well as reforms to the electoral
law. In Ethiopia’s last general election in 2015, the ruling party won all of the 547 seats in parliament. Oppositionists say the EPRDF uses its hegemony to weaken those opposed to it, and that releasing political prisoners is an important first step for the government to show it is committed to making deep reforms rather than superficial ones.
150 COUNTRY PROFILES
EAST AFRICA
KENYA
Recovery mode SOUTH SUDAN
Growth was barely affected by the recent political troubles
UGANDA
K E N YA
K
APPEASING THE OPPOSITION
Kenyatta’s lack of legitimacy in huge swathes of the country will pose serious problems for his administration over his second term. He will soon be reaching out to opposition areas. Kenyatta will lean on the country’s devolution programme, which gives funding and authority to local governments, in an
Kisumu
RUTO IN THE WAITING ROOM
NAIROBI
TANZANIA
Mombasa
Indian Ocean
Population: 49.7 million Population growth: 2.6% GDP per capita: $1678 Life expectancy: 62.2 Adult literacy: 78% Inflation: 8% Human development index (out of 188 countries): 146 Foreign direct investment: $394m Current account as % of GDP: -6.1% Mobile phone penetration: 81% Key export: Black tea Last change of leader: 2013 GDP growth (%)
5.5 5.8
5
64
70.5
78.4
86
2015
2016
2017*
2018*
5.7 GDP ($bn)
*Estimation October 2017
enya’s government will hobble into 2018 after a year of prolonged political uncertainty that has left the country deeply divided. The year ahead will be spent trying to reduce tensions after two flawed electoral contests: a general election in August and a repeat presidential election in October. These events inflamed political tempers, leaving opposition figures bitter and millions of voters locked out of the electoral system. President Uhuru Kenyatta is set to focus less attention on regional and international issues and put more effort into affairs at home. Kenyatta’s electoral victory on 26 October was upheld by the Supreme Court, after it dismissed two legal challenges to the vote’s validity. Months earlier, the court had shockedthe world by annulling the 8 August election and ordering a new poll on the grounds that the electoral commission had committed “irregularities and illegalities”. Kenyatta cruised to a landslide victory, scoring 98% of the votes cast after the country’s main opposition coalition, the National Super Alliance (Nasa), boycotted the 26 October vote. This has created a major political chasm. In total, 12 million registered voters – out of Kenya’s population of 49 million people – did not go to the polls and voter turnout plummeted to 39%, the lowest in Kenya’s history. Voting did not take place in 25 of the country’s 290 constituencies.
Lake Victoria
election annulment, Odinga has taken up the cause of electoral justice. He is gearing up to retain his role as agitatorin-chief over the next year by holding rallies and challenging the governing Jubilee Party’s policies.
200 km
ETHIOPIA
SOMALIA
Kenyatta faces a difficult climate after 12 million voters failed to vote
attempt to appease the opposition. He is expected to trumpet the fruits of devolution and disburse outstanding payments to county governments in opposition strongholds such as Homa Bay, Kisumu, Mombasa and Siaya. Nasa has formed a civil disobedience arm known as the National Resistance Movement (NRM) that will work with local governments to build momentum for constitutional referendums that would limit the power of the executive. Long-time opposition leader Raila Odinga had said that this year’s election would be his last shot at the presidency. But in the months after the 8 August
Of particular interest over the year ahead will be Kenyatta’s relationship with deputy president William Ruto. The two men campaigned well together over the prolonged election season, but with Ruto’s eyes firmly fixed on succeeding Kenyatta, their alliance could splinter. Other key people to watch in the governing party include Mike Sonko, a rising star who was this year elected Nairobi’s new governor, and Aden Duale, the party’s chief whip in the national assembly. The ethnic makeup of the Jubilee Party, the fruit of a pact between Kenyatta’s Kikuyus and Ruto’s Kalenjins, is under strain as Kikuyu elements become less supportive of Ruto’s presidential ambitions. The looming replacement of Odinga as opposition leader will also see Nasa’s co-principals trying to rally their support bases. The economy was showing signs of a slight slowdown before the election period, and credit rating agency Moody’s could issue a downgrade off the back of inconsistent economicandfiscal policies. The government says it could issue a new eurobond to help it pay off some of its old loans. Public debt is expected to reach 54.7% of gross domestic production in 2017. The government has a cushion, should the economy take a hit, in the form of $1.5bn in stand-by arrangements with the International Monetary Fund. A prolonged drought resulting from the El Niño weather pattern is still hurting agricultural production. The government has estimated that crop yields will decline by 20% because of poor rains. Meanwhile, at least 3.4 million people are food insecure and 3.5 million people are in urgent need of safe drinking water, according to government estimates. Private-sector credit growth expanded by just 3.3% in the year to March 2017,
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151
LARGER PEACEKEEPING ROLE
The tourism industry is projected to grow by 6% per year over the next decade after a number of foreign embassies lifted travel warnings to popular coastal areas including Lamu and Mombasa. But the threat of terrorist attacks in north-eastern areas remains high. Kenya’s war against Al-Shabaab in Somalia prompted militants to launch
20
Kenya lending rate Interest rate cap implemented
SOURCE: KENYA CENTRAL BANK
according to the most recent data from the central bank. That is the slowest growth since 2005. Analysts blame the lending rate cap, which was introduced in August 2016 as a means to shore up support for the governing party ahead of the election. Experts are expecting new accounting rules for banks, forcing lenders to be even more selective. Mergers and acquisitions in the banking sector are also likely. Kenya’s businesses hope for more activity over the year ahead. The most recent high-profile acquisition was the $100m purchase of Kenya’s coffee shop chain Java House by Dubai-based private-equity firm Abraaj Group in July 2017. Kenya’s large business, mostly notably telecoms giant Safaricom, will pursue expansion strategies abroad. The stunning growth of ride-hailing app Uber in Kenya looks set to continue over the year ahead. Also poised for further growth are sports betting companies and fintech lenders.
13.86
15
10
09- 11- 01- 03- 05- 07- 09- 11- 01- 03- 0515 15 16 16 16 16 16 16 17 17 17
$2.1bn
Cost of the pipeline Kenya needs to transport its oil from Turkana to Lamu Port several cross-border attacks in 2017 in Garissa and Mandera counties. The war against Somalia’s Islamist rebels shows no signs of letting up. Kenya and Ethiopia will be forced to play a bigger role in the conflict over the next year because the African Union mission in Somalia is drawing down its forces. And, after years of threats, the government’s promise to close down the Dadaab refugee camp went unfulfilled. Kenya’s plans to become an oilproducing country in 2017 turned out to be premature. A local-content dispute between Kenyatta and Turkana county
governor Josphat Nanok was resolved in November, but experts believe it will be years before oil is pumped out of the ground. ThecompletionoftheChinese-funded standard gauge railway, linking the port of Mombasa to Nairobi, was celebrated with great fanfare in May 2017. The next stage of the project will take the railway to Kenya’s border with Uganda. Other planned infrastructure projects are still in the works. The Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) corridor is still on the cards. But Uganda’s decision to pump its oil through Tanzania, rather than Kenya, has forced Nairobi to turn to new partners to fund a $2.1bn pipeline to transport its oil from Turkana to Lamu Port. In October, the government signed a deal with British company Tullow Oil and its exploration partners Africa Oil and A.P. Moller-Maersk. Mombasa’s port performed well despite political uncertainty. The amount of cargo handled at the port rose by more than 10% over the first nine months of 2017 compared with the same period the yearbefore.Theport’sincreasedhandling capacity and the launch of the standard gauge railway are behind the growth. Kenya has been trailing behind some of its peers in attracting manufacturing investment. However, in May Swedish company Volvo said that it will soon begin assembling vehicles in Kenya.
Eastbound and down THE YEAR AHEAD for the East African Community (EAC) is set to be rudderless as the bloc’s most influential leaders focus on domestic problems. Kenya’s President Uhuru Kenyatta and Tanzania’s President John Magufuli are both struggling to contain mounting opposition movements. Worse still, a growing trade spat between Kenya and THE AFRICA REPORT
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Tanzania could damage East Africa’s dream of regional integration. In November, Tanzania’s government burnt 6,000 chickens that had been illegally imported from Kenya, and auctioned more than 1,300 cattle that had crossed the border. That response goes against EAC legislation. Now, more ambitious treaties that the EAC has long sought
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to implement – such as a monetary union and closer economic integration – look to be off the agenda for the next year at least. It looks doubtful that the bloc will raise the $1.3bn needed to implement its development strategy quickly. Other members of the bloc are unlikely to pick up the slack. Uganda’s President Yoweri Museveni, who is
chairman of the EAC, visited Brussels to hold talks with the European Union (EU) in November. The focus was the EU’s Economic Partnership Agreement with the EAC, which has stalled. But Museveni looks set to prioritise his drive to change the constitution in order to allow him another term in office over the development of the EAC.
152 COUNTRY PROFILES
EAST AFRICA
RWANDA
Kagame keeps going
The ruling party maintains a tight grip on political space and the economy
UGANDA
TANZANIA
The country needs billions of dollars for ambitious infrastructure plans
REGIONAL INTEGRATION
As a small, landlocked country inan often unstableneighbourhood,Rwandacounts foreign policy as a top concern. There are no signs of improvement in Kigali’s tense relationship with France, stemming from a renewed French investigation into the shooting down of a plane that kicked off the 1994 genocide. Political uncertainty in the DRC and Burundi are also of concern in case refugee numbers begin to rise. Rwanda is a big backer of regional
DEM. REP. OF CONGO
Lake Kivu
KIGALI
R WANDA
BURUNDI
50 km
Population: 12.2 million Population growth: 2.4% GDP per capita: $754 Life expectancy: 64.7 Adult literacy: 70.5% Inflation: 7.1% Human development index (out of 188 countries): 159 Foreign direct investment: $410m Current account as % of GDP: -10.2% Mobile phone penetration: 70% Key export: Niobium Last change of leader: 2000 GDP growth (%)
5.9
6.2
6.8
8.3
8.4
8.9
9.4
2015
2016
2017*
2018*
8.9 GDP ($bn)
CALLING INVESTORS
*Estimation October 2017
W
ithhisvictoryintheAugust 2017 presidential election and removal of term limits,PresidentPaulKagame cemented his political dominance and opened the way to stay in power until at least 2034. After independent candidate Philippe Mpayimana scored less than 1% of the vote, Kagame and his allies in the Rwandan Patriotic Front (RPF) see no political threats on the horizon. The government tightly controls the political space and stifles dissent. In March 2016, a military high court sentenced Colonel Tom Byabagamba and Brigadier General (retired) Frank Rusagara to 21 and 20 years in prison on charges including insurrection. Rights groups argue that the charges were politically motivated. Byabagamba had said the government was responsible for the suspicious deaths of people voicing critical opinions. That leaves the economy as the government’s main focus for the new presidential term. Kagame appointed a technocrat, former World Bank special adviser Édouard Ngirente, as prime minister in September 2017, putting a stop to naming members of the so-called opposition to the post. Job creation and major infrastructure projects are two of the priorities for Kagame’s government.
climb the rankings of business tourism destinations and a slate of new hotels are due to open soon. RwandAir also now flies to 26 destinations across Africa, Europe and Asia. Work is ongoing for a $800m new airport for the capital city. Tourism generated $404m from 1.3 million visitors in 2016, and revenue is expected to climb to $460m in 2017. Since the commodity crunch began a few years ago, the government has been calling for a boost to exports and a reduction in imports. Local manufacturers complain, however, that the cost of transportation and electricity remain high. The Kigali special economic zone, set up in 2013, is a crucial part of the country’s manufacturing drive and seeks to address some of those problems. The government had set a highly ambitious target of having a new standard-gauge railway built to link Kigali to the East African coast by 2018, but it has not been able to attract the financing.
integration within the six-member East African Community to make its small market attractive. It declared Kiswahili its fourth official language in 2017. Low commodity prices are hurting export revenue, but the economy is predicted to continue growing at a rapid pace. Agriculture is a key sector because of the number of people it employs, and the International Monetary Fund estimates that revenue from tea and coffee exports should rise from $121.9m in 2016 to $151.1m in 2017. Mining and tourism are two other major sources of foreign exchange for the economy. Rwanda continues to
A gas-to-power project on Lake Kivu is expected to produce 100MW by 2020. The government wants to boost electricity generation capacity from 190MW to 563MW by the end of the 2017/2018 fiscal year, but again it needs to secure billions of dollars of financing. Because of the evidence of Rwanda’s developmental progress, donors are looking to devote their money to countries with bigger problems and populations. Kagame also wants to end aid dependence. The finance ministry estimates that just 17% of the 2017 budget will come from donor funds. Rwanda’s debt is approaching 45% of gross domestic product, and the World Bank and International Monetary Fund are advising the government to slow down its borrowing and focus on making the private sector the engine of economic growth. Crystal Ventures, the RPF’s investment vehicle, is charged with kickstarting this process. The government is now working on a new planning document to help the country reach upper middle-income status by 2035.
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EAST AFRICA
COUNTRY 153 PROFILES
SEYCHELLES
Cool with cohabitation VICTORIA
The national budget is in surplus and tourist numbers are rising
P
MAHÉ
MAHÉ
Indian Ocean
10 km
olitics continues to take a more consensual tone in the Seychelles since Parti Lepep’s Danny Faure took over the country’s presidency from James Michel, and opposition leader Wavel Ramkalawan’s alliance won a majority in parliament in September 2016. Faure promised unity and reconciliation when he took power, and in June 2017 he ended a 24-year tradition when he chose not to stand in the election for party leader of the governing Parti Lepep, with the aim of distancing his role as president from partisan politics. Faure’s party now has to work with the four-party opposition alliance Linyon Demokratik Seselwa, which includes Ramkalawan’s Seychelles National Party (SNP), which won the majority in the national assembly for the first time in 40 years last year. Whereas Ramkalawan used to be the government’s harshest critic, he says that he appreciates Faure’s consensual style. The national assembly created the Committee on Truth, Reconciliation and National Unity to help Seychellois deal with the long-term divisions created by the 1977 coup, the creation of a one-party state, and the reintroduction of multipartyism in 1993.
POVERTY LINGERS
Ramkalawan’s allies say his attacks on the government are expected to pick up as presidential elections approach in 2020. The SNP generally agrees with the government’s agenda but says that not enough is being done to help the poorest members of the population. According to the Household Budget Survey published in December 2015, 39% of the population lives below the poverty line, defined as R3,945 ($300) per adult per month. Ramkalawan also says that he THE AFRICA REPORT
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10 km
PRASLIN
LA DIGUE
150 km
Population: 0.1 million Population growth: 1.3% GDP per capita: $15,658 Life expectancy: 73.3 Adult literacy: 95.2% Inflation: 2.8% Human development index (out of 188 countries): 63 Foreign direct investment: $155m Current account as % of GDP: -15.6% Mobile phone penetration: 161.2% Key export: Tuna Last change of leader: 2016 GDP growth (%)
5
4.5
4.1
3.4
GDP ($bn)
1.4
1.4
1.5
1.6
2015
2016
2017*
2018*
wants to pass a constitutional reform that will stop a president from being able to hand over to a vice-president without provoking new elections, as was the case with Michel and Faure. The economy is growing strongly. Nonetheless, the government may accept a new International Monetary Fund (IMF) programme to help it with its reform agenda. The budget was on course to record a surplus of 2.5% of gross domestic product in 2017. Recent low commodity prices kept inflation at negative rates at the beginning of 2016, but with the rising trend in global fuel prices, inflation started to rise, reaching
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3.2% year-on-year in July 2017. The government is concerned about high levels of social spending and plans to increase thecountry’sretirementagefrom63to65. The economy is dependent on two main sources of income: tourism and fisheries. Visitor arrivals increased more than 21% as of July 2017, compared with the same period last year. In a bid to regulate the growth of the sector, the government introduced a ban on the construction of hotels with more than 25 rooms – which are largely owned by foreigners – in 2015. By 2017 it had approved 18 exceptions to that rule and said it expected the measure to be in place until at least 2020. COMPETITION IN THE SKIES
*Estimation October 2017
Faure and Ramkalawan seem happy to work together on joint projects
Airlines are flocking to the Seychelles. British Airways has announced plans to add twice-weekly direct flights from LondonHeathrowinMarch2018,andAir France will begin operating thrice-weekly direct flights from Paris Charles de Gaulle using its recently launched sister airline Joon from May next year. While others cash in on the growth, national carrier Air Seychellesisstruggling,andtheincreased competition from big European carriers will not make it any easier. The government is investing in other transport infrastructure to spur trade. A $107m project is under way to expand the country’s main port at Victoria. With an estimated 793m barrels of oil beneath the Seychelles ocean floor, the oil industry holds promise for economic growth. Japan’s JOGMEC is currently the only company engaged in active exploration after two firms suspended their activities early last year. Patrick Joseph, the new head of state-owned oil company PetroSeychelles, is prioritising attracting investment. The leak of offshore documents known as the Paradise Papers has drawn more negative attention to the offshore finance industry in the Seychelles. The IMF says that the government needs to do more to improve regulation of the offshore sector and to fight against money laundering and tax evasion.
154 COUNTRY PROFILES
EAST AFRICA
SOMALIA
The trials of Farmaajo The government has not been able to address the country’s security threats
Hargeysa
Famine has likely been averted, but many people still need humanitarian aid
ETHIOPIA
A
BALANCING ACT
The rendition crisis highlights numerous faultlines in the government. Farmaajo is seeking to manage public distrust of Ethiopia, the so-called meddling ‘big brother’, while also managing the uncomfortable reality that Addis is an essential security partner. Ethiopia can flex its muscle by simply
SOMALIA KENYA
Indian Ocean
MOGADISHU
200 km
Population: 14.7 million Population growth: 2.9% GDP per capita: ND Life expectancy: 55.7 Adult literacy: ND Inflation: ND Human development index (out of 188 countries): ND Foreign direct investment: $339m Current account as % of GDP: -11.1% Mobile phone penetration: 58% Key export: Live goats Last change of leader: 2017 GDP growth (%)
3.6
3.2
2.4
3.5
GDP ($bn)
6.1
6.3
6.5
6.8
2015
2016
2017*
2018*
REVENUE MUST RISE
*Estimation October 2017
midst deadly bombings in the capital – two truck bombs killed more than 300 people in Mogadishu in October – and other security challenges, Somalia faces a tumultuous 2018. The fragile state struggles to overcome numerous crises and prepares for the withdrawal of troops from the African Union (AU) peacekeeping mission. Somalia remains one of the poorest countries in the world, languishing at the bottom of most United Nations (UN) indicator tables. The February 2017 election of Mohamed Abdullahi Mohamed, known colloquially as Farmaajo, sparked jubilation across the country. But Farmaajo, a US-passport-holding academic, is losing a lot of that public support as his government struggles to deliver on campaign promises. Security remains the government’s top priority. After more than a decade, and amid decreasing European Union funding, AU troops are scheduled to start leaving in 2018. This will adversely affect Somalia’s stability if adequate measures are not in place to take the fight to the Islamist rebels of Al-Shabaab, which still freely operates outside major towns. In September, the government handed Abdikarin Sheikh Muse – a senior figure in the ethnic Somalian Ogaden liberation movement in Ethiopia – to the authorities in Addis Ababa. People accused the government of betrayal.
region, as its re-emergence in the Horn is a serious cause for concern for Ethiopia. The federal government and Somalia’s states – which have an increasingly tense relationship with Mogadishu – are working on plans to integrate regional militias into the national army and police. Concerns over factionalism in the security forces remain. After an extended period without any pirate attacks, there were a couple in March and April 2017. After security comes the economy. Somalia has $5.1bn in external debt and has few prospects to pay it back soon. This limits government borrowing from international financial institutions. Some progress is being made in meeting basic requirements for the International Monetary Fund and the World Bank to write off debt, but the government needs to meet targets through improved financialmanagementandrevenuecollection.
DJIBOUTI
withdrawing its soldiers from key positions that in the past saw Islamist group Al-Shabaab swiftly retaking towns. There are other important foreignpolicy challenges. The Gulf Cooperation Council (GCC) split in 2017 is an ongoing diplomatic and economic problem as some GCC countries view Somalia’s ‘neutral position’ as tacit support for Qatar. The United Arab Emirates’ desire toexpandcontrol of Somaliportsthrough DP World may also fuel tensions and could further divide Somalia’s states by pitting them against the federal government. Egypt’s recent diplomatic forays in Somalia could also spark turmoil in the
The National Communications Act, which passed in August 2017, was a major achievement that aims to open up new avenues for much-needed revenue. According to the World Bank, the federal government only collects revenue in the range of 1-2% of the country’s $6bn gross domestic product, whereas other countries in the region collect on average about 13%. Officials face the major challenge of encouraging the business community to participate in the formal economy, so improving the telecommunications regulatory framework will be critical to generating income. The government had also talked up plans about holding a new oil licensing round in 2017, which may now be held in 2018. Also on the agenda is the reintroduction of the shilling currency to reduce reliance on the US dollar. Agricultural production remains erratic. The UN warned early in 2017 that the country was heading for another famine and that an estimated 6.2 million people were in need of humanitarian assistance. But rains picked up by the middle of the year, suggesting that a famine would likely be averted.
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EAST AFRICA
COUNTRY 155 PROFILES
SOUTH SUDAN Crushing crises CAR
T
his was supposed to be the year that a transitional governance arrangement would end. Instead, 2018 is now expected to be a year of continuing economic, political and humanitarian crises. The government in Juba has not been able to quell rebel forces angered by the ruling party’s authoritarian tendencies. The transitional government, initiated in a 2015 peace accord overseen by the Intergovernmental Authority on Development (IGAD), was meant to end the fighting in the new country, bringing the warring parties together in a 30-month arrangement that would lead to elections before President Salva Kiir’s mandate expires in April 2018. Salva led the government with rebel leader Riek Machar, his immediate deputy, but the arrangement fell apart in July 2016, leading to Riek fleeing the country. Riek’s rebellion has weakened and fractured, presenting more of a local than a national threat. Neither Riek nor Kiir are under international sanctions. NEW REBEL GROUPS
There were heightened military conflicts in 2017 as armed groups sprouted up in Southern Equatoria Region and with pockets of opposition in the north. Disputes between the Dinka, Nuer and other ethnic groups have contributed to the proliferation of armed groups. Some government and military leaders have fled the country and called for armed rebellion against Salva. Others are fighting it out on the ground. The army’s former deputy chief of staff, Thomas Cirillo Swaka, now leads the newish National Salvation Front rebel group. About two million people have already fled as refugees and two million more are in camps for internally displaced people. And with the peace agreement THE AFRICA REPORT
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SUDAN
ETHIOPIA
Famine has been avoided, but half the population are severely food insecure
CHAD
SOUTH SUDAN JUBA
KEN.
DRC UG.
200 km
Population: 12.6 million Population growth: 2.9% GDP per capita: $222 Life expectancy: 56.1 Adult literacy: 31.9% Inflation: 182.2% Human development index (out of 188 countries): 181 Foreign direct investment: -$17m Current account as % of GDP: 1.7% Mobile phone penetration: 22% Key export: Petroleum and crude oil Last change of leader: 2011 GDP growth (%)
-0.2
-13.8
-6.3 -3.5
GDP ($bn)
12.5 2015
3.1
2.9
3.1
2016
2017*
2018*
in tatters, the countries of the region are again trying to restart the peace process. That is a more complicated task than before, as they seek to deal with the many different armed groups that have emerged. The United Nations (UN) has warned that disjointed international efforts are helping to prolong the conflict, as countries in the region pursue their own interests. Elections are still scheduled for late 2018, but the UN warns that the country risks falling deeper into conflict if a litany of problems are not addressed before then. IGAD agreed to send a 4,000-strong peacekeeping force to Juba
D E C E M B E R 2 017- J A N UA R Y 2 018
in 2016, which was delayed. In May, Salva declared a unilateral ceasefire after announcing a national dialogue initiative, but the truce has not held and military operations have continued. While Riek remains under house arrest in South Africa and has refused to disavow violence as a solution, Salva has been unable to stabilise the country. Mediators questioned Salva’s commitment to peace after an offensive against a rebel stronghold in August 2017, three months after declaring the unilateral ceasefire. Riek has said the transitional arrangement is meaningless and has called for peace talks outside the country. ECONOMIC STATISTICS ARE DIRE
*Estimation October 2017
There is no viable peace process on the table as rebel groups multiply
The economy has collapsed and oil output remains at less than one third of its pre-independence production levels. The International Monetary Fund estimates that inflation will remain in the triple digits. Foreign-exchange reserves in the central bank would last only for a week. A plan to increase oil production from 130,000 barrels per day in 2017 to around 350,000 is unlikely to bear fruit while fighting continues and the government spends huge sums on the war. An arms embargo championed by the US has not received support at the UN Security Council. Agricultural production in the southern region,the country’s breadbasket,has collapsed due to insecurity and drought. In 2017, a famine was declared in two counties in the north but was averted following a rapid response. About half the population of 12 million people remains severely food insecure. The situation is not likely to improve in the short term, as highways leading to the countryside have recorded a rise in ambushes. The government will continue to challenge the UN mission in the country. In August 2017, Juba ordered the regional protection force to leave the international airport and grounded all UN flights until they sought clearance. Meanwhile, criminality is on the rise and the government is restricting the space in which the media operates.
156 COUNTRY PROFILES
EAST AFRICA
TANZANIA
The rise of economic nationalism RWANDA
‘INFLAMMATORY SPEECH’
The main opposition party Chama cha Demokrasia na Maendeleo (CHADEMA) is coalescing around former prime minister Edward Lowassa, who has been busy establishing grassroots networks ahead of a likely 2020 run. CHADEMA is counting on its wounded chief legal adviser, Singida East parliamentarian
Lake Victoria
KENYA
Arusha
BURUNDI
DODOMA
C
owingtheopposition,thegovernment of President John Magufuli heads into 2018 with bolstered anti-corruption credentials and renewed infighting ahead of elections planned for 2020. The government’s plans for economic lift-off are tied to the development of big natural gas projects, but investors remain wary about committing to spend billions amidst Dodoma’s crackdown on the mining sector. Chama Cha Mapinduzi (CCM), Tanzania’s ruling party, is still reeling from the fallout from the 2015 election victory and is witnessing a reign of mistrust leading to an unprecedented purge of political cadres as President Magufuli seeks to firm his grip on the machinery that has governed the East African country since independence in 1963. Magufuli wants to be see as tough on corruption, but the opposition points out that he has principally been going after the allies and perceived supporters of his political opponents. Not everyone is keen on Magafuli’s bulldozing style. As the 2020 election fast approaches, the centre of the CCM is stretched by uncertainty with key young Turks challenging its leadership. Since Nape Nnauye’s sacking from the sports and information portfolio for investigating a raid on a media house, he has been increasingly outspoken, appealing to both sides of the political divide.
400 km
UGANDA
TANZANIA ZAMB.
MAL.
