by Francis Ssekamatte & Geoffrey Bakunda*
Africa's marginalisation in global trade has never been more of a reality than today. Africa's share of global trade has fallen from 6 per cent in 1980 to just 1.2 per cent by 2005 and is expected to fall further below 1 per cent by 2010. All this is happening despite the fact that Africa has 12 per cent share of the world's population. According the DATA (Debt, Aids, Trade and Africa) statistics, if Africa could regain just 1 per cent share of global trade, it would earn $70 billion more in exports each year, several times more than what it currently receives in foreign aid.
The question therefore is : How can Africa regain its share of global trade?
Much as Africa finds itself in a generally unfair trading environment where it is the weakest trading partner and a latecomer, African governments and the private sector leaders should institute measures, strategies and policies to re-energise Africa's trade potential. Such efforts and processes to create effective export sectors will have to be informed by a new mentality. For any progress to be realized, we have to shed the "commodity mindset" - (undifferentiated, unbranded export offerings) which has engulfed us for generations.
This commodity mindset is an entrenched belief and general acceptance that Africa should export commodities.This commodity mentality is now synonymous with all export thinking at all levels of society.
While the rich Western nations are in some way responsible for the poverty of the Third World through continuing extortion and savvy manipulation of the terms of trade, it's actually the poor nature of exports with which our countries are engaging the international market that best explain why we remain among the poorest on earth.
Poor countries' exports consist of the most easily imitated products - undifferentiated offerings placed on the international market with little or no added value. These are largely raw material commodity products - green coffee beans, raw cotton, fruits and vegetables, fish, cut flowers, etc; for which competition is based on price only. Exporting firms are operating at the lowest ends of the value chains, thus commanding little or no control over their products on the overseas markets.
This price-based competition leads to enormous pressure on wages and keeps the ordinary citizens poor. By implication, and perhaps cynically speaking, the more the nation exports its primary commodities, the poorer it gets.
We are pleading for an entire paradigm shift and in this way suggesting that unless the public and private sector industry leaders abandon the old outdated thinking based in the theories of comparative advantage, we will never come out of poverty and the poor international performance currently experienced.
*Dr. Geoffrey Bakunda, PhD (International Trade Development) & Mr. Francis Ssekamatte Musoke - BCP, MSc. are based at Makerere University Business School
allafrica.com
May 29, 2007
China launches Nigerian satellite
China in mid-May launched a communications satellite for Nigeria, the first of its kind in Africa and the first time a foreign buyer has purchased a Chinese satellite and its launching service. The Nigerian Communication Satellite, or NIGCOMSAT-1, is a super hybrid geo-stationary satellite designed to operate in Africa, parts of the Middle East and southern Europe.
Experts estimate that the satellite program will revolutionize telecommunications, broadcasting and broadband multimedia services in Africa. It will create more than 150,000 jobs for Nigerians, save broadband users more than 95 million U.S. dollars a year, as well as providing Internet access to remote rural villages, and save more than 660 million U.S. dollars in phone call charges. It is also expected to play key roles in e-commerce, improving government efficiency and promoting the development of the digital economy in Nigeria and throughout the entire African continent.
The satellite will change positions in orbit until it is finally fixed at a longitude of 42 degrees east. It is expected to be put into use by Nigeria before the end of the year and has a lifespan of 15 years. The satellite will be monitored and tracked by a ground station to be built in Abuja, the capital of Nigeria, by Chinese firm Great Wall Industry Corporation, and a ground station in Kashgar, in northwest China's Xinjiang Uygur Autonomous Region. The Chinese company will offer support services and training for Nigerian technicians.
The satellite's ground facility in Abuja "had the potential of making Nigeria a major traffic hub in the west and central African region" and will prompt Nigeria and neighboring countries to "expand their switching facilities to be able to handle international traffic," according to a Nigerian communication official.
China was awarded the U.S. $11 million deal in 2004 after it outbid 21 international rivals.
People's Daily
Experts estimate that the satellite program will revolutionize telecommunications, broadcasting and broadband multimedia services in Africa. It will create more than 150,000 jobs for Nigerians, save broadband users more than 95 million U.S. dollars a year, as well as providing Internet access to remote rural villages, and save more than 660 million U.S. dollars in phone call charges. It is also expected to play key roles in e-commerce, improving government efficiency and promoting the development of the digital economy in Nigeria and throughout the entire African continent.
The satellite will change positions in orbit until it is finally fixed at a longitude of 42 degrees east. It is expected to be put into use by Nigeria before the end of the year and has a lifespan of 15 years. The satellite will be monitored and tracked by a ground station to be built in Abuja, the capital of Nigeria, by Chinese firm Great Wall Industry Corporation, and a ground station in Kashgar, in northwest China's Xinjiang Uygur Autonomous Region. The Chinese company will offer support services and training for Nigerian technicians.
The satellite's ground facility in Abuja "had the potential of making Nigeria a major traffic hub in the west and central African region" and will prompt Nigeria and neighboring countries to "expand their switching facilities to be able to handle international traffic," according to a Nigerian communication official.
China was awarded the U.S. $11 million deal in 2004 after it outbid 21 international rivals.
People's Daily
China approves China-Africa Development Fund
The recently established China-Africa Development Fund will start from one billion U.S. dollars, and then add up to three billion U.S. dollars in the second phase, until eventually amounting to five billion dollars. The business scope of the fund mainly includes equity and quasi-equity investment, fund investments, fund management, investment management and consulting services.
The fund will be used to support African countries' agriculture, manufacture, energy sector, transportation, telecommunications, urban infrastructure, resource exploration and the development of Chinese enterprises in Africa.
"The CDB attaches great importance to cooperation with Africa," said Gao Jian, vice governor of China Development Bank (CDB), the main initiator of the fund. "We have sent eight working groups to Africa. This year, we plan to send another 18 working groups there."
Current loans outstanding of the CBD in Africa amounted to one billion U.S. dollars by the end of March, he said, adding the bank has been following the development of 30 projects in African countries, which involve three billion U.S. dollars.
The CDB is a development financial institution of the Chinese government. As of December 2006, the total assets of the CDB exceeded 295 billion U.S. dollars, with the balance of loans being 256 billion U.S. dollars, and the NPL ratio being 0.72 percent.
People's Daily
The fund will be used to support African countries' agriculture, manufacture, energy sector, transportation, telecommunications, urban infrastructure, resource exploration and the development of Chinese enterprises in Africa.
"The CDB attaches great importance to cooperation with Africa," said Gao Jian, vice governor of China Development Bank (CDB), the main initiator of the fund. "We have sent eight working groups to Africa. This year, we plan to send another 18 working groups there."
Current loans outstanding of the CBD in Africa amounted to one billion U.S. dollars by the end of March, he said, adding the bank has been following the development of 30 projects in African countries, which involve three billion U.S. dollars.
The CDB is a development financial institution of the Chinese government. As of December 2006, the total assets of the CDB exceeded 295 billion U.S. dollars, with the balance of loans being 256 billion U.S. dollars, and the NPL ratio being 0.72 percent.
People's Daily
China's Africa trade shoots up by 40%
China boosted its trade with Africa by 40 percent in 2006 as it strengthened ties with the continent to secure natural resources.
Trade between the two amounted to $55.5 billion in 2006, making China Africa's third-largest trading partner, deputy commerce minister Wei Jianguo said in a speech at the annual meeting of the Africa Development Bank (ADB) in Shanghai in mid-May. China had invested $11.7 billion in Africa at the end of 2006 and boosted aid as it sought energy supplies, he said.
It is targeting projects in nations such as Angola, Libya and Nigeria to satisfy a demand for oil that has almost doubled in a decade. China imports about 30 percent of its oil needs from Africa.
Last year China agreed to double its aid to Africa by 2009, set up a $5 billion fund for investments in the continent, and pledged to provide $3 billion of loans over the next three years. China Development Bank, one of the nation's three policy lenders, had extended a total of $1 billion of preferential loans to Africa by the end of March. The country cancelled 10.9 billion yuan ($1.4 billion) of debt for 31 African nations, Xinhua News Agency reported in November.
Chinese investments in Africa have been focused on agricultural development, manufacturing, transport, electricity and other infrastructure projects. The country trails the US and France in African trade.
Business Report
Trade between the two amounted to $55.5 billion in 2006, making China Africa's third-largest trading partner, deputy commerce minister Wei Jianguo said in a speech at the annual meeting of the Africa Development Bank (ADB) in Shanghai in mid-May. China had invested $11.7 billion in Africa at the end of 2006 and boosted aid as it sought energy supplies, he said.
It is targeting projects in nations such as Angola, Libya and Nigeria to satisfy a demand for oil that has almost doubled in a decade. China imports about 30 percent of its oil needs from Africa.
Last year China agreed to double its aid to Africa by 2009, set up a $5 billion fund for investments in the continent, and pledged to provide $3 billion of loans over the next three years. China Development Bank, one of the nation's three policy lenders, had extended a total of $1 billion of preferential loans to Africa by the end of March. The country cancelled 10.9 billion yuan ($1.4 billion) of debt for 31 African nations, Xinhua News Agency reported in November.
Chinese investments in Africa have been focused on agricultural development, manufacturing, transport, electricity and other infrastructure projects. The country trails the US and France in African trade.
Business Report
Addressing Uganda's trade deficit
Uganda's imports continue to outweigh exports. Efforts to balance out the patterns are not yielding quick results. Private Sector Foundation Uganda Acting Director of Trade John Ssempebwa talks about the trends :
From 2003-2005, exports grew by 24 per cent but imports grew by 50 per cent over the same period. Basing on 2005 figures, totals exports were worth 1.4 trillion Shillings ($828 million), with imports at Shs3.5 trillion ($2 billion), a Shs2 trillion ($1.2 billion) deficit. This indicates that Ugandans are getting poorer. Balancing our trade equation is one of the country's greatest challenges. So anything that increases the value of exports and that makes exporting faster should be a priority.
Question : How effective have the duty free initiatives such as the All But Arms (EBA) of the European Union and the African Growth Opportunities Act (AGOA) of the US been in boosting exports from Uganda?
Answer : The EBA gave us duty-free and quota-free market access, but less than 1 per cent of trade with the EU was conducted under the EBA. The majority of exporters still preferred to export under the Cotonou Agreement because the EBA had very stringent rules of origin criteria. Then there were also the supply chain constraints, which meant that the peasants who actually grow these crops did not benefit from price increases in these markets to increase production. As for Agoa, the US market demands large quantities and at very high quality standards which the smaller companies have not been able to meet. There is really nothing wrong with those facilities but the real challenge for Uganda is not being able to supply the same quantity of products at the same quality on a sustained basis.
Question : How is PSFU involved in value addition campaigns?
Answer : To encourage value addition, our action plan includes calls for waivers on all materials used in the production of value added commodities. Some of these are still classified as inputs under the East African Customs Union and are taxed at 10 per cent duty. We are vouching for total elimination of this tax, in addition to other measures.
Question : Some argue that regional trade would benefit Uganda more than trade with the EU and the US. Do you share that view?
Answer : That is true because those markets have very high quality standards, which we can only meet at a very high cost. Then everyone all over the world is fighting for those markets, making them very competitive. Given all those challenges, the best markets for our products are the regional ones. That is why the Comesa region has now overtaken the EU as the biggest export market for Ugandan products.
Question : Uganda must be missing out on trade opportunities because it has not signed up for the Comesa Free Trade Area (FTA)?
answer : Almost all the countries who want our products in the region are members of the Comesa FTA. When they are trading they do not tax each other's products like they tax ours because we are not part of the FTA. However, we remain hopeful that at the Comesa Summit in Nairobi (May 2007), Uganda will finally ratify the FTA pact.
Question : The cost of doing business in Uganda also puts us at a regional disadvantage.
Answer : True, but by the Competitiveness Index, we are not very different from many of the other countries in the region, apart from probably Kenya. There is need for the government to implement policies that have been suggested for power and infrastructure development.
Question : Where do you see the trade sector in the next five years?
Answer : I see increased participation by the private sector in trade negotiations. I see new trade policy frameworks being implemented to reduce the negative trade imbalance and more trading activities in the region, especially if Uganda joins Comesa FTA. But I also see more imports from the EU because of the Economic Partnership Agreements (EPAs), which are due to come into effect on January 1, 2008.
Question : The EPAs are a controversial issue. What if Uganda does not sign up?
Answer : The EU is one of Uganda's leading trading partners. If Uganda does not ratify the EPAs, every exporter to the EU will lose duty free access to that market come next year. Exporters will have to pay the "most favoured" (MF) rates, which are charged if the country of origin is not part of the preferential agreement such as the EPAs. These taxes and duties will make Ugandan products less competitive than those from other countries that have signed the EPAs. The crucial issue in EPA is development assistance. Given that we need donor support from the EU for our infrastructure projects, how shall we achieve this assistance without signing the EPA?
Monitor
From 2003-2005, exports grew by 24 per cent but imports grew by 50 per cent over the same period. Basing on 2005 figures, totals exports were worth 1.4 trillion Shillings ($828 million), with imports at Shs3.5 trillion ($2 billion), a Shs2 trillion ($1.2 billion) deficit. This indicates that Ugandans are getting poorer. Balancing our trade equation is one of the country's greatest challenges. So anything that increases the value of exports and that makes exporting faster should be a priority.
Question : How effective have the duty free initiatives such as the All But Arms (EBA) of the European Union and the African Growth Opportunities Act (AGOA) of the US been in boosting exports from Uganda?
Answer : The EBA gave us duty-free and quota-free market access, but less than 1 per cent of trade with the EU was conducted under the EBA. The majority of exporters still preferred to export under the Cotonou Agreement because the EBA had very stringent rules of origin criteria. Then there were also the supply chain constraints, which meant that the peasants who actually grow these crops did not benefit from price increases in these markets to increase production. As for Agoa, the US market demands large quantities and at very high quality standards which the smaller companies have not been able to meet. There is really nothing wrong with those facilities but the real challenge for Uganda is not being able to supply the same quantity of products at the same quality on a sustained basis.
Question : How is PSFU involved in value addition campaigns?
Answer : To encourage value addition, our action plan includes calls for waivers on all materials used in the production of value added commodities. Some of these are still classified as inputs under the East African Customs Union and are taxed at 10 per cent duty. We are vouching for total elimination of this tax, in addition to other measures.
Question : Some argue that regional trade would benefit Uganda more than trade with the EU and the US. Do you share that view?
Answer : That is true because those markets have very high quality standards, which we can only meet at a very high cost. Then everyone all over the world is fighting for those markets, making them very competitive. Given all those challenges, the best markets for our products are the regional ones. That is why the Comesa region has now overtaken the EU as the biggest export market for Ugandan products.
Question : Uganda must be missing out on trade opportunities because it has not signed up for the Comesa Free Trade Area (FTA)?
answer : Almost all the countries who want our products in the region are members of the Comesa FTA. When they are trading they do not tax each other's products like they tax ours because we are not part of the FTA. However, we remain hopeful that at the Comesa Summit in Nairobi (May 2007), Uganda will finally ratify the FTA pact.
Question : The cost of doing business in Uganda also puts us at a regional disadvantage.
Answer : True, but by the Competitiveness Index, we are not very different from many of the other countries in the region, apart from probably Kenya. There is need for the government to implement policies that have been suggested for power and infrastructure development.
Question : Where do you see the trade sector in the next five years?
Answer : I see increased participation by the private sector in trade negotiations. I see new trade policy frameworks being implemented to reduce the negative trade imbalance and more trading activities in the region, especially if Uganda joins Comesa FTA. But I also see more imports from the EU because of the Economic Partnership Agreements (EPAs), which are due to come into effect on January 1, 2008.
Question : The EPAs are a controversial issue. What if Uganda does not sign up?
Answer : The EU is one of Uganda's leading trading partners. If Uganda does not ratify the EPAs, every exporter to the EU will lose duty free access to that market come next year. Exporters will have to pay the "most favoured" (MF) rates, which are charged if the country of origin is not part of the preferential agreement such as the EPAs. These taxes and duties will make Ugandan products less competitive than those from other countries that have signed the EPAs. The crucial issue in EPA is development assistance. Given that we need donor support from the EU for our infrastructure projects, how shall we achieve this assistance without signing the EPA?
Monitor
Africa must beware of being short-changed again, this time by China
by Gatonga Kairu
Chinese business people have landed in African capitals in their thousands, triggering excitement over the deepening trade relations between China and Africa. Additionally, China, unlike the West, is apparently giving a helping hand to African nations without asking questions about governance and justice.
However, there is a possibility that the advantages of trading with Asia, and especially China, are being grossly exaggerated. In other words, as we look East, we must carry with us the lessons learnt from our engagement with the West.
For starters, there is a huge and growing trade deficit in favour of China, currently standing at $3 billion. The trade still involves the export of African raw materials to China, without any value addition, to meet the huge demand for Chinese industries that grow by the day. In turn, we are importing cheap textiles and low quality electronics, forcing locally-owned industries to close down.
China, like the West, has not helped Africa improve its manufacturing and processing, particularly agro-processing. China's goal is to get a grip of the continent's natural resources, specifically oil and minerals.
Second, the trade imbalances have created resentment in African countries, mainly due to China's insatiable need to offload its huge population and labour onto small economies. In Zambia and Tanzania, for instance, Chinese traders are literally competing with hawkers, selling soap, toothbrushes and spoons on the streets. Watch what will happen once the mega road construction projects start in Kenya: subcontractors, site foremen and suppliers of even the most basic tools and commodities will be Chinese.
The social and political consequences of killing local small and cottage industries are grave. The local people are feeling short-changed, so much so that the reduction of Chinese activity in Zambia's economy was a major issue in that country' recent elections.
Chinese enterprises in Africa are low quality employers offering minimum wages.
Then, there is the risk that Africa is being sucked into an economic and ideological battle, just as happened during the Cold War. With a mammoth and educated population and an economy growing at a very fast rate, China is a serious threat to the dominance of the West, particularly the United States.
Although Western governments are fond of arm twisting, shifting goalposts and generally playing Big Brother, the Chinese are masters of soft power.
Africa has not earned real money worth talking about from its trade with China. We must re-examine our political, social, economic and cultural relations with China, failing which we will get a raw deal, again!
The East African
Chinese business people have landed in African capitals in their thousands, triggering excitement over the deepening trade relations between China and Africa. Additionally, China, unlike the West, is apparently giving a helping hand to African nations without asking questions about governance and justice.
However, there is a possibility that the advantages of trading with Asia, and especially China, are being grossly exaggerated. In other words, as we look East, we must carry with us the lessons learnt from our engagement with the West.
For starters, there is a huge and growing trade deficit in favour of China, currently standing at $3 billion. The trade still involves the export of African raw materials to China, without any value addition, to meet the huge demand for Chinese industries that grow by the day. In turn, we are importing cheap textiles and low quality electronics, forcing locally-owned industries to close down.
China, like the West, has not helped Africa improve its manufacturing and processing, particularly agro-processing. China's goal is to get a grip of the continent's natural resources, specifically oil and minerals.
Second, the trade imbalances have created resentment in African countries, mainly due to China's insatiable need to offload its huge population and labour onto small economies. In Zambia and Tanzania, for instance, Chinese traders are literally competing with hawkers, selling soap, toothbrushes and spoons on the streets. Watch what will happen once the mega road construction projects start in Kenya: subcontractors, site foremen and suppliers of even the most basic tools and commodities will be Chinese.
The social and political consequences of killing local small and cottage industries are grave. The local people are feeling short-changed, so much so that the reduction of Chinese activity in Zambia's economy was a major issue in that country' recent elections.
Chinese enterprises in Africa are low quality employers offering minimum wages.
Then, there is the risk that Africa is being sucked into an economic and ideological battle, just as happened during the Cold War. With a mammoth and educated population and an economy growing at a very fast rate, China is a serious threat to the dominance of the West, particularly the United States.
Although Western governments are fond of arm twisting, shifting goalposts and generally playing Big Brother, the Chinese are masters of soft power.
Africa has not earned real money worth talking about from its trade with China. We must re-examine our political, social, economic and cultural relations with China, failing which we will get a raw deal, again!
The East African
East Africa attracts hunters for oil and gas
Oil companies, both western and Asian, are hunting in earnest for oil and gas in East Africa, a still largely under-explored region, as energy nationalism in Russia, Venezuela and the Middle East closes off opportunities in more proven areas.
"East Africa, for a frontier area, is experiencing one of the highest levels of investment in the world right now - but we're only seeing the beginning," said Chris Matchette-Downes, vice president of business development at Black Marlin Energy, an oil service company based in Dubai and specializing in the region. About $500 million is being spent on research but so far only about 479 wells have been drilled from Eritrea to Cape Town including Madagascar, compared with as many as 30,000 in northern and western Africa, he said.
Significant discoveries of oil could help some countries in the region reduce their dependence on aid and expensive imported oil and help wean their residents from chopping down trees for household fuel. Exploitation, however, could be difficult and require costly infrastructure development. Except for a rickety rail network, not rehabilitated since colonial times, most of the region lacks pipelines and ports to export oil.
While some countries, like Sudan and Ethiopia, are showing early promise as oil and natural gas producers, Freedom House, an independent monitor, rated these two countries as among the most repressive regimes in the world. Many countries in East Africa, moreover, are in only the early stages of setting up a regulatory and legal framework for the oil industry. Oil companies worry whether their contracts will be respected.
Still, even at this early stage, oil has recently been found in Uganda and in Madagascar. Gas has been discovered in Tanzania and Ethiopia. Oil production is rising steadily in Sudan. Seismic studies and drilling are proceeding steadily in Kenya, Mozambique, the semi-autonomous Somali
province of Puntland, and in the waters surrounding the Seychelles. The shores of Zanzibar are attracting interest from international oil giants, like Royal Dutch Shell.
But the geology of East Africa is more complex than that of the western side of the continent, so oil deposits will be more challenging to find in the east, seismic experts say. At the same time, a commercially viable, world-class basin has yet to be discovered in East Africa to rival the world's top 100 basins, like the North Sea and the Gulf of Mexico.
Exploration and production in Sudan, the largest regional oil producer and an OPEC observer, which is pumping a modest 491,000 barrels a day, is dominated by China National Petroleum Company, Petronas of Malaysia and ONGC of India, since formal U.S. sanctions bar U.S. firms and deter western companies from operating there. Sudan's future as a major oil producer will be determined by the country's ability to stabilize the security situation and respect contracts, analysts say.
Meanwhile, Madagascar is expecting to pump its first oil this summer, when a Houston-based explorer, Madagascar Oil, will produce and store a small amount of heavy crude from the island's Bemalonga onshore field, before a government decision on how best to use it, said Alex Archila, interim chairman of the company. Madagascar Oil is evaluating the economic viability of producing oil from the field, which may hold as much as 10 billion barrels of heavy crude, he said. The company has also started a pilot study of how to produce heavy oil from beneath parts of the field that are being mined for bitumen. Exxon Mobil is also drilling for oil off the island's northwest coast.
In Uganda, oil production is expected to start in 2009 from a field on the shores of Lake Albert, on the border with the Democratic Republic of Congo. Two independent oil producers, Heritage Oil of Canada and Tullow Oil of Britain, will produce about 6,000 barrels a day of light, sweet crude that will be used locally to produce kerosene and other fuels and to supply a small power plant, said Chris Perry, investor relations officer at Tullow.
Perry said that Tullow was also evaluating a series of recent oil discoveries to determine whether enough crude could be produced to justify construction of a $2 billion, 1,300-kilometer, or 800-mile, export pipeline to Mombasa, the Kenyan port which serves land-locked Uganda.
In the past two years, Tanzania has leased large swaths of its offshore area to exploration and production companies that include Petrobras of Brazil, Statoil of Norway, and Aminex, an Anglo-Irish company. Tanzania has sizeable reserves of natural gas, and a French exploration company, Maurel and Prom, announced a gas find there in January. But offshore exploration plans by oil majors, including Royal Dutch Shell, have been held up for years around the semi-autonomous islands of Zanzibar, until an agreement is reached on resource management with the mainland Tanzanian government.
Uganda, Tanzania and Kenya have started coordinating regional oil development through the East African Petroleum Conference, an intergovernmental association which held its third meeting in March in Arusha, the capital of Tanzania. In Kenya, China National Offshore Oil Corp. and Woodside Petroleum of Australia, among others, have committed to exploratory drilling programs, mainly offshore.
In Mozambique, one offshore well will be drilled this year in the Ruvuma basin, an area that straddles the border with southern Tanzania, said Matchette-Downes of Black Marlin. Eni of Italy, Anadarko of the United States, Petronas of Malaysia and Norsk Hydro of Norway signed up for offshore exploration acreage in the area last year.