Dar es Salaam
Indian Ocean
Magufuli is cracking down on independent views among politicians
DRC
MOZAMBIQUE
Population: 57.3 million Population growth: 3.1% GDP per capita: $1,041 Life expectancy: 65.5 Adult literacy: 80.3% Inflation: 5.4% Human development index (out of 188 countries): 151 Foreign direct investment: $1.4bn Current account as % of GDP: -5.6% Mobile phone penetration: 74% Key export: Gold Last change of leader: 2015 GDP growth (%)
7
7
6.5
6.8
GDP ($bn)
45.6
47.7
51.6
56.6
2015
2016
2017*
2018*
Magufuli rose to power promising industrialdevelopment,astandardgauge railway and upgraded ports and roads. So far, his biggest victories have been in the fight against corruption. While Magufuli scores points, there are conspicuous delays in execution in key policy areas. LOOKING FOR GUARANTEES
*Estimation October 2017
Building infrastructure and increasing revenue are big government priorities
TunduLissu,toincreasepoliticalpressure on the government in the year ahead. New security appointees, especially inspector general of police Simon Sirro, are unlikely to relent on the clampdown and the opposition can be certain of more court dates. For example, the authorities arrested Alliance for Change and Transparency leader Zitto Kabwe in late October for ‘inflammatory speech’ after criticising the government. Yet the focus on political ‘crimes’ means less attention is being paid to the security crisis in the Kibiti District of Lindi coastal region, which witnessed several murders of key figures in 2017.
Indeed, one immediate casualty looks to be the nascent oil and gas industry following the exit of Sospeter Muhongo in May 2017. He was seen as a steady and business-friendly hand. Now negotiations on a commercial framework for the planned $30bn liquefied natural gas (LNG) plant are likely to drag on beyond 2018 as oil companies consider new resource laws enacted in July. Eyes are on oil company Statoil, which is expected to seek guarantees before any agreements, for example by insisting on project-specific laws for the LNG plant. This could send the government back into a legislative frenzy, as it seeks to prevent delays on the project’s 2025 commissioning timeline. Elsewhere, a new oil pipeline to Uganda is a sign of improving ties with Kampala. For miners, a reign of uncertainty continues as Magufuli unleashes loyal cadres to review mineral agreements. Barrick Gold, whose Acacia mine has been the battleground for government attempts to get more out of the mining sector, says it does not expect its dispute with the government – which initially included a $190bn fine – to be resolved until the middle of 2018. While mines minister Angellah Kairuki has pledged cooperation with companies, the government’s efforts to extract further concessions will dampen investor appetite, analysts say. This could stall the government’s target of raising the sector’s contribution to gross domestic product (GDP) from about 4% currently to 8% by 2020. The local private sector is generally supportive of Magufuli policies of economic nationalism. However, the Tanzania Private Sector Foundation said that the huge fine sought from Acacia was bad for investment in the country.
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157
PROFITS UNDER PRESSURE
Manyindustriesareaggressivelypursuing initiatives to cut costs. Due to expensive and unstable power, AB InBev’s Tanzania Breweries is reducing its reliance on the grid by using solar in refrigeration and may scale up these efforts. Agriculture is a key sector because of the number of people it employs and its
Tanzania gold exports, year ending March($bn) 1.49 1.25
2015
1.21
2016
SOURCE: TANZANIAINVEST
Mining is not the only sector where policymakers are creating obstacles. The government is forcing telecoms to list on the stock market. In 2017, there was embarrassment due to the undersubscription of the country’s largest initial public offering by Vodacom. The regulators are pushing players to extend rural network coverage, with little regard forfeasibility,companiessay.Theyexpect to see a jump in capital expenditure along with rising costs of operation. Halotel, a unit of Vietnam’s Viettel, has been rolling a rural strategy but has been met with disappointingsubscriptionnumbers.The global industry lobby, GSMA, is running an Africa-first operator roaming pilot with Ericsson, Vodacom, Bharti Airtel and Millicom in Tanzania, and its expected 2018 results could help telecoms sustainably expand 3G coverage. Joining telecoms in a likely struggle for profit is the construction sector, although the expected commencement of major projects like the standard gauge railway andnewdamscouldseefortunesrevived.
2017
5.5m
Tonnes of maize expected in the 2017 harvest, a 3% drop due to poor rains contribution to GDP. Poor rains mean that a 3% drop in maize production was expected in 2017, with the harvest slipping to 5.5m tonnes. State utility Tanesco’s ability to deliver reliable power will remain a concern considering Mugufuli has stymied attempts to wean it off debt by raising power tariffs. With as much as $370m in debt, Tanesco has little room to invest in generation and transmission projects. Meanwhile reports suggest that the highly anticipated second phase of the Kinyerezi gas power plant planned for commissioning this year is unlikely to
deliver the expected additional capacity of 240MW, as the site lacks the fresh water necessary for running a combined cycle. With Tanzania’s growing energy needs, the government is ignoring global outcry over the conservation of a Unesco World Heritage site to pursue development of the 2,100MW Stiegler’s Gorge dam in the Selous Game Reserve. If it is built, the dam will put Tanzania on course to meet its 5,000MW target by 2020. Current production is about 1,400MW, with demand rising 13% annually. Tanesco is not looking to local banks for a lifeline because liquidity remains a challenge for lenders. In the short term, private-sector lending growth will likely remain at about 2% compared to recent levels of 15-17%. Non-performing loans hit 9.5% in early 2017, well above the central bank’s target of 5%. Banks are increasing efforts to attract cheaper foreign capital to shore up portfolios as seen in attempts to enhance transparency by attaining international credit ratings. However, high exposure to retail segments and agriculture presents risks. Tense relations with Kenya, the country’s largest trading partner, look set to undermine business. Reciprocal barriers against each other’s goods continue to recur, on top of other long-running disputes. The two governments, however, are now looking for financing for the construction of the Malindi-Bagamoyo highway to boost trade links.
A hawk at the central bank TANZANIA’S NEW CENTRAL BANK GOVERNOR Florens Luoga’s first comments to the media were that he would have a lot to learn but was all the same eager to take over at the central bank, underscoring the ruling party’s return to form of appointing ‘lightweight’ officials to key economic posts. Since 2008 when outgoing governor Benno Ndulu was appointed, THE AFRICA REPORT
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the institution has come a long way from years of graft-related turmoil that climaxed with the sacking of Daudi Ballali in 2008. Ndulu is credited with restoring stability in the financial sector, presiding over a fairly stable price regime and helping to maintain economic growth well above 7% annually. But for all of his success, President John Magufuli
D E C E M B E R 2 017- J A N UA R Y 2 018
could not wait to see him leave and unceremoniously announced his replacement, two months ahead of scheduled retirement. He called for a hasty handover and deployed a hawkish taxation expert who was part of a probe against Acacia Mining, leaving the financial industry apprehensive. For some time, Magufuli has attacked the autonomy
of the central bank, complaining it has not done enough to prop up the shilling and reduce interest rates. With Luoga, a newfound loyalist likely to put politics before the markets, the bets are now on that a shake-up could be visited on the financial industry, in a continued pattern targeting business holdings of key opposition figures.
158 COUNTRY PROFILES
EAST AFRICA
UGANDA
President for life Parliament is working to remove presidential age limits
A
ttempts to wrestle land from ordinary Ugandans to pave the way for infrastructure projects, and to remove a ceiling on the age limit for a presidential candidate, will shape government’s key plans throughout much of 2018. New dams and oil projects are set to boost the economy, while government and opposition supporters fight it out in parliament and the streets about the removal of presidential age limits. In early September, President Yoweri Museveni kicked off a countrywide campaign to educate the masses about land. Key to his message was why government needed to acquire land compulsorily if infrastructure projects were to succeed and create much-needed jobs for a large population of idle youth. He said that the failure to access land had frustrated investors and government programmes. At 73, Museveni is not eligible to stand for the presidency at the next general elections in 2021. His National Resistance Movement (NRM) is backing plans to change the constitution to allow him to run again. Both plans have a political risk. Government-led projects often fail. And the independence of the legislature is widely questioned. LAND GRAB
Handled poorly, both issues could cause tempers to flare, as has already happened in the Acholi region, where some locals stripped naked before government officials in their show of opposition to the allocation of their land for the construction of a sugar factory. Buganda Kingdom, one of the largest holders of prime land in the country, is vehemently opposed to government’s plan of compulsory acquisition; the kingdom sees it as nothing but a land grab.
Gulu
UGANDA
DEMOCRATIC REPUBLIC OF CONGO
KAMPALA Mbarara
Jinja KENYA
Lake Victoria TANZANIA
RWANDA
Population: 42.9 million Population growth: 3.3% GDP per capita: $701 Life expectancy: 59.2 Adult literacy: 73.9% Inflation: 5.8% Human development index (out of 188 countries): 163 Foreign direct investment: $541m Current account as % of GDP: -5.6% Mobile phone penetration: 55% Key export: Coffee Last change of leader: 1986 GDP growth (%)
4.4 5.7
Major General Muhoozi Kainerugaba, as his senior adviser, stoking claims that Muhoozi is being prepared for the succession. Following events in Zimbabwe, Museveni has purged the army staff. He also announced a possible bump in public sector pay, co-incidentally on the day of Mugabe’s eviction from office. IN AND OUT OF JAIL
5.2
2.3
GDP ($bn)
25.2
25.3
26.4
28.4
2015
2016
2017*
2018*
*Estimation October 2017
Oil and infrastructure projects are set to boost the economy
100 km SOUTH SUDAN
When it comes to scrapping the age limit, President Museveni, who has been in power for the past 31 years, could stick around longer if the amendment to the constitution sails through parliament. As The Africa Report went to press a private members’ bill to amend the constitution was in committee before going to a final vote. The amendment, which could clear the way for Museveni to be a president for life, requires just a two-thirds majority in parliament, which the NRM has. The opposition regularly criticises the regime for placing too much authority in the hands of Museveni’s family. In January, he appointed his son,
The opposition has not yet come up with a strategy to block any changes to the constitution. Elections for the leadership of the largest opposition party, the Forum for Democratic Change (FDC), were slated for November 2017 and appear to have kept party president Mugisha Muntu preoccupied, although he is expected to retain his position. In October, the authorities arrested the FDC’s former president Kizza Besigye after the government violently repressed a planned rally. Besigye is regularly arrested on trumped-up charges. Uganda has stepped back from its interventionist stance in South Sudan, and is now hosting an estimated 1 million South Sudanese refugees. The government campaign to capture Lord’s Resistance Army rebel leader Joseph Kony has not produced any real progress, and the group’s power and influence has been on the decline for years. The economy is gearing up for high levels of growth in the year ahead. Investment projects in energy and oil are bound to continue in 2018. Those sectors are expected to boost economic growth in the coming year. Two key power projects – the 600MW Karuma dam and the 183MW Isimba dam – are scheduled to be launched in late 2018. The two plants are expected to nearly double the country’s energy output. Other important infrastructure projects going forward include a new standard-gauge railway line to link Kampala with the Kenyan port of Mombasa. The government signed a $2.9bn loan deal with Chinese state financiers for the construction of the line by China Harbour Engineering. Problems with the current rail link to Kenya are set to
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continue into 2018. In October of 2017, thegovernmentcanceledamanagement contract with the indebted Rift Valley Railways consortium for failure to respect the terms of its concession. Uganda Railways Corporation has taken over the Ugandan side of the rail network. Construction of the crude-oil pipeline from Hoima in western Uganda to the Chongoleani peninsula near the Tanzanian port of Tanga is expected to start in 2018. Uganda and Tanzania are expected to continue their negotiations over the pipeline into 2018 (see box), with the tax regime one of the key issues. The 1,445km pipeline, which will have a flow rate of 216,000 barrels per day, will be the longest heated pipeline in the world. It is expected to cost $3.5bn. Uganda has so far discovered 1.7bn barrels of recoverable oil reserves. To prepare for the boom in activity in western Uganda, the government wants to build a new international airport at Hoima and have it operational by 2019. OIL AND GAS LICENCES
The government has high hopes that other oil exploration projects will produce good results. In September, it awarded two licences to Nigeria’s Oranto Petroleum and one to Australia’s Armour Energy. Other deals are possible in the months ahead from other firms that showed an interest in Uganda’s 2015 oil round covering six blocks.
SOURCE: GOVERNMENT OF UGANDA
159
Commercially viable oil and gas finds in Uganda
2006
Construction of a $3.55bn oil pipeline begins, due to be completed by 2020
2017
Completion of a $4bn oil refinery, commercial oil production begins
2020
1,445km
Length of the Hoima-Tanga crude oil pipeline due to begin construction in 2018 A decision to offer exclusive rights to the current upstream oil companies to develop the country’s gas fields and generate power is bearing fruit. French oil major Total has applied for a licence to generate 146MW of power from gas, although it will mainly serve the oil companies’ operations. In August, just as the government laid the foundation stone for the crude oil pipeline, the ministry of energy announced that it had picked the Albertine Graben Refinery Consortium, which includes General Electric, Yaatra Ventures, Intracontinent Asset Holdings
and Italy’s Saipem, to build the refinery at an estimated cost of $4bn. Finding the money to construct the refinery remains a headache. Uganda’s public debt, at 34% of gross domestic product (GDP), remains close to the East African Community ceiling of 50%. The International Monetary Fund estimates government debt will peak at 42% of GDP in the financial year 2019/2020, when the scaling up of infrastructure investment is completed. Non-performing loans are on the rise, but banks could witness a rebound in performance in 2018, especially after the government passed financial regulations to allow bancassurance and agency banking. Agency banking will limit the building of brick and mortar branches, and lead to the closure of some as banks cut costs. The agriculture sector makes up a large share of GDP and employs many Ugandans. The Uganda Sugar Manufacturers’ Association predicted sugar production would rise 10% in 2017 to reach 475,000tn. Coffee is the main cash crop, and its production is rising. The 2017 season produced exports of 4.3m 60kg bags, up 39.4% on the previous season, according to the Uganda Coffee Development Authority (UCDA), which has set a target of 20m bags for 2030. The UCDA is working with the Uganda Cooperative Alliance to train coffee farmers in business development.
Getting neighbourly UGANDA AND TANZANIA plan to build their largest ever cross-border infrastructure project, bringing the two countries closer than they have ever been since Tanzanian forces helped to overthrow President Idi Amin nearly 40 years ago. With the two countries now negotiating the commercial terms that will govern the construction of the 1,445km crude-oil THE AFRICA REPORT
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export pipeline, talks on other partnerships, such as building a gas pipeline and an oil refinery, are also being held. The new friendship with Uganda throws Tanzania back into the East African fold as a key player in regional infrastructure projects. As the oldest leader in the bloc, President Yoweri Museveni was one of the main architects of the
D E C E M B E R 2 017- J A N UA R Y 2 018
northern corridor integration project, in which Uganda, Kenya, Rwanda and later South Sudan collaborate in a variety of spheres. Tanzania was left out because the other partner states felt it was reluctant to participate in East African Community initiatives. Economic ties have been growing slowly. In 2015, the Export-Import Bank of Tanzania entered
the Ugandan market, a year after Tanzanian pay TV company Azam did the same. For now, Tanzania, with its democratic credentials intact, finds itself in a chaotic regional playing field. President John Magufuli, who rarely minces his words, is expected to steer clear of discussing political contests in the region in the spirit of respecting sovereignty.
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COUNTRY PROFILES
CENTRAL AFRICA CONTENTS
LIBYA
ALGERIA
164 PEOPLE TO WATCH NIGER
MALI
166 CAMEROON
CHAD SUDAN Lake Chad
168 CENTRAL AFRICAN REPUBLIC
Abeche
N’Djamena
169 CHAD
BENIN
NIGERIA
ETHIOPIA
CENTRAL AFRICAN REPUBLIC
CAMEROON
Douala
Yaoundé
Malabo
Bangui
172 EQUATORIAL GUINEA
EQUAT. GUINEA Libreville Port-Gentil
São Tomé SÃO TOMÉ E PRÍNCIPE
GABON
Kisangani
Mbandaka
CONGO
Goma
DEMOCRATIC REPUBLIC OF CONGO
Brazzaville
Pointe-Noire
SOUTH SUDAN
170 DEMOCRATIC REPUBLIC OF CONGO
Bukavu
Kinshasa
UGANDA
KENYA
174 REPUBLIC OF CONGO
RWANDA BURUNDI
175 SÃO TOMÉ E PRÍNCIPE
TANZANIA
Matadi
173 GABON
Atlantic Ocean ANGOLA 300 km
Lubumbashi MALAWI
ZAMBIA
SOURCE: GDP CURRENT PRICES – IMF WORLD ECONOMIC OUTLOOK DATABASE, OCT. 2017
CENTRAL AFRICA 2017 GDP (% of regional total)
58.5%
308 193.1 137.8
2030
2018
THE AFRICA REPORT
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2050
SOURCE: UN WORLD POPULATION DIVISION (THE 2017 REVISION)
CENTRAL AFRICA POPULATION (millions)
D E C E M B E R 2 017- J A N UA R Y 2 018
1
trillion CFA francs
Financial transactions by mobile phone in Cameroon and Gabon account for about $1.8bn per year
JANUARY GABON La Tropicale Amissa Bongo bike race
APRIL CAMEROON Cameroon International Film Festival
OCTOBER CAMEROON Presidential elections
DECEMBER DRC Presidential elections
161
162 COUNTRY PROFILES
CENTRAL AFRICA
PEOPLE TO WATCH DEMOCRATIC REPUBLIC OF CONGO
Up-and-coming rap star
ALL RIGHTS RESERVED
Twice nominated at this year’s Africa Hip-Hop Awards, Sista Becky is setting her sights on other African markets. For her, rap need not be political, provocative or ‘street’ to have impact; it needs to be sincere and relatable. Her rap is about everyday life and experiences, though she is the first to recognise that her “everyday,” as a university-educated young professional differs from that of the majority of Congolese. Manifestly proud of her heritage, she interweaves her French words with lyrics from local languages to set herself apart from other francophone rappers.
EQUATORIAL GUINEA
Teodoro Nguema Obiang Mangue Playboy vice-president
REPUBLIC OF CONGO
Firmin Ayessa The political prime minister Appointed deputy prime minister for civil service, state reform, labour and social security in August, Firmin Ayessa is a key regime loyalist who has held a string of influential backroom roles, including director of President Denis Sassou Nguesso’s cabinet for the past decade. Ayessa is a Mbochi, like Sassou, from the north and one of the President’s closest advisers. In his new job, he is effectively the political prime minister and could have a critical influence over the succession. Some say he could even be Sassou-Nguessou’s successor, or serve an interim role until the president’s son, Denis-Christel Sassou Nguesso, takes over.
GABON
Madeleine Berre Taking care of business
SGG GABON
The son, vice-president, and likely successor of President Teodoro Obiang Nguema Mbasogo will be in the spotlight as his father steps closer to retirement. Known for dating celebrities and his collection of Michael Jackson memorabilia, Obiang junior faces a tough year fending off enemies at home, while presumably avoiding France, where any false move could land him in prison after a French court convicted him of money laundering and corruption in October 2017.
GUY-GERVAIS KITINA/AFP
Sista Becky
Commerce minister since 2015, this former boss of the Confédération Patronale Gabonaise is one of Gabon’s top business leaders. Her ministry has a big role to play in Gabon’s economic diversification and getting the government to work together with the private sector. The hardworking daughter of Rose Francine Rogombé, who was transitional president after the death of President Omar Bongo in 2009, Berre has a background in company law and was the former director of professional services firm Deloitte’s operations in Gabon. She is using her skills from the private sector to work on a new investment code and launch a one-stop shop for investors to access government services. THE AFRICA REPORT
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163
CAMEROON
Felix Nkongho Agbor-Balla
MATTHIEU ALEXANDRE/CARITAS INTERNATIONALIS
ALL RIGHTS RESERVED
A voice of the marginalised
CENTRAL AFRICAN REPUBLIC
Dieudonné Nzapalainga Ecumenical spirit The CAR’s first ever cardinal is one of the few leaders in the country capable of serving as a bridge between Muslim and Christian communities. Nzapalainga became the archbishop of Bangui in 2012. With other religious leaders, he founded a platform in 2014 to support dialogue and fight against the instrumentalisation of religion in the country’s current civil conflict. Nzapalainga regularly reminds the government of its duty to protect all Central Africans. Throughout the conflict that began in 2013, he used his position to push for peace, saying “CAR yearns for peace… It is our responsibility to be the architects of that peace.” He wants to play a key role in national reconciliation and, as such, seeks to stay above the political fray. He is from CAR’s south-east and played a crucial role in mediating a May 2017 conflict when Anti-Balaka militias attacked the south-eastern city of Bangassou.
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The Cameroonian lawyer is a moderate leader of the anglophone protests that have swept through north-west and south-west Cameroon since late 2016. He is committed to non-violence. However, his role in organising the October 2016 lawyer protests against the government’s attempts to undermine the regions’ common law systems earned him seven months in prison on terrorism charges before the government relented. As leader of the Cameroon Anglophone Civil Society Consortium, Agbor-Balla is not seeking independence: he says a federal system of governance would be best to allow each of the language communities to thrive. That idea is gaining support from francophone Cameroonians as the country heads to the polls in 2018.
164 COUNTRY PROFILES
CENTRAL AFRICA
CAMEROON
The pre-campaign begins
Veteran leader Paul Biya is preparing to run for another term in 2019
CHAD
Boko Haram continues attacks, and there is conflict in Anglophone regions
UNQUESTIONABLY LOYAL
The presidential vote has the highest stakes. Biya – 84 and in power for 35 years – has not announced his intention to run, but the RDPC has been calling on him to be its candidate. No opposition party has scored any major points since the last election in 2011 when Biya took 78% of the vote, but Biya and the ruling party may end up with lower scores than normal in Anglophone North-West and South-West Provinces, where populations complain about their marginalisation. The next presidential election must be held before the end of his current term in November 2018. Biya’s position gives him total control over the country’s institutions, including the ones that will organise the 2018 votes.
Garoua
NIGERIA
CENTRAL AFRICAN REPUBLIC
CAMEROON Douala YAOUNDÉ
Gulf of Guinea EQUATORIAL GUINEA
GABON
CONGO
Population: 24.1 million Population growth: 2.6% GDP per capita: $1,263 Life expectancy: 56 Adult literacy: 75% Inflation: 0.7% Human development index (out of 188 countries): 153 Foreign direct investment: $128m Current account as % of GDP: -3.6% Mobile phone penetration: 68% Key export: Petroleum and crude oil Last change of leader: 1982 GDP growth (%)
5.8
4.7
4.6
4
GDP ($bn)
28.4
29.3
30.7
33.1
2015
2016
2017*
2018*
AGEING LEADERSHIP
*Estimation October 2017
T
he year ahead will be a crucial one for Cameroon. The government has to organise four elections – including the presidentials – and prepare to house the Africa Cup of Nations football tournament in 2019. It also faces a renewed challenge from Anglophone groups that want to create their own independent state. Amidst low commodity prices and a stilted political atmosphere, the government fears that an armed rebellion could take hold in the Anglophone regions of the country (see box). The year ahead will be marked by political jockeying as the country holds presidential, senatorial, national assembly and municipal elections. With the hegemony and power of incumbency of President Paul Biya and the ruling Rassemblement Démocratique du Peuple Camerounais (RDPC), no political shakeups are expected in 2018. Although it has not yet been decided, the government may hold all of the elections at the same time in order to save money.
Biya’s advanced age, supporters have also been calling for him to organise the elections early to make sure that he locks in another seven-year term. Election time means big promises, like Biya’s 2011 programme to hire 25,000 new government employees. In 2016, Biya announced that his government would provide 500,000 computers to the country’s students. His spokesmen talk about the computers as a presidential gift and have tried to hide from the public that the government got a loan from China for them. They are due to be distributed in 2018.
200 km
He appoints judges and the president of the supreme court, the body that will announce the official election results, since the Conseil Constitutionnel envisaged in the 1996 constitution has still not been created. Biya also appoints the president and the members of Elections Cameroon (ELECAM), the electoral body. In April 2017, he picked unquestionably loyal former governor Enow Abrams Egbé as the new ELECAM boss. The opposition points out that he and the other members of ELECAM are RDPC cadres. The RDPC is already in campaign mode and will hold a congress to name its candidate before October 2018. Given
The opposition is planning on running several candidates for the presidency without much of a chance that any of them can win. Opposition parties are weak, divided and struggling to come up with the finances to have an effective presence in the country’s 360 municipalities. The Social Democratic Front (SDF), led by John Fru Ndi and with its stronghold in North-West Province, remains Cameroon’s largest opposition party. Fru Ndi scored just over 10% in the 2011 presidential vote and faces accusations that he has accepted money from the ruling party and has softened his stances. Fru Ndi, 76, is facing calls to step down in favour of his young and dynamic party vice-president Joshua Osih. The SDF was due to hold a congress to elect its leadership in October 2017, but it has been postponed, and another meeting to choose a presidential candidate in February or March 2018. The SDF has said that it would support an opposition candidate but only if that candidate comes from the SDF. The structure of government will be an important matter of debate as the election approaches. Members of the Anglophone community – and a small number of Francophones – have complained about the lack of decentralised authority. Changes that have been debated include creating an Anglophone and a Francophone state government
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165
TOO MANY PROJECTS AT ONCE
Although Cameroon does not depend on oil and gas as much as some of its neighbouring countries, with the recent downturn in commodity prices, Biya’s administration signed up for an International Monetary Fund (IMF) programme in June. The government has little capacity to manage many large infrastructure projects, and the IMF reports that the government has loans equal to 20% of gross domestic product that have
Total youth unemployment
(% of total labour force ages 15-24)
6.3 2010
6.3
6.3
6.3
6.7
2011 2012
2013
2014
2015
6.3
$250m
6.9 2016
Cameroon’s share of an undersea fibre-optic cable linking it with Brazil yet to be disbursed. The IMF programme is focusing on cutting tax incentives and improving the management of many troubled state-owned enterprises. The economy should get a boost in the year ahead thanks to the government’s ambitious programme of stadium building for the next continental football championships, to be held in 2019. It plans to have seven stadiums and 25 training pitches ready for the tournament. The Confederation of African Football has expressed doubts about Yaoundé’s organisational abilities. With the government backing more
SOURCE: WORLD BANK/ILO
below the central-government level or simply giving more money and responsibility to the country’s ten regions. So far, Biya has refused to talk about the topic, saying that he is fundamentally opposed to federalism or another further division of the country. With regular suicide attacks in northern Cameroon, the Yaoundé government will continue its collaboration with Washington and Paris to fight the Nigeria-based Boko Haram Islamist rebel group. Between April and October 2017, Boko Haram killed 158 civilians in northern Cameroon. Cameroon’s economic growth has gradually slowed since 2014 at the height of the commodities boom. The economy is somewhat diversified, and the small oil and gas sector is not predominant. Corruption, a lack of infrastructure and a poor business environment have hampered growth of the private sector.
infrastructure projects, Cameroon is becoming a Central African hub for cement production, with Nigeria’s Dangote Cement and other companies in the process of expanding their capacity. Local company Egin is one of the latest entrants into the competitive sector, and is building a plant to produce 100,000tn per annum. Other construction projects are moving ahead. The Export-Import Bank of China is financing Cameroon’s $250m share of an undersea fibre-optic cable to link the country with Brazil. China is also financing the construction of the port at Kribi, where commercial operations are due to begin in late 2017 or early 2018. Gas has tended to attract more investment than oil in recent years in Cameroon. Anglo-French company Perenco expects first gas for its floating liquefied natural gas (LNG) plant at Sanaga in the fourth quarter of 2017. It will be able to produce 1.2m tonnes of LNG for export and 30,000tn of liquefied petroleum gas for the domestic market. Agriculture employs many rural Cameroonians and has not recently attracted any major investments. The government wants the country to produce 600,000tn of cocoa per annum by 2020, but farmers are not putting enough new land under cultivation and production has recently struggled to reach an annual 300,000tn due in part to the impact of lower global prices.