In the semi-autonomous region of Puntland in northern Somalia, Range Resources, based in Melbourne, Australia, has contracted for all mineral and hydrocarbon rights in the region, said Peter Landau, the company's managing director. Range Resources has opened an office in the port city of Boosaso and will drill its first of four exploration wells this year onshore, he said. "Puntland is considered a geological mirror image to Yemen," Landau said. Yemen, already an oil producer, is located across the Gulf of Aden from Puntland.
Ethiopia - which has proven natural gas reserves of 4 trillion cubic feet, or 100 million cubic meters - is also in the sights of oil explorers, despite ethnic conflicts there. White Nile, Petronas and Lundin Petroleum, a independent Swedish oil company, have all signed on to drill in Ogaden province - where last month the Ogaden National Liberation Front, an ethnic Somali independence group, which claimed responsibility for a recent raid on a Chinese-run oil field which killed 74 people.
Throughout most of the region, however, civic unrest is not a major stumbling block, at least during the exploratory phase. Unconventional geology, heavy oil, and the need to factor in costly infrastructure developments may weigh on development decisions, but the explorers, at least are upbeat on East Africa.
IHT
"East Africa, for a frontier area, is experiencing one of the highest levels of investment in the world right now - but we're only seeing the beginning," said Chris Matchette-Downes, vice president of business development at Black Marlin Energy, an oil service company based in Dubai and specializing in the region. About $500 million is being spent on research but so far only about 479 wells have been drilled from Eritrea to Cape Town including Madagascar, compared with as many as 30,000 in northern and western Africa, he said.
Significant discoveries of oil could help some countries in the region reduce their dependence on aid and expensive imported oil and help wean their residents from chopping down trees for household fuel. Exploitation, however, could be difficult and require costly infrastructure development. Except for a rickety rail network, not rehabilitated since colonial times, most of the region lacks pipelines and ports to export oil.
While some countries, like Sudan and Ethiopia, are showing early promise as oil and natural gas producers, Freedom House, an independent monitor, rated these two countries as among the most repressive regimes in the world. Many countries in East Africa, moreover, are in only the early stages of setting up a regulatory and legal framework for the oil industry. Oil companies worry whether their contracts will be respected.
Still, even at this early stage, oil has recently been found in Uganda and in Madagascar. Gas has been discovered in Tanzania and Ethiopia. Oil production is rising steadily in Sudan. Seismic studies and drilling are proceeding steadily in Kenya, Mozambique, the semi-autonomous Somali
province of Puntland, and in the waters surrounding the Seychelles. The shores of Zanzibar are attracting interest from international oil giants, like Royal Dutch Shell.
But the geology of East Africa is more complex than that of the western side of the continent, so oil deposits will be more challenging to find in the east, seismic experts say. At the same time, a commercially viable, world-class basin has yet to be discovered in East Africa to rival the world's top 100 basins, like the North Sea and the Gulf of Mexico.
Exploration and production in Sudan, the largest regional oil producer and an OPEC observer, which is pumping a modest 491,000 barrels a day, is dominated by China National Petroleum Company, Petronas of Malaysia and ONGC of India, since formal U.S. sanctions bar U.S. firms and deter western companies from operating there. Sudan's future as a major oil producer will be determined by the country's ability to stabilize the security situation and respect contracts, analysts say.
Meanwhile, Madagascar is expecting to pump its first oil this summer, when a Houston-based explorer, Madagascar Oil, will produce and store a small amount of heavy crude from the island's Bemalonga onshore field, before a government decision on how best to use it, said Alex Archila, interim chairman of the company. Madagascar Oil is evaluating the economic viability of producing oil from the field, which may hold as much as 10 billion barrels of heavy crude, he said. The company has also started a pilot study of how to produce heavy oil from beneath parts of the field that are being mined for bitumen. Exxon Mobil is also drilling for oil off the island's northwest coast.
In Uganda, oil production is expected to start in 2009 from a field on the shores of Lake Albert, on the border with the Democratic Republic of Congo. Two independent oil producers, Heritage Oil of Canada and Tullow Oil of Britain, will produce about 6,000 barrels a day of light, sweet crude that will be used locally to produce kerosene and other fuels and to supply a small power plant, said Chris Perry, investor relations officer at Tullow.
Perry said that Tullow was also evaluating a series of recent oil discoveries to determine whether enough crude could be produced to justify construction of a $2 billion, 1,300-kilometer, or 800-mile, export pipeline to Mombasa, the Kenyan port which serves land-locked Uganda.
In the past two years, Tanzania has leased large swaths of its offshore area to exploration and production companies that include Petrobras of Brazil, Statoil of Norway, and Aminex, an Anglo-Irish company. Tanzania has sizeable reserves of natural gas, and a French exploration company, Maurel and Prom, announced a gas find there in January. But offshore exploration plans by oil majors, including Royal Dutch Shell, have been held up for years around the semi-autonomous islands of Zanzibar, until an agreement is reached on resource management with the mainland Tanzanian government.
Uganda, Tanzania and Kenya have started coordinating regional oil development through the East African Petroleum Conference, an intergovernmental association which held its third meeting in March in Arusha, the capital of Tanzania. In Kenya, China National Offshore Oil Corp. and Woodside Petroleum of Australia, among others, have committed to exploratory drilling programs, mainly offshore.
In Mozambique, one offshore well will be drilled this year in the Ruvuma basin, an area that straddles the border with southern Tanzania, said Matchette-Downes of Black Marlin. Eni of Italy, Anadarko of the United States, Petronas of Malaysia and Norsk Hydro of Norway signed up for offshore exploration acreage in the area last year.
In the semi-autonomous region of Puntland in northern Somalia, Range Resources, based in Melbourne, Australia, has contracted for all mineral and hydrocarbon rights in the region, said Peter Landau, the company's managing director. Range Resources has opened an office in the port city of Boosaso and will drill its first of four exploration wells this year onshore, he said. "Puntland is considered a geological mirror image to Yemen," Landau said. Yemen, already an oil producer, is located across the Gulf of Aden from Puntland.
Ethiopia - which has proven natural gas reserves of 4 trillion cubic feet, or 100 million cubic meters - is also in the sights of oil explorers, despite ethnic conflicts there. White Nile, Petronas and Lundin Petroleum, a independent Swedish oil company, have all signed on to drill in Ogaden province - where last month the Ogaden National Liberation Front, an ethnic Somali independence group, which claimed responsibility for a recent raid on a Chinese-run oil field which killed 74 people.
Throughout most of the region, however, civic unrest is not a major stumbling block, at least during the exploratory phase. Unconventional geology, heavy oil, and the need to factor in costly infrastructure developments may weigh on development decisions, but the explorers, at least are upbeat on East Africa.
IHT
Closed trade doors make Africa poorer
The British humanitarian organization OXFAM warned that Africa will suffer more poverty if agricultural debates continue stalemated in multilateral trade negotiations. According to Elizabeth Mueni, an OXFAM official in Kenya, current measures of trade in the world place the continent in perpetual dependence.
"If no agreement is reached concerning the suppression of subsidies for agricultural products applied by the United States, the European Union and other developed countries, Africa will be even poorer," Mueni emphasized. She added that the wealthy nations should be more understanding of the position of Africa and other developing nations if they want to prevent another failure. "The backwardness of Africa is alarming and it is due neither to a lack of natural nor human resources," she explained.
Africa, with a minimal participation in international trade at two percent, requires special and differential treatment and access to markets and fair prices for its exports. Experts agree that the benefits of globalization have not reached Africa and in spite of its great mineral resources, it grows poorer and poorer while its population is consumed by diseases such as malaria and AIDS.
Prensa Latina
"If no agreement is reached concerning the suppression of subsidies for agricultural products applied by the United States, the European Union and other developed countries, Africa will be even poorer," Mueni emphasized. She added that the wealthy nations should be more understanding of the position of Africa and other developing nations if they want to prevent another failure. "The backwardness of Africa is alarming and it is due neither to a lack of natural nor human resources," she explained.
Africa, with a minimal participation in international trade at two percent, requires special and differential treatment and access to markets and fair prices for its exports. Experts agree that the benefits of globalization have not reached Africa and in spite of its great mineral resources, it grows poorer and poorer while its population is consumed by diseases such as malaria and AIDS.
Prensa Latina
WTO proposes lower tariffs on agricultural products from poor nations
The World Trade Organisation on May 26 proposed sharply lowering tariffs on some agricultural products from poorer countries in exchange for them reducing trade protection measures. The WTO's chief agriculture negotiator, Crawford Falconer, said the new proposal could allow for progress in the stalled Doha round of negotiations aimed at reducing barriers to global commerce.
Falconer said developed countries should reduce tariffs for tropical products to zero for tariffs currently situated at less than 25 percent, while those above that threshold should drop by 85 percent. He also proposed limiting special safeguard mechanisms used by poorer countries that allow them to increase tariffs to protect their economies against abrupt influxes of imports.
That position goes against that of the G33, a group of 46 developing countries with large rural populations, including Indonesia, India, China and Kenya. The group has demanded that the safeguard mechanism be applied to all import products. Falconer's proposal, however, is in keeping with the position of the so-called Cairns group of agricultural export countries, including Australia, Canada and Brazil.
Focus on the Global South, an NGO, said the proposal showed "ignorance or gross insensitivity towards the crisis caused by import surges experienced by a vast number of developing countries." It cited Cameroon as an example, saying poultry imports into the African country increased nearly 300 percent between 1999 and 2004, resulting in the loss of 110,000 rural jobs annually between 1994 and 2003.
The new proposal complements another one distributed to WTO members by Falconer a month ago recommending a decrease is US agriculture subsidies to below 19 billion dollars per year. It also proposed 50 percent decreases in agriculture tariffs and cuts of between 65 and 80 percent for the highest tariffs.
WTO negotiations aimed at reducing barriers to global commerce have gone nowhere for the past six years. Differences, notably on trade in agricultural products, have blocked progress in the Doha Development Round, launched with great fanfare in the Qatari capital in 2001.
Raw Story
Falconer said developed countries should reduce tariffs for tropical products to zero for tariffs currently situated at less than 25 percent, while those above that threshold should drop by 85 percent. He also proposed limiting special safeguard mechanisms used by poorer countries that allow them to increase tariffs to protect their economies against abrupt influxes of imports.
That position goes against that of the G33, a group of 46 developing countries with large rural populations, including Indonesia, India, China and Kenya. The group has demanded that the safeguard mechanism be applied to all import products. Falconer's proposal, however, is in keeping with the position of the so-called Cairns group of agricultural export countries, including Australia, Canada and Brazil.
Focus on the Global South, an NGO, said the proposal showed "ignorance or gross insensitivity towards the crisis caused by import surges experienced by a vast number of developing countries." It cited Cameroon as an example, saying poultry imports into the African country increased nearly 300 percent between 1999 and 2004, resulting in the loss of 110,000 rural jobs annually between 1994 and 2003.
The new proposal complements another one distributed to WTO members by Falconer a month ago recommending a decrease is US agriculture subsidies to below 19 billion dollars per year. It also proposed 50 percent decreases in agriculture tariffs and cuts of between 65 and 80 percent for the highest tariffs.
WTO negotiations aimed at reducing barriers to global commerce have gone nowhere for the past six years. Differences, notably on trade in agricultural products, have blocked progress in the Doha Development Round, launched with great fanfare in the Qatari capital in 2001.
Raw Story
Small enterprises are not the solution for Africa
by Margaret Legum
An elderly foreign visitor to South Africa, encountering the phenomenon of selling at intersections, is said perhaps apocryphally - to have reported : "Hangers, grapes, bags? Everything!" Picture the disappointment of the seller, whose apparently easy customer declares that she NEVER buys anything at intersections!
There can be few less rewarding and more exhausting occupations than tramping up and down between polluting cars, competing with others for the irritated attention of motorists. Anyone who thinks hawking is an easy alternative to working should please imagine someone they love having to resort to such "work." Close behind it comes operating a small business that is not making it. The small and medium sized enterprise sector (SMEs) is being advocated by conventional economists as the solution to unemployment in the global market, and large amounts of money are annually being pumped into support for small businesses, with micro-financing schemes, training and support.
There is little reliable research on success rates, but it is known that some 80 percent fail in the first year, and most of the rest are gone in under five years. This is not apparent in the statistics because start-ups replace failures so that the number seems stable. I know no one who works in this sector who is not deeply discouraged. Moreover, few small enterprises employ others except on a casual, family-style, basis : the "employee" gets meals and some pocket money. The reasons they do not work as job-creation fall into two categories. First, entrepreneurship is not easy or natural for most people, not something like learning a computer programme. It involves a competitive, focused, risk-taking mind-set that is not traditional in cultures that emphasise security and community over individual achievement and celebrity.
As a generalisation, for instance, women will prefer to put small reliable income and food security for their family above risk for the sake of great reward; while the male culture will put the family home up as security for a risky loan. The American culture of competitive strife is very different from a peasant culture in which people rely on each other for support, and the community moves up and down together. Personal confidence and assertiveness are basic necessities for entrepreneurship, two qualities that were not encouraged but rather crushed under colonial rule. The fact that African women comprise a good proportion of small business start-ups is not a contradiction of this. Lacking employment, they have no alternative; and they tend to work in groups, retaining community support. But they mostly fail to achieve serious scale, mostly because there is virtually no demand in poor areas, which are cash deserts.
That is a result of the second reason : the global market gives huge advantage to size. If a small business succeeds, it is inevitably taken over by larger business. When that happens jobs are lost because the larger entity remains competitive only by replacing people, which is why mergers and acquisitions dominate at the top.
The American economy is the epitome of the competitive entrepreneurial society, probably having the world?s highest proportion of successful SMEs. It also has its highest rate of bankruptcy and repossessions. The outskirts of most American cities are a desert of vacant retail shop fronts, abandoned superstores and dead shopping malls. This is stark evidence of the failure of small business, as they get squeezed out of the market by larger enterprise. Ironically, the Americans are the first country to legislate against their own enterprise being acquired by foreign giants.
However, small businesses and livelihoods, whether individual or cooperative, are undoubtedly the way of the future. But for that to happen we need deliberate government policy intervention.
We need to emulate the Chinese, who have produced a plan that will ensure they come up smiling. That is because they are not bound by the theoretical models of the West. They have noticed the centralising suction exerted by the global market; that wealth concentrates globally, regionally and nationally, and have determined to contradict the resulting depletion of rural and poor areas. In those areas, they are deliberately investing in social services, subsidising agriculture and giving preference to local economic activity. In a sense they are ring-fencing such areas from the effects of global competition. Unfettered market forces are not a sacred cow to the Chinese; large business does not dominate politics.
We could do the same. The African version would be based on the understanding of the dual economy, one part of which is successful in the global market, while the other's marginalisation inevitably creates failure, including in small business. Government can create community investment trusts in poor areas, so that jobs and money invested there are recycled within those communities, rather than pouring out into the global sector.
For that to happen we must change the model. From expecting the rural areas and townships to climb the ladder to the global economy we should move to decentralising, deliberately localising economic activity.
The Statesman
An elderly foreign visitor to South Africa, encountering the phenomenon of selling at intersections, is said perhaps apocryphally - to have reported : "Hangers, grapes, bags? Everything!" Picture the disappointment of the seller, whose apparently easy customer declares that she NEVER buys anything at intersections!
There can be few less rewarding and more exhausting occupations than tramping up and down between polluting cars, competing with others for the irritated attention of motorists. Anyone who thinks hawking is an easy alternative to working should please imagine someone they love having to resort to such "work." Close behind it comes operating a small business that is not making it. The small and medium sized enterprise sector (SMEs) is being advocated by conventional economists as the solution to unemployment in the global market, and large amounts of money are annually being pumped into support for small businesses, with micro-financing schemes, training and support.
There is little reliable research on success rates, but it is known that some 80 percent fail in the first year, and most of the rest are gone in under five years. This is not apparent in the statistics because start-ups replace failures so that the number seems stable. I know no one who works in this sector who is not deeply discouraged. Moreover, few small enterprises employ others except on a casual, family-style, basis : the "employee" gets meals and some pocket money. The reasons they do not work as job-creation fall into two categories. First, entrepreneurship is not easy or natural for most people, not something like learning a computer programme. It involves a competitive, focused, risk-taking mind-set that is not traditional in cultures that emphasise security and community over individual achievement and celebrity.
As a generalisation, for instance, women will prefer to put small reliable income and food security for their family above risk for the sake of great reward; while the male culture will put the family home up as security for a risky loan. The American culture of competitive strife is very different from a peasant culture in which people rely on each other for support, and the community moves up and down together. Personal confidence and assertiveness are basic necessities for entrepreneurship, two qualities that were not encouraged but rather crushed under colonial rule. The fact that African women comprise a good proportion of small business start-ups is not a contradiction of this. Lacking employment, they have no alternative; and they tend to work in groups, retaining community support. But they mostly fail to achieve serious scale, mostly because there is virtually no demand in poor areas, which are cash deserts.
That is a result of the second reason : the global market gives huge advantage to size. If a small business succeeds, it is inevitably taken over by larger business. When that happens jobs are lost because the larger entity remains competitive only by replacing people, which is why mergers and acquisitions dominate at the top.
The American economy is the epitome of the competitive entrepreneurial society, probably having the world?s highest proportion of successful SMEs. It also has its highest rate of bankruptcy and repossessions. The outskirts of most American cities are a desert of vacant retail shop fronts, abandoned superstores and dead shopping malls. This is stark evidence of the failure of small business, as they get squeezed out of the market by larger enterprise. Ironically, the Americans are the first country to legislate against their own enterprise being acquired by foreign giants.
However, small businesses and livelihoods, whether individual or cooperative, are undoubtedly the way of the future. But for that to happen we need deliberate government policy intervention.
We need to emulate the Chinese, who have produced a plan that will ensure they come up smiling. That is because they are not bound by the theoretical models of the West. They have noticed the centralising suction exerted by the global market; that wealth concentrates globally, regionally and nationally, and have determined to contradict the resulting depletion of rural and poor areas. In those areas, they are deliberately investing in social services, subsidising agriculture and giving preference to local economic activity. In a sense they are ring-fencing such areas from the effects of global competition. Unfettered market forces are not a sacred cow to the Chinese; large business does not dominate politics.
We could do the same. The African version would be based on the understanding of the dual economy, one part of which is successful in the global market, while the other's marginalisation inevitably creates failure, including in small business. Government can create community investment trusts in poor areas, so that jobs and money invested there are recycled within those communities, rather than pouring out into the global sector.
For that to happen we must change the model. From expecting the rural areas and townships to climb the ladder to the global economy we should move to decentralising, deliberately localising economic activity.
The Statesman
May 25, 2007
Ghana's non-traditional exports rise
Officials of the Ghana Export Promotion Council (GEPC) are optimistic that the value of non-traditional exports will cross the one billion dollar mark in 2007. The Council set the target in its strategic plan three years ago, but returns from exports had fallen short of estimates to attain the goal. The renewed confidence stemmed from the excellent performance of the sector in recent years, which had seen it register an average annual growth of 14.3 per cent.
Non-traditional export values rose from 705.4 million dollars in 2004 to 893 million dollars in 2006. The sector made a 26 per cent contribution to the country's total exports value of 3.4 billion dollars for 2006. The General Manager of GEPC, Lawrence Prempeh, attributed the improved performance of the sector to macro-economic stability and the hard work of entrepreneurs.
Prempeh said there were currently over 383 different non-traditional export products categorized into agricultural, processed/semi-processed and handicrafts. He said the GEPC had a database of over 3,000 registered private sector exporting companies organized into 15 Product Associations. He underscored the importance of diversifying the economy through the exports of other products apart from the traditional ones like cocoa, gold and timber. He said the EU market continued as a major destination of Ghanaian NTEs products, recording 419.9 million dollars for 2006, with the Economic Community of West African States (ECOWAS) being ranked second with 242.7 million dollars.
On country-by-country basis the United Kingdom is the leading market for NTEs, followed by France, Burkina Faso and Nigeria. Prempeh emphasized the need for countries within the West African sub-region to intensify intra trade, saying it was a major way of sustaining their economies.
My Joy
Non-traditional export values rose from 705.4 million dollars in 2004 to 893 million dollars in 2006. The sector made a 26 per cent contribution to the country's total exports value of 3.4 billion dollars for 2006. The General Manager of GEPC, Lawrence Prempeh, attributed the improved performance of the sector to macro-economic stability and the hard work of entrepreneurs.
Prempeh said there were currently over 383 different non-traditional export products categorized into agricultural, processed/semi-processed and handicrafts. He said the GEPC had a database of over 3,000 registered private sector exporting companies organized into 15 Product Associations. He underscored the importance of diversifying the economy through the exports of other products apart from the traditional ones like cocoa, gold and timber. He said the EU market continued as a major destination of Ghanaian NTEs products, recording 419.9 million dollars for 2006, with the Economic Community of West African States (ECOWAS) being ranked second with 242.7 million dollars.
On country-by-country basis the United Kingdom is the leading market for NTEs, followed by France, Burkina Faso and Nigeria. Prempeh emphasized the need for countries within the West African sub-region to intensify intra trade, saying it was a major way of sustaining their economies.
My Joy
EU's ex-colonies deny being rushed into trade deals
Europe's former colonies do not agree with European anti-poverty campaigners who say poor nations are being forced into new trade deals with the European Union, an African minister said. Trade officials from the European Union and the Africa, Caribbean and Pacific (ACP) group of nearly 80 countries drew up a plan on May 25 for the final stages of talks on the agreements.
European trade chief Peter Mandelson says the Economic Partnership Agreements, which would remove trade barriers, provide development aid and seek to promote foreign investment, are the best way to fight poverty. But aid groups say they will be damaging for the former colonies and they accuse Brussels of rushing the talks.
"I hear what you are saying, that there is this attitude by local NGOs that the EU is imposing agreements on the ACP," said Mohlabi Kenneth Tsekoa, the foreign minister of Lesotho, which holds the presidency of the group. "No, to the contrary, this is a dialogue. We have put our case
very clearly and we continue to do so."
Several NGOs had urged the ACP countries not to be rushed into wrapping up the talks by the year-end expiry of a waiver that has allowed their preferential trade deals with the EU to continue, despite being ruled illegal under World Trade Organisation rules.
Privately, some officials from ACP countries say they lack the expertise to carry out the negotiations on their terms.
Reuters Alertnet
European trade chief Peter Mandelson says the Economic Partnership Agreements, which would remove trade barriers, provide development aid and seek to promote foreign investment, are the best way to fight poverty. But aid groups say they will be damaging for the former colonies and they accuse Brussels of rushing the talks.
"I hear what you are saying, that there is this attitude by local NGOs that the EU is imposing agreements on the ACP," said Mohlabi Kenneth Tsekoa, the foreign minister of Lesotho, which holds the presidency of the group. "No, to the contrary, this is a dialogue. We have put our case
very clearly and we continue to do so."
Several NGOs had urged the ACP countries not to be rushed into wrapping up the talks by the year-end expiry of a waiver that has allowed their preferential trade deals with the EU to continue, despite being ruled illegal under World Trade Organisation rules.
Privately, some officials from ACP countries say they lack the expertise to carry out the negotiations on their terms.
Reuters Alertnet
Nigeria's Dangote group opens $178 million cement plant
Outgoing President Olusegun Obasanjo has said what Nigeria needed to turn its economy around were forthright and foresighted businessmen investing in the manufacturing sector, rather than those who solely engage in buying and selling. He spoke while commissioning the $178 million Obajana Cement plant owned by the Dangote Group of Companies. Obasanjo said the president of the group, Alhaji Aliko Dangote, has distinguished himself as one of the few manufacturers who have faith in the country and are ready to help transform its economy.
Obasanjo said his administration's support for Dangote was informed by his commitment to the growth and development of the country rather than favouritism as it is being alleged in some quarters. He also challenged other entrepreneurs to emulate Dangote in order to be equally favoured. "People used to say Dangote is being favoured by the government and they also want to be favoured but they don't want to do what Dangote is doing. Let them do what Dangote is doing and see if they will not be favoured", he said. He said he felt fulfilled, satisfied and overjoyed that the cement plant came on stream before he would leave office.
Obasanjo went down memory lane and said Nigeria was not only celebrating the new plant but what he called the four F's-forthrightness, fore-sight, fortitude and fortune of Aliko Dangote. "Aliko told me the truth on the problem of cement importation and I did not argue with him. I went back to the drawing board and it is now a success. He took the challenge and worked on it because people like him can smell good business from a distance. The foresight in this project is monumental, so we are also celebrating foresight and fortitude. He did not give up and now fortune is beckoning on him."
Obasanjo said the lesson from the Obajana dream was that, "Nothing can be achieved unless we drive ourselves to achieve success. All that should be put together must be put together. If after 50 years we can produce only 2.5 million metric tonnes of cement and just now the Obajana plant is producing much higher quantity within a short time, then we are moving forward."