Anglophones up in arms SINCE NOVEMBER 2016, members of the Anglophone minority – about 20% of Cameroon’s 22 million people – have been protesting against their marginalisation. Different groups are calling for federalism, while others are seeking independence or simply improvements in living conditions. Many leaders of the independence movement are living in the diaspora. THE AFRICA REPORT
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But Anglophone separatists are a major headache for the government in Yaoundé. The secessionists say they have formed an army that they will use to get independence for the North-West and SouthWest regions. The supposed government of the new state of Ambazonia says it will rely on the new Southern Cameroon Security Forces, and President Paul Biya
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is taking the threat seriously. Several civil society leaders face trial by a military tribunal. In August, the authorities arrested five secession supporters in Mbengwi, saying that they are members of the Southern Cameroon Liberation Movement, another group supporting the idea of Ambazonia. One of those arrested was Alfred Ngyah Dasi, said to be the group’s
leader. The government said it found a bunker at his home with arms, military uniforms and tools to detonate explosives. The think tank International Crisis Group warns that if a solution is not found soon, the conflict may become a violent one. Yaoundé has sent a strong military presence to cover the Anglophone zones, especially regions close to Nigeria.
166 COUNTRY PROFILES
CENTRAL AFRICA
CENTRAL AFRICAN REPUBLIC A country out of control
Low levels of conflict persist throughout many parts of the country
300 km
CHAD
The government is relying on donors to finance its development programmes
The full implementation of the government’s DDRR programme is planned to take place in the first half of 2018. With funds from the UN and the World Bank, the programme aims to help 5,000 former combatants and their communities. In 2017, Touadéra attempted to foster greater reconciliation by bringing more politicians from rebel groups into his government. Nearly all armed groups have agreed to participate, but Noureddine Adam’s Front Patriotique pour la Renaissance de la Centrafrique (FPRC) is sceptical. He says that he will only participate if his soldiers who are currently in prison are freed. Adam’s group also boycotted the initial pilot of the DDRR programme, which involves 560 fighters from 14 rebel groups. In October, Abdoulaye Hissène’s Union pour la Centrafrique formed an alliance with the FPRC that analysts predict could lead to renewed calls
CENTRAL AFRICAN REPUBLIC Berberati BANGUI
CONSPIRACIES AND PLOTS
CONGO
DEMOCRATIC REP. OF CONGO
Population: 4.7 million Population growth: 1.1% GDP per capita: $400 Life expectancy: 51.5 Adult literacy: 36.8% Inflation: 3.8% Human development index (out of 188 countries): 188 Foreign direct investment: $31m Current account as % of GDP: -9.7% Mobile phone penetration: 25% Key export: Tropical wood Last change of leader: 2016 GDP growth (%)
4.5 4.8
5
4.7
GDP ($bn)
1.6
1.8
2
2.2
2015
2016
2017*
2018*
*Estimation October 2017
A MISSION THAT FAILED
SOUTH SUDAN
CAMEROON
P
resident Faustin-Archange Touadéra, in power since March 2016, continues to struggle to implement reforms and reinforce the peace process. The central government controls just a fraction of the country’s territory, and fighting persists in spite of the presence of United Nations (UN) peacekeepers. The government is about to launch its major disarmament, demobilisation, rehabilitation and rehabilitation(DDRR)programme.Thepeace process is key to getting the economy back on a stronger footing. There are several threats to national security on the horizon in 2018. Fighting has recently intensified, new rebel alliances are being formed and the UN has warned about the use of mercenaries. The fighting has been worst in the southeast and north-west.
SUDAN
with the UN sending some 600 troops from the Republic of Congo back home in mid-2017 after they were accused of sex abuse. In November, UN secretary general António Guterres called for an additional 900 troops in order to respond to the threat of ethnic cleansing.
for the secession of northern Central African Republic (CAR). The country has been under a UN arms embargo since 2013, and the European Union has been training some of the troops of the Forces Armées Centrafricaines, which are supposed to take control of the country and replace the UN force. The first group of those newly trained forces are due to launch operations in early 2018. The population is increasingly critical of the 12,000-strong UN mission for its passivity and the fact that it has not brought peace since its arrival in 2014. And there have been many abuse claims,
Religious leaders insist that politicians and rebels are instrumentalising religion in order to prolong the conflict. The largely Muslim Seleka forces overthrew President François Bozizé in 2013, and groups of largely Christian Anti-Balaka forces sprung up in response to Seleka’s control of the country. Taoudéra’s principal political rival is national assembly president Abdoul Karim Meckassoua. Just a few months after the two took office their relationship soured. Towards the end of the year, Meckassoua launched legal proceedings against influential Taoudéra supporter Didatien Kossimatchi after Kossimatchi said that Meckassoua was behind coup attempts. The legal and political wrangling concerning two of the country’s most powerful politicians is set to continue into the year ahead. Mining and forestry activity are responsible for the country’s recent economic growth. The Kimberley Process allowed the CAR to begin exporting its diamonds again in 2016, but concerns remain about rebel groups and their control of natural resources. The government’s economic planning frameworkupto2021isthePlanNational de Relèvement et de Consolidation de la Paix, which is expected to cost $3.1bn and attracted donor funding at a conference held in November 2016. Donors pledged $2.3bn over the next three years to work on programmes for national reconciliation, improving security and strengthening the productive sectors of theeconomy.TheCARremainsarelatively low priority for the donor community, and it had disbursed just about a third of its 2017 commitments by October 2017. The conflict in CAR has so far displaced some 1.1 million people.
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CENTRAL AFRICA
COUNTRY 167 PROFILES
CHAD
Dour times for Déby The government has promised a new constitution to improve governance
T
he year ahead will be dominated by discussions about a new constitution and the government’s response to the oil-fuelled economic crisis. The shape of the new constitution is as yet unclear, but President Idris Déby Itno made a campaign promise to modernise the country’s institutions. Prime minister Albert Pahimi Padacké is leading the reform process, and areas likely to be addressed are the relationships between institutions,thejudiciary,andtermlimits. Decentralisation is another theme the government has been talking about, with the possibility of a federal system under debate. The opposition claims that Déby wants to restart the clock on his terms as president – he has been in power since 1990 and his fifth term ends in 2021. The government plans to adopt the proposed constitutional changes in 2018. Déby’s role fighting Islamist threats in the Sahel helps to insulate him from domestic pressures. In 2018, the opposition, led by Union Nationale pour le Développement et le Renouveau’s Saleh Kebzabo, will continue to call for legislative elections that were due to be held two years ago. The government prolonged parliamentarians’ mandates in 2015 citing a lack of financial resources. The opposition says that Déby is afraid he might lose, as his score in the April 2016 presidential election dropped precipitously to 59.9% from 88% in 2011. CONDITIONAL PROMISES
Onthesocialfront,N’Djamenacontinues to be the scene of regular political and other protests, which are often broken up by the police. Groups, from teachers to judges, have recently gone on strike. Chad is due to return to positive economic growth in 2018, according to the International Monetary Fund, which THE AFRICA REPORT
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CHAD NIGER
Lake Chad
SUDAN
N'DJAMENA NIGERIA CAM.
Moundou
400 km
SOUTH SUDAN
CENTRAL AFRICAN REPUBLIC
Population: 14.9 million Population growth: 3.1% GDP per capita: $799 Life expectancy: 51.9 Adult literacy: 40.2% Inflation: 0.2% Human development index (out of 188 countries): 186 Foreign direct investment: $560m Current account as % of GDP: -2% Mobile phone penetration: 44% Key export: Petroleum and crude oil Last change of leader: 1990 GDP growth (%)
2.4
-6.4
0.6
11
10.1
9.7
10.1
2015
2016
2017*
2018*
1.8 GDP ($bn)
*Estimation October 2017
The drop in oil prices has driven Chad into the arms of the IMF
mean most of the discussed investments will not bear fruit, say analysts. Many infrastructure projects, including the Cité Internationale des Affaires, are now frozen. However, China National Complete Plant Import & Export Corporation announced in July that it had signed a contract to build an oil refinery.
LIBYA
signed a $312m bailout programme in July 2017. As part of its austerity programme, the government has slashed salaries in the civil service, removed ‘ghost workers’ and cut scholarships for students. Déby threatened to withdraw ChadiantroopsfromMali,Cameroonand other military missions if the international community did not come to its aid. The government’s 2017-2021 development got a big boost in September 2017 through a donor and investment conference that promised $12.9bn over the next five years. However, much of the aid has conditionalities attached, and the poor business climate and corruption
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GLENCORE DEBT
If the aid and investment does not come through, oil remains the government’s sole hope to turn the economy around. But oil prices remain low, and the government is not able to repay its $1.4bn debt to Swiss commodities conglomerate Glencore, which it used to finance the purchase of a 25% stake in the Doba oil field. As The Africa Report went to press, talks were ongoing about a new restructuring of the debt. Relations with major international companies remain tense after Exxon resolved its conflict with the government in June 2017. N’Djamena had insisted the company pay a $74bn fine over unpaid taxes, but then settled the case amicably. In terms of security, even if the threat of attacks by Boko Haram is low, there are worries. Chad is working to get itself off the US visa ban list after a row about furnishing sample passports in late 2017. After that diplomatic discord, in October 2017 N’Djamena withdrew hundreds of its troops who were in Niger to help the government deal with Boko Haram. The continued instability in Libya is also a concern for Déby’s government. Chadian rebel groups, like Mahamat Mahdi Ali’s Front pour l’Alternance et la Concorde au Tchad, have room to operate in Chad’s northern neighbour. The UN warns that the Lake Chad basin, a recent target of Boko Haram attacks and a site of vast environmental degradation, is experiencing a humanitarian crisis. It warned that an estimated 800,000 children across the countries of the region were severely malnourished in 2017. With Chad’s former foreign minister Moussa Faki Mahamat heading the African Union, the Sahel may get more international attention.
168 COUNTRY PROFILES
CENTRAL AFRICA
DEMOCRATIC REPUBLIC OF Delays are the name of the game Kabila’s foot-dragging over elections sets the scene for a tense 2018 CAM.
Rebounding commodity prices herald renewed activity in the mining sector
REBELS CO-OPTED
It was the latter faction that Kabila co-opted when Bruno Tshibala, who had fought alongside Tshisekedi for more than 30 years, was named prime minister of a ‘national unity government’ in April. Three months later, another
Kisangani
CONGO GABON
KINSHASA
Atlantic Ocean 400 km
ANGOLA
Goma
DEMOCRATIC REPUBLIC OF CONGO
UGANDA RWANDA BURUNDI TANZANIA
ZAMBIA
Population: 81.3 million Population growth: 3.3% GDP per capita: $466 Life expectancy: 59.1 Adult literacy: 77.3% Inflation: 41.7% Human development index (out of 188 countries): 176 Foreign direct investment: $1.2bn Current account as % of GDP: -4.6% Mobile phone penetration: 39% Key export: Cathodes Last change of leader: 2001 GDP growth (%)
2.4
2.8
3
38.4
39.3
40.4
41.6
2015
2016
2017*
2018*
6.9
2018 and theRassemblement accused the CENI of preparing a large-scale fraud. In his attempts to hang on to power, Kabila counts on the help of people like intelligence chief Kalev Mutondo, chief of staff Néhémie Mwilanya Wilondja and president of the national assembly, Aubin Minaku. NEW VIOLENCE BLACKSPOTS
Lubumbashi
GDP ($bn)
*Estimation October 2017
U
ncertainty and intrigue are set to dominate the year ahead. In late 2017, there was finally a roadmap to end the political crisis that began at the end of 2016 when President Joseph Kabila failed to hold elections and leave office. After the opposition and donor community rejected the electoral commission’s plans to hold the vote in April 2019, Kabila proposed a date of December 2018. Some members of the opposition reject that timeline and are calling for massive protests. But Kabila continues to divide the opposition. At the end of 2016, his government postponed elections indefinitely. Then, on New Year’s Eve, Kabila’s parliamentary coalition – the Majorité Présidentielle (MP) – and the main opposition groups sealed an agreement fixing elections for late 2017. The accord prohibited thesignatoriesfrom seekingto amend the constitution to permit Kabila to seek a third term. The death of Etienne Tshisekedi, the lodestar of the opposition and head of the Rassemblement, the largest anti-Kabila coalition, on 1 February put an end to the accord de la St-Sylvestre, as it was known, as a credible roadmap towardsthepresident’sdeparturein2017. The Rassemblement is now split. Supporters of Tshisekedi’s son, Félix, and Moïse Katumbi, a wealthy ally-turnedrival of Kabila who is currently in exile, went one way; those who never trusted Katumbi and the G7 – seven parties that broke away from the MP coalition in September 2015 – went the other.
SOUTH SUDAN
CAR
leading Rassemblement rebel, Joseph Olengankoy, was appointed head of the committee tasked with implementing the accord. For the hardline opposition, Tshibala and Olengankoy are traitors, providing window dressing for Kabila’s project to delay elections until he finds a means to remain in power. Commission Electorale Nationale Indépendante (CENI) president Corneille Nangaa, who is deeply distrusted by the opposition, regularly speaks of the overwhelming logistical and financial burden of organising polls. The enrolment of more than 40 million voters is due to be completed in January
To further blacken the mood of Kabila’s opponents, chatter of holding a constitutional referendum – where presidential term limits or the manner of electing the head of state might be on the agenda – persisted throughout 2017. But polling shows that Kabila is unpopular and a large majority think he should have left at the end of his second term. Katumbi and Félix Tshisekedi insist that, if elections are not held in 2017, the CENI should be overhauled and there must be a transition without Kabila. While oppositionists take to the streets of Kinshasa to express their dissatisfaction with the status quo, others are doing so in pitched battles (see box). The previously calm region of Grand Kasaï has been ablaze with fighting between the military and Kamwina Nsapu, a militia group loyal to a customary chief killed by state forces in August 2016. Thousands have been killed and 1.4 million displaced so far. In August, the United Nations revealed the existence of a new government-backed militia – the Bana Mura – which is responsible for targeting the Luba and Lulua ethnic groups from which Kamwina Nsapu recruits. The UN accused Bana Mura members of killing hundreds, as well as mutilating, raping and disembowelling pregnant women. The conflict-scarred east of the country remains riddled by violence. Larger militias like the Forces Démocratiques de Libération du Rwanda are significantly weaker now, but many militias have fragmented and rendered peacekeeping efforts outdated. Maï-Maï groups are active in North Kivu Province, and the anti-government rhetoric of certain groups is becoming more intense.
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169
CONGO
MAIS NON, MADAME!
The government is looking for a way to turn the economy around. In June, prime minister Tshibala wrote to the International Monetary Fund (IMF) to request discussions about financial support to patch up the consequences of low mineral prices and high government
Rebounding commodity prices, notably cobalt, during 2017 have returned a spring to the step of the mining sector and the government – even if there will Estimated Accepted Date be a lag before the treasury feels the completion deadline originally benefit. The state hopes to capitalise on of national to organise proposed this and is pressurising mining compavoter polls after the by the nies, most notably by reintroducing a registration US threatened goverment for elections more fiscally onerous mining code for to withdraw parliamentary debate. The legislation support is deeply unpopular with the industry Jan. 2018 Dec. 2018 Apr. 2019 but may be adopted in 2018. In September, state-owned mining company Gécamines announced Many suspect Kabila has that audits show some joint-venture decreed that any political partners are “artificially minimising” the proceeds due to the government conditionality attached and has threatened to review certain to assistance from the likes contracts. The government is also of the IMF is intolerable pressing miners to sell dollars to the central bank in exchange for francs, deficits. In response, IMF managing something the companies are loath, director Christine Lagarde proposed and have so far refused, to do. sending a delegation to Kinshasa in On the horizon are renewed operaSeptember to talk about possible astions at Glencore-controlled Katanga Mining, after being suspended in 2015. sistance, noting in her letter that “a Glencore boss Ivan Glasenberg said credible path toward political stability that the mine will produce 150,000tn of will probably be a prerequisite”. The government rejected the visit. Although copper in 2018, ramping up to 300,000tn Kabila’s finance minister has claimed a year from the following year. More there were calendar clashes and that production boosts could come soon. he continues to cooperate with the IMF, Ivanhoe and its mining partners are many suspect that Kabila has decreed exploring the Kamoa-Kakula deposit, that any political conditionality is intolone of the richest copper finds in the erable – regardless of how desperately world, and could produce 12m tonnes the DRC might need the money. per annum within a few years.
SOURCE: DRC GOVERNMENT
The uneasy alliance between Kabila’s governmentandBundudiaKongo(BDK), a xenophobic cult that aims to restore the monarchy of the Kongo Kingdom, brokedownin2017.BDKgunmenbusted Ne Muanda Nsemi, their prophet, and more than 4,000 other inmates from Kinshasa’s Makala prison in May, and the government has accused the sect of additional attacks in the Congolese capital and the neighbouring province of Kongo Central, the group’s stronghold. BDK virulently promotes a popular belief that Kabila is a Rwandan impostor and claims he should be chased from power. The natural-resource-dependent economy has been hit by the low price of copper, cobalt and oil, and the impact on an already impoverished population has been miserable. In a highly dollarised economy where many basic goods are imported, the decline of the Congolese franc has obliterated household purchasing power. Inflation from January to 15 September 2017 was 35% and the franc was at 1,560 to $1 in October 2017, comparedto920francs attheendof2015.
Trouble for Tanganyika THE CONFLICT IN TANGANYIKA Province in the south-east began more than four years ago and has displaced more than half a million people. This war between militias made up of Twa, a pygmy tribe, and Luba, a Bantu people, has gone largely unnoticed. The fighting calmed in late 2015 but returned in furious fashion in July 2016 as bands THE AFRICA REPORT
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of men, armed with traditional weapons, launched murderous reprisal attacks. There are 3.8 million internally displaced people (IDPs) in the DRC, but Tanganyika has recorded the strongest increase, from 370,000 in December 2016 to 543,000 at the end of March 2017, according to the UN. Militiamen have set displacement camps on fire.
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Against all evidence, the local authorities insist they have pacified the province. In 2017, fresh conflict erupted near the border with South Kivu between the Twa and Banyamulenge (Tutsi) communities. The government has started sending convoys of IDPs back to their villages. They claim the returnees have gone willingly; others disagree.
At the root of the conflict is the discrimination the Twa minority has suffered over a long period. Under Laurent-Désiré Kabila and then his son, Joseph, the government organised Twa people into paramilitary units. The resulting sense of empowerment has prompted many pygmies no longer to accept their second-class status.
Société Nationale d’Électricité du Congo Renewed efforts to improve access to electricity The government of Congo is continuing the efforts it launched a decade ago to improve the electricity grid at a national level, through an action plan implemented by the SNE and scheduled to run until 2019. Over the past decade, the Congolese government has made significant investments in electricity generation, transmission and distribution infrastructure. This infrastructure has been made available to the SNE (National Electricity Company), the incumbent utility company, to meet the growing demand by citizens and businesses for sustainable and high quality electricity.
Essential infrastructure investments The 120 MW-capacity Imboulou hydroelectric power plant, located 220 kilometres from Brazzaville between the counties of Plateaux and Pool, was commissioned in 2010 by the SNE. It was built at a cost of about $340 million. More recently, that of Liouesso (19.2 MW) came into operation in 2016 in the landlocked county of Sangha in the north of the country and will, in conjunction with a brand new national road, the N2, contribute to opening up the area.
A successful partnership with EDF PIn order to improve SNE’s performance, the State also signed a contract with French power giant, EDF International, in 2013. The contract, which ended in September 2016, led to the development of a strategy that put customers, employees and performance at the heart of operations over the 2015-2017 period.
Major production units managed by SNE Hydroelectric power stations Moukoukoulou Djoué Imboulou Liouesso Thermal power stations CBT CT Oyo CT Ouesso
Installed power (in MW) 74 15
It enabled the state enterprise to ensure the availability of production facilities and to stabilise the transmission system, drastically reducing th he number of power outages. On the commercial side, action was taken to improve the debt recovery ratte, which has subsequently shown a slight increasse. Progress has also been made in financial reporting, with more reliable accounting data.
120 19,2
Installed power (in MW) 32,5 5,4 4,8
Despite this progress, there are still many concerns surrounding the distribution and marketing of electricity, particularly in the two main cities, Brazzaville and Pointe-Noire, with the saturation of substations and MT feeders, load shedding, delays in the upgrading of some facilities and fraud.
ADVERTORIAL
To continue to be able to deal with these challenges, the SNE implemented a 2017-2019 action plan. Its goal is to improve the service offered to customers while maintaining operational equilibrium. This strategic vision responds to the need to continue the public company’s turnaround to ensure a balanced sector.
• Production upgrades Among the many objectives set in terms of production, the 2017-2019 plan aims at the general upgrading of the Imboulou and Moukoukoulou hydroelectric power stations, as well as the Brazzaville, Oyo and Ouesso thermal power stations. By the same token, it includes the rehabilitation of the Djoué and Djeno power plants and expanding the production capacity of the Congo Electric Power Station (CEC). This will allow production facilities to attain maximum output. In the longer term, studies will have to be carried out for the construction of new hydroelectric power stations (Mourala, Sounda, Kouembali, and Chollet).
• Transmission
upgrades
The strategic plan provides for the strengthening of the transformation capacities of the Brazzaville and Pointe-Noire distribution substations as well as the improvement of the transmission capacity of the Moukoukoulou-Mindouli line. Several rehabilitation objectives have been set, in particular for the northern networks connected to Imboulou and the southern networks linked with Moukoukoulou, as well as with the Djiri National Dispatching Centre in Brazzaville. The plan also includes the building of the administrative capital’s High Voltage (HT) loop.
SNE has an important place in our country because electricity contributes to improved living standards for our people and to the country’s economic growth.
Louis KANOHA-ELENGA Director General Chairman of the Board
• Distribution upgrades To better distribute available electricity in terms of both quantity and quality. This is the challenge SNE has set out to meet within the framework of its three-year plan, through the modernisation of the network and its management. This includes increasing transmission capacity (by building new feeders) and the reorganisation and development of the distribution network.
• Marketing upgrades The improvement of SNE’s accounting results depends on it acquiring new customers that can be connected under the best conditions. The achievement of this objective is based on the massive implementation of meters, the development of prepaid electricity, e-accounts, the mass use of electronic payment, nvoicing the State as a customer and improved invoicing for public lighting. When all these actions are being implemented, it is essential that the customer continues to receive special attention, through improved service standards in SNE agencies and practical advice on the economical use of electricity, especially by promoting low energy light bulbs.
Société Nationale d’Électricité Boulevard Denis-Sassou-Nguesso B.P: 95 Brazzaville, Republic of Congo Tel.: (+242) 222 81 05 66
www.sne.cg
DIFCOM ©DR
A plan of action deployed until 2019
172 COUNTRY PROFILES
CENTRAL AFRICA
EQUATORIAL GUINEA History repeats itself BIOKO
A French money laundering case puts corruption in the spotlight
Bata Atlantic Ocean
F
rance’s corruption case against presidential son and vicepresident Teodoro ‘Teodorín’ Nguema Obiang Mangue is a headache for the Equatorial Guinean government. Teodorín is in pole position to replace his father, President Teodoro Obiang Nguema Mbasogo, who is 75 and subject to rumours about his ill health. The French case is unlikely to change Obiang’s calculations, and the country’s crippling economic crisis is of more immediate concern for the government. Through patronage and intimidation, the ruling Partido Democrático de Guinea Ecuatorial (PDGE) dominates the Equatorial Guinean political scene. It is expected to handily win legislative and municipal elections planned for late 2017 after Obiang won 93.5% of the presidential vote in April 2016. The Convergencia Para la Democracia Social, led by Andrés Esono Ondó, is the strongest oppositionparty andonly hasone seat in parliament. The government is often organising talks aimed at reconciling political parties, but those parties that denounce its authoritarian tendencies – both at home and abroad – refuse to take part. In practice, the government shows no sign of accepting political competition. In mid-2017, Ciudadanos por la Innovación leader Gabriel Nse Obiang Obono was sentenced to six months in prison and was temporarily banned from political activity for insulting the PDGE. ANTI-FOREIGNER SENTIMENT
President Obiang has been grooming Teodorín to take over, having made him his constitutional successor and given him responsibility for the management of the military. In October, Teodorín was sentenced to three months in prison on corruption and money laundering charges. He is appealing that decision,
importance of economic diversification for the oil- and gas-dependent country. Equatorial Guinea has been unable to attract much investment outside of the hydrocarbons sector due to factors including corruption, the poor business environment and the small size of the domestic market. This has made the country one of the world’s worst-performing economies for the past two years. Like its oil exporting neighbours, Equatorial Guinea is turning to the International Monetary Fund (IMF) in order to find its way out of the crisis.
CAMEROON
MALABO
EQUATORIAL GUINEA
GABON 50 km
Population: 1.3 million Population growth: 3.8% GDP per capita: $11,948 Life expectancy: 57.9 Adult literacy: 95.3% Inflation: 1.7% Human development index (out of 188 countries): 135 Foreign direct investment: $54m Current account as % of GDP: -8% Mobile phone penetration: 66% Key export: Petroleum and crude oil Last change of leader: 1979 GDP growth (%)
-9.1
PROJECTS FROZEN
-7.8 -9.7
-7.4
10.2
10.1
10
2016
2017*
2018*
GDP ($bn)
12.2 2015
*Estimation October 2017
Malabo is in another economic crisis, again failing to prepare for a downturn
and meanwhile the Obiang regime is whipping up anti-foreigner sentiment and burnishing its credential as a pro-African government willing to stand up against ‘neo-colonialist’ initiatives. The government paints the French case and a previous one in the US as attempts by powerful foreign interests to get involved in Equatorial Guinea’s internal affairs. Oil companies worry about what a Teodorín succession would mean for the country’s oil sector, as he is said to not get along with his half-brother, oil minister Gabriel Mbaga Obiang Lima. Prior to the recent drop in oil prices, the government had been discussing the
Diversification will again be a theme of the third national economic conference, which is planned for 2018. One of the projects that the government is pushing is the development of a tuna processing plant on Annobón Island, which is some 700km to the north of Malabo. The IMF has not yet agreed to help the government, and predicts that its oil production will drop 21% in the year ahead, leading to another year of shrinkage for the economy. If the IMF agrees a deal, it will mean that the government will have to massively slash state spending. The Malabo government reports that its revenue has recently dropped by 70%-80%. The government has been spending a lot on infrastructure, with many projects now frozen. One of the major investments that is going ahead is the planned floating liquefied natural gas (LNG) plant to be operatedbyUK-basedoilcompanyOphir. The firm awarded some contracts in late-2017 and expected to make its final investment decision before the end of the year in order to produce its first commercial gas in 2020. It should produce 2.2m tonnes of LNG per annum over 15-20 years. The year 2017 also brought more oil exploration deals after the launch of a new bidding round in 2016. Another bright spot, after years of delays, is that Gabon and Equatorial Guinea have finally agreed to allow citizens from the region visa-free travel for stays of under three months.