President Obasanjo also said that he had directed the Bureau for Public Enterprises (BPE) to give the Dangote Group the right of first refusal in the Onikologbo Cement Company in Benin Republic, where Nigeria is a major shareholder. "I have directed the BPE to give Dangote the right of first refusal on the Onikologbo Cement Company privatisation, and he has also been given the permission to establish a 50,000 mega watts power plant, for which he has deposited $30 million. He has also been asked to deposit another $20 million for the establishment of a refinery and another deposit of $10 million for the building of a fertiliser plant in the country. Nobody will do it for us. If after 50 years of our cement business in Nigeria we could not get it right and under four years Dangote has gotten it, we have to support him," he said. Obasanjo said he regretted that the cement industry was a casualty of the rot that was visited on the country by successive administrations. He said only three out of the seven cement plants operating before he left office in 1979 were in operation when he resumed office in 1999.
Dangote, while welcoming guests to the plant, explained that with the coming on stream of the Obajana cement factory, Nigeria would save about $460 million from the importation of cement,while creating direct and indirect employment for over 10,000 people. He regretted that "despite huge investment by both government and the private sector into cement manufacturing in the past, we have failed to achieve our objective of Nigeria becoming a major producer and net exporter of cement. Not only did we fail to meet this objective, we were not able to produce enough to meet our local demand. We have to depend on imports to meet the bulk of our local demand, representing a huge outflow of forex from our economy."
Between the year 2000 and 2006, according to Dangote, "local cement production was 16.3 mm tonnes and imports during the same period totaled 39.2 mm tonnes. He estimated that Nigeria paid a total of $3 billion during the period for cement importation.
The Dangote group President, who traced his humble beginning from Kano to Lagos, said "since Nigeria has given so much to me and I stand here before you to vow that I will give back to Nigeria." He urged Nigerians to join him in the ownership of the company when Obajana finally goes public in December 2007.
Dangote said he expected that by 2010, Nigeria will become a net exporter of cement, as the present factory has capacity to load 100 trucks per day. When the plants in Ibeshe Ogun State and the Benue Cement Company factory are fully rehabilitated, the group will be producing over 18 million tonnes of cement per year.
Dangote said his group is mindful of the community, disclosing that it has partnered with the International Finance Corporation (IFC) to institute a $200,000 HIV/AIDS programme in the Obajana area of Kogi State. The group was also to sign a Memorandum of Understanding (MoU) with Power Holding Company of Nigeria on a N700m ($5.5 million) electricity project for the extension of power to the plant, which will automatically benefit the community.
This Day
Obasanjo said his administration's support for Dangote was informed by his commitment to the growth and development of the country rather than favouritism as it is being alleged in some quarters. He also challenged other entrepreneurs to emulate Dangote in order to be equally favoured. "People used to say Dangote is being favoured by the government and they also want to be favoured but they don't want to do what Dangote is doing. Let them do what Dangote is doing and see if they will not be favoured", he said. He said he felt fulfilled, satisfied and overjoyed that the cement plant came on stream before he would leave office.
Obasanjo went down memory lane and said Nigeria was not only celebrating the new plant but what he called the four F's-forthrightness, fore-sight, fortitude and fortune of Aliko Dangote. "Aliko told me the truth on the problem of cement importation and I did not argue with him. I went back to the drawing board and it is now a success. He took the challenge and worked on it because people like him can smell good business from a distance. The foresight in this project is monumental, so we are also celebrating foresight and fortitude. He did not give up and now fortune is beckoning on him."
Obasanjo said the lesson from the Obajana dream was that, "Nothing can be achieved unless we drive ourselves to achieve success. All that should be put together must be put together. If after 50 years we can produce only 2.5 million metric tonnes of cement and just now the Obajana plant is producing much higher quantity within a short time, then we are moving forward."
President Obasanjo also said that he had directed the Bureau for Public Enterprises (BPE) to give the Dangote Group the right of first refusal in the Onikologbo Cement Company in Benin Republic, where Nigeria is a major shareholder. "I have directed the BPE to give Dangote the right of first refusal on the Onikologbo Cement Company privatisation, and he has also been given the permission to establish a 50,000 mega watts power plant, for which he has deposited $30 million. He has also been asked to deposit another $20 million for the establishment of a refinery and another deposit of $10 million for the building of a fertiliser plant in the country. Nobody will do it for us. If after 50 years of our cement business in Nigeria we could not get it right and under four years Dangote has gotten it, we have to support him," he said. Obasanjo said he regretted that the cement industry was a casualty of the rot that was visited on the country by successive administrations. He said only three out of the seven cement plants operating before he left office in 1979 were in operation when he resumed office in 1999.
Dangote, while welcoming guests to the plant, explained that with the coming on stream of the Obajana cement factory, Nigeria would save about $460 million from the importation of cement,while creating direct and indirect employment for over 10,000 people. He regretted that "despite huge investment by both government and the private sector into cement manufacturing in the past, we have failed to achieve our objective of Nigeria becoming a major producer and net exporter of cement. Not only did we fail to meet this objective, we were not able to produce enough to meet our local demand. We have to depend on imports to meet the bulk of our local demand, representing a huge outflow of forex from our economy."
Between the year 2000 and 2006, according to Dangote, "local cement production was 16.3 mm tonnes and imports during the same period totaled 39.2 mm tonnes. He estimated that Nigeria paid a total of $3 billion during the period for cement importation.
The Dangote group President, who traced his humble beginning from Kano to Lagos, said "since Nigeria has given so much to me and I stand here before you to vow that I will give back to Nigeria." He urged Nigerians to join him in the ownership of the company when Obajana finally goes public in December 2007.
Dangote said he expected that by 2010, Nigeria will become a net exporter of cement, as the present factory has capacity to load 100 trucks per day. When the plants in Ibeshe Ogun State and the Benue Cement Company factory are fully rehabilitated, the group will be producing over 18 million tonnes of cement per year.
Dangote said his group is mindful of the community, disclosing that it has partnered with the International Finance Corporation (IFC) to institute a $200,000 HIV/AIDS programme in the Obajana area of Kogi State. The group was also to sign a Memorandum of Understanding (MoU) with Power Holding Company of Nigeria on a N700m ($5.5 million) electricity project for the extension of power to the plant, which will automatically benefit the community.
This Day
West Africa increasingly a drugs trade hub
Karen Tandy, head of the U.S. Drug Enforcement Administration, has said that Europe's appetite for drugs was increasingly being supplied from West Africa, which has emerged with alarming speed as a major shipping hub for cocaine, heroin and synthetic drugs from all over the world. She said cocaine traffickers had shifted their focus from the U.S. market toward Europe, which is gripped by a cocaine craze similar to that experienced in North America in the 1980s. "The euro has replaced the dollar in the Western Hemisphere as the currency of choice among these traffickers, which is an extraordinary shift," she said. "As cocaine use has declined in the U.S. dramatically, in the European market it has risen."
Traffickers are drawn by bigger profits on the European street, where a kilogram of cocaine sells for about $50,000, compared with $30,000 in the United States, officials say. Donald Semesky, chief of financial operations for the U.S. agency, said 90 percent of the €1.7 billion in euro currency ($2.3 billion) registered as having entered the United States in 2005 came through Latin America, where drug cartels launder their European proceeds.
Spain and Portugal are the main gateway of drugs into Europe. Officials in the two countries seized 70 tons of cocaine in 2006, almost the same amount as was seized in all of Europe in 2004, according to UN figures. Spain has become a European leader in money laundering and is home to about 25 percent of all €500 notes - known locally as Bin Ladens - in the eurozone, according to figures published in 2006 by the Spanish central bank.
Tandy said West Africa's role in the trade of Latin American cocaine, Asian heroin and Chinese chemicals used for synthetic drug production was a growing worry and had ballooned in the past three years. The U.S. drug agency has responded by training more than 1,000 law enforcement
officers in Africa in the past year, officials said. She said that the region's proximity to Latin America and Europe and its weak governments made it a "logical" location for trafficking and storing drugs and refueling boats and planes.
Russell Benson, the agency's regional director for Europe and Asia, said Latin American cartels had set up shop in countries like Nigeria, Guinea-Bissau, Guinea and Ghana, where they worked alongside African drug syndicates. There was also a growing cocaine trade in Morocco, he said. West Africa has also become a hub for shipments of money to Latin America.
Tandy and Benson said the agency had no evidence to suggest drug traffickers in West and North Africa worked with rings that move thousands of migrants through and from the region every year, or with Islamic extremist groups that have bases in North Africa. However, Tandy said it was logical that there may be links in the region between the drug business and terrorist groups.
A signal of the reach of African drug rings, agency officials said, was the presence of Nigerian trafficking cells in Kabul. Afghanistan produces about 90 percent of the world's opium, the base for heroin. "In Kabul, you have pockets, cells of Nigerians now and that connotes a level of sophistication and entrenchment in the market that further supports the concern that we have about Africa," Tandy said.
IHT
Traffickers are drawn by bigger profits on the European street, where a kilogram of cocaine sells for about $50,000, compared with $30,000 in the United States, officials say. Donald Semesky, chief of financial operations for the U.S. agency, said 90 percent of the €1.7 billion in euro currency ($2.3 billion) registered as having entered the United States in 2005 came through Latin America, where drug cartels launder their European proceeds.
Spain and Portugal are the main gateway of drugs into Europe. Officials in the two countries seized 70 tons of cocaine in 2006, almost the same amount as was seized in all of Europe in 2004, according to UN figures. Spain has become a European leader in money laundering and is home to about 25 percent of all €500 notes - known locally as Bin Ladens - in the eurozone, according to figures published in 2006 by the Spanish central bank.
Tandy said West Africa's role in the trade of Latin American cocaine, Asian heroin and Chinese chemicals used for synthetic drug production was a growing worry and had ballooned in the past three years. The U.S. drug agency has responded by training more than 1,000 law enforcement
officers in Africa in the past year, officials said. She said that the region's proximity to Latin America and Europe and its weak governments made it a "logical" location for trafficking and storing drugs and refueling boats and planes.
Russell Benson, the agency's regional director for Europe and Asia, said Latin American cartels had set up shop in countries like Nigeria, Guinea-Bissau, Guinea and Ghana, where they worked alongside African drug syndicates. There was also a growing cocaine trade in Morocco, he said. West Africa has also become a hub for shipments of money to Latin America.
Tandy and Benson said the agency had no evidence to suggest drug traffickers in West and North Africa worked with rings that move thousands of migrants through and from the region every year, or with Islamic extremist groups that have bases in North Africa. However, Tandy said it was logical that there may be links in the region between the drug business and terrorist groups.
A signal of the reach of African drug rings, agency officials said, was the presence of Nigerian trafficking cells in Kabul. Afghanistan produces about 90 percent of the world's opium, the base for heroin. "In Kabul, you have pockets, cells of Nigerians now and that connotes a level of sophistication and entrenchment in the market that further supports the concern that we have about Africa," Tandy said.
IHT
South African economy shifting from manufacturing to services
South African trade was shifting from manufacturing to services, with the services sector contributing almost two-thirds of the value of economic output, said Harry Zarenga, associate professor at the Wits School of Economic and Business Sciences. He said that the services sector had overtaken traditionally important sectors of the economy. Agriculture and mining had declined considerably in terms of their contribution to the value of production by the end of 2006.
“Although growth in the agriculture sector declined in 2006 by some 13% and in the mining sector by slightly more than a half percent, this was more than made up for by substantial growth in the construction sector (13,3%), finance sector (8,3%) and the trade and tourism sectors (6,3%),” said Zarenga. Real estate, finance and business services grew 8,3% in 2006 year from 5,5% in 2005. Wholesale, retail, hotels and restaurants grew 6,7% from 6,4%.
“The chief contributors to the economy in terms of relative size (from 1989 to 2006) were manufacturing (16,4%), retail, wholesale, hotels and restaurants (13,8%), transport and communications (9,8%), finance and real estate (19,1%), and government services (12,9%),” said Zarenga. He said the principal element fuelling the country’s expenditure was private consumption.
Business Day
“Although growth in the agriculture sector declined in 2006 by some 13% and in the mining sector by slightly more than a half percent, this was more than made up for by substantial growth in the construction sector (13,3%), finance sector (8,3%) and the trade and tourism sectors (6,3%),” said Zarenga. Real estate, finance and business services grew 8,3% in 2006 year from 5,5% in 2005. Wholesale, retail, hotels and restaurants grew 6,7% from 6,4%.
“The chief contributors to the economy in terms of relative size (from 1989 to 2006) were manufacturing (16,4%), retail, wholesale, hotels and restaurants (13,8%), transport and communications (9,8%), finance and real estate (19,1%), and government services (12,9%),” said Zarenga. He said the principal element fuelling the country’s expenditure was private consumption.