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CENTRAL AFRICA
COUNTRY 173 PROFILES
GABON
Oily headaches The government has turned to the IMF to help deal with the oil slump
100 km
Atlantic Ocean
INTERNATIONAL PING-PONG
The strength of the country’s political reconciliation will be tested in legislative elections that have been pushed back until April 2018 at the latest, ostensibly to allow the government to implement reforms from the national dialogue. Ping wants the Coalition pour la Nouvelle République (CNR) to boycott the legislatives but he does not lead any of its constituent parties. The CNR has seen its support among elite politicians dip, withseveralPingbackershavingswitched THE AFRICA REPORT
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LIBREVILLE Port-Gentil
T
he schisms born of the controversial and contested August 2016 presidential election continue to shape the country’s politics as the pain of sustained low oil prices have driven the government into the arms of the International Monetary Fund. Since suspicious results in President Ali Bongo Ondimba’s home provinces of the Haut-Ogooué gave him a victory that provoked spasms of violence, oppositionist and former African Union Commission chairman Jean Ping has claimed to be the true and elected president of Gabon. The ruling Parti Démocratique Gabonais government is set to continue with its strategy of making minimal reforms and trying to divide the opposition. In late 2017, Bongo named a new government with oppositionist Pierre Claver Maganga Moussavou in the post of vice-president, a post without any decision-making power. Maganga Moussavou had co-chaired the April-May 2017 national dialogue that passed on recommending presidential term limits but promised to bring in two-round presidential elections. Ping boycotted the talks and is calling for his supporters to use any means necessary to get Bongo out of power.
travel ban on Ping in August 2017, the European Parliament issued a warning to Libreville that Brussels could consider sanctions if the government’s intimidation of the opposition continues. On the diplomatic front, Libreville and Malabo, the capital of Equatorial Guinea, have promised to improve relations and are waiting for the International Court of Justice to rule on the territorial dispute over several small islands including Mbanié that the two countries agreed to submit to the court in late 2016. Gabon’s economy is still oildependent and low prices herald weak economic growth for the next few years. The International Monetary Fund (IMF), which signed its first-ever bailout programme with the Gabon government in mid-2017, predicts that annual oil production will decline from about 80m barrels in 2017 to 74m barrels in 2022.
CAMEROON EQUATORIAL GUINEA
GABON Franceville
CONGO
Population: 2 million Population growth: 2.5% GDP per capita: $7,584 Life expectancy: 64.9 Adult literacy: 83.2% Inflation: 2.5% Human development index (out of 188 countries): 109 Foreign direct investment: $703m Current account as % of GDP: -9.3% Mobile phone penetration: 144% Key export: Petroleum and crude oil Last change of leader: 2009 GDP growth (%)
3.9
2.1
CONFLICTS AND CUTS
2.7 1
GDP ($bn)
14.4
14
14.5
15.5
2015
2016
2017*
2018*
*Estimation October 2017
Radical oppositionists favour boycotts while moderates are being co-opted
sidesandotherspubliclydisagreeingwith himonhisstancesofcategoricalrefusalof dialogue. And while Bongo has poached some people from the opposition, those alliances have tended to be short lived. Ping’s eyes seemed focused on forces outside of Gabon, as he has not been able to do much more than claim he is the rightful president since the 2016 vote. The International Criminal Court is due to make a decision in the coming months about whether to open up a case about Gabon’s post-electoral violence, in which the opposition says that more than 30 people were killed. And after the government issued a temporary
D E C E M B E R 2 017- J A N UA R Y 2 018
Public debt rose to more than 60% of gross domestic product in 2016, leading the government to dial back its investments and seek other ways to increase revenue, such as by reducing tax breaks. It has been in high-profile conflicts with contractors, for example Italian businessman Guido Santullo, who has in turn been caught up in the government’s selective anti-corruption investigations. And with a constrained budget, it has been unable to pay workers on time, leading to strikes. The government’s 2017-2019 Plan de Relance Economique calls for a hiring freeze, except for in health and education. Libreville points to the 2010 ban on the export of unprocessed wood, the special economic zone at Nkok and developments in agribusiness as signs of a gradual diversification. Libreville’s preferred partner for agricultural projects, Singaporean firm Olam, opened its largest palm oil processing plant on the African continent in Ngounié Province in April. It has the capacity to produce about 140,000tn of palm oil per annum. Meanwhile, work is under way to expand the capacity of the Owendo port.
174 COUNTRY PROFILES
CENTRAL AFRICA
REPUBLIC OF CONGO Debt and doubt
Brazzaville is in tense negotiations with the IMF after hiding its debt levels
200 km
CAMEROON
Opposition parties do not pose a real challenge to the PCT in 2018
CREDIBILITY UNDERMINED
Amidst the economic troubles, the government is keen to avoid testing how much exasperation and resentment may simmer below the surface throughout the rest of the country. This might explain why retired general Jean-Marie Michel Mokoko, arguably
GABON Atlantic Ocean
REPUBLIC OF CONGO
BRAZZAVILLE
Pointe-Noire
DEMOCRATIC REP. OF CONGO
CABINDA (Angola)
Population: 5.3 million Population growth: 2.6% GDP per capita: $1,794 Life expectancy: 62.9 Adult literacy: 79.3% Inflation: -0.4% Human development index (out of 188 countries): 135 Foreign direct investment: $2bn Current account as % of GDP: -15.9% Mobile phone penetration: 113% Key export: Petroleum and crude oil Last change of leader: 1997 GDP growth (%)
FRENCH CORRUPTION PROBE
-2.8
-3.6
2.8
8.6
7.9
7.8
8
2015
2016
2017*
2018*
2.6 GDP ($bn)
*Estimation October 2017
F
or President Denis Sassou Nguesso, 2018 offers a reassuring continuation of hegemonic executive power – surrounded by trusted acolytes and with opposition parties confined to a token parliamentary and municipal presence and fierce critics marginalised or jailed. But after struggling to stave off financial difficulties since the 2014 collapse in oil prices, Brazzaville was finally forced in 2017 to seek the assistance of the International Monetary Fund (IMF), with potentially painful consequences for government spending power and attitudes to governance and financial accountability. The opposition Union Panafricaine pour la Démocratie Sociale – to which prime minister Clément Mouamba belonged until he defected to the government camp in 2015 – and Guy Brice Parfait Kolélas’ UDH-Yuki pose few challenges to the government. They each have eight seats in the 151-member national assembly, whereas the ruling Parti Congolais du Travail has 90. However, the government faces opponents willing to use violence to achieve their aims. Pool region, just north and west of Brazzaville, remains deeply unsettled, with civilians paying the price of a nasty local conflict between the Ninja guerrillas led by Frédéric Bintsamou (‘Pasteur Ntumi’) and government troops. The United Nations estimated that165,000peopleneededhumanitarian aid due to the fighting in 2017.
system on the road by borrowing against oil export shipments. But that gamble has backfired: less than a decade since much of Congo’s international debt was written off, the country enters 2018 with a debt burden of $9.7bn, equal to 110% of gross domestic product. Theregimewillbeunderpressurefrom the IMF to protect core social spending and basic services in the year ahead. That will present Sassou Nguesso’s ministers with the task of pruning budgets that keep security forces, bureaucracy and political establishment onside. The government scrambled to make payments and briefly missed one on a eurobond in August2017duetoongoingdisputes over old debts. In October, the government said it was considering a temporary freeze on payments to private creditors.
CAR
the regime’s most respected and charismatic opponent, has been kept in jail for much of the past 18 months. The country’s economic problems loom large in 2018. The government had begun its talks with the IMF earlier in the year by massively understating the scale of Congo’s debts, only to see its credibility undermined when the true position was revealed. High pre-2014 oil prices translated into an unimpressive and often ill-judged development return – exemplified by the construction of an international airport in Ollombo to serve Sassou Nguesso’s home town. After the oil shock, the regime sought to keep the
These hard choices will be made against the unfolding backdrop of the “Biens Mal Acquis” affair in France – a judicial probe into how members of African ruling families acquired their French assets. Several close relatives of the president have been placed under formal investigation: daughter Julienne Sassou Nguesso and her husband Guy Johnson, sister-in-law Catherine Ignanga, and two of his nephews, Wilfrid Nguesso and Edgar Nguesso. This makes for a difficult context in which to promote the political role of the president’s son, and presumed favoured heir, Denis-Christel Sassou Nguesso, currently a parliamentarian and deputy chief executive of the national oil company Société Nationale des Pétroles du Congo (SNPC). In October, the government promised to audit and reform the oil-dependent economy’s most important state-owned company. Some opaque elements in the management of the country’s oil are already coming to light. In 2017, Italian prosecutors launched an investigation into state-owned Eni’s activities. In 2017, the Swiss authorities launched a corruption investigation into the activities of commodities trader Gunvor in Congo.
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CENTRAL AFRICA
COUNTRY 175 PROFILES
SÃO TOMÉ E PRÍNCIPE
Trovoada treading water PRINCIPE
Oil prospects continue to disappoint and infrastructure projects are delayed
SÃO TOMÉ
SÃO TOMÉ E PRÍNCIPE
T
hanks to an absolute major ity in parliament, in 2018 the government of Prime Minister Patrice Trovoada will be the first one since the introduction of multi party democracy in 1990 to conclude its fouryear term. As the country goes to the polls, the Trovoada government has largely failed to attract foreign invest ment, transform the economy, reduce poverty and create jobs as promised in the 2014 legislative elections. Backed by a programme with the International Monetary Fund, the government is implementing austerity measures, which have increased the hardships of the impoverished majority of the population. The measures include reforming staterun utilities, cutting subsidies and reducing spending. Legislative elections are due in October, and local elections that were postponed in 2017 may be held at the same time. Trovoada, 55, plans to run again and counts on the help of right hand man Afonso Varela, the minister in the presidency for parliamentary affairs. The polls will show if the opposition can capitalise on the dwindling populari tyofTrovoadaandhisAcçãoDemocrática Independente (ADI). The ADI could lose its majority – 33 seats in the 55member national assembly – but the main opposi tion group, the Movimento de Libertação de São Tomé e Príncipe/Partido Social Democrata (MLSTP/PSD, 16 seats) faces its own challenges. LEADERS WANTED
The party is plagued by internal divisions and it lacks a charismatic and popular leader, as chairman Aurélio Martins is a controversial figure. Notwithstanding, the MLSTP/PSD might be able to retake a few of the district councils lost to the ADI in the 2014 local elections. THE AFRICA REPORT
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SÃO TOMÉ Atlantic Ocean
5 km
Population: 0.2 million Population growth: 2.2% GDP per capita: $1,749 Life expectancy: 66.6 Adult literacy: 74.9% Inflation: 4.5% Human development index (out of 188 countries): 142 Foreign direct investment: $22m Current account as % of GDP: -10.2% Mobile phone penetration: 85% Key export: Cocoa beans Last change of leader: 2014 GDP growth (%)
5
4 GDP ($bn)
0.3 2015
4.1
5.5
0.4
0.4
0.4
2016
2017*
2018*
The prospects for the other opposition parties – the Partido de Convergência Democrática (five seats) and the União para a Democracia e Desenvolvimento (one seat) – are not any better, since they lack both a popular leadership and campaign funds. The three opposition parties continue to denounce what they call Trovoada’s authoritarian style and say he will do anything to remain in power. They argue that the ADI has unfair advantages with the newly established constitutional court and the restructured electoral com mission. The ADIdominated national assembly passed legislation in 2017 that
D E C E M B E R 2 017- J A N UA R Y 2 018
allowed the governing party to control the composition of both institutions. Tourism, construction and agriculture remain the bases of the economy, which continues to grow at too slow a pace to make major advances in the fight against poverty. The cocoa sector accounts for most of the country’s agricultural ex ports, and cocoa exports dropped in the first quarter of 2017 to 423tn from 632tn in the same period of 2016, due to poor weather and lower prices. Investment flows from countries like Portugal and Angola are expected to remain modest. And with a drop in tax revenue, the government is working on the introduction of a valueadded tax announced for 2019. STUCK IN PORT
*Estimation October 2017
The political class is gearing up for legislative elections in October 2018
When the Trovoada government abruptly cut ties with Taiwan and re established full diplomatic relations with China in late 2016, it expected Beijing to help finance the construction of a deepsea port in Fernão Dias. However, the construction work for this large infrastructure project – with a price tag of $800m – has not begun. The port was due to be operational in 2019. The government is also waiting on Chinese help to expand the international airport at São Tomé and welcomed a $146m aid package from Beijing at a time when it was cutting spending in 2017. As far as São Tomé’s lacklustre oil sector is concerned, 2018 might be de cisive since Kosmos Energy and Galp Energia will then conclude the analysis and interpretation of data from their 3D seismic survey conducted in 2017 in the exclusive economic zone (EEZ)’s Blocks 5, 6, 11 and 12. If the results are positive, the drilling of exploration wells could take place in 2019. However, if they are disappointing, the EEZ might suffer a similar fate as the moribund Joint Development Zone with Nigeria. There, companies have abandoned four of five blocks since 2012 due to poor exploration results. Meanwhile, the cur rent Nigerian owners of the remaining block have remained largely inactive.
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COUNTRY PROFILES
WEST AFRICA CONTENTS 178 PEOPLE TO WATCH
LIBYA
180 BENIN ALGERIA
181 BURKINA FASO 182 CABO VERDE
MALI
MAURITANIA
183 CÔTE D’IVOIRE
DAKAR
185 GAMBIA
NIGER
Timbuktu
186 GHANA
Gao
SENEGAL
BANJUL
Mopti
GAMBIA
BAMAKO
GUINEABISSAU
BISSAU
CONAKRY FREETOWN
CABO VERDE
NIAMEY
CÔTE D'IVOIRE
SIERRA LEONE
MONROVIA
YAMOUSSOUKRO
LIBERIA
PRAIA
Maiduguri
BENIN
PORTOLOMÉ NOVO
ACCRA
Abidjan
190 LIBERIA
NIGERIA
TOGO GHANA
188 GUINEA 189 GUINEA-BISSAU
OUAGADOUGOU
BURKINA FASO
GUINEA
CHAD
Zinder
191 MALI
ABUJA
Port Harcourt
192 NIGER CAR CAMEROON
Atlantic Ocean
300 km
193 NIGERIA 195 SENEGAL 196 SIERRA LEONE
WEST AFRICA 2017 GDP (% of regional total) 0.2% Gambia 0.2% Guinea-Bissau 0.3% Cabo Verde 0.4% Liberia 0.7% Sierra Leone 0.8% Togo 1.4% Niger 1.6% Guinea 1.7% Benin 2.3% Burkina Faso 2.7% Mali 2.8% Senegal 7.1% Côte d’Ivoire 8% Ghana
Nigeria
69.8%
TOTAL
$565.8bn
SOURCE : GDP CURRENT PRICES – IMF WORLD ECONOMIC OUTLOOK DATABASE, OCTOBER 2017
197 TOGO
512.4
800.7
377.4
2030
2018
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2050
SOURCE: UN WORLD POPULATION DIVISION (THE 2017 REVISION)
WEST AFRICA POPULATION (millions)
D E C E M B E R 2 017- J A N UA R Y 2 018
249
Number of verdicts, including judgments and rulings, delivered by the ECOWAS Community Court of Justice since its inception in 2001
MARCH SIERRA LEONE Presidential elections
MARCH CÔTE D’IVOIRE Africa CEO Forum
JULY NIGERIA Nigeria Oil & Gas conference
AUGUST MALI Presidential elections
177
178 COUNTRY PROFILES
WEST AFRICA
PEOPLE TO WATCH MALI
Didier Dacko
NIGERIA
James Ibori A political comeback?
JAY LOUVION/WTO
In December 2016, after serving half of a 13-year jail sentence in the UK for money laundering, former Delta State governor James Ibori was extradited to Nigeria and returned to a hero’s welcome in his home state. Since his return, he has mainly stayed out of the limelight, although in February 2017, when back in London for a court hearing, he indicated he would appeal against the conviction, which imposes a 10-year ban on running for elected office. Were he to succeed, national elections in 2019 may be the moment when Ibori launches a comeback. “What happens in African politics – you are in it until you die,” he told Reuters outside the court in London.
GAMBIA
Fatoumata Tambajang Justice after Jammeh
HARANDANE DICKO/ITALIA ALL’ONU
Malian General Didier Dacko is the commander of the Sahel’s new G5 force representing the joint efforts of the governments of Burkina Faso, Chad, Mali, Mauritania and Niger in their common struggle against largely Islamist rebel groups in the region. The 5,000-strong force’s headquarters was inaugurated in the Malian city of Mopti in 2017. Dacko will lead the joint force, which, unlike previous joint operations, will have a unified command. The US has not been supportive of the G5 but France provided €50m ($58.2m) to help its initial operations. The year ahead will be a crucial test for Dacko and the G5’s effectiveness as a regional bulwark against terrorist threats. Dacko, 50, has proven his skills in northern Mali, and was named chief of army staff in 2016.
ESTELLE SHIRBON/REUTERS
A general for the G5
Fatoumata Tambajang’s path has taken her from being the leader of the ‘Calabash Revolution’ against president Yahya Jammeh’s regime in 2016 to the country’s vice-president in 2017. The Calabash Revolution was the name given to protests at the country’s high court during a three-month trial of more than 30 opposition activists in 2016. They endured beatings and other forms of abuse from Jammeh’s paramilitary forces. The protests added strength to the civil resistance, resulting in Jammeh’s defeat in the polls on 1 December 2016. Tambajang also chaired the inter-party committee that negotiated the coalition of opposition parties that ran against Jammeh.
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179
GHANA
Boakye Agyarko
Appointed Ghana’s energy minister in February 2017, former Bank of New York vice-president Boakye Agyarko will make key decisions in 2018 about two sectors essential to the economy’s growth: hydrocarbons and electricity. The government is borrowing billions of dollars from China to build oil and gas and other infrastructure. Meanwhile, Kosmos Energy and its partners in the TEN oil field have planned a new drilling programme for 2018 after the International Tribunal for the Law of the Sea ruled in Ghana’s favour in a border dispute with Côte d’Ivoire. Agyarko, 60, went to the US as a political refugee after being shot during a military coup in 1983. He was policy advisor for the New Patriotic Party’s 2016 election campaign.
ISSAM ZEJLY FOR JA
Banking on another oil boom
CÔTE D’IVOIRE
Amadou Gon Coulibaly Continuity ticket Prime minister Amadou Gon Coulibaly wields a lot of power in the central government and is seen as President Alassane Dramane Ouattara’s (ADO) preferred succesor to the presidency in 2020. To get there, the government veteran will have to fend off challenges from former warlord Guillaume Soro and ADO ally Henri Konan Bédié. As a former agriculture minister, he knows what it will take to keep the economy growing at a fast pace, something that could be a key to victory if voters are looking for continuity when elections come around in three years’ time.
NIGERIA
Nnedi Okorafor Futures and fantasies
BRET HARTMAN/TED
The Nigerian-American author Nnedi Okorafor’s star is reaching new heights. She will co-produce the HBO television adaptation of her novel Who Fears Death, which has George R.R. Martin of Game of Thrones fame as an executive producer. She is writing a three-issue comic series for Marvel set in Lagos with a lead superhero called Ngozi, her next novel Remote Control, a fantasy set in a near-future Ghana, will be released at the end of 2017, while the third and final instalment of the Binti novella trilogy, Binti: The Night Masquerade, will go on sale in January. Okorafor has championed more inclusion in the white-male-dominated sci-fi world.
THE AFRICA REPORT
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N° 96
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D E C E M B E R 2 017- J A N UA R Y 2 018
180 COUNTRY PROFILES
WEST AFRICA
BENIN
Tough tasks for Talon President Talon has backed off on his plans for constitutional changes
BENIN
Cotton production reached new highs in the 2016/2017 season
PRIVATISATION’S NEVER EASY
Talon’s economic reforms are unpopular with a population that is suffering from high unemployment and a rising cost of living. Protests organised by civil society organisations, opposition parties and unions in October 2017 were attended by an estimated 10,000 people in Cotonou and Porto-Novo. Teachers and healthcare workers have also been
Parakou TOGO NIGERIA
GHANA PORTO NOVO Cotonou
150 km
Gulf of Guinea
Population: 11.2 million Population growth: 2.8% GDP per capita: $826 Life expectancy: 59.8 Adult literacy: 38.4% Inflation: 2% Human development index (out of 188 countries): 167 Foreign direct investment: $161m Current account as % of GDP: -8.7% Mobile phone penetration: 80% Key export: Gold Last change of leader: 2016 GDP growth (%)
4 2.1
INVESTOR QUARRELS
6
5.4
GDP ($bn)
8.3
8.6
9.4
10.6
2015
2016
2017*
2018*
*Estimation October 2017
O
n election, in 2016, President Patrice Talon said he wanted to bring business sensibilities to government and break the cycle of electioneering’s empty promises. So far, parliament has rejected his attempts to push through a new constitution, which would allow presidents a single six-year term, amongst other changes. Although trade with Nigeria has been hurt by the economic slowdown there, the Beninese economy continues to grow and the cotton sector produced a record harvest in 2016/2017. Talon and his allies control parliament, with the opposition holding just 21 of 83 seats. Many of the politicians who supported former president Thomas Boni Yayi have given their backing to Talon’s plans for government reform and building infrastructure. After parliament blocked his party’s attempts to fast-track the legislative process in April 2017, Talon said he had given up on trying to change the constitution, but he could try to reintroduce the proposed changes using normal parliamentary procedures. Talon, a businessman who made his money in cotton, launched his presidential bid without a grassroots political party and relies on newfound allies who also ran against him. They include Pascal Irénée Koupaki, who is secretary general in the presidency, and planning minister Abdoulaye Bio Tchané.
Talon’s 2016-2021 programme for economic development involves 45 projects across key sectors of the economy. Many are in the transport and logistics sector. They include the new Glo-Djigbé international airport, adding more than 1,300km to the national road network, and rehabilitation and expansion projects at the port of Cotonou, which is responsible for an estimated 80% of government revenue. To improve the business environment, parliament also passed nine laws in 18 months to make the country more attractive to investors.
BURKINA FASO
striking over the government’s spending cuts and plans for privatisation. While Talon complained of government harassment under the previous regime, which accused him of trying to assassinate Boni Yayi, some say history is repeating itself with oppositionist and former Talon ally Sébastien Germain Ajavon. The big-time frozen chicken importer came in third in the 2016 presidential race and since then has been arrested and subjected to intense tax and other investigations. Ajavon was found guilty of fraud in October 2017 and is in turn suing the government for more than $400m in damage to his reputation.
An investor dispute has held back the development of the planned Benin-Niger railway. The Supreme Court ruled in October 2017 that France’s Bolloré does not have the right to build the rail link, and that local investor Samuel Dossou and his Petrolin Group, which has no prior experience in the field, is the rightful holder of a government contract. Another conflict emerged in October over South Africa’s MTN not paying its licence fees, which MTN says are too high. Agriculture continues to grow thanks to big harvests. The 2016/2017 season delivered a record 451,205tn of cotton, according to the Association Interprofessionnelle du Coton (AIC). That represented 20% growth on the previous season, and the AIC predicts production could reach 500,000tn in 2017/2018. The government plans to prepare the ground for large-scale investments in the country’s different agricultural zones. To meet the growing demand for energy, the government is backing the construction of four power plants, each with a capacity of 120MW. Work on the first plant, financed by the government and the Islamic Development Bank, began in September 2017. Onthesocialfront,thegovernmenthas rolled out regulations that make health insurance mandatory for all Beninois. The policy takes effect in January 2018, with the government paying for the poorest sections of the population and others covered by their employers.
THE AFRICA REPORT
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N° 96
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D E C E M B E R 2 017- J A N UA R Y 2 018
WEST AFRICA
COUNTRY 181 PROFILES
BURKINA FASO
Ouaga blues Insecurity and post-transition problems cast a dark cloud over politics
MALI NIGER
The government has announced a vast development plan for the north
UNFINISHED BUSINESS
Kaboré’s government has not delivered on any big post-Compaoré wins. The former president himself is living in Côte d’Ivoire and may not face justice in his trial for the killing of protesters that started in May 2017. President Alassane Ouattara’s government refuses to extradite Compaoré. THE AFRICA REPORT
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BURK INA FASO Bobo-Dioulasso GHANA
BENIN TOGO
CÔTE-D'IVOIRE
100 km
Population: 19.2 million Population growth: 2.9% GDP per capita: $696 Life expectancy: 59 Adult literacy: 36% Inflation: 1.5% Human development index (out of 188 countries): 185 Foreign direct investment: $309m Current account as % of GDP: -7.2% Mobile phone penetration: 84% Key export: Gold Last change of leader: 2015 GDP growth (%)
STRICTER BANKING
5.9
6.4
6.5
11.2
12.1
13.2
14.7
2015
2016
2017*
2018*
4 GDP ($bn)
*Estimation October 2017
P
resident Roch Marc Kaboré and the governing Mouvement du Peuple pour le Progrès (MPP) have little time left to make their case for re-election before the next vote is held in 2020. Long gone is the euphoria after the overthrow of Blaise Compaoré in 2014, and Kaboré is struggling to make hismark. Meanwhile,the cottonandgold sectors are boosting economic growth. Kaboré’s chances in 2020 are somewhat slimmer after the death of his chief strategist, Salif Diallo, in August 2017. Diallo, who was president of the national assembly, had helped both Compaoré and Kaboré win presidential elections. The government plans to pass a new constitution in 2018 that will be subject to a national referendum. The opposition and non-governmental organisations insist that they will not accept any changes to presidential term limits. The proposed constitution will weaken presidential authority and create a semi-presidential system of governance. It also enshrines rights to water, healthcare and housing. The opposition is led by Zéphirin Diabré, president of the Union pour le Progrès et le Changement. He regularly criticises the government for its inertia, but has emphasised that the country’s major parties generally agree on what needs to be done. The opposition is joined by a swathe of civil society groups that stand up for the ideals of the movement that led to Compaoré’s downfall.
OUAGADOUGOU
To keep the economy growing, the government wants to mobilise funding for its Plan National de Développement Economique et Social. Kaboré’s government is currently in talks with the International Monetary Fund to support infrastructure spending, to fight corruption and waste, and to expand domestic revenue generation. The key sectors for the year ahead are cotton and gold. The country produced 39.6tn of gold in 2016 and aimed for 45tn in 2017. Production is set to grow with the commissioning of Endeavour Mining’s Houndé mine in October 2017, which is set to produce 235,000oz per annum.
D E C E M B E R 2 017- J A N UA R Y 2 018
Other mines are being developed, and the Société des Mines de Sanbrado should begin generating 150,000oz per annum from 2019. Mines minister Oumarou Idani is calling for better regulation and a crackdown on artisanal mining. Electricity is a constraint for the mining sector. Some miners are turning to their own solutions rather than relying on the grid. Iamgold signed a deal in March 2017 for the construction of a 15MW solar plant for its Essakane mine. The African Development Bank is also financing solar projects to generate a combined 50MW for the cities of Ouagadougou and Bobo-Dioulasso. In the banking sector, there could soon be more local and regional consolidation. Banks in the Union Economique et Monétaire Ouest Africaine area have to meet capital ratios that will begin to rise in January 2018 and reach 11.5% in 2022. Second only to gold as an export, the cotton sector expects good results, too, with the harvest predicted to rise from 683,000tn in 2016/2017 to 820,000tn in 2017/2018. But economic growth also depends on security. Since 2015, more than 100 people have been killed in terrorist attacks that have hurt the tourism and hotel businesses. Insecurity is also on the rise in several regions of the country, particularly the north, despite the best efforts of the security services. An attack on vehicles going to an Avocet Mining mine killed two people in September. Kaboré himself served as defence minister until he named Jean Claude Bouda to the post in February 2017. The military says that it does not have the equipment and troops it needs to provide security across all of Burkina Faso’s territory. In August, the government announced the launch of a vast development plan for northern Burkina to help in the fight against insecurity. It includes 455bn CFA francs ($809m) in projects to improve security and build roads, schools and water projects. About half of the population of the region has access to clean water.
182 COUNTRY PROFILES
WEST AFRICA
CABO VERDE
Change doesn’t come quickly The MpD has been slow to implement its campaign promises WI
Privatisations of key state companies are due soon
AIRLINE TURBULENCE
The government has been slow to roll out structural changes to improve the economy. In May, economy minister José Gonçalvesannounced part of therestructuring plan for TACV, the state-owned airline and a drain on state resources. The companystoppeditsdomesticoperations
ND
WA
LE
EW
RD
ISLES Atlantic Ocean ISLES ARD
LITTLE INVESTOR APPETITE
PRAÏA
50 km
Population: 0.5 million Population growth: 1.2% GDP per capita: $3,213 Life expectancy: 73.5 Adult literacy: 87.6% Inflation: 1% Human development index (out of 188 countries): 122 Foreign direct investment: $119m Current account as % of GDP: -6.1% Mobile phone penetration: 122% Key export: Petroleum and crude oil Last change of leader: 2016 GDP growth (%)
3.8
1
4
4.1
GDP ($bn)
1.6
1.6
1.7
1.9
2015
2016
2017*
2018*
*Estimation October 2017
T
he government of Prime Minister Ulisses Correia e Silva came into power in 2016 and has since found that implementing campaign promises is more difficult than making them. Those goals included profound economic changes, with a new model more focused on private investment and less dependent on external aid. The high level of government debt means that the Movimento para a Democracia (MpD) government has little room for manoeuvre. The country’s financial stability is at risk because public debt stood at 131% of gross domestic productin2016.Theeconomyisgrowing, but not as fast as the government would like, and it says that it cannot reduce the country’s debt in the short term. Fighting tax evasion and improving tax collection are two of the finance ministry’s top goals. On the campaign trail in 2016, the MpD promised to create 45,000 jobs in half a decade. In March, the Instituto Nacional de Estatísticas reported that the working-age population without a job rose from 12.4% in 2015 to 15% in 2016. In the 2016 legislative elections, the Partido Africano da Independência de CaboVerde,ledbyJaniraHopfferAlmada, was voted out of power. It won 29 seats in the 72-member national assembly and is the government’s most vocal critic. Almada says the government is hurting the poorest segments of the population by raising water and electricity tariffs.
640,000 tourists in 2016, and the target is to reach 1 million. In September, the government also passed a law to give residence permits to foreigners who invest in real estate. The country’s first casino officially opened in March 2017 on the island of Sal, with another one under construction in the capital city, Praia.
CABO VERDE
in order to prepare for privatisation, but the selling of shares was delayed, and, to some surprise, the government announced a one-year management contract with Icelandair in August 2017. About 260 employeesare expected to lose their jobs in the coming months due to the airline’s estimated $120m in debt, and the government says it still intends to sell off shares in TACV. Travel and tourism accounted for an estimated 17% of gross domestic product in 2016. Numbers from Europe are growing, and the government is in talks about joining the European visa-free Schengen area. The country received
Twoothermajorstate-ownedcompanies, airport manager Aeroportos e Segurança Aérea and electricity company Electra, are due to be privatised. The government hopes to raise around $100m from the selling of state-owned stakes. Early signs suggest that there is not much investor appetite in Cabo Verde. In August, the government cancelled a major bidding round for port concessions due to the lack of companies interested. Inabidtosupportamoreactiveprivate sector the government is working on a guarantee fund to help share the risks with commercial banks that will lend to local companies. It is also backing a project to create a special economic zone based around Porto Grande in the island of São Vicente. The MpD government is in talks with China on help for the project. Inter-island maritime transport is a problem. No government has ever managed to find an adequate solution. An old or inadequate fleet leaves peripheral islands isolated for several days at a time. Campaigners are calling for increased decentralisation to give local government more control over finances and decision-making. In São Vicente, more than 10,000 people took to the streets on 5 July to demand more autonomy, which was a campaign promise that the MpD has yet to deliver on. Security is another problem high on the national agenda. Urban crime is high. Aware of what this means, especially for the tourism sector, the government is implementing a video surveillance programme in several cities. Government statistics show that 90.1% of the population has access to electricity and that the share of renewables – 20% – is rising quickly.
THE AFRICA REPORT
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N° 96
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D E C E M B E R 2 017- J A N UA R Y 2 018
WEST AFRICA
COUNTRY 183 PROFILES
CÔTE D’IVOIRE
Pressures pile up on Ouattara Security and the succession are on the agenda ahead of the 2020 vote GUINEA
MALI
Cocoa production reached an Ivorian record in 2016/2017, lowering prices
MUTINIES PAY OFF
Unexpected expenses aggravated the cocoa rout. After two waves of army mutinies that paralysed several cities in January and May 2017, the government ceded to the soldiers’ monetary demands and paid $170m in bonuses to more than 8,000 soldiers. This opened the way to more demands. The government agreed in July to pay almost $500m to civil servants over the next eight years to settle a dispute over wage arrears. It THE AFRICA REPORT
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CÔTE D'IVOIRE
LIBERIA
GHANA
Bouaké YAMOUSSOUKRO Abidjan Gulf of Guinea
200 km
Population: 24.3 million Population growth: 2.5% GDP per capita: $1,599 Life expectancy: 51.9 Adult literacy: 43.1 Inflation: 1% Human development index (out of 188 countries): 171 Foreign direct investment: $481m Current account as % of GDP: -2.9% Mobile phone penetration: 126% Key export: Cocoa beans Last change of leader: 2010 GDP growth (%)
7.7
7.6
7.3
32.8
35.7
39.9
45.4
2015
2016
2017*
2018*
8.9 GDP ($bn)
obtained budget support from the World Bank and the IMF to help face these internal and external shocks in 2017. After cocoa production hit an historic record and reached 2m tonnes in the 2016/2017 season, farmers are expecting a somewhat smaller crop for 2017/2018. Forecasts vary from 1.7m to 1.9m tonnes, which will drive a global surplus for the second year in a row and will help to maintain low prices. After a series of problems where local companies were not able to deliver on their cocoa export contracts, the government is implementing a series of reforms in the cocoa industry (see box overleaf ).
D E C E M B E R 2 017- J A N UA R Y 2 018
Much of the country’s agriculture is rain-fed and smallholder-driven. In the first half of 2017, coffee purchases declined 73% to 27,987tn because of unfavorable weather conditions. While output keeps declining, the government wants to bring production to 200,000tn by 2020. Production of cashews is set to rise to 673,236tn in 2017, up from 649,587tn in 2016. Crude oil output fell 21% in the first half of 2017 to 36,061 barrels per day (bpd), compared with an average of 42,000 bpd in 2016. In September, the International Tribunal for the Law of the Sea ruled in favour of Ghana in a boundary dispute, leaving the TEN fields – holding an estimated 2bn barrels of oil and 1.2trn cubic feet of natural gas – to Ghana. POWER PROJECTS
*Estimation October 2017
A
fter his most difficult year since taking office in 2011 President Alassane Ouattara is hoping for some relief. In 2017 cocoa prices slumped and hurt the country’s finances, soldiers staged mutinies, civil servants led strikes and tensions emerged in the ruling coalition ahead of the 2020 elections. The political class is aflutter and machinating behind the scenes amidst uncertainty about who will replace Ouattara as president in three years’ time. Despite all these challenges, Côte d’Ivoire remains one of the fastest-growing economies in subSaharan Africa thanks to its agriculture and infrastructure expansion. Stateinvestmenthasbeencriticaltothe country’s growth since the end of the civil war in 2011. But with lower cocoa prices, the government has not been reeling in its high-spending habits enough. The budget deficit is set to rise to 4.5% in 2017, missing the target of 3.7%. Cocoa futures have slumped more than 30% since mid2016, affecting earnings in a country where cocoa beans account for about 30%ofexports. Thegovernment trimmed expenditures – except salaries – by 10% in 2017. It cut the investment budget by 200bn CFA francs ($358m), affecting spending on the likes of constructing schools, health centres and roads.
BURKINA FASO
The gas sector is attracting more investment, and gas output was stable in the first half of 2017 at an average of 236,126 cubic feet per day. French oil giant Total is leading a consortium that is developing a liquefied natural gas project in Vridi, near Abidjan, due to be commissioned by the middle of 2018. Construction began in late 2016, and the plant is due to have a capacity of 3m tonnes per annum. Electricity production in the first half of 2017 rose 4% to 5,099GWh as the 285MW hydroelectric dam at Soubre, on the Sassandra River, started operating. The plant, built by China’s Sinohydro, brought installed power capacity to 2,200MW. The country is talking with Sinohydro about three other dams on the same river that would have a combined capacity of 500MW. The government, which targets capacity of 4,000MW by 2020, has six other dam projects of at least 600MW each in the pipeline. Côte d’Ivoire plans to invest massively in infrastructure in 2018. In October, the government proposed to increase the 2018 budget by 4.3% to 6.7trn CFA francs, of which a third will be dedicated to investments, including in infrastructure. At the port of Abidjan, extension works on the Vridi canal by China Harbour Engineering are well under way and will
184 COUNTRY PROFILES
WEST AFRICA
CÔTE D’IVOIRE Pressures pile up on Ouattara
DEAL OR NO DEAL?
Planned for 2020, the next presidential election is already in politicians’ minds and has fueled tensions within the governing coalition, the Rassemblement des Houphouétistes pour la Démocratie et la Paix. Divisions have emerged as
Cocoa beans production (million tonnes)
Côte d’Ivoire
Global
4.251
3.981
4.700
1.796
1.581
2.010
2014/2015
2015/2016
2016/2017
$1.6bn
Cost of the Métro d’Abidjan project, to be built by a French-only consortium
ex-president Henri Konan Bédié, the head of the Parti Démocratique de Côte d’Ivoire (PDCI), says the group’s candidate for the next vote will have to come from his party as part of a 2014 agreement to rotate the presidency between the parties. Ouattara’s Rassemblement des Républicains denies such a deal exists. In July 2017, Ouattara demoted two PDCI ministers, including defence minister Alain-Richard Donwahi, while promoting two of his confidants: prime ministerAmadouGonCoulibaly,whoinherited the budget portfolio, and Hamed Bakayoko, who took over the defence
SOURCE: ICCO, AUGUST 2017
becompletedin2019.Asecondcontainer terminal, to be operated by Bolloré, is also being constructed. A total of 860bn CFA francs is being invested, as the port wants to double its traffic to 40m tonnes by 2023. In San-Pédro, Mediterranean Shipping Company (MSC) signed a 35-year concession deal to operate the container terminal. MSC and Dubai’s Bilal General Transport will spend nearly $300m to expand the terminal. A benchmark project of Ouattara’s second term is an urban train line for Abidjan, known as the Métro d’Abidjan. The first line of the railway was due to be built and operated by a French-South Koreanconsortiumbutthegroupfailedto raise the financing. France finally agreed to fund the €1.4bn ($1.6bn) project and requested that only French companies build it. Bouygues and Keolis remain in the consortium, and the Ivorian government is conducting talks with Alstom, Thalès and Colas Rail to take part in the construction that will take four years to complete. The metro will have the capacity to transport 530,000 passengers per day and will reshape Abidjan.
ministry. The move was seen as a way for Ouattara to tighten his inner circle and prepare for his succession. Gon Coulibaly is widely seen as Ouattara’s preferred successor. Observers say it is likely that the governing coalition will split before the next election. The cabinet changes also targeted Guillaume Soro, the ex-rebel leader turned president of the national assembly. The May 2017 discovery of a cache of weapons during the mutinies in a house said to be owned by Soro’s head of protocol, Souleymane Kamaraté Koné, has fueled suspicions that Soro was behind the instability. Soro, seen as a contender for the 2020 race, still exerts influence on the army, made up of many ex-rebels he once commanded. Issiaka Ouattara, who became head of the Garde Républicaine in January, is a key Soro ally in the armed forces. Soro and Bédié met several times this year in what was interpreted as a rapprochement between the two men, possibly in preparation for a joint 2020 ticket. Relations between Soro and Ouattara are said to be tense, and Soro called for dialogue in October 2017. It is not clear whether the Front Populaire Ivoirien of ex-president Laurent Gbagbo – which is still deeply divided between the Gbagbo-or-nothing camp and those who want to move on – will be able to use these divisions to regain some national influence.
Hot times for the cocoa regulator THE COCOA SECTOR was hit hard last season by the slump in prices – a consequence of high production from West Africa which led to a nearly 400,000tn global surplus. This has called into question the benefits of the recent production increases, which are seen as unsustainable because they have been largely made possible at the expense of protected forests.
These problems revealed the weaknesses of Côte d'Ivoire’s cocoa marketing system, based on forward sales, which was put in place in 2012 to reduce the effect of price fluctuations on farmers. Last year’s market slump caused dozens of Ivorian exporters to default on their contracts. More than 300,000tn had to be re-auctioned, weighing
on already falling prices and forcing the public regulator, the Conseil du Café-Cacao (CCC), to tap into its stabilisation fund. The move cost the CCC more than $500m. The regulating body has been criticised for failing to check if local shippers were financially solid. The CCC also communicated very poorly during the crisis, showing how opaque the THE AFRICA REPORT
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N° 96
sector continues to be despite multiple pledges of more transparency. The government requested an audit of the marketing system and replaced the CCC head in July. The new CCC team led by Yves Koné has toughened controls for exporters and buyers. One of its biggest challenges for the CCC will be to regain trust from farmers. •
D E C E M B E R 2 017- J A N UA R Y 2 018
WEST AFRICA
COUNTRY 185 PROFILES
GAMBIA
Joy and jolts after Jammeh production and a steep drop in tourism, which accounted for about 9% of gross domestic product before the 2016 political crisis. Banjul is now working with the International Monetary Fund and donor governments to get its finances on a more sustainable basis. The government cut the national budget by 6% in 2017.
The autocratic Jammeh regime has left the new government with a huge task SENEGAL
RESPECT FOR HUMAN RIGHTS
The security forces enabled Jammeh’s brutality, and the Barrow government is engaged in thoroughgoing reforms that include downsizing and retraining to ensure respect for civilian control and human rights. The government has also brought murder charges against several senior officials of the national intelligence agencies. The Economic Community of West African States intervened in Gambia to get Jammeh to respect the results of THE AFRICA REPORT
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GAMBIA BANJUL
PORTS, BRIDGES AND ROADS
SENEGAL
50 km
Population: 2.1 million Population growth: 3% GDP per capita: $488 Life expectancy: 60.5 Adult literacy: 55.5% Inflation: 8.3% Human development index (out of 188 countries): 173 Foreign direct investment: -$2m Current account as % of GDP: -9.4% Mobile phone penetration: 140% Key export: Wood Last change of leader: 2017 GDP growth (%)
4.3
2.2
3
3.5
GDP ($bn)
0.9
1
1
1.1
2015
2016
2017*
2018*
*Estimation October 2017
A
fter the jubilation of the surprising downfall of dictator Yahya Jammeh in January 2017, President Adama Barrow faces the crushing weight of expectations. Barrow says his immediate priorities are health, agriculture, electricity and national reconciliation. This is followed by constitutional, electoral and institutional reforms and improvement to the management of the civil service, security services and state-owned companies. Barrow relies on the support of seven political parties, including the People’s Progressive Party and the People’s Democratic Organisation for Independence and Socialism (PDOIS). TheUnitedDemocraticPartybecamethe biggest opposition party under Jammeh. All of the parties except the PDOIS have representatives in ministerial positions in the new government. Vice-president Fatoumata Tambajang is a representative from civil society and a key player in the events that swept Jammeh from power. In August, opposition leader Mama Kandeh of the Gambia Democratic Congress was questioned by the police after accusing Barrow’s administration of stealing money given by foreign donors. His supporters said this was a Jammehstyle clampdown on dissent.
Atlantic Ocean
An expected rebound in tourism could help the economy to grow
the December 2016 presidential election, and some 500 troops are due to stay in Gambia until the middle of 2018. A government commission is investigating the assets of Jammeh and his allies in the hope of being able to bolster the state’s coffers. Meanwhile, the government is setting up a truth, reconciliation and reparation commission to deliver justice for victims of crimes committed under the 22 years of Jammeh’s rule. Many people want Jammeh to be tried, but he is in exile in Equatorial Guinea. The new government inherited difficult economic circumstances, including high levels of debt, poor agricultural
D E C E M B E R 2 017- J A N UA R Y 2 018
The port at Banjul needs major investment to accommodate more traffic. The government is talking to investors about an expansion. In the meantime, dredging works will allow three more wharfs to be operational. Also under consideration is a new deep-sea port at Tanji. Regional infrastructure is needed to improve trade ties, and in late 2017 the 950m Trans-Gambia bridge was 40% complete. It should facilitate trade between Gambia, Guinea, Mali and Senegal. Some other ongoing road projects include the Laminkoto-Pasamass road and the Basse-Fatoto-Koina road being built by Chinese contractors. After recent discoveries in Senegal, oil companies are interested in exploration in Gambia. However, the government is fighting with controversial investor Frank Timis’s African Petroleum, which is seeking arbitration after Banjul said the company’s rights to Blocks A1 and A4 had expired in 2016. The government says that it is already looking for new investors. Gambia ended its diplomatic recognition of Taiwan in 2017 and hopes for an influx of Chinese investment. The National Water and Electricity Company’s plants are in a state of disrepair. The government estimates that the construction of a new 20MW plant and other rehabilitation works will help to end the electricity crisis within two to three years. In July, the governments of Senegal and Gambia signed a deal for Dakar to export 10MW of power to Gambia in order to help bridge its production deficit. Relations between the two countries have improved significantly since Jammeh, who Dakar accused of supporting a separatist movement in Casamance, left power.
186 COUNTRY PROFILES
WEST AFRICA
GHANA
Back to boom times More oil and gas production will kickstart further growth in 2018
Tamale
The NDC is about to choose its new leader after its 2016 electoral losses
BUSINESS FRIENDLY
In September, the finance ministry announced that the 2018 budget will target agriculture and industrialisation projects that are part of the ‘One District, One Factory’ plan. According to the trade and industry ministry nearly 200 factories are ready to be launched, all of which
TOGO
GHANA Kumasi
CÔTE D'IVOIRE
ACCRA Takoradi
150 km
Gulf of Guinea
Population: 28.8 million Population growth: 2.2% GDP per capita: $1,608 Life expectancy: 61.5 Adult literacy: 76.6% Inflation: 11.8% Human development index (out of 188 countries): 139 Foreign direct investment: $3.5bn Current account as % of GDP: -5.8% Mobile phone penetration: 139% Key export: Gold Last change of leader: 2017 GDP growth (%)
3.8
3.5
5.9
MORE REFORMS NEEDED
8.9
GDP ($bn)
36.9
42.8
45.5
49.2
2015
2016
2017*
2018*
*Estimation October 2017
E
conomic threats are the biggest worry for President Nana Akufo-Addo as he enters into his second year in the presidency in 2018, and the year ahead could produce double-digit growth. The New Patriotic Party (NPP) came into government with ballooning public debt and spending restrictions that were part of a three-year International Monetary Fund (IMF) bailout package that is due to come to an end in 2018. Akufo-Addocampaignedasareformer, and putting that into practice is proving difficult. The economy is set to grow strongly in 2017 and 2018, but there are huge debts to be settled for state-run corporations and the country needs new infrastructureinordertoboostproductivity.Toachievethatandotherprogrammes, Akufo-Addo is working with key allies: vice-presidentMahamuduBawumia,who focuses on big economic plans; finance minister Ken Ofori-Atta; justice minister Gloria Akuffo; foreign minister Shirley Ayorkor Botchway; agriculture minister OwusuAfriyieAkoto;andenergyminister Boakye Agyarko. The NPP is yet to deliver on its promise to appoint a special prosecutor for corruption cases after 2017 yielded many instances of mismanagement by the administration of President John Dramani Mahama. As The Africa Report went to press, a bill to address the establishment of the office was due to be brought before parliament.
in principle agreed to provide $1bn for infrastructure projects and $10bn for the development of the bauxite and aluminium industry, which will include railway lines linking to those in Burkina Faso. The government also says that it will use $2bn of the controversial $3bn China Development Bank loan that got stopped in its tracks in 2014 for infrastructure projects in the oil and gas sector. Accra and Chinese firm Sinohydro signed a preliminary deal in July for $4bn worth of hydroelectricity and solar power plants.
BURKINA FASO
will be privately owned. The country has 216 and analysts warn that it will be difficult to identify viable projects and drum up investor interest. Foreign and local investors are watching keenly to see if the government makes good on its promise to reduce red tape and promote a more business-friendly environment. China is not waiting, however, and the government is counting on help from Beijing. Previous governments blew hot and cold about Chinese loans, but China has already agreed on a $15bn facility, $2bn of which will go towards One District, One Factory projects. China Export-Import Bank has
Ghana’s $918m bailout programme with the IMF, which was agreed in 2015, will come to an end in December 2018 after the government requested an extension from April. Over the past three years, the country’s public debt has continued to increase. Ghana had a public debt stock of 68.6% of gross domestic product in June 2017. The IMF predicts that it will still be more than 66% by the end of 2018. The IMF is warning that the government’s reforms may not be deep enough. In 2017, the government tried to deal with the huge debts of state-owned energy companies, but investors were not interested in what was on offer. In October, Accra struggled to attract buyers for $820m in local-currency bonds to be used to wipe out old debts. The IMF says other measures are needed to allow the companies to run on a sustainable basis. The country’s biggest hopes for an economic growth spurt are the oil and gas sector. There have been a series of recent positive developments. In September, after the three-year court case, the International Tribunal for the Law of the Sea ruled in Ghana’s favour in its dispute over maritime borders with Côte d’Ivoire. During the case, companies had to halt some of their oil development projects. Tullow’s TEN project – which under the court ruling in 2016 was barred from the new drilling of wells and expanding field developments – is aiming to reach its full capacity of 80,000 barrels per day (bpd), up from an average of 50,000
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WEST AFRICA
AMBITIOUS TARGET
Ghana had a bumper harvest in the 2016/2017 season with an estimated 950,000tn, its highest level since 2011’s 1m tonnes. Cross-border smuggling will continue to be a problem given the price disparity with neighbouring Côte d’Ivoire. For this season, the Ivorian cocoa authority reduced the producer
Ghana’s oil production growth In thousand barrels a day
250 200
production expected production
150 100 50 0
2013
2014
2015
2016
h1-17 oct. 17
$8.95bn
Oil, gold and cocoa export revenue in August 2017, from $7bn a year earlier
price to $1,223 per tonne, whereas the price in Ghana is $1,725. Elsewhere in the agricultural sector, the government has set an overly ambitious target of reaching food self-sufficiency by 2020. To help get there, the agriculture ministry is seeking to get improved seeds to 300,000 small-scale farmers by the end of 2018. After a rocky year plagued with reports of illegal mining in 2017, the government issued a blanket ban on small-scale gold miners in a bid to curb environmental degradation. This has hurt legitimate businesses, leaving those who accessed loans in debt, and workers jobless.
SOURCE: MINISTRY OF FINANCE, GHANA
bpd this year. Production at the Jubilee field remains around 100,000 bpd while Eni’s Sankofa-Gye Nyame field, which launched operations in July 2017, has the potential to reach 45,000 bpd in the first phase of its operations. The electricity sector should also get a boost in the year ahead from new gas projects. In February 2018, the Sankofa gas field will come online and add 170-180m cubic feet of gas per day to national production, bringing it to 300m cubic feet per day. In September, Akufo-Addo signed an agreement with Russia’s Gazprom for the supply of liquefied natural gas (LNG) that is part of the Tema LNG development that could add 1,000MW to the national grid through a planned regasification plant. The government’s target is to add 3,000MW of capacity by 2020. The cocoa sector took a hit in 2017 when the price fell to around $1,975 per tonne from $3,000 the year before. Prices are due to remain low due to high levels of production in West Africa.
COUNTRY 187 PROFILES
After mass layoffs in 2014 and the closing of its Obuasi mine, Anglogold Ashanti – the largest gold producer in Ghana – has revealed plans to reopen the mine within the next year. In September 2017, the company sold off its Miradani concession to US gold producer Asanko Gold. Drilling at Miradani, which is close to Asanko’s current mine, will begin in the last quarter of 2017. Prospects for gold in 2018 are looking up, as analysts predict the price to rise to $1,400 per ounce in 2018 from $1,300 in 2017. Revenue from oil, gold and cocoa exports rose to $8.95bn in August 2017, up from $7bn at the same time in 2016. On the political front, the opposition National Democratic Congress (NDC) has been licking its wounds after losing several parliamentary seats as well as the presidency in the December 2016 elections. Following his defeat, former president Mahama has kept a relatively low profile. With the party electing a new flag bearer at a national conference before the end of 2018, he may try to run for the leader once again. As The Africa Report went to press, only Alban Bagbin – a former majority leader in parliament, now second deputy speaker – had confirmed his intention to go for the party leadership. Other possible candidates include Ekwow Spio-Garbrah, former minister of trade and industry, and Sylvester Mensah, former head of the National Health Insurance Authority.
Be cool to your school AFTER ALMOST A DECADE of campaigning for it, President Nana Akufo-Addo launched nationwide free senior secondary-level schooling and vocational education and training programmes in 2017. More than 424,000 students were enrolled free for the 2017/2018 academic year, 90,000 more than in 2016/2017. The cost for the THE AFRICA REPORT
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launch of the free schooling policy was ¢400m ($90.6m). Though it has been lauded, concerns about the quality of and access to education for younger students remain. Despite the country’s universal basic education, campaigners argue that many families are still unable to afford extra materials required to send their children to primary school.
D E C E M B E R 2 017- J A N UA R Y 2 018
Former president John Dramani Mahama promised to eradicate the 2,900 ‘schools under trees’ across the country. As of June 2016, more than 2,000 schools were said to have been upgraded and a further 430 were to be completed by the end of 2017. But education officers around the country dispute these figures and point out that there are
several hundred more schools in dilapidated buildings. Meanwhile, the government is considering going back to a four-year programme for senior secondary school, after cutting the term to three years in 2010. Concerns about the cost of an extra free year will mean that the government is considering the affordability of such a change.
188 COUNTRY PROFILES
WEST AFRICA
GUINEA
The mining rush is on Uncertainty surrounds President Condé’s plans for 2020
GUINEABISSAU
ALL EGGS IN A CHINESE BASKET
With its eyes on new mining developments and a mega-deal signed with Beijing in September, the government predicts that the economy could be producing double-digit growth within the next few years, despite low current prices for iron ore and bauxite. Behind the big numbers, it is worried about its ability to fight poverty and is now in talks with the International Monetary Fund. The Chinese deal promises investment of $20bn over the next 20 years in
with logistics joint venture Alliance Minière Responsable that will help SMB to produce at a rate of 35m tonnes per annum beginning in 2018. In addition, Australia’s Alliance Mining Commodities is due to add 5m tonnes of production from 2019 from its mine at Koumbia.
MALI
GUINEA Kankan
CONAKRY
P
olitical uncertainty looms on the horizon of 2018, linked to delayed local elections and the presidential succession. The constitution forbids President Alpha Condé from running for another term in 2020, but many in his entourage say that he should remain in power. The situation could also undermine a $20bn deal signed with China in September. Condé himself has not said what he plans to do in 2020. Against a backdrop of politico-ethnic tensions, a third-term run could lead to instability. Within the governing RPG Arc-en-ciel party, no one wantstoseemtoambitious.Namesmooted to replace Condé include Ibrahima Kassory Fofana, a minister in the presidency in charge of investment, and former finance minister Ousmane Kaba. The local elections cannot take place without money and political will. The Commission Electorale Nationale Indépendante says that some $35m will be required. If President Alpha Condé’s government does not show its willingness to hold the polls in the first months of 2018, opposition leader Cellou Dalein Diallo could call his supporters out into the streets, which would lead to violent confrontations between the security forces and protesters.