Business Day
Comesa states finally ratify common tariff
The progress towards a Customs Union for the Common Market for Eastern and Southern Africa (Comesa) member states has received a boost following the ratification of the Common External Tariff (CET) rates by the Council of Ministers at a May meeting in Nairobi.
Different tariff bands will be levied on goods originating from outside the Comesa region. However, the rates will not be operational until the laws to regulate the Customs Union are formulated. The Customs Union will officially come into force on December 8, 2008.
According to Comesa secretary general Erastus Mwencha, raw materials and capital goods imported into a member state from other regions will be zero-rated. On the other hand, intermediate goods and finished products coming into the Comesa region will attract 10 and 25 per cent duty. "Technically, we are already in a Customs Union. However, between now and the official launch of the Customs Union in December next year, we will agree with ministers in charge of trade in the member states to work out the relevant legislation to operationalise it," Mwencha said.
Responding to scepticism about the recommended rates, Mwencha said the East African Community, whose Customs Union came into force in January 2005, is a good example that common external tariffs work. He said some seven out of the 19 Comesa member states "are already implementing" the Customs Union. But, he said, this will only be official when the laws are formulated to govern the Customs Union.
East African
Different tariff bands will be levied on goods originating from outside the Comesa region. However, the rates will not be operational until the laws to regulate the Customs Union are formulated. The Customs Union will officially come into force on December 8, 2008.
According to Comesa secretary general Erastus Mwencha, raw materials and capital goods imported into a member state from other regions will be zero-rated. On the other hand, intermediate goods and finished products coming into the Comesa region will attract 10 and 25 per cent duty. "Technically, we are already in a Customs Union. However, between now and the official launch of the Customs Union in December next year, we will agree with ministers in charge of trade in the member states to work out the relevant legislation to operationalise it," Mwencha said.
Responding to scepticism about the recommended rates, Mwencha said the East African Community, whose Customs Union came into force in January 2005, is a good example that common external tariffs work. He said some seven out of the 19 Comesa member states "are already implementing" the Customs Union. But, he said, this will only be official when the laws are formulated to govern the Customs Union.
East African
Mauritius trade fair to be held in June
Access to investment and business information has to be enhanced if Eastern and Central Africa is to realize fast agricultural and industrial growth. Prakash Beeharry, the chief executive officer of Enterprise Mauritius, a venture dealing with show casing and marketing Mauritius products, said an information deficit still remains a major challenge to trade in the region, and that it must be urgently addressed.
He was speaking at a Nairobi Hotel during a press briefing on the ongoing preparations for the second edition of the fourth Mauritius for Africa Trade Fair which will take place from 27th to 30th June 2007 and in which more than 500 importers from eastern and southern Africa region
are expected. Beeharry said the main aim of the trade fair was to promote economic and business partnership across Africa and the entire world through creation of linkages and contacts with different individuals and firms. This will involve sharing of knowledge on investment opportunities across the world.
Products on display during the trade fair will include textiles, footwear, food and beverages, IT products and services, plastics and allied products, chemicals, cosmetics, engineering equipment among others. The event is expected to draw more than 300 exhibitors, 600 professional buyers and 30,000 shoppers in the complete show that will see all Mauritanian products and services showcased under one roof.
Mauritius is one of the developing countries currently lauded as economic growth examples in the world, alongside others like South Korea, Taiwan , and others referred to as the Asian Tigers.
Kenya Times
He was speaking at a Nairobi Hotel during a press briefing on the ongoing preparations for the second edition of the fourth Mauritius for Africa Trade Fair which will take place from 27th to 30th June 2007 and in which more than 500 importers from eastern and southern Africa region
are expected. Beeharry said the main aim of the trade fair was to promote economic and business partnership across Africa and the entire world through creation of linkages and contacts with different individuals and firms. This will involve sharing of knowledge on investment opportunities across the world.
Products on display during the trade fair will include textiles, footwear, food and beverages, IT products and services, plastics and allied products, chemicals, cosmetics, engineering equipment among others. The event is expected to draw more than 300 exhibitors, 600 professional buyers and 30,000 shoppers in the complete show that will see all Mauritanian products and services showcased under one roof.
Mauritius is one of the developing countries currently lauded as economic growth examples in the world, alongside others like South Korea, Taiwan , and others referred to as the Asian Tigers.
Kenya Times
Cape Verde may get Chinese-African trade
The Chinese ambassador to Cape Verde, Sun Rongmao, said on May 23 in Praia that the country may be home to one of the six special trade areas that the Beijing authorities plan to set up in Africa. Sun, whose three-year mission is coming to an end, has focused on "the excellent geo-strategic position” of Cape Verde to be chosen as the location for one of these areas, and said there was a “good chance” that this will occur.
Cape Verde’s foreign minister Borges noted that Cape Verde was well situated geographically “between Africa, the Americas and Europe,” and argued that the country lives in peace and is socially stable, which are both “important for development of economic activities.”
Macau Hub
Cape Verde’s foreign minister Borges noted that Cape Verde was well situated geographically “between Africa, the Americas and Europe,” and argued that the country lives in peace and is socially stable, which are both “important for development of economic activities.”
Macau Hub
May 20, 2007
The scramble for Africa's oil : ExxonMobil's Chad presence has little benefit for locals
The United States now imports more of its oil from Africa than it does from Saudi Arabia. How is oil and the money it brings to the continent's treasuries transforming Africa? For his new book, Untapped: The Scramble for Africa's Oil, John Ghazvinian traveled from the parched dust bowls of Chad and Sudan to the swamps and jungles of Nigeria and the Congo, and from the corridors of Washington to the gleaming offices of "Big Oil."
Does oil-producing Africa live up to the hype? Why is it impossible to buy bananas in Gabon, when they grow in profusion in the nation's virgin rainforest? Can an underdeveloped country like São Tomé and PrÃncipe learn from other nations' mistakes and avoid the "curse of oil"? What effect does the establishment of an oil-company compound in the middle of Chad have on the neighboring land and people?
In 1996, ExxonMobil discovered between 800 million and 1 billion barrels of oil in the Doba basin of southern Chad. Chadian crude is of the heavy and sour variety that fetches low prices on the international market, and the country's landlocked geography adds formidable transportation costs to any venture. Besides, with civil war and political instability a fact of life from 1965 until the early 1990s, there was never much chance of Chad's oil industry getting off the ground. In 1996, however, there seemed to be just enough oil in Chad, and nearly enough political stability, to justify giving the country another look. ExxonMobil began to examine financing and feasibility options, setting into motion what would become one of the most extraordinary chapters in the history of African oil exploration.
Disagreements between multinational corporations and destitute African villages often turn into a needlessly polarized ideological battle between proponents and opponents of globalization and free-market capitalism, or into an oversimplified David and Goliath tale. I wanted to see for myself the situation around the Doba basin and whether critics were justified in heaping so much blame onto ExxonMobil.
Getting there from N'Djaména, Chad's capital, was going to be a challenge, though. In 2005 Chad's national airline, Toumaï Air Chad, was down to one functioning plane, a battered 737 servicing six African destinations and one domestic airport in the east of the country, as well as the annual pilgrimage to Mecca. Until such time as it was able to purchase a second aircraft, Toumaï regretted that it would not be providing service to southern or northern Chad.
I asked about how I might make the journey by land, but received bewildered looks and was sternly warned that it would be a rough and dusty 200-mile trek across the blazing heat of the Sahel, and very much not for the faint of heart.
None of this was a problem for ExxonMobil staff, of course, because the company had its own airport and chartered a fleet of planes making regular flights between N'Djaména and Doba. In the early days of the project, when it was still being hailed as a "model" for African oil exploration, Exxon had been happy to fly journalists south, and had bent over backward to set up tours and meetings with local managers. But this was 2005, and ExxonMobil had been burned by a slew of negative stories in the international press. So, when I approached the company six months in advance, I was told by its Houston PR department that arranging a flight would not be possible. Even if I somehow made it to Doba under my own auspices, in fact, it would not be possible to have a tour of the company's project in southern Chad. Nor was I allowed to speak to Exxon staff at any point while I was in the country, not even off the record. Any questions I had would be answered by Houston.
Given the cost of hiring a car and driver for the two-day round-trip south—at least $200 a day—public transport rapidly emerged as my only option. At the crack of dawn one Thursday, I watched as my suitcase was lifted to the roof of a beaten-up old Land Cruiser and steadily squashed under a small mountain of accumulating bags and boxes and threadbare trunks. Off to one side, a young man unscrewed the vehicle's fuel cap and stuck a piece of rubber tubing into the tank, to the other end of which he stuck a small plastic funnel. Out of nowhere, several glass jugs appeared, filled with gasoline, which the man steadily poured into the funnel, taking great care not to spill any.
It was as powerful an image as one could possibly ask for. Chad may have recently joined the ranks of the world's oil-producing countries, but the country still lacks a downstream oil sector, and its citizens have yet to see what an actual gas station looks like. There is no refinery for Doba crude to be sent to, so every last drop of Chad's crude goes straight into the ExxonMobil pipeline and straight onto supertankers parked off the Cameroonian coast. There are few cars in Chad, but those that exist (almost all of them taxis or official vehicles) operate not on Chadian oil but on Nigerian gasoline. The refined product is driven—often smuggled—across the border, and sold from glass jars in shaded spots along the side of the road that look like little more than American-style lemonade stands.
"The government ignored all the negatives. They told the population that oil would be a paradise, that it would solve all of their problems. But we saw the experience of Nigeria and others and wanted to ensure that the population was informed about the reality." It was my understanding that I was speaking to Nadji Nelambaye, coordinator of the local coalition of NGOs, but since it was pitch-black and I was using my lone candle to help me take notes, I could have been talking to anybody.
Like more than 98 percent of Chadians, the residents of Moundou have no access to electricity. In one of the extraordinary ironies of Chad's oil boom, this energy-rich country's dilapidated grid provides, at the best of times, a mere 20 megawatts of electricity. The world's newest oil producer literally cannot keep the lights on. Moundou, like most of Chad, spends its nights in total darkness, save for the flickers of gas lamps and candles, or the headlights of passing motorcycles.
Meanwhile, in nearby Kome, the twenty-five-mile-wide ExxonMobil facility lights up the night sky for miles around thanks to its state-of-the-art 120-megawatt generating plant. Not only does the ExxonMobil compound produce six times as much electricity as the entire Republic of Chad, it likely produces as much as the entire Sahel. So bright is the light from Kome, and so dark is everything around it, in fact, that the facility is visible from outer space.
Moundou is very much "not" Chad's answer to Port Harcourt, Nigeria. ExxonMobil has confined its operations to the fenced compound at Kome, some fifty miles away, and Moundou has continued to languish as a dusty backwater, where even the town's three hotels no longer bother to repair their broken generators. According to the World Bank, Moundou, a town of 96,000 people, has only two doctors.
On the drive to Kome, Nadji rattled off some of the problems that ExxonMobil's presence was believed to have caused. The coalition had done a study showing that eleven primary schools had closed, thanks to teachers leaving to find more lucrative—if temporary—jobs with ExxonMobil. Worse, many girls had given up on school entirely to work outside the oilfields as prostitutes, and the rate of AIDS infection was increasing. Young men, meanwhile, had abandoned their fields to look for work at ExxonMobil, resulting in a decline in agricultural productivity and an accompanying rise in the local price of millet—a situation exacerbated by the increase in demand for grain from people working for ExxonMobil. The government had not stepped in to regulate prices and local people had suffered hardship.
As we drove along the red-dirt track, enormous construction trucks loaded with Filipino laborers passed by every few minutes, kicking up blinding clouds of dust and diesel exhaust. Nadji didn't miss a beat. He explained that the coalition had tracked an increase in respiratory illness among the local population since the project began and had pressured ExxonMobil to address the problem. Exxon, he said, had refused to pave the road, claiming that was the government's job, and had instead watered the road to keep the dust down. In the desert heat, though, the water evaporated quickly. Within hours, the dust was back.
Nadji continued describing the social disruptions the coalition was tracking. During the construction phase of the project, he said, ExxonMobil subcontractors had trained locals to act as paramilitaries. Since the construction ended, however, most of the locals had gone back to their villages and, unaccustomed to making ends meet without the generous salaries paid by the contractors, had put their newfound skills to use in aggressive acts of criminality and banditry. Divorce rates had also gone up, thanks to displaced farmers spending their compensation packages on prostitutes. "If you take a poor, rural man who has never seen more than $5 or $6 in his hand and you give him $2,000 in compensation, he is likely to spend it on beer and girls." With less land to go around since ExxonMobil moved into the area, farmers and animal husbandmen had also been driven into nasty conflicts.