SENEGAL
SIERRA LEONE
Atlantic Ocean
BAUXITE BONANZA
CÔTE D'IVOIRE
LIBERIA
200 km
Population: 12.7 million Population growth: 2.5% GDP per capita: $708 Life expectancy: 59.2 Adult literacy: 30.4% Inflation: 8.5% Human development index (out of 188 countries): 183 Foreign direct investment: $104m Current account as % of GDP: -25% Mobile phone penetration: 85% Key export: Aluminium Last change of leader: 2010 GDP growth (%)
6.6
6.7
5.8
8.8
8.5
9.2
9.9
2015
2016
2017*
2018*
3.5 GDP ($bn)
*Estimation October 2017
A mining boom is under way for bauxite, gold, and possibly iron ore
exchange for access to some of Guinea’s bauxite reserves. The Chinese companies due to develop mines are China Power Investment Corporation (CPI), China Henan International Cooperation Group and Chalco. In exchange, the government wants to use its Chinese loans to build key new infrastructure projects. They include road improvements in Conakry, a road linking Coyah and Dabola, an upgrade to the Conakry port, a power line from Lissan to Fomi and a university project. Mining investment has been boosting the economy since 2016. In 2017, Société Minière de Boké (SMB) signed a deal
The government’s target is for bauxite production to reach at least 60m tonnes per annum by the end of the decade, up from a predicted 31m in 2017. Most of the mining players are foreign-owned, but La Guinéenne des Bauxites, founded by Mori Diané, is set to be the first locally owned company to export bauxite. The backers of the Guinea Alumina Corporation – Dubal, Mubadala and the Guinean government – have reformulated their plans and are now looking to invest up to $5bn. The Friguia refinery, controlled by Russia’s Rusal, could also restart its operations in 2018. AngloGold Ashanti is spending $400m to expand its gold mine at Siguiri. In 2017, China’s Chinalco was said to be in talks with Conakry about the giant Simandou iron ore mine, which lost both of its investors over the past few years. In October, the government agreed a deal with French oil major Total in which the company will conduct seismic mapping of Guinea’s offshore in exchange for the right to negotiate contracts for three oil blocks. The government also launched an oil licensing round in late 2017 that is due to conclude with the awarding of licences in late 2018. Mining activity has not created an economic transformation that has benefited the populations where Guinea’s bauxite is located. Boké, the the heart of that region, was the site of several protests in 2017 about the lack of jobs, environmental despoliation and poor electricity provisioning. The government hopes to meet rising demand for electricity with a few new projects. Construction has begun on the $1.5bn Souapiti dam, which is due to produce 515MW. Work is soon due to begin on the 90MW Fomi dam.
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WEST AFRICA
COUNTRY 189 PROFILES
GUINEA-BISSAU Hardheaded Vaz There are few signs that the current political stalemate will end soon
SENEGAL
Port and energy projects should boost the country’s small economy
GUINEA-BISSAU BISSAU
G
GROWTH CONTINUES APACE
The UN Security Council and the Economic Community of West African States (ECOWAS) – which, with the African Union, the European Union and the Comunidade dos Países de Língua Portuguesa, form the five mediating groups – have been most vocal •
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GUINEA Atlantic Ocean
50 km
Population: 1.9 million Population growth: 2.5% GDP per capita: $761 Life expectancy: 55.5 Adult literacy: 59.9% Inflation: 2.8% Human development index (out of 188 countries): 178 Foreign direct investment: $20m Current account as % of GDP: 0.1% Mobile phone penetration: 70% Key export: Cashew nuts Last change of leader: 2014 GDP growth (%)
5.1
CABLE IS COMING
5.1
5
5
1.2
1.3
1.4
2016
2017*
2018*
GDP ($bn)
1 2015
*Estimation October 2017
uinea-Bissau’s political crisis, now entering its third year, is leaving international mediators increasingly weary. Having concluded a lengthy mediation between the two sides within the main party, the Partido Africano para a Independência de Guiné e Cabo Verde (PAIGC), the international community is still waiting for the implementation of the Conakry Accord, which was signed in October 2016. The crisis pits the supporters of President José Mário Vaz againstthe alliesofformer prime minister Domingos Simões Pereira. The Conakry deal calls for a unity government and the appointment of a consensus prime minister. This could then serve as a basis for further political reform, including a much clearer delineation of duties between the president and prime minister, and the preparation of fresh legislative elections. Those are due in April 2018, two months after the long-running United Nations (UN) mission is supposed to have wrapped up. There has been little progress on those fronts. Prime minister Umaro Sissoco Embaló, appointed by President Vaz in December 2016 without the consent of the PAICG leadership, has not been replaced and there have been no steps towards forming an inclusive government. In July President Vaz met national assemblypresidentCiprianoCassamáfor the first time in two years, but parliament has held no sessions since then.
THE AFRICA REPORT
export – an uptick in construction activity and improvements in water and electricity supply. ETG, 3F, Valency and Vink Corp remain the big players in the cashew sector, and Bissau is trying to cut down on smuggling. There is also the prospect of an oil boom: in the wake of discoveries off the Senegalesecoast,Chinese,Australianand Swedish oil companies have stepped up exploration in Guinea-Bissau’s offshore areas. One company, FAR of Australia, has suggested that in one of its blocks there may be as many as 470m barrels of recoverable oil.
in expressing their displeasure. Similar frustration surrounds stalled military reforms, which are supposed to involve downsizing the army and restoring discipline and civilian control. ECOWAS is threatening to impose sanctions if it does not see progress soon. The ongoing political deadlock essentially concerns Bissau, the capital. The rest of the country goes about its business as usual while the economy continues to grow at an average of about 5% per year, as it has been doing since 2015. The International Monetary Fund (IMF) attributes this to the high prices for cashew nuts – Guinea-Bissau’s principal
D E C E M B E R 2 017- J A N UA R Y 2 018
Other big deals are going ahead. Shenyang Lan Sa Trading, a Chinese company, signed a deal with the governmentinOctober2016fortheconstruction of a biomass power facility that would be supplied by waste from rice production. Preparations for the construction of the 30MW plant began in March 2017. On completion, it would triple the country’s electricity output. In July 2017, the government also signed a deal with the World Bank and telecoms companies to hook the country up to the ACE submarine telecommunications cable. The link-up should be operational by early 2019. The government is also due to announce the winner of a contract to operate the port at Bissau after French firm Necotrans and ICTSI of the Philippines submitted bids to take over from a state-owned firm in mid-2017. Following a 2015 bailout for two major banks, the IMF and the government agreed to have the banking commission of the Union Economique et Monétaire Ouest Africaine assess the country’s banks. The commission submitted its report to the finance ministry in March. The waitis nowonforthe execution ofthe action plan and for a significant capital increase to absorb losses from bad loans. In spite of these upbeat economic data, there has been social unrest. Media workers, teachers and government workers were on strike for parts of 2017, and periodic protests are likely to continue.
190 COUNTRY PROFILES
WEST AFRICA
LIBERIA
State of confusion Commodity-based activity is seeing an uptick despite weaker prices
RAGS-TO-RICHES
Since the October vote, new political blocs have coalesced. Boakai is now working with Charles Brumskine – the candidate who filed the petition complaining about the first round and who came in third with 9.6% – and also-ran Alexander Cummings, who took 7.2%. They say that Weah’s style of politics is dangerous: he is a populist with a rags-toriches story who has many political allies with links to belligerent forces from the country’s civil war. Weah’s running mate
CÔTE D'IVOIRE
MONROVIA
A
s The Africa Report went to press, Liberia was in a state of political uncertainty. The supreme court had suspended the second round of the presidential poll, which is a key milestone since it was due to mark the country’s first democratic transition in the presidency since 1944. After candidates complained about fraud in the first round of the vote on 10 October, the court ordered an investigation that could lead to the re-run of the vote or the holding of the planned second round between frontrunner George Weah and vice-president Joseph Boakai. President Ellen Johnson Sirleaf’s term expires on 15 January 2018, and it is not clear what will happen if elections are not held by then. But whoever wins when elections are eventually held will face similar challenges: an economy that is not growing fast enough to fight poverty and a political front with deep divisions. Former football star and Coalition for Democratic Change candidate Weah took 38.4% in the first round, followed by Boakai of the Unity Party with 28.8%. With the lack of clarity about when new elections would be held, Johnson Sirleaf warnedthatthecountry’sdemocracywas under attack. Boakai has accused her of seeking to undermine his campaign.
the International Monetary Fund in late 2017 and delivered mixed results on the reforms agreed. Inflation remains in the double digits, and the majority of the population is involved in small-scale agriculture, which faces many challenges.
GUINEA
SIERRA LEONE
Buchanan
FARMING, INFRASTRUCTURE
LIBERIA Atlantic Ocean
100 km
Population: 4.7 million Population growth: 2.5% GDP per capita: $475 Life expectancy: 61.2 Adult literacy: 47.6% Inflation: 12.8% Human development index (out of 188 countries): 177 Foreign direct investment: $453m Current account as % of GDP: -26.7% Mobile phone penetration: 83% Key export: Iron ore Last change of leader: 2018 GDP growth (%)
0
4
-1.6
2.6
2
2.1
2.1
2.2
2015
2016
2017*
2018*
GDP ($bn)
*Estimation October 2017
The next round of the presidential election has been suspended
isJewelHoward,formerwifeandfirstlady to war criminal Charles Taylor, and he has since received the backing of former warlord Prince Johnson, who took 8.2% in the first round of the presidential vote. While the 2017 vote was peaceful, Liberia’s history of conflict means that security remains a top concern, especially as the last small group of troops from the United Nations mission in the country are due to leave in March 2018. Weak commodity prices – especially for rubber and iron ore – and the lingering effects of the Ebola outbreak are causing the economy to grow slowly. Liberia completed its programme with
Johnson Sirleaf ’s government has launched the three-year Liberia Agricultural Transformation Agenda to improve the production and processing of cash and staple crops through six agricultural clusters. The ambitious programme has struggled to attract financing and includes subsidies for inputs and risk-sharing schemes to get commercial banks to lend more to farmers. The government has also welcomed large Asian concessions that locals have denounced for land grabbing. For example, Malaysia’s Sime Darby signed a deal giving it access to 220,000ha and so far has planted oil palm on 10,500ha and is building new processing facilities. The government has slowly been rebuilding infrastructure since the end of the civil war in 2003. The 88MW Mount Coffee dam was rehabilitated and began production in December 2016, and in September 2016 the government signed a deal for a 10MW solar power plant outside Monrovia with Gigawatt Global. Despite the recent lower prices, natural resources are attracting investment. Steel giant ArcelorMittal, which has laid off local workers in recent years, is working on plans to begin producing 5m tonnes per annum from the Mount Gangra deposit, which is near its mine at Mount Tokadeh. Because of Gangra’s higher grade of ore, the company has set its plans to increase production at Tokadeh to 15m tonnes per year. Gold production has been a bright spot. Toronto-listed Avesoro Resources began commercial operations at its New Liberty mine in March 2016 and is on course to produce at least 70,000oz in 2017. The government also awarded an exploration licence to Altus Strategies for the Zolowo deposit in Lofa County in November 2017.
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WEST AFRICA
COUNTRY 191 PROFILES
MALI
A house divided
Violence is growing in central Mali, and peace in the north remains elusive
ALGERIA
The gold and cotton sectors are booming, but poverty levels remain high
ABANDONED PLANS
The opposition, led by Soumaïla Cissé of the Union pour la République et la Démocratie, won a victory in mid-2017 by forcing the government to abandon its plans to reform the constitution. The amendments proposed would have •
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SENEGAL
Gao
BAMAKO Ségou
NIGER BURKINA FASO
GUINEA
GHANA
BENIN
Population: 18.5 million Population growth: 3% GDP per capita: $794 Life expectancy: 58.5 Adult literacy: 38.7% Inflation: 0.2% Human development index (out of 188 countries): 175 Foreign direct investment: $126m Current account as % of GDP: -7% Mobile phone penetration: 120% Key export: Gold Last change of leader: 2013 GDP growth (%)
6
5.8
5.3
PRO-BUSINESS REFORMS
5
GDP ($bn)
13,1
14
15
16,3
2015
2016
2017*
2018*
*Estimation October 2017
M
THE AFRICA REPORT
MALI MAURITANIA
ali enters 2018 with the same problemsasithadduringthe 2012 conflict that divided the country. But on top of that, 2018 will be an election year and President Ibrahim Boubacar Keïta (IBK) is up for re-election for another five-year term. Weakened by a series of corruption scandals, IBK could face a stiff challenge from the opposition at the ballot box in July 2018 if its leaders can form a united front. If the parties of the opposition cannot work together, it is likely that IBK and his allies will win a second term. Security is a government priority, as it struggles to manage the cycle of reprisal attacks between militias in northern Mali. Jihadist forces also continue to launch regular attacks on the security services in the north. The government still does not have complete control of Kidal and is in talks to launch joint military operations with the pro-government Platforme militia and the Coordination des Mouvements de l’Azawad rebels. The government rolled out several failed measures in 2017 to support peace talks between the Platforme militia, northern jihadist groups and Tuareg fighters arguing for greater autonomy and/or independence. To great fanfare the government announced the launch in 2017 of a 10-year multibillion-dollar programme of investments to revitalise northern Mali. It remains unclear where the government will get the money. In the meantime, violence and ethnic clashes are growing in central Mali.
challenge for the government. Fearing that there could be fraud at the polls, the opposition is also demanding an audit of the electoral register. Decentralisation is a key part of the 2015 Algiers accord meant to put an end to the conflict in northern Mali. The central government wants to improve local governments and strengthen their relationships with Bamako. The government plans to finance its decentralisation programme with as much as 456bn CFA francs ($819.2m), but has faced opposition in parliament over decentralisation. Deputies claim that greater regionalisation will weaken national unity.
300 km
strengthenedthepresidency,forexample by allowing the president to appoint a thirdofthemembersoftheproposedsenate and letting the president choose the head of the Cour Constitutionnelle. Cissé would need a huge wave of discontent to win in 2018, as he scored just 22.4% of the vote in the second round of the 2013 presidential vote. There are likely to be many presidential candidates as IBK’s allies in the Alliance pour la Démocratie au Mali-Parti Africain pour la Solidarité et la Justice, led by Tiémoko Sangaré, plan to have their own candidate. Due to insecurity and other challenges, organising the elections will be a big
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The economy continues to grow in spite of the instability but largely in sectors that do not translate rapidly into improved livelihoods for the population. Gold mining is another key growth sector. The government predicts that production could rise 40% year-on-year in 2017 to reach 95tn. B2Gold started commercial production at its Fekola project in November 2017 and is due to produce at a rate of about 375,000oz per year for the next five years. Meanwhile Hummingbird Resources’ Yanfolila mine is set to generate 132,000oz per annum in its first full year of production in 2018. Thanks to higher prices and input subsidies, cotton production reached a record of 645,000tn in the 2016/2017 season. The government predicts that the 2017/2018 will deliver another record, with a harvest of 725,000tn. The lack of electricity is a constraint on economic growth. Turkish company AksaEnerjibeganproductionof30MWat a new thermal plant in September 2017. The government is rolling out a series of reforms to improve the business environment and to fight corruption. In 2017, it approved a law that outlaws the awarding of government contracts without a competitive bidding process. It is also cutting spending and implementing tax reforms to raise revenue as part of its programme with the International Monetary Fund.
192 COUNTRY PROFILES
WEST AFRICA
NIGER
Stretched in the Sahel Unchallenged on the political front, Issoufou is taking a lead in the Sahel
300 km
ALGERIA
Agriculture has been a bright spot while oil and uranium prices are low
BORDER TROUBLES
Niger has never been able to fully control its borders and remote northern regions. Despite some domestic opposition to Issoufou’s focus on international affairs, Niger’s tough stance on terrorism nevertheless appears to be bearing fruit – the country has not seen a serious
NIGER MALI
Agadez
NIAMEY
Zinder
BURKINA FASO
CHAD
NIGERIA
BENIN
Population: 21.5 million Population growth: 3.8% GDP per capita: $421 Life expectancy: 61.9 Adult literacy: 19.1% Inflation: 1% Human development index (out of 188 countries): 187 Foreign direct investment: $293m Current account as % of GDP: -18.6% Mobile phone penetration: 49% Key export: Gold Last change of leader: 2011 GDP growth (%)
4.7
5
4.2
7.2
7.5
7.9
8.6
2015
2016
2017*
2018*
4
LOW PRICES ON EXPORTS
GDP ($bn)
*Estimation October 2017
N
igerenters2018witharenewed focus on foreign policy and tackling Sahelian threats, a position that continues to receive broad support from Western powers. The country is due to play a leading role in the new Sahel G5 counter-terrorism force that President Mahamadou Issoufou has been instrumental in setting up. It will tackle the problems of people trafficking, drug smuggling and armed Islamist groups across the Sahel. Contributions towards the Sahel G5’s anticipated $496m budget have so far come from France and the European Union (EU), but there have been delays getting authorisation for the force at the United Nations Security Council due to objections from the United States. France is expected to fit guided missiles onto its five Reaper drones based in Niamey, which have previously only been used for intelligence gathering. Niger’s armed forces will be stretched by the new Sahel G5 deployment. The country’s troops are already involved in a number of other regional security missions that look likely to continue throughout 2018. Niger announced the setting up of the Multinational Security Force with Burkina Faso and Mali in the Liptako-Gourma border region in 2017, and the country also has soldiers serving in the Multinational Joint Task Force against the northern Nigerian Islamist group Boko Haram.
the government stretched to foot the bill to care for them. Efforts by Niger and the EU to stem the flow of migrants to Europe through Niger will continue. The EU’s border management agency Frontex plans to open a liaison office in the city of Agadez, a central point of departure for migrants attempting a trans-Saharan crossing to Libya. President Emmanuel Macron of France has offered to further support Niger’s efforts, and the country will continue to make arrests using an anti-trafficking law passed in 2015. Nevertheless, the number of migrants reaching Europe did not fall significantly in 2017,and migrants have already begun changing their routes to avoid controls.
LIBYA
terror attack by Al Qaeda in the Islamic Maghreb since 2013. However, as this group continues to change its strategies and its geographic location, another attack on Niger cannot be ruled out. The October ambush that killed several US and Nigerien troops shows that the security situation remains troubled. This inability to secure the country’s territory has made it difficult for the government to deal with tens of thousands of refugees from the Boko Haram conflict living on the border with Nigeria in the remote eastern Diffa Province. A significant repatriation of Nigerian refugees looks unlikely in 2018, leaving
Onthedomesticpoliticalfront,thereisno obvious sign of a serious opposition challenge to Issoufou’s position. Presidential elections are not due for another three years and Issoufou’s main rival, Hama Amadou, has kept a low profile since his arrest and incarceration in the run-up to the 2016 poll. Opposition leader El Hadj Amadou Djibo was sentenced to three months prison in 2017 on what activists say are trumped-up charges. Many Nigeriens continue to be disappointed with Issoufou’s achievements, and popular protests by democracy campaigners, students and unions are set to continue. The economy is growing strongly, but threats will continue to plague Niger, one of the world’s poorest countries. Continued low world prices for uranium and oil – the country’s main sources of foreign currency – will be a drain on government finances. Until the prices recover, there will likely be little progress on plansbytheFrenchnucleargiantArevato open the giant Imouraren uranium mine, and without a pipeline to export crude, there is unlikely to be new investment in the oil industry. Although notable progress has been made in boosting agricultural production and averting serious food crises in recent years, Niger remainsvulnerabletohungerandspiking food prices if the rains fail again.
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D E C E M B E R 2 017- J A N UA R Y 2 018
WEST AFRICA
COUNTRY 193 PROFILES
NIGERIA
Buhari on the back foot
A
midst concerns about the health condition of President Muhammadu Buhari and questions about whether he will be fit to complete his term following extended medical trips to the UK in the outgoing year, the government is facing the Boko Haram rebellion, the end of the Niger Delta Avengers’ ceasefire and renewed calls for secession of the country’s south-eastern region. Amidst the continued economic pain caused by low oil prices, the country is shifting into gear for national elections slated for February 2019. The next 12 months will be dominated by the politics of who will win in the next elections. For now, the answer to this question is anyone’s guess. Buhari is said to be interested in seeking a second term in office. However, questions remain about his physical fitness for the job. So while the president’s allies seek to dispel doubts about his physical capacity, an announcement on his intention to seek a second term is unlikely until later in the year to allow time for him to achieve as many of his campaign promises as possible before the next campaign season kicks off in earnest. Whether Buhari runs or not, the field of contestants will soon take shape. Vicepresident Yemi Osinbajo stepped up to lead the country in Buhari’s absence, but he says he has no intention for running for higher office in 2019. OPPONENTS WELL POSITIONED
Challengers are already making moves to prepare to run. One of them is Atiku Abubakar, a former vice-president under the Olusegun Obasanjo administration who has unofficially declared his intention. Having helped to finance Buhari’s run for office in 2015, he found himself sidelined once the administration took THE AFRICA REPORT
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NIGER
CHAD
Kano ABUJA
NIGERIA Lagos Port Harcourt
CAMEROON
Gulf of Guinea
Population: 190.9 million Population growth: 2.6% GDP per capita: $2,092 Life expectancy: 53.1 Adult literacy: 59.6% Inflation: 16.3% Human development index (out of 188 countries): 152 Foreign direct investment: $4.4bn Current account as % of GDP: 1.9% Mobile phone penetration: 82% Key export: Petroleum and crude oil Last change of leader: 2015 GDP growth (%)
2.7
0.8 1.9
-1.6
GDP ($bn)
493.8 2015
BROAD DEMANDS
405.4
394.8
460.7
2016
2017*
2018*
*Estimation October 2017
The worst of the economic pain may be over as diversification bears fruit
The main opposition party, the PDP, has sorted out its internal squabbles. Based on an unwritten power rotation agreement between the political elite, the party is likely to choose a candidate from the north to be its flag bearer. But there remains a remote possibility that it could yet gamble by eschewing ethnicity in favour of competence and select a southern candidate like the charismatic Donald Duke, the former governor of Cross River State, to lead it to the polls. Northerner Sule Lamido, a former foreign minister, is also in the running to be the party’s candidate. The PDP is preparing for a national conference in December where it will pick a new party leadership.
300 km
BENIN
With Buhari's ill health, candidates are prepping for elections in 2019
power. One stumbling block is that Atiku has limited influence in the governing All Progressives Congress (APC) and the People’s Democratic Party (PDP). This problem of influence will not be a problem for another expected but yet undeclared candidate, Bukola Saraki, the president of the senate. He was a member of the PDP for years and a previous chairman of the influential governor’s forum before breaking away with some colleagues to join the coalition of parties that formed the APC. Saraki’s broad network and connections mean that he is well positioned to give the other contenders a run for their money.
D E C E M B E R 2 017- J A N UA R Y 2 018
The opposition says Buhari has been slow to act on key decisions and that the cabinet, despite having some capable figures, has been hamstrung and unable to deliver the big successes expected by the populace. With the return of power to the north in 2015 following Buhari’s victory against then incumbent Goodluck Jonathan, tensions between Nigeria’s ethnic groups were reignited and these have since crystallised into broad and sustained demands for a comprehensive review of the country’s constitutional arrangements that centralise state power and control of natural resources with the federal government (see box). The security situation in the northeast retrogressed in 2017, with an uptick in guerrilla attacks by Boko Haram insurgents. One hundred and thirteen of the girls abducted from the town of Chibok in Borno state by the militants remain in captivity, and the government is still keenly seeking their rescue. Buhari hopes that his economic diversification strategy will bear fruit, and is proposing a record national budget of $27.3bn, with a third of that devoted to investments. The government is seeking to borrow $5.5bn from foreign sources, in part through a $2.5bn eurobond. Early signs are that diversification is beginning to take off, with a tech hub
194 COUNTRY PROFILES
WEST AFRICA
growing in Lagos’s Yaba neighbourhood Total cereal imports (in thousand tonnes) and a rich cinema, TV and music scene. 7,466 In the government’s economic growth 7,320 7,050 and recovery roadmap, it prioritises six sectors: agriculture, manufacturing, minerals, services, construction and real estate, and oil and gas. In 2017, the agriculture sector was one of the best performers and there was a small uptick in manufacturing. In early 2017, Nigerian billionaire Aliko Dangote announced Average 2015/2016 2016/2017 projects to invest a total of $4.6bn in 2011/12-2015/16 forecast dairy, rice and sugar projects. The Rice Farmers Association of Nigeria reports Pressure will remain that 2017 production reached 5.8m on the administration tonnes, while national consumption is about 8m tonnes. to deliver policies The economy ended its recession in that materially improve 2017 but pressure will remain on the the lives of its citizens administration to deliver policies that materially improve the lives of citizens. Growth remains sluggish and inflation the government introduce multiple remained in the double digits in 2017. exchange rates in 2016 to prevent Foreign reserves are ticking upwards further devaluation are unlikely to be and reached $30bn in 2017. repeated in the coming year. In 2018, the government will make a NAIRA’S STABILITY final push to pass legislation to reform Since the introduction of a window for the oil and gas sector, having achieved trading of foreign exchange between some small wins in 2017. After delayed maintenance and militant attacks hurt investors and exporters in April where production, Nigeria averaged about the price of the currency is determined by market forces, the value of the 1.8m barrels per day (bpd) in 2017. naira has been less volatile and the Investments in the upstream and downexpectation that oil prices will remain stream sectors are going ahead. French around the $50 range in 2018 means supermajor Total’s Egina field is due to that the currency troubles that saw come onstream in 2018, adding 200,000
SOURCE: FAO
NIGERIA Buhari on the back foot
bpd to the company’s production. The government also insists that the Dangote 650,000bpd oil refinery will be operational by the end of 2019. The banking sector has survived the downturn in oil prices without a major crisis. However, the central bank reported that there were four banks that did not meet minimum capital requirements in 2017, and non-performing loans rose to 15% in March 2017, up from 6% in 2015, suggesting that the pain is not yet over. The fallout from the default of telecoms firm Etisalat Nigeria – an emblematic example of the country’s recent economic turbulence – is continuing, with the senate promising in October to probe the deals that led to the company’s downfall. Amidst strict foreign exchange controls, the Emirati company was unable to repay its loans in 2017. It now has new investors and trades under the name 9mobile. The government says it will soon address pricing problems in the power sector and add grid capacity. The Chinesebacked Mambilla dam could be a game changer in the medium term, with the capacity to produce 3,050MW, more than half of the country’s current electricity production. The government and China Civil Engineering Construction Corporation signed a deal for the $5.8bn megaproject in September. The company says that construction should take at least six years.
Buhari's red lines FOR THE FIRST TIME IN OVER A DECADE, governors of Nigeria’s 17 southern states convened in Lagos in October under the umbrella of the Southern Governors Forum. The aim of the gathering was to hash out a common position on the ongoing debate on national restructuring that has been reignited across the country over the past
year. Their verdict was that Nigeria should return to “true federalism” whereby key administrative powers and control of vital natural resources are devolved from the federal government to the states. This, in the view of the governors, is the only way to effectively address the frequent cries of marginalisation from sections of the country.
Heightened calls for national reform have been fuelled in no small measure by the incendiary rhetoric of Nnamdi Kanu, the controversial founder of the eastern secessionist Indigenous People of Biafra group, who disappeared from public view in late 2017 and whose group has now been proscribed. In response, President THE AFRICA REPORT
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Muhammadu Buhari has proclaimed that calls for the country to be split are a “red line” in the debate which will not be entertained. In recent national broadcasts, Buhari stated and restated his position that Nigeria’s unity is not negotiable and that “highly irresponsible groups” who have seized on the legitimate debate will not be allowed to sow discord. •
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WEST AFRICA
COUNTRY 195 PROFILES
SENEGAL
Success for Sall
The new urban development at Diamniadio should spur growth
O
ff the back of a big win in the 2017 legislative elections, President Macky Sall is focused on delivering on campaign promises before presidential elections are held in 2019. Sall has called for political dialogue, but the opposition rejects his calls, criticising the management of the 2017 polls. Meanwhile, infrastructure spending and oil and gas projects are set to grow the economy. The opposition remains divided, strengthening Sall’s position. There are few challenges to Sall’s governance programme and economic development agenda, and he is backed by 125 Benno Bokk Yakaar (BBY) coalition members in the 165-seat parliament. Many members of the opposition want to be its leader, including former president Abdoulaye Wade and Rewmi’s Idrissa Seck. Seck is a shadow of his former self and Wade is alienating supporters by seeking to be succeeded by his son Karim. Since 2014, Dakar mayor Khalifa Sall has been the president’s most serious challenger. Currently in jail on charges of misappropriating public funds, the Parti Socialiste member claims he is the victim of a political conspiracy and is building up sympathy from the public. FINANCING THE GROWTH PLAN
The next few years of economic growth will depend on the agriculture sector and infrastructure investments that are part of the government’s Plan Sénégal Emergent. However, the International Monetary Fund warns that debt service payments will reach 30% of state revenue in 2017 and that the government should cut down on tax breaks. Targets include modernising agriculture, improving roads and meeting demand for electricity. In agriculture a number of new projects are underway THE AFRICA REPORT
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100 km Atlantic Ocean
The government is laying the foundationsfortheoil andgassector.Itlaunched the Comité d’Orientation Stratégique du Pétrole et du Gaz in 2017 to craft a national vision for oil and gas activity, in addition to the Institut National du Pétrole et du Gaz to train workers for the new jobs that will be created.
MAURITANIA Saint-Louis
DAKAR Thiès
SENEGAL MALI
GAMBIA
APPETITE FOR DRILLING
GUINEA-BISSAU
GUINEA
Population: 15.9 million Population growth: 2.9% GDP per capita: $998 Life expectancy: 66.9 Adult literacy: 55.7% Inflation: 2.1% Human development index (out of 188 countries): 162 Foreign direct investment: $393m Current account as % of GDP: -5.1% Mobile phone penetration: 99% Key export: Gold Last change of leader: 2012 GDP growth (%)
6.7
6.8
7
13.7
14.7
16.1
17.9
2015
2016
2017*
2018*
6.5 GDP ($bn)
*Estimation October 2017
Sall’s BBY coalition took a large majority of seats in 2017 elections
and the government’s new department of industry is focusing on creating agribusiness opportunities. Dakar’s plan is for the country to be self-sufficient in rice production, requiring a total harvest of 1.7m tonnes of paddy rice, but analysts predict that target may not be met. The government has reformed the state-owned electricity utility, and the country is due to have seven new solar power plants by the end of 2018. The 125MW coal-fired plant at Sendou is due to launch operations in 2018. Gas finds offshore could also be used for domestic power generation, but are only likely to be developed in a few years’ time.
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The Saint-Louis Offshore Profond block, whichisbeingdevelopedbyaconsortium that includes Kosmos Energy, is estimated to contain between 17trn and 20trn cubic feet of gas. Meanwhile, the Cayar Offshore Profond licence has an estimated 5trn cubic feet. A consortium led by Cairn is due to make a final investment decision by 2019 about three blocks it estimates to contain 2.7bn barrels of oil. But ownership disputes over those blockscoulddelaythestartofthatproject. The new developments at the city of Diamniadio are helping Senegal to better manage its urbanisation. By the end of 2018, nearly 20,000 housing units out of a planned 40,000 are due to be completed. The 1,500ha site currently being developed is supposed to take pressure off Dakar by housing an administrative centre with 15 ministries, in addition to a hospital and a special economic zone (SEZ). Chinese investor Helen Hai, an early backer of Ethiopia’s textile boom, says her C&H Garments will employ up to 5,000 people in Diamniadio at a new plant due to be operational in the SEZ in late 2017 or early 2018. A conflict has cast a pall over the telecoms sector. Local money-transfer company Wari was due to buy Millicom’s Tigo subsidiary in 2017, but the Luxembourgbased firm said it was going with other bidders because Wari could not come up with the $129m. Wari disputes that claim and is taking its case to court. On the security front, Senegal has so far avoided the terrorist attacks that have hurt other West African countries. However, the authorities arrested three people said to be linked to Nigeria’s Boko Haram Islamist group and the Islamic State rebels in Dakar in early 2017.
196 COUNTRY PROFILES
WEST AFRICA
SIERRA LEONE
Elections come into focus The government has turned to the IMF to help with economic headwinds
S
ierra Leone is gearing up for general elections in 2018 against the backdrop of a slow-growing economy and a recent natural disaster in Freetown. President Ernest Bai Koroma gave up on talk of changing the constitution to run for a third term and will instead step down next year. The preferred successor, foreign minister Samura Kamara, faces an uphill battle, but the main opposition party is splintering after again choosing its losing 2012 candidate for the race. Campaigning heated up in October as Sierra Leone’s top parties chose their flag bearers. There were 28 disappointed candidates in the governing All People’s Congress(APC)asKamarawasnamedits presidential candidate. Also in October, the opposition Sierra Leone People’s Party (SLPP) announced the selection of Julius Maada Bio, a former military leader and its defeated candidate in 2012, after a long drawn-out process that was marred by defections of key members. Both of Sierra Leone’s main parties have been splintering. Kandeh Kolleh Yumkella,aformertopUnitedNationsofficial and defector from SLPP, launched a new party, the National Grand Coalition, in October. Mohamed Kamarainba Mansaray, a defector from the APC, has long been campaigning mainly in the APC’s northern stronghold as leader of the Alliance Democratic Party. FAILED CORRUPTION TEST
The presidential contest is likely to be a three-way race between Kamara, Bio and Yumkella. As for the parliament, city and district council competitions, they will almost certainly be dominated by the APC and its historic rival, the SLPP. The National Electoral Commission, headed by the generally respected Mohamed Nfa-Alie Conteh, has
disqualifying it for a grant of hundreds of millions of dollars for the fiscal year 2018. This provides a lot of ammunition for opposition politicians, in part because Koroma ran on an anti-corruption, pro-business platform. But so far, the SLPP has not been scoring many points, as it has been mired in infighting. The downturn in commodity prices and the Ebola crisis sent shockwaves through the economy, which has yet to recover completely. It will take a few more years of solid economic growth for Sierra Leone to reach pre-2014 gross domestic product levels.
GUINEA
Makeni
SIERRA LEONE
FREETOWN
Kenema
LIBERIA
Atlantic Ocean
100 km
Population: 7.6 million Population growth: 2.2% GDP per capita: $594 Life expectancy: 51.3 Adult literacy: 48.1% Inflation: 16.9% Human development index (out of 188 countries): 179 Foreign direct investment: $516m Current account as % of GDP: -21.1% Mobile phone penetration: 98% Key export: Diamonds Last change of leader: 2007 GDP growth (%)
6.1
6
6.1
4.3
3.7
3.9
4.1
2015
2016
2017*
2018*
-20.5 GDP ($bn)
COST-CUTTING CAMPAIGN
*Estimation October 2017
Both major parties lost supporters when choosing presidential candidates
complained that it does not have the funds to conduct the elections. Neither did the timeline for elections he released in July include plans to hold a referendum on a number of constitutional changes that had been proposed to take place a few months before the general elections. A committee appointed by Koroma to examine the recommendations of the constitutional review committee, some of which the APC objects to, has not delivered a final report. Forthethirdtimeinarow,SierraLeone failed the US-sponsored Millennium Challenge Corporation’s indicators for corruptionandgovernmenteffectiveness,
Iron ore projects had been expected to send the economy skyrocketing, but it ended up shrinking by 20.5% in 2015. After the collapse of London Mining, the Marampa mine remains closed. China’s Shandong Iron & Steel ended up as the sole shareholder of the bigger Tonkolili iron mine and has been on a cost-cutting campaign to deal with the impact of low iron ore prices. There is hope that other mining projects can deliver, and London-listed Sula Iron & Gold reported finding high grades of gold at its Ferensola project in September. High inflation, corruption scandals and the APC government’s slow response to the Ebola epidemic in 2014 and the August 2017 mudslide disaster that killed about 1,000 people in Freetown create a difficult situation for the incumbent party and the economy. The country’s economic circumstances put several big infrastructure projects on hold, such as the new airport at Mamamah. The government turned to help from the International Monetary Fund in July and signed a three-year programme worth $224.2m, but as part of the deal must cut fuel subsidies and end some tax exemptions. The IMF says that the government needs to concentrate on investing in key infrastructure projects. In the meantime, France’s Bolloré is currently working on a 270m expansion of Freetown’s container terminal, to be operational in late 2018.
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WEST AFRICA
COUNTRY 197 PROFILES
TOGO
Pressure mounts on Faure
Term limits and other reforms are the subject of intense national debate
BENIN
Lomé is a key transshipment hub for landlocked West African countries
Since then, a coalition of 14 political parties has been calling for increased democratisation, with some insisting that Gnassingbé should step down. Under pressure from protests, the government tried to pass constitutional changes that would limit the president to two five-year terms and a two-round presidential election. The point of contention is whether the two terms should be retroactive or not. Gnassingbé’s allies insist that, even though he has been in power since 2005, heshouldbeallowedtorunagainin2020. The government plans to hold a popular referendum on the reforms. The angry political debates have also contributed to an uptick in violence and thelaunchofopaqueself-defencegroups. Ghana’s President Nana Akufo-Addo is mediatingthecrisis,andfellowEconomic •
N° 96
TOGO
NIGERIA
GHANA LOMÉ 200 km
Gulf of Guinea
•
CEMENT AND AGRIBUSINESS
Population: 7.8 million Population growth: 2.5% GDP per capita: $622 Life expectancy: 60.2 Adult literacy: 66.5% Inflation: 0.8% Human development index (out of 188 countries): 166 Foreign direct investment: $255m Current account as % of GDP: -8.3% Mobile phone penetration: 75% Key export: Gold Last change of leader: 2005 GDP growth (%)
5.3
5.3
5
5
4.2
4.4
4.8
5.3
2015
2016
2017*
2018*
GDP ($bn)
UPTICK IN VIOLENCE
THE AFRICA REPORT
Sokodé Lake Volta
*Estimation October 2017
F
aure Gnassingbé is now facing the biggest threat to his presidency. As The Africa Report went to press, the government announced the launch of a national dialogue. The year ahead is due to be marked by continued protest movements and political uncertainty as Gnassingbé responds to various calls for him to implement reforms that limit his power and also to step down. The Gnassingbé family has ruled Togo for more than 50 years. A wave of contestation began in August 2017, when the Parti National Panafricain (PNP) mobilised thousands of Togolese to call for the reinstatement of the 1992 constitution and to allow members of the diaspora to vote. Regular protests have taken place since then. The PNP is a relatively new party led by Tikpi Atchadam, who has begun to eclipse other opposition leaders like Jean-Pierre Fabre of the Alliance Nationale pour le Changement,thelargestoppositionparty.
Indépendante, which they said could not organise free and fair votes. The government signed a $238m programme with the International Monetary Fund in January 2017 to help it deal with high levels of debt and other economic threats. The economy has been growing strongly, but the threat of political instability looms, as popular protests block roads and slow down activity.
Community of West African States member Gambia advised Gnassingbé to step down. Without an agreed-upon roadmap for how to deal with the crisis, opposition leaders say they will keep up their protests. To limit the scope of the populardemonstrations,thegovernment hasselectivelycuttheinternetandmobile phone networks. The country is due to hold legislative and municipal elections next year. They could be held at the same time, and the municipal vote will be the first time in 30 years that mayors will be elected rather than appointed. Protesters also targeted the Commission Electorale Nationale
D E C E M B E R 2 017- J A N UA R Y 2 018
In July 2017, good harvests pushed inflation down to -2.5% as the government reduced spending – by reducing fuel subsidies, for example – to help reduce the deficit. Public debt levels have been high – they hit 80.8% of gross domestic productin2016–duetothegovernment’s recent borrowing to build new infrastructure, such as roads. The government had also launched the Programme d’Urgence de Développement Communautaire to finance infrastructure in the country’s most marginalised communities. Those projects are helping out the construction sector. In July 2017, Cimtogo launched a new cement plant at Awandjelo, near Kara in northern Togo. It will add 250,000tn per annum to national capacity, which now stands at 2.3m tonnes. Investments in roads and port capacity are designed to strengthen Togo’s role as a trade hub for landlocked countries in West Africa. The Port Autonome de Lomé has been steadily increasing its throughput and predicted that it would handle 16m tonnes of goods in 2017. Production of food and other crops is rising. Analysts predict that cotton production will reach 160,000tn in the 2017/2018 season, after it rose 33% to 108,000tn in the previous season. Brewer Brasserie BB is also focusing on sourcing local rice to make malt for the production of its beer. There are no major electricity generation projects under way. The governments of Benin and Togo want to build a hydroelectric dam on their border at Adjarala, but they are struggling to find the finance.
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COUNTRY PROFILES
NORTH AFRICA CONTENTS 200 PEOPLE TO WATCH Algiers
Atlantic Ocean
Tangier Oran
Fes Casablanca Rabat Marrakech
202 ALGERIA
Constantine
Tunis
Tripoli
Béchar
203 EGYPT
Mediterranean Sea
TUNISIA
Benghazi
MOROCCO
205 LIBYA
Alexandria
206 MAURITANIA
Cairo
ALGERIA
Tindouf
L I B YA
207 MOROCCO
EGYPT
208 SUDAN
Aswan
209 TUNISIA Nouadhibou
SUDAN
MALI NIGER
SENEGAL
CHAD
Khartoum
ERITREA
M A U R I TA N I A Nouakchott 400 km
ETHIOPIA CENTRAL AFRICAN REPUBLIC
NORTH AFRICA 2017 GDP (% of regional total) 21.5% Algeria
Sudan 14.6% Morocco 13.6%
TOTAL
$815.7bn
Mauritania 0.6% Libya 4.1%
40.7% Egypt
SOURCE: GDP CURRENT PRICES – IMF WORLD ECONOMIC OUTLOOK DATABASE, OCT. 2017
Tunisia 4.9%
291.3 242.3
2018
THE AFRICA REPORT
2030
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368.9
2050
SOURCE: UN WORLD POPULATION DIVISION (THE 2017 REVISION)
NORTH AFRICA POPULATION (millions)
D E C E M B E R 2 017- J A N UA R Y 2 018
SOUTH SUDAN
3%
The World Bank predicts overall growth for the Middle East North Africa region of more than 3% in 2018 and 2019 – an improvement but still half of pre-Arab Spring levels
JAN./FEB. MOROCCO African Nations Championship football tournament
MARCH LIBYA Presidential elections
MARCH EGYPT Presidential elections
JUNE MOROCCO Fes Festival of World Sacred Music
199
200 COUNTRY PROFILES
NORTH AFRICA
PEOPLE TO WATCH EGYPT
Khaled Ali Presidential hopeful MAURITANIA
Mohamed Ould Ghadda
The recently imprisoned politician has emerged as the key figure in the senators’ resistance to President Mohamed Ould Abdel Aziz’s August 2017 constitutional change abolishing the senate. Just before his arrest he launched an official probe into contracts awarded by the government without going through competitive tenders. He could be a serious opposition challenger to Abdel Aziz if, as expected, he changes the rules and stands for a third term in 2019. Because he is Arab (Beidane), Ould Ghadda could attract votes of the Arab electorate, which has so far supported the government and would not vote for the anti-slavery campaigner and presidential contender Biram Dah Abeid.
ALL RIGHTS RESERVED
Corruption-busting former senator
Ali is a prominent rights lawyer and former presidential candidate who is not at all loved by the government of President Abdul Fattah al-Sisi. Ali announced in October that he will be running for president, but has little chance of succeeding because of the government’s authoritarian tendencies. There is a court case against him which could jeopardise his chances if he is found guilty. Ali is already being harassed by security services and, in the meantime, gaining support from activists, rights groups and 25 January revolutionary-minded circles.
TUNISIA
Bochra Belhaj Hmida Champion of women
NICOLAS FAUQUÉ/WWW.IMAGESDETUNISIE.COM
Brilliant lawyer Bochra Belhaj Hmida, 62, has devoted her career to Tunisia’s women. In August 2017, President Béji Caid Essebsi appointed her to head La Commission des Libertés Individuelles et de l’Egalité, a new human rights commission, to study and make proposals on topics such as inheritance rights. She is fiercely independent and entered into politics after the downfall of president Zine el-Abidine Ben Ali in 2011. She initially joined Ettakatol but criticised it for not respecting its promises. She then joined Essebsi’s Nidaa Tounes in 2012 and was elected to parliament in 2014. She has since distanced herself from the party leadership and uses her media access to promote the rights of women. THE AFRICA REPORT
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201
LIBYA
Mustafa Sanalla
MOROCCO
Zineb El Adaoui Expert investigator
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KADRI MOHAMED/IMAGESPIC/ABACA
With ongoing protests over marginalisation in the Rif region, newly appointed inspector general of the interior ministry Zineb El Adaoui has a tough job on her hands. King Mohammed VI has asked her to investigate the reasons behind the vast delays in government projects planned for the city of Al Hoceima, which include new roads and other infrastructure. The 33-year veteran of government service is a rising star and was the first Moroccan woman to work as a magistrate at the Cour des Comptes, a body that provides oversight on state spending, and the first woman wali (governor). She has shown her tenacity in getting to the bottom of the problems in the Al Hoceima projects and has also been known to question high-ranking officials.
ALGERIA
Ahmed Ouyahia A return to power The move across Algiers of arch political manipulator Ahmed Ouyahia, from running President Abdelaziz Bouteflika’s office to becoming head of go overnment for a fourth term, represented the rulin ng group’s need for a safe pair of hands to stab bilise an economy in crisis after three years of lo ower oil prices. It wants him to help deliver a favourable result in the 2019 presidential elections. Ouyahia has a political profile as head of the e Rassemblement National Démocratique, which h gained seats in the 4 May general election, mainly at the ruling party’s expense. He will see ek to prove his programme of printing money to rrefloat the economy can work.
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National Oil Corporation (NOC) chairman Sanalla has emerged from a difficult promotion to become an unlikely champion of national unity, overcoming efforts by power brokers in Tripoli and Benghazi to take control of the critical industry. Not only do the NOC’s oil sales pay government salaries, its gas has helped to keep power stations functioning in the most difficult circumstances. Sanalla’s request for a mandate to “reinforce NOC’s authority and neutrality” has yet to be given by an international community that has struggled to get a coordinated grip on Libya. But it is a measure of Sanalla’s prestige that Field Marshal Khalifa Haftar has recognised the NOC chief’s authority over the industry, even as his forces have taken control of oil fields in Cyrenaica.
MOHAMED HAMMI/SIPA
ALL RIGHTS RESERVED
Oil man for troubled times
202 COUNTRY PROFILES
NORTH AFRICA
ALGERIA
Prayers for the printing press The ailing Bouteflika plans to run in presidential elections in 2019
P
rovided his health remains stable, President Abdelaziz Bouteflika will continue to overseeaffairsfromawell-equipped medical suite at his residence in Zeralda, along the coast from Algiers. A renewed programme of reform will be trumpeted by prime minister Ahmed Ouyahia, who is looking to an Algerian version of quantitative easing to stimulate the moribund economy: the central bank is ordered to print some $100bn over the next five years to repay huge public-sector debts and finance infrastructure. Above all, Ouyahia – supported by the ‘Bouteflika clan’ and senior members of the military and security establishment – will be expected to deliver a presidential election, scheduled for 2019, that leaves existing power structures in place. Ouyahia and Abdelmoumen Ould Kaddour – the head of state energy giant Sonatrach – have indicated that terms for international oil companies (IOCs) could be eased to promote oil and gas investment, which has disappointed in recent years. Ouyahia will be more accommodating in his approach to business leaders than his predecessor Abdelmadjid Tebboune – especially those close to influential presidential brother Saïd Bouteflika, led by Forum des Chefs d’Entreprises chief Ali Haddad. Tebboune had run a clean-up campaign whose slogan, “the state is the state and money is money,” struck a chord with millions of voters. His tenure as prime minister lasted only three months. LOCAL PROTESTS
The majority of the population would like to see deeper changes that raise living standards and create opportunities. Their frustrations are reflected in the localised protestmovementsthatcontinuetobreak out. Ouyahia’s plans to put the economy
Oran
more feedstock following a big investment in power plants. The government is talking up progress towards building new infrastructure: public works minister Abdelghani Zaalane has called on local firm Cosider to accelerate work so the Algiers metro’s 9.5km extension can finally reach Houari Boumediene International Airport by 2021. Zaalane has promised a new airport terminal will be completed in 2018, with total capacity to welcome 10 million passengers a year. A metro extension is also under way to link suburbs to the centre of the third-largest city, Constantine.
Mediterranean Sea
ALGIERS
Constantine TUN.
MOROCCO
ALGERIA
LIBYA
MAURIT.
400 km
MALI NIGER
Population: 41.3 million Population growth: 1.8% GDP per capita: $4,225 Life expectancy: 75 Adult literacy: 80.2% Inflation: 5.5% Human development index (out of 188 countries): 83 Foreign direct investment: $1.5bn Current account as % of GDP: -13% Mobile phone penetration: 117% Key export: Petroleum and crude oil Last change of leader: 1999 GDP growth (%)
3.7
3.3
1.5
0.8
GDP ($bn)
165.9
159
175.5
179.9
2015
2016
2017*
2018*
SHODDY WORK
*Estimation October 2017
The economy is under severe strains and is due to be reformed
SPAIN
on a more sustainable footing could add to pressures on household budgets – especially if speculation about a major currency devaluation is confirmed – but a national protest movement as yet shows few signs of forming. The government can point to some successes. After years of delay, several majorIOCsandSonatrachwillsoonbring big natural gas fields on-stream in the south-west, adding around 318bn cubic feet per year of capacity. This will help Algeria to maintain its export commitments to Italy and other markets – which have been threatened by failure to renew reserves and infrastructure – and provide
But all too often work is delayed and poorly implemented. On 16 September, a bridge linking Tébessa to the controversial East-West Highway collapsed. Zaalane’s ministry blamed technical “error”. Locals said it was due to fraud, as contractors had cut corners to boost profits. Such claims reflect the widespread view that political and business elites display hogra (contempt) towards Algeria’s populations. OuyahiaisexpectedtoencourageIOCs toexploreAlgeria’ssubstantialshaleareas for unconventional oil and gas reserves that could assure Sonatrach’s mediumand long-term production targets. But the anti-fracking protest that broke out at Ain Salah and spread around the south in 2014/2015 shook the government, as it represented a wider feeling that fragile populations are ignored by the state. For thousands of Algerians, these frustrations have been expressed through radical jihadist groups. A huge military deployment has controlled flows of arms and militants across the Libyan border. Stabilising Libya – while keeping out migrants – will remain a priority for Algiers. The threat of a Libyan-style conflict persuades many Algerians they shouldcurbtheiranger.ShouldOuyahia’s programme to print money to kick-start theeconomyfailtodeliver,popularanger, as well as increased factional infighting, could make the run-up to election year a very uncomfortable experience.
THE AFRICA REPORT
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NORTH AFRICA
COUNTRY 203 PROFILES
EGYPT
Strongman Sisi Alexandria CAIRO
A currency devaluation and an IMF programme are helping the economy
With Sisi’s iron grip on the country’s political space and the crushing of the Muslim Brotherhood and other political forces, he is likely to win elections if they take place next year. He was first elected with 97% of the vote in 2014. Sisi is relying on the help of General Kamal Amer, the head of the Support Egypt bloc in THE AFRICA REPORT
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N° 96
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SAUDI ARABIA
LIBYA
EGYPT
A GLOBAL ROLE
ea
SQUASHING THE OPPOSITION
ISRAEL Port Saïd
dS Re
A
fter a tumultuous year economically in 2017, Egypt is expecting to record some positive news on that front. But justasitseemstohavegottheeconomyin order, the country may experience some political turbulence as the date for the presidential election nears. According to the presidential terms set by the constitution, there should be an election no later than 8 May 2018, and it is expected to be held in March. In the meantime the government is rolling out unpopular policies, like subsidy cuts, which are part of its programme with the International Monetary Fund. There was some uncertainty about whether the upcoming vote would take place in 2018, as a popular petition circulated in 2017 to extend President Abdel Fattah al-Sisi’s time in office by amending the article in the constitution. However, Sisi eventually decided in August to go ahead with the elections. The Sinai conflict and terrorist attacks loom large on the national agenda. Militants allied with the Islamic State rebels continue to launch regular attacks – often targeting the police, army and Christian civilians – in the Sinai Peninsula. There are several areas in the region that remain outside of the government’s control. The government had marginalised the area, and its sometimes indiscriminate counter-insurgency campaignsarestrengtheninglocaldiscontent.
charges to exclude him from running in 2018, human rights groups say. Other opposition leaders were also arrested on dubious grounds in late 2017. The government continues to crack down on the media, non-governmental organisations and other independent voices.