The list of complaints went on and on.
After an hour, we arrived outside ExxonMobil's Kome operating base, and I immediately saw why the company had become reluctant to bring journalists here for show-and-tell (as well as why Nadji was so keen for me to see it). On one side of the road, surrounded by a high perimeter fence, was the base—an ultramodern, air-conditioned facility with its own airport, powered by four electric turbines and protected by armed guards. A sign next to one of the buildings welcomed visitors to Kome, which it declared, in a chunky typeface, to be "Home of the World's Greatest Drilling Team." On the other side of the road was a stinking, ramshackle slum, which a far-more-modest road sign identified as "Atan."
Ten years ago, neither Atan nor the Kome base existed. The area had been home to a few hundred pastoralists living in clusters of round mud huts. But when Exxon began building Kome, word got out that the company would need a few hundred laborers, and people poured in from miles around. They stood for hours and days outside the perimeter fence, in the hopes of snapping up even a temporary job. Days turned into weeks and months, and a small squatter camp grew up outside Kome. The presence of large numbers of young men attracted girls, who had heard there was a good living to be made as prostitutes. Before long, the girls were coming from neighboring Nigeria, Cameroon, and the Central African Republic, and even Ghana. As the squatter camp grew, its residents nicknamed it the "Quartier Attend," which roughly translates as "Waitsville" or "Waiting Town."
With its transient population of young laborers and girls from all over West Africa, "Quartier Attend" developed a reputation as a place of loose morals, and people began referring to it jokingly as "Quartier Satan," or "Devil-town." (In French, "Satan" rhymes with "attend.") At its height, it was home to as many as 17,000 people, many of them from as far away as Morocco and the Philippines. Some worked as drivers or security guards for ExxonMobil, but others were just attracted by the dynamic economy. Families began settling in Attend, and small primary schools were set up, along with a mosque and a church, and even a small cinema. The village elected a chief and got itself officially recognized by the government as a town on the map of Chad. And, in a touching display of civic pride, it asked to be called Atan, which, although pronounced in the same way as Attend, lacked the baggage of the town's dubious beginnings, and almost looked like an authentic, phonetically spelled African name.
Despite the veneer of respectability, Atan is an enormous festering embarrassment for ExxonMobil—a living, breathing metaphor for the failure of the Doba drilling operation to bring meaningful development to the people of Chad. On one side of the road, Exxon employees enjoy modern rooms, complete with private bathrooms, DVD players, and Internet connections. They are cared for in a modern clinic and can unwind on basketball courts, to which there will soon be added a tennis court and swimming pool. On the other side of the road, in a makeshift camp, some 10,000 people make do without clean running water.
When I began taking snapshots, Nadji quickly made me stuff my camera into my bag, warning me that I would get my film confiscated if I wasn't careful. ExxonMobil, he said, paid plainclothes "vigilants" to stop anyone taking pictures, even if the camera was not pointed at the Kome base. So we made do with wandering the streets of Atan, admiring the improvised shops and stalls selling everything from cigarettes to fried meat to a vicious home-brew called "bili-bili."
Despite its schools and houses of worship, Atan has not entirely shed its sin-city image. Next to each other along the road, and within easy access of the base, are two "nightclubs." One, called Phoenix, is favored by the French workers from Kome, while the other, La Maison Blanche Number One (White House Number One), is staffed by English-speaking girls from Nigeria and Ghana and caters mostly to an American clientele. We stepped out of the sun and into the Phoenix and found it mostly empty. After all, it was still early in the morning. I noticed a passageway that led to a semiprivate spot behind the nightclub, where the girls would take their tricks for sex, and Nadji told me he had last been here with a French television crew who had come late at night and filmed illicitly for a documentary. Although Atan was a public space where, with the appropriate permits, any journalist ought to be allowed to film, ExxonMobil's influence in Chad meant that the extraordinary visual narrative of this town's coexistence with the Kome base could never be documented properly for a Western audience.
Nadji began to look a bit nervous and suggested we leave before our presence drew too much interest. We drove down the road a few miles to Ngalaba, one of three traditional villages that had become known as "villages enclavés"—enclaved villages. Ngalaba, along with nearby Maikeuri and Bendoh, was cut off from some of its traditional grazing lands by power lines and feeder pipelines when the Doba project got under way, and villagers say their livelihoods have been destroyed. ExxonMobil insists that its facilities pose no danger to the villagers and that they have been compensated for the loss of their arable land.
Ngalaba is a village of 1,125 people, led by a traditional ruler named Tamro, a quiet and thoughtful man in his late thirties or early forties, who at first seemed hesitant to talk to us. Speaking in the local Ngambaye language, which Nadji translated into French for me, Chief Tamro looked into the distance and admitted that he was "worried." He had noticed that the mangoes had failed to thrive this year, and wondered if it was because of the gas flare from a nearby well. He complained that ExxonMobil had left some of its exploratory wells unplugged, and that village livestock had fallen in. "We lost many animals that way," he said, before adding that Exxon had responded to their complaints about dust by coating the dirt road with molasses, which is toxic to goats and cattle. "I am very worried," he repeated, so quietly that we could barely hear him. "Honestly, I would rather they just found us another piece of land and we could all go there and leave the village." The men who had gathered around us looked genuinely saddened and disappointed by what they heard their chief saying. "We need to start over. There is no security here."
"This is our land," a dark and round-faced young man named Judé piped up. "We've seen no benefit from it. We lost our land and have received nothing for it. At first they said they were going to build hospitals and dispensaries here. But they've done none of that." Exxon, Chief Tamro explained, had offered the village its choice of five options : a school, a well, a granary, one kilometer of paved road, or a marketplace. The villagers chose the school, understanding that it would house six grades, but ExxonMobil built them a two-room schoolhouse instead. "Let me ask you something, sir." The chief tried to contain his frustration. "If I take something from you, should I then come and dictate the terms of my compensation to you for the loss? Surely it is for me to apologize and ask you what I can do to make it up to you."
He pointed out a tiny, windowless concrete shed that stood out among the round straw and mud huts. "They told me that they spent 30 million francs (about $60,000) on that house, and that their workers were going to live in it. In the end I had to break the door down so I could sleep in it myself." The men all shook their heads. "I ask you," the chief said, "does that look like a 30 million–franc house? You know how much I could have done for this village with 30 million francs?"
Slate
Does oil-producing Africa live up to the hype? Why is it impossible to buy bananas in Gabon, when they grow in profusion in the nation's virgin rainforest? Can an underdeveloped country like São Tomé and PrÃncipe learn from other nations' mistakes and avoid the "curse of oil"? What effect does the establishment of an oil-company compound in the middle of Chad have on the neighboring land and people?
In 1996, ExxonMobil discovered between 800 million and 1 billion barrels of oil in the Doba basin of southern Chad. Chadian crude is of the heavy and sour variety that fetches low prices on the international market, and the country's landlocked geography adds formidable transportation costs to any venture. Besides, with civil war and political instability a fact of life from 1965 until the early 1990s, there was never much chance of Chad's oil industry getting off the ground. In 1996, however, there seemed to be just enough oil in Chad, and nearly enough political stability, to justify giving the country another look. ExxonMobil began to examine financing and feasibility options, setting into motion what would become one of the most extraordinary chapters in the history of African oil exploration.
Disagreements between multinational corporations and destitute African villages often turn into a needlessly polarized ideological battle between proponents and opponents of globalization and free-market capitalism, or into an oversimplified David and Goliath tale. I wanted to see for myself the situation around the Doba basin and whether critics were justified in heaping so much blame onto ExxonMobil.
Getting there from N'Djaména, Chad's capital, was going to be a challenge, though. In 2005 Chad's national airline, Toumaï Air Chad, was down to one functioning plane, a battered 737 servicing six African destinations and one domestic airport in the east of the country, as well as the annual pilgrimage to Mecca. Until such time as it was able to purchase a second aircraft, Toumaï regretted that it would not be providing service to southern or northern Chad.
I asked about how I might make the journey by land, but received bewildered looks and was sternly warned that it would be a rough and dusty 200-mile trek across the blazing heat of the Sahel, and very much not for the faint of heart.
None of this was a problem for ExxonMobil staff, of course, because the company had its own airport and chartered a fleet of planes making regular flights between N'Djaména and Doba. In the early days of the project, when it was still being hailed as a "model" for African oil exploration, Exxon had been happy to fly journalists south, and had bent over backward to set up tours and meetings with local managers. But this was 2005, and ExxonMobil had been burned by a slew of negative stories in the international press. So, when I approached the company six months in advance, I was told by its Houston PR department that arranging a flight would not be possible. Even if I somehow made it to Doba under my own auspices, in fact, it would not be possible to have a tour of the company's project in southern Chad. Nor was I allowed to speak to Exxon staff at any point while I was in the country, not even off the record. Any questions I had would be answered by Houston.
Given the cost of hiring a car and driver for the two-day round-trip south—at least $200 a day—public transport rapidly emerged as my only option. At the crack of dawn one Thursday, I watched as my suitcase was lifted to the roof of a beaten-up old Land Cruiser and steadily squashed under a small mountain of accumulating bags and boxes and threadbare trunks. Off to one side, a young man unscrewed the vehicle's fuel cap and stuck a piece of rubber tubing into the tank, to the other end of which he stuck a small plastic funnel. Out of nowhere, several glass jugs appeared, filled with gasoline, which the man steadily poured into the funnel, taking great care not to spill any.
It was as powerful an image as one could possibly ask for. Chad may have recently joined the ranks of the world's oil-producing countries, but the country still lacks a downstream oil sector, and its citizens have yet to see what an actual gas station looks like. There is no refinery for Doba crude to be sent to, so every last drop of Chad's crude goes straight into the ExxonMobil pipeline and straight onto supertankers parked off the Cameroonian coast. There are few cars in Chad, but those that exist (almost all of them taxis or official vehicles) operate not on Chadian oil but on Nigerian gasoline. The refined product is driven—often smuggled—across the border, and sold from glass jars in shaded spots along the side of the road that look like little more than American-style lemonade stands.
"The government ignored all the negatives. They told the population that oil would be a paradise, that it would solve all of their problems. But we saw the experience of Nigeria and others and wanted to ensure that the population was informed about the reality." It was my understanding that I was speaking to Nadji Nelambaye, coordinator of the local coalition of NGOs, but since it was pitch-black and I was using my lone candle to help me take notes, I could have been talking to anybody.
Like more than 98 percent of Chadians, the residents of Moundou have no access to electricity. In one of the extraordinary ironies of Chad's oil boom, this energy-rich country's dilapidated grid provides, at the best of times, a mere 20 megawatts of electricity. The world's newest oil producer literally cannot keep the lights on. Moundou, like most of Chad, spends its nights in total darkness, save for the flickers of gas lamps and candles, or the headlights of passing motorcycles.
Meanwhile, in nearby Kome, the twenty-five-mile-wide ExxonMobil facility lights up the night sky for miles around thanks to its state-of-the-art 120-megawatt generating plant. Not only does the ExxonMobil compound produce six times as much electricity as the entire Republic of Chad, it likely produces as much as the entire Sahel. So bright is the light from Kome, and so dark is everything around it, in fact, that the facility is visible from outer space.
Moundou is very much "not" Chad's answer to Port Harcourt, Nigeria. ExxonMobil has confined its operations to the fenced compound at Kome, some fifty miles away, and Moundou has continued to languish as a dusty backwater, where even the town's three hotels no longer bother to repair their broken generators. According to the World Bank, Moundou, a town of 96,000 people, has only two doctors.
On the drive to Kome, Nadji rattled off some of the problems that ExxonMobil's presence was believed to have caused. The coalition had done a study showing that eleven primary schools had closed, thanks to teachers leaving to find more lucrative—if temporary—jobs with ExxonMobil. Worse, many girls had given up on school entirely to work outside the oilfields as prostitutes, and the rate of AIDS infection was increasing. Young men, meanwhile, had abandoned their fields to look for work at ExxonMobil, resulting in a decline in agricultural productivity and an accompanying rise in the local price of millet—a situation exacerbated by the increase in demand for grain from people working for ExxonMobil. The government had not stepped in to regulate prices and local people had suffered hardship.
As we drove along the red-dirt track, enormous construction trucks loaded with Filipino laborers passed by every few minutes, kicking up blinding clouds of dust and diesel exhaust. Nadji didn't miss a beat. He explained that the coalition had tracked an increase in respiratory illness among the local population since the project began and had pressured ExxonMobil to address the problem. Exxon, he said, had refused to pave the road, claiming that was the government's job, and had instead watered the road to keep the dust down. In the desert heat, though, the water evaporated quickly. Within hours, the dust was back.
Nadji continued describing the social disruptions the coalition was tracking. During the construction phase of the project, he said, ExxonMobil subcontractors had trained locals to act as paramilitaries. Since the construction ended, however, most of the locals had gone back to their villages and, unaccustomed to making ends meet without the generous salaries paid by the contractors, had put their newfound skills to use in aggressive acts of criminality and banditry. Divorce rates had also gone up, thanks to displaced farmers spending their compensation packages on prostitutes. "If you take a poor, rural man who has never seen more than $5 or $6 in his hand and you give him $2,000 in compensation, he is likely to spend it on beer and girls." With less land to go around since ExxonMobil moved into the area, farmers and animal husbandmen had also been driven into nasty conflicts.
The list of complaints went on and on.
After an hour, we arrived outside ExxonMobil's Kome operating base, and I immediately saw why the company had become reluctant to bring journalists here for show-and-tell (as well as why Nadji was so keen for me to see it). On one side of the road, surrounded by a high perimeter fence, was the base—an ultramodern, air-conditioned facility with its own airport, powered by four electric turbines and protected by armed guards. A sign next to one of the buildings welcomed visitors to Kome, which it declared, in a chunky typeface, to be "Home of the World's Greatest Drilling Team." On the other side of the road was a stinking, ramshackle slum, which a far-more-modest road sign identified as "Atan."
Ten years ago, neither Atan nor the Kome base existed. The area had been home to a few hundred pastoralists living in clusters of round mud huts. But when Exxon began building Kome, word got out that the company would need a few hundred laborers, and people poured in from miles around. They stood for hours and days outside the perimeter fence, in the hopes of snapping up even a temporary job. Days turned into weeks and months, and a small squatter camp grew up outside Kome. The presence of large numbers of young men attracted girls, who had heard there was a good living to be made as prostitutes. Before long, the girls were coming from neighboring Nigeria, Cameroon, and the Central African Republic, and even Ghana. As the squatter camp grew, its residents nicknamed it the "Quartier Attend," which roughly translates as "Waitsville" or "Waiting Town."
With its transient population of young laborers and girls from all over West Africa, "Quartier Attend" developed a reputation as a place of loose morals, and people began referring to it jokingly as "Quartier Satan," or "Devil-town." (In French, "Satan" rhymes with "attend.") At its height, it was home to as many as 17,000 people, many of them from as far away as Morocco and the Philippines. Some worked as drivers or security guards for ExxonMobil, but others were just attracted by the dynamic economy. Families began settling in Attend, and small primary schools were set up, along with a mosque and a church, and even a small cinema. The village elected a chief and got itself officially recognized by the government as a town on the map of Chad. And, in a touching display of civic pride, it asked to be called Atan, which, although pronounced in the same way as Attend, lacked the baggage of the town's dubious beginnings, and almost looked like an authentic, phonetically spelled African name.
Despite the veneer of respectability, Atan is an enormous festering embarrassment for ExxonMobil—a living, breathing metaphor for the failure of the Doba drilling operation to bring meaningful development to the people of Chad. On one side of the road, Exxon employees enjoy modern rooms, complete with private bathrooms, DVD players, and Internet connections. They are cared for in a modern clinic and can unwind on basketball courts, to which there will soon be added a tennis court and swimming pool. On the other side of the road, in a makeshift camp, some 10,000 people make do without clean running water.
When I began taking snapshots, Nadji quickly made me stuff my camera into my bag, warning me that I would get my film confiscated if I wasn't careful. ExxonMobil, he said, paid plainclothes "vigilants" to stop anyone taking pictures, even if the camera was not pointed at the Kome base. So we made do with wandering the streets of Atan, admiring the improvised shops and stalls selling everything from cigarettes to fried meat to a vicious home-brew called "bili-bili."
Despite its schools and houses of worship, Atan has not entirely shed its sin-city image. Next to each other along the road, and within easy access of the base, are two "nightclubs." One, called Phoenix, is favored by the French workers from Kome, while the other, La Maison Blanche Number One (White House Number One), is staffed by English-speaking girls from Nigeria and Ghana and caters mostly to an American clientele. We stepped out of the sun and into the Phoenix and found it mostly empty. After all, it was still early in the morning. I noticed a passageway that led to a semiprivate spot behind the nightclub, where the girls would take their tricks for sex, and Nadji told me he had last been here with a French television crew who had come late at night and filmed illicitly for a documentary. Although Atan was a public space where, with the appropriate permits, any journalist ought to be allowed to film, ExxonMobil's influence in Chad meant that the extraordinary visual narrative of this town's coexistence with the Kome base could never be documented properly for a Western audience.
Nadji began to look a bit nervous and suggested we leave before our presence drew too much interest. We drove down the road a few miles to Ngalaba, one of three traditional villages that had become known as "villages enclavés"—enclaved villages. Ngalaba, along with nearby Maikeuri and Bendoh, was cut off from some of its traditional grazing lands by power lines and feeder pipelines when the Doba project got under way, and villagers say their livelihoods have been destroyed. ExxonMobil insists that its facilities pose no danger to the villagers and that they have been compensated for the loss of their arable land.
Ngalaba is a village of 1,125 people, led by a traditional ruler named Tamro, a quiet and thoughtful man in his late thirties or early forties, who at first seemed hesitant to talk to us. Speaking in the local Ngambaye language, which Nadji translated into French for me, Chief Tamro looked into the distance and admitted that he was "worried." He had noticed that the mangoes had failed to thrive this year, and wondered if it was because of the gas flare from a nearby well. He complained that ExxonMobil had left some of its exploratory wells unplugged, and that village livestock had fallen in. "We lost many animals that way," he said, before adding that Exxon had responded to their complaints about dust by coating the dirt road with molasses, which is toxic to goats and cattle. "I am very worried," he repeated, so quietly that we could barely hear him. "Honestly, I would rather they just found us another piece of land and we could all go there and leave the village." The men who had gathered around us looked genuinely saddened and disappointed by what they heard their chief saying. "We need to start over. There is no security here."
"This is our land," a dark and round-faced young man named Judé piped up. "We've seen no benefit from it. We lost our land and have received nothing for it. At first they said they were going to build hospitals and dispensaries here. But they've done none of that." Exxon, Chief Tamro explained, had offered the village its choice of five options : a school, a well, a granary, one kilometer of paved road, or a marketplace. The villagers chose the school, understanding that it would house six grades, but ExxonMobil built them a two-room schoolhouse instead. "Let me ask you something, sir." The chief tried to contain his frustration. "If I take something from you, should I then come and dictate the terms of my compensation to you for the loss? Surely it is for me to apologize and ask you what I can do to make it up to you."
He pointed out a tiny, windowless concrete shed that stood out among the round straw and mud huts. "They told me that they spent 30 million francs (about $60,000) on that house, and that their workers were going to live in it. In the end I had to break the door down so I could sleep in it myself." The men all shook their heads. "I ask you," the chief said, "does that look like a 30 million–franc house? You know how much I could have done for this village with 30 million francs?"
Slate
China's engagement with Africa lop-sided
Chinese investment in Africa remains a one-way street and Beijing must do more to ensure its money truly benefits the continent, the head of the African Development Bank has said.
In an interview ahead of the bank's meeting in Shanghai, its president Donald Kaberuka said that China's involvement was vital to the continent's development, but Beijing needed to give more in terms of technology transfer and reserving some key posts in Chinese projects for Africans.
"Those issues, we have to deal with them. There are real and they are a source of friction," Kaberuka said. "In areas like textiles and some low-level products, those issues should be dealt with because otherwise that would compromise the bigger picture."
China has launched a major push to increase its aid, investment and overall influence in Africa but has drawn accusations that it is motivated purely by the need to gain access to the continent's oil and other natural resources. Beijing has been quick to highlight its construction of roads and other infrastructure in some countries and to dismiss comparisons with the past colonial plundering of African resources by Western powers.
Kaberuka said the bank's decision to hold its mid-May annual meeting in China's financial hub indicated the growing importance of Sino-African ties. However, he said, China's interest in the continent remains centred on its resources and much work is needed to ensure a more mature
economic partnership.
"Africa is still a commodity-dependent economy, so whether our partners are looking for commodities is central to the relationship." "The Africa-China partnership is highly concentrated in the oil and mining industry ... it is still commodity based and I think the challenge for the Chinese and ourselves is to move up the value chain. I don't see any reason why we can't find a mechanism to encourage Chinese investors to go to Africa and produce higher value products there ... It can make it a win-win situation. The timing is right to discuss the issues of this relationship."
Kaberuka said it is largely up to Africa, not China, to make this happen. "That is Africa's agenda, it cannot be Europe's agenda or China's agenda, it has to be Africa's agenda. It very much depends on what these African countries do with these new opportunities," he said.
Kaberuka said he wants to see more concessions from China to ensure that African nations do not compromise their future development by taking on unsustainable debt levels. "I have no problem with China lending money to countries to build infrastructure as long as the long-term picture of those countries makes the debt sustainable."
Kaberuka would like to see more soft loans, aid and other "concessionary resources" from both China and other partners. "There are countries that can afford to borrow money - and I hope that in the coming years more and more African countries can graduate (from their debt) and work the capital markets."
Despite areas where improvement is needed, China's role in Africa remains vital to the continent, he said. "It is important that China continues to provide the support it has provided over a long period of time. China is often called a new donor but it is not a new one. China has been involved in the region from many years ago."
Business Report
In an interview ahead of the bank's meeting in Shanghai, its president Donald Kaberuka said that China's involvement was vital to the continent's development, but Beijing needed to give more in terms of technology transfer and reserving some key posts in Chinese projects for Africans.
"Those issues, we have to deal with them. There are real and they are a source of friction," Kaberuka said. "In areas like textiles and some low-level products, those issues should be dealt with because otherwise that would compromise the bigger picture."
China has launched a major push to increase its aid, investment and overall influence in Africa but has drawn accusations that it is motivated purely by the need to gain access to the continent's oil and other natural resources. Beijing has been quick to highlight its construction of roads and other infrastructure in some countries and to dismiss comparisons with the past colonial plundering of African resources by Western powers.
Kaberuka said the bank's decision to hold its mid-May annual meeting in China's financial hub indicated the growing importance of Sino-African ties. However, he said, China's interest in the continent remains centred on its resources and much work is needed to ensure a more mature
economic partnership.
"Africa is still a commodity-dependent economy, so whether our partners are looking for commodities is central to the relationship." "The Africa-China partnership is highly concentrated in the oil and mining industry ... it is still commodity based and I think the challenge for the Chinese and ourselves is to move up the value chain. I don't see any reason why we can't find a mechanism to encourage Chinese investors to go to Africa and produce higher value products there ... It can make it a win-win situation. The timing is right to discuss the issues of this relationship."
Kaberuka said it is largely up to Africa, not China, to make this happen. "That is Africa's agenda, it cannot be Europe's agenda or China's agenda, it has to be Africa's agenda. It very much depends on what these African countries do with these new opportunities," he said.
Kaberuka said he wants to see more concessions from China to ensure that African nations do not compromise their future development by taking on unsustainable debt levels. "I have no problem with China lending money to countries to build infrastructure as long as the long-term picture of those countries makes the debt sustainable."
Kaberuka would like to see more soft loans, aid and other "concessionary resources" from both China and other partners. "There are countries that can afford to borrow money - and I hope that in the coming years more and more African countries can graduate (from their debt) and work the capital markets."
Despite areas where improvement is needed, China's role in Africa remains vital to the continent, he said. "It is important that China continues to provide the support it has provided over a long period of time. China is often called a new donor but it is not a new one. China has been involved in the region from many years ago."
Business Report
China lacks 'knowledge of African people'
Chinese companies operating in Africa must be more sensitive to local conditions and give back to communities to succeed in a continent that is a growing Chinese investment target, Chinese officials have said.
China's engagement with Africa has been deepening, with more than 800 companies, most state-owned, operating there as China covets Africa's oil and mineral wealth to feed its economic boom and invests heavily in improving Africa's infrastructure. But as China's presence increases in Africa, so does criticism its companies violate labour and environmental standards and leave little to trickle down to local communities.
"Chinese companies still lack knowledge of African people and African markets," Lu Bo, a deputy director at China's ministry of commerce, told a conference