Mediterranean Sea
SUDAN
300 km
Population: 97.6 million Population growth: 2% GDP per capita: ND Life expectancy: 71.3 Adult literacy: 75.2 Inflation: 23.5% Human development index (out of 188 countries): 111 Foreign direct investment: $8.1bn Current account as % of GDP: -5.9% Mobile phone penetration: 114% Key export: Petroleum and crude oil Last change of leader: 2014 GDP growth (%)
4.4
4.3
4.5 4.1
GDP ($bn)
332.1
332.3
2015
2016
N/A
N/A
2017*
2018*
*Estimation October 2017
Sisi is expected to sail through presidential elections due in March
parliament, to whip up support for the government’s policy initiatives. There are some very early signs indicating that former presidential candidate Ahmed Shafiq may make a bid for the presidency if elections are held in 2018. Former Arab League chief Amr Moussa, who also previously ran for the top post, is making a comeback on the political scene after being more or less absent for the past few years. The government is using strong-arm tactics to intimidate opposition candidates. In September, Bread and Freedom party leader Khalid Ali was sentenced to three months in prison on trumped-up
D E C E M B E R 2 017- J A N UA R Y 2 018
Egypt remains a critical player in the Middle East and North Africa, from brokering a recent reconciliation of Palestinian political forces to backing General Khalifa Haftar in the Libya crisis. Ties with Washington are waning after an August decision by Washington to reduce its aid due to concerns about human rights.WhilethemurderofItalianstudent Giulio Regeni in 2016 had hurt relations with Europe, they are back to normal. Cairo is now in talks with Moscow on a proposed $25bn programme to build nuclear power plants. Egypt has also been at the centre of the ongoing dispute between Qatar and its neighbours in the Gulf. Gulf countries have helped Cairo to cushion some of the impact of its recent economic crisis, paying cash to the central bank. The Saudis are now proposing a $500bn industrial zone that will link the country to Egypt and Jordan. For now, however, the economy will continue to take centre stage in Egypt as citizens look for signs of alleviation after a burdensome year. Inflation is expected to continue falling as prices cool off from their fiery surge driven by the government’s decision to float the currency in November 2016. Inflation levels hit 31% in April 2017. The downtrend should also encourage the central bank to cut interest rates. To fight inflation, the central bank aggressively hiked interest rates, raising them consecutively by 7%. While inflation is slowly falling, interest rates have remained the same. Last year’s surge in interest rates meant that it has been more profitable for consumers and businesses alike to save their money, or in the case of banks and foreign investors, to invest heavily in government debt. The dynamic has caused a slowdown
204 COUNTRY PROFILES
NORTH AFRICA
EGYPT Strongman Sisi
POWER BOOST
One big economic turnaround is in the electricity sector. When German manufacturer Siemens completes work on its ‘megaproject’, three new 4.8GW power plants and 12 wind farms will double Egypt’s electricity production to 16.4GW. The supergiant Zohr gas field, the largest in the Mediterranean, will
Subsidy bill in 2017/2018 fiscal year budget, beginning in July 2017 Amount (bn Egyptian pounds) SOURCE: EGYPTIAN GOVERNMENT
in business activity as well as limiting companies’ access to credit, with local banks also investing in the government securities. That money is not enough, and the government is working on a programme to issue $10bn in eurobonds in 2018. Elsewhere, government revenue has been on the rise since it implemented a value-added tax in 2016 in the hope of bringing the public debt burden down to – a still high – 86% of gross domestic product by the end of 2019. The government passed a new investment law in 2017 to make the country more attractive to foreign businesses. As part of its $12bn IMF programme, Egypt is gearing up to list some public companies on local and international stock markets after announcing last year that seven to 10 of them will be picked based on performance, profits and potential for growth. Cairo has also been cutting energy subsidies, and fuel prices rose by more than 50% in 2017. The government’s plan is to completely eliminatesubsidiesonmostfuelsby2019.
105
Food subsidies & others
80
Electricity
145
Fuel subsidies
Total 330
$10bn
Value of the government’s new eurobond programme to be issued in 2018 also start producing before the end of the year. It will deliver around 1.7bn cubic feet per day in its first phase. Drilling on the second phase will begin in mid-2018. The Zohr discovery is encouraging more exploration, and other developments in the sector are moving ahead. BP’s North Alexandria gas fields began commercial operations in May 2017, producing 700m cubic feet per day. Production is due to rise to 1.2bn cubic feet per day by 2019. At that point, the government expects that the country could be self-sufficient and begin gas exports.
The tourism sector, which has been in the doldrums since the events of the Arab Spring in 2011, is showing signs of growth. The government reported that tourist arrivals rose by 54% year-on-year in the first seven months of 2017, to reach 4.3 million. The government’s target is 8 million for the year, which would be slightly more than half the number recorded in 2010. In banking, financial institutions have been able to weather the recent downturn due to their sufficient capitalisation. Even with the major depreciation of the Egyptian pound in November 2016, in 2017, non-performing loans stood at 5.7%. The Sisi government continues to back the development of huge infrastructure works. The recent expansion of the Suez Canal, which was financed with a large bond selling operation, has not led to a significant burst in promised new activity. The Suez Canal Authority reported that in the first 10 months of 2017, traffic rose by just 2.9% year-on-year. Its goal is to double revenue by 2023, but the largest rise in local revenue has been from the massive devaluation of the Egyptian pound rather than an uptick in activity. The development of the new administrative capital in Cairo has taken the canal’s place in Cairo’s economic rhetoric (see box).
Capital for the capital TWO YEARS AGO, Egypt announced that it is building a new administrative capital. Since then, construction has been under way and there is a much clearer plan and strategy for the city. Officials say that the megaproject should not be viewed as a new capital, but rather an extension of the capital. Modern Cairo was originally built for a population of
5 million people, and today it hosts between 18 and 22 million, depending on the time of day. Critics of the new construction project say the government should concentrate instead on infrastructure problems. Located 30km from central Cairo and 40km from the Suez Canal Economic Zone, the ‘regional smart city’ covers 714km² and is
expected to contribute $10bn to gross domestic product by 2030. The company that was created to manage the city is 51% owned by the New Urban Communities Authority and 49% owned by the army, which has major stakes elsewhere in the economy. Through accessible transportation, integrated housing units and diverse economic activities, city THE AFRICA REPORT
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N° 96
planners want to attract up to 6 million people once it is fully developed. The first phase should see government offices relocating from central Cairo in 2018. The next development would be the financial and retail district, and China State Construction Engineering signed a deal in October 2017 to build the city’s central business district. •
D E C E M B E R 2 017- J A N UA R Y 2 018
NORTH AFRICA
COUNTRY 205 PROFILES
LIBYA
At daggers drawn
The UN is struggling to get the main actors to agree on a peace deal TUNISIA
HUMAN TRAFFICKING
That unity will be further tested as the Tripolibased government struggles to assert any authority, while Haftar continues to win sometimes impressive but not yet decisive military victories. Serraj wants to hold elections in early 2018, but that does not have universal support, as there is no clear roadmap out of the conflict and fighting persists THE AFRICA REPORT
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TRIPOLI
ALGERIA
L
ibya’s future as a unitary state will remain in question in 2018. It continues on life support, its numerous conflicts and crim inalised economy poisoning politics and society across swathes of Africa and the Mediterranean.Meanwhile,acritical,but not so great, game for international and local influence is played out, in theory as part of an effort to restore peace. Factions across Libya range from the internationallyrecognisedPrimeMinister Faiez Serraj and his Tripolibased Government of National Accord (GNA), and the rival AlBaidabased House of Representatives with the Libyan National Army (LNA) under Field Marshal Khalifa Haftar, to powerful militias from Misrata, Zintan and the south, and Islamist groups of varying degrees of radicalism and localised movements. That is without considering the involvement of foreign governments, each with its own agenda. The enthusiasm of France’s President Emmanuel Macron to host talks between Serraj and Haftar in early August un derlined the extent to which Libya is a major issue for Europe. France has been more enthusiastic about Haftar than other European governments; Haftar will continue to receive strong support from the United Arab Emirates, Egypt, prob ably from Russia and possibly from the White House. But, officially, Europeans and the US support Serraj’s GNA.
Mediterranean Sea Benghazi EGYPT
L I B YA
NIGER
CHAD
SUDAN
Population: 6.4 million Population growth: 0.9% GDP per capita: $5,166 Life expectancy: 71.8 Adult literacy: 91% Inflation: 32.8% Human development index (out of 188 countries): 102 Foreign direct investment: $493m Current account as % of GDP: 1.8% Mobile phone penetration: 120% Key export: Petroleum and crude oil Last change of leader: 2016 GDP growth (%)
-3
55.1
17.8
20.5
33.3
2015
2016
-10.3
31.2
GDP ($bn)
2017*
47.5
FROM GLOBAL TO TRIBAL
*Estimation October 2017
Oil production briefly reached 1m bpd in 2017, but supplies remain erratic
(NOC) chairman. He has not only held together Libya’s only legitimate revenue earner, in the face of efforts in Tripoli and Benghazi to take more partisan control, buthasalsooverseenanincreaseincrude oil production to nearly 1m barrels per day. The NOC’s oil pays government sal aries, and its gas has helped keep power stations online. Meanwhile, modern and traditional agriculture, and other industries, are falling into disrepair. Tirelessly working to ensure the NOC remains what he calls “the best guaran tee that Libya will remain as a unitary state”, Sanalla has called on the European Union to expand its Operation Sophia mandate to prevent oil smuggling as well as the trafficking of people and arms.
300 km
2018*
in many regions. There were more than 200,000 internally displaced people as of September 2017. Efforts to tackle human trafficking out of Libya will remain a critical issue for European partners in 2018, while North African neighbours are most concerned about securing their borders. Longterm effortstostabiliseLibyawillrequirebring ing all significant factions to the table in a revived, United Nationsled peace process in the hands of canny academic turned UN insider Ghassan Salame, who replaced Martin Kobler as UN envoy. Another influential player is Mustafa Sanalla, the National Oil Corporation
D E C E M B E R 2 017- J A N UA R Y 2 018
While Libyawatchers see Sanalla’s in terventions as one of the few coherent and positive contributions to keeping Libya alive, Haftar’s formula that might is right has won some supporters – who may yet include US President Donald Trump. But the field marshal is not assured victory in Tripoli. Meanwhile, Serraj’s GNA is still likely to depend on the Misrata and other Islamist militias who control Tripolitania. In the south, Arab tribes, Toubou and other minorities function beyond Tripoli’s control, although Haftar has local allies in the Fezzan. The Brussels based International Crisis Group has warned that fighting between various forces in the southwest “has increased since early 2017 and covert foreign mil itary support to them seems likely to rise […], accelerated by tensions among tribes, which have fought five successive local wars since 2011.” The economy remains in tatters, and oil production is a crucial lifeline. Production averaged 1.6m barrels per day (bpd) prior to the crisis, but it strug gled to remain at more than 1m bpd month to month throughout 2017. The economy is set to shrink again in 2017 and 2018, and the government continues to record huge deficits because of low oil prices and the cost of the conflict.
206 COUNTRY PROFILES
NORTH AFRICA
MAURITANIA
Keeping them guessing Abdel Aziz’s latest moves introduce uncertainty ahead of the 2019 election
DECENTRALISATION
The opposition remains weak and divided after several rounds of boycotted elections. The main opposition alliance, the Forum National pour la Démocratie et l’Unité, is having difficulty choosing a joint presidential candidate now that leading light Ahmed Ould Daddah of the RassemblementdesForcesDémocratiques is too old to run for the presidency. The vast majority of the population approved a referendum in August to
The economy has been slowly rebounding since 2015, when a drop in iron ore prices shook the economy. After hitting $40/tn in 2016, iron ore prices were back at $60/tn in 2017. The government estimates that iron production could surpass 14m tonnes in 2017.
ALGERIA
MALI
Nouadhibou
M A U R I TA N I A
NO TO DEVALUATION
NOUAKCHOTT
300 km
SENEGAL
Population: 4.4 million Population growth: 2.8% GDP per capita: $1,284 Life expectancy: 63.2 Adult literacy: 52.1% Inflation: 2.1% Human development index (out of 188 countries): 157 Foreign direct investment: $272m Current account as % of GDP: -14.2% Mobile phone penetration: 87% Key export: Iron ore Last change of leader: 2008 GDP growth (%)
1.7
3.8
4.8
4.7
5
5.1
2015
2016
2017*
2018*
0.9
3
GDP ($bn)
*Estimation October 2017
P
olitical tensions are high in Nouakchott as the country prepares for regional, municipal and legislative elections in late 2018 and presidential elections in 2019 that are due to see the retirement of President Mohamed Ould Abdel Aziz. The general-turned-president cracked down on his opponents in late 2017, with the authorities arresting former senator Mohamed Ould Ghadda and seeking the arrest of Morocco-based Mauritanian businessman Mohamed Ould Bouamatou on charges unrelated to their opposition to his regime. The government has been saying that it has evidence of vast international crimes being prepared, but others see the impact of a political falling out. The constitution bars Abdel Aziz from running again, but oppositionists point out that the rule of law is weak and that the president launched coups in 2005 and 2008. Some of Abdel Aziz’s supporters have begun to call for him to remain in power, but the president himself has not made his intentions known. If he does step down at the end of his term, he could play an influential role in the choice of a successor, with General Mohamed Ould Cheikh Mohamed Ahmed and prime minister Yahya Ould Hademine as possibilities.
Atlantic Ocean
A major gold mine expansion helps cushion the blow of lower iron ore prices
MOROCCO
abolish the Senate and create decentralised governments with substantial finances and authority. The referendum’s passing also means that the country is getting a new flag and national anthem. In the lead up to the vote, the government regularly shut down opposition marches. Abdel Aziz brandishes his antiterrorism credentials to boost his international profile. Mauritania is part of the newly formed G5 force created to tackle terrorism in the Sahel, but Nouakchott generally keeps its troops closer to home, having refused to allow them to participate in France’s Operation Barkhane mission in the Sahel.
The government has cut spending, including fuel subsidies, to reduce the budget deficit. Having refused the International Monetary Fund’s (IMF) calls for a strong devaluation of the currency because the country does not have an export base that would benefit from a weaker ouguiya, the government signed a new three-year deal with the IMF in November. Gas, gold and other projects are set to improve economic growth in the coming year. Canada’s Kinross plans to spend $590m between 2018 and 2020 to expand operations at its Tasiast gold mine. It predicts that production from the mine will quadruple by 2022 to reach 800,000oz per year. The year 2018 will also bring the launch of key infrastructure projects. The African Development Bank and other financiers are lending 57bn CFA francs ($102.5m) for the construction of a bridge to link Mauritania and Senegal over the Senegal River. But Mauritania’s recent borrowing is taking the debt level to dangerous heights, with public debt due to hit 80.8% of gross domestic product in 2018. Some policy-makers argue that debt will not be a problem in the medium term as US-based Kosmos Energy plans to begin commercial production of gas at its Tortue field – which is estimated to contain some 15trn cubic feet of gas – by 2022. In the meantime, Kosmos and its partners are continuing a drilling campaign to discover more reserves. Meanwhile, in agriculture, 2017 was due to deliver a bad harvest because of poor rains. The United Nations Food and Agriculture Organisation gave the government $39m in November to help with the country’s food security needs over the next few years.
THE AFRICA REPORT
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NORTH AFRICA
COUNTRY 207 PROFILES
MOROCCO
The Rif’s rift widens The lack of regional development is becoming a bigger political issue
PORTUGAL Atlantic Ocean
Tourism is down, agriculture is erratic and manufacturing is the big hope
BEYOND THE SAHARA
On the geopolitical front, Morocco will continue its policy of reaching out to sub-Saharan African governments, both as a means to boost trade links and to shore up Morocco’s position in the disputed Western Sahara territory. Morocco will continue to push for support among members of the African Union, which it re-joined in 2017 after THE AFRICA REPORT
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N° 96
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CANARY ISLES (Spain)
400 km
Rabat
Marrakesh
MOROCCO ALGERIA MAURITANIA
MALI
Population: 35.7 million Population growth: 1.4% GDP per capita: $3,177 Life expectancy: 74.3 Adult literacy: 72.4% Inflation: 0.9% Human development index (out of 188 countries): 123 Foreign direct investment: $2.3bn Current account as % of GDP: -4% Mobile phone penetration: 121% Key export: Ignition wiring sets Last change of leader: 1999 GDP growth (%)
BOATS, PLANES AND CARS
3
1.2
4.8
101.2
103.6
110.7
118.6
2015
2016
2017*
2018*
4.5 GDP ($bn)
*Estimation October 2017
S
immering social tensions in the restive northern Rif Province look set to play an important role on the political scene in 2018, following the failure of the government of Saad Eddine El Othmani to conclusively put an end to the al-Hirak al-Shaabi (the Popular Movement) protests. Demonstrations broke out in late 2016 following the death of an Al Hoceima fishmonger, which was blamed by many on corrupt local officials. King Mohammed VI has made a number of high-profile declarations ordering thegovernmenttospeedupdevelopment programmes in the Rif – long a hotspot for rebellion among the majority Berber population – but street demonstrations may continue in Al Hoceima, particularly if arrested Hirak leaders are brought to trial. The government and the King will be keen to demonstrate a renewed commitment to solving the crisis. Despite political gridlock for almost six months in early 2017, when the moderate Islamist Parti de la Justice et du Développement struggled to form a governing coalition following legislative elections, efforts are being made to move on from these divisions with a number of fresh faces in cabinet posts. In 2018 there may be an attempt by all sides on the political divide to calm tensions and move the government’s often stagnant programme forward.
Casablanca
December 2016 Morocco and Nigeria signed an ambitious deal – which has yet to make much progress – to work together on a gas pipeline to link West Africa to Europe. Although economic growth picked up in 2017 after a significant fall in 2016, challenges remain. For example, tourism revenue dropped by about 5% in the first four months of 2017. The government is seeking to improve its record on job creation for young people and to move the agricultural sector away from continued dependence on increasingly erratic rainfall. If the rains fail again in 2018, the government will be forced to increase wheat imports, pay out insurance to farmers and cut back growth forecasts. There is unlikely to be much progress on plans to cut subsidies on cooking gas and sugar.
SPAIN
an absence of more than 30 years due to the Western Sahara conflict. Moroccan companies will continue to sign deals and partnerships with predominantly francophone African countries in the telecoms, insurance and fertiliser sectors. With lower phosphate and fertiliser prices, Morocco’s OCP Group is looking for new projects on the continent. If, as expected, Morocco joins the Economic Community of West African States in December 2017, considerable work will need to be undertaken to comply with trade and tariff requirements in the zone, but this should open up new market opportunities. In
D E C E M B E R 2 017- J A N UA R Y 2 018
Nevertheless, investment outside of the agriculture sector remains strong, with the aeronautics, car manufacturing and renewable energy sectors continuing to perform well. Under the Plan d’Accélération Industrielle, the government is aiming to increase auto industry exports to reach D100bn ($10.2bn) by 2020. Tanger-Med port looks likely to continue its strong performance, with a goal to double its container capacity in the coming years. In March 2017, Chinese investors promised a $1bn investment to build Tanger Tech City. Cheap fuel continues to be a boon for Morocco, a net energy importer. Sound Energy, a British oil company, hopes to secure the go-ahead for a natural gas pipeline to supply Rabat and Casablanca following finds in its concession in north-eastern Morocco. Pressure from the International Monetary Fund for Morocco to float its currency regime is likely to continue in 2018. Although the governor of the Bank Al-Maghrib has made encouraging signs that Morocco will liberalise its currency, progress has been slow and several influential business leaders are against the idea because of their fears about devaluation.
208 COUNTRY PROFILES
NORTH AFRICA
SUDAN
In from the cold
Two years of talks between the government and the opposition led to the establishment of a unity government in April 2017. Bashir’s ally and former deputy Bakri Hassan Salih is now prime minister of a government with 31 ministers and 44 secretaries of state. Rebel groups and some opposition parties refused to join the process. The killing of protesters in a refugee camp in Darfur, the arrest of human rights activists and journalists and the proposal of new restrictive media laws show that not much is changing on Sudan’s poor human rights record.
ea
HUMAN RIGHTS ABUSES
SAUDI ARABIA
dS
ERITREA
KHARTOUM
SUDAN
CAR
SOUTH SUDAN
Population: 40.5 million Population growth: 2.4% GDP per capita: $2,917 Life expectancy: 63.7 Adult literacy: 75.9% Inflation: 26.9% Human development index (out of 188 countries): 165 Foreign direct investment: $1.1bn Current account as % of GDP: -1.9% Mobile phone penetration: 69% Key export: Petroleum and crude oil Last change of leader: 1989 GDP growth (%)
4.9
3
3.7
3.6
GDP ($bn)
81.4
91.2
2015
2016
145.2
119 2017*
Sudan’s 2011 secession, such as the demarcation of borders. Each government accuses the other of supporting rebels. The continuing civil war in South Sudan has benefited Sudan, as it has halted the flow of weapons from South Sudan. But it has also brought hundreds of thousands of refugees. SUBSIDY CUTS
ETHIOPIA
*Estimation October 2017
A
s Sudan heads into 2018, the government expects an economic boost from the fact that Washington lifted trade and financial sanctions against the country in October 2017. But Khartoum’s politics remain fraught after an incomplete national dialogue and with President Omar al-Bashir saying that he will step down in 2020. Meanwhile, conclusive peace still remains elusive. On-and-off talks with the rebel Sudan Revolutionary Front (SRF), a loose coalition of four rebel groups, are not moving forward. Political changes – such as allowing foreign aid to reach war-torn regions, increased cooperation on counterterrorism and ending military links with North Korea – helped to build support for the removal of sanctions. But most importantly, it was lobbying from Saudi Arabia to reward Sudan for its diplomatic shift away from Iran. Sudanese troops make up the bulk of frontline soldiers in Saudi Arabia’s war in Yemen. Elections are scheduled for 2020 and Bashir, in power since 1989 and wanted by the International Criminal Court for war crimes in Darfur, has said he will not run. But he has said that before.
Port-Sudan
Re
High public debt and inflation levels are hurting economic growth
400 km
EGYPT
LIBYA CHAD
The lifting of US sanctions is a big deal for the regime in Khartoum
2018*
The Sudan People’s Liberation Movement-North, which fights in Blue Nile and South Kordofan along the border with South Sudan, has now split into two factions. It is not clear yet what the split means for the future of the regions. The three other rebel groups in the SRF coalition are from the western region of Darfur and said to be regrouping and receiving support from Libya’s military strong man, Khalifa Haftar. Sudan and South Sudan remain in an uneasy relationship, as South Sudan’s President Salva Kiir’s 2017 visit to Khartoum showed. There are still unresolved problems following South
The lifting of the US embargo will allow the Sudanese economy to breathe some fresh air, though not as fast as many in Khartoum would like. Inflation remained above 30% for most of 2017 and the government regularly spends more than it takes in, despite fuel and electricity subsidy cuts started in 2016. More subsidy cuts are due in 2018 and 2019. In November 2017, the black market value of the Sudanese pound hit a record low of 27 to the US dollar. The central bank maintains the official rate of S£6.7 to the dollar and is considering measures to close that gap but does not seem to support floating the currency. US and European companies have begun to express interest in Sudan, especially in energy and agriculture. The government is currently negotiating with Norway’s Scatec Solar about a 400MW solar power project. In April, the government also signed a $200m loan with the Arab Fund for Economic and Social Development for the construction of a 350MW power plant outside Khartoum. Many foreign companies, however, will remain cautious about Sudan’s bureaucracy and corruption. With public debt of about $50bn, Khartoum is eligible for debt relief under the Heavily Indebted Poor Countries initiative, but it must come to an understanding with its main creditors in partnership with South Sudan. The country’s gold sector is booming, and the government has reported production of 74.6tn in the first nine months of 2017, which puts it on track to beat the 93.4tn of the full year 2016. Much of that production is from artisanal operations, with about 10 companies running larger projects.
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NORTH AFRICA
COUNTRY 209 PROFILES
TUNISIA
Tunis turns ever so slowly
The political transition is taking longer than planned
Sousse ALGERIA
Sfax Mediterranean
T
unisia has a government of national unity and greater political stability, but President Béji Caïd Essebsi and his team are finding it difficult to implement reforms and complete the post-Arab Spring transition. Prime minister Youssef Chahed’s government is backed by nine parties and political groups that support its roadmap after a deal was agreed in August 2016. Top priorities include improving security, decentralisation, and building key projects with the $15bn in aid and proposed investments from 2016’s ‘Tunisia 2020’ conference. The government postponed municipal elections due in December 2017 until March 2018. They are a key part of the decentralisation programme, and are the last round of elections to complete the country’s political transition. Essebsi’s Nidaa Tounes party has been weakened since his son Hafedh Caïd Essebsi became party president in January 2016. Nidaa Tounes is due to hold an elective conference before the municipal elections, and Wafa Makhlouf, a party cofounder, is running against Hafedh. Finding a way forward is crucial before legislative elections in 2019. The Islamist party Ennahda is participating in the unity government but it, too, has been suffering from disunity. Leader Rachid Ghannouchi plans on running for the presidency in 2019, and Ennahda’s pollsters predict that he could win due to unhappiness with Essebsi’s lack of achievements. GOVERNMENT AMNESTY
Transitional justice has been a sticking point for government. There have been few convictions of high-ranking officials and their allies in business, and parliament passed a controversial amnesty law for government officials in September. THE AFRICA REPORT
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TUNISIA
Sea LIBYA 150 km
Population: 11.5 million Population growth: 1.1% GDP per capita: $3,518 Life expectancy: 75 Adult literacy: 81.8% Inflation: 4.5% Human development index (out of 188 countries): 97 Foreign direct investment: $958m Current account as % of GDP: -8.7% Mobile phone penetration: 126% Key export: Ignition wiring sets Last change of leader: 2014 GDP growth (%)
1.1
3
1
2.3
43.2
42.1
39.9
39.3
2015
2016
2017*
2018*
GDP ($bn)
Political infighting and the opposition of unions and other groups have slowed the implementation of reforms. One recent unpopular proposal is the adoption of laws on the creation of public-private partnerships, which civil society groups fear could lead to the privatisation of crucial public services. Economic growth in 2017 and beyond depends on sectors such as phosphate mining, agriculture and tourism. Tourists are returning after the 2015 Sousse massacre, and the government reported that revenue from the sector hit $851m in the first three quarters of 2017, up 21% year on year. The government
D E C E M B E R 2 017- J A N UA R Y 2 018
predicts that the country could receive 6.5 million tourists in 2017, which would be around pre-2015 levels. While security has been improving, the government plans to maintain the current state of emergency until at least February 2018. The country has been facing difficult economic circumstances, with 5.5% inflation and a 40% depreciation of the dinar in 2017. The central bank is letting the dinar fall in the hope that it will spur exports, after the country’s trade deficit hit record highs in 2017. Public debt also stood at an unhealthy 73% of gross domestic product (GDP) and the public sector wage bill as high as 14.1% of GDP. JOB CUTS FOR CIVIL SERVANTS
*Estimation October 2017
Phosphate mining and tourism are key areas for growth
TUNIS
Those are issues the government is working on with the support of the International Monetary Fund (IMF). In 2017, the IMF temporarily refused to disburse more aid from its $2.8bn programme with Tunis because of slow progress on reforms. The proposed 2018 budget includes tax increases and moves tocut3,000stateworkersfromthepayroll. Also on the agenda is the privatisation of some state-owned enterprises, including three banks, which is generally unpopular, as is the rising cost of living. Southern and central Tunisia hosted regular protests throughout 2017 due to the lack of jobs and poor living conditions. The government agreed a deal to create jobs and build infrastructure in July to end protests in Tataouine and Kebili that had stopped some oil and gas projects. The phosphate mining sector has also recently been disrupted by protests. The Compagnie des Phosphates de Gafsa reported that its production had dropped by 18.5% to 3.1m tonnes in the first nine months of 2017. Elsewhere, Groupe Chimique Tunisien’s Mdhilla II phosphate plant is due to launch operations in 2018 with a production capacity of 500,000tn per annum. To increase electricity production and spur development, energy minister Hela Cheikhrouhou has rolled out a plan to add 1,000MW through solar and wind projects over the next three years.
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POEM BY DAMI AJAYI
From A Woman’s Body is a Country (Ouida Books)
HOME Homebound crowd, saddled with miserly experiences & the misery of sore feet: pray, carry word home for me, tell my parents I am well. Ambition sent me on an errand like flung stone in flight, sailing through the air, assailed by foreign tongues. At night, I lie on my side & I hear the distant folk songs from home, carried in the winds. My heart aches. I stall tears with machismo when my feet ache from journeys untold, when my body shivers from the ecstasy of virgin roads. Days have climbed upon themselves like complacent lovers. Nights have dried out like vigil oil lamps. Feet have kissed earth’s dirt for too long. Home is the gurgling of familiar streams, the clarity of laughter, a soft knock rapping on the door of memories. Home is red mangoes on corrugated iron roofs. Home is a visiting dream, a vanishing apparition, a piquant tune. Home is retreat, return.
THE AFRICA REPORT
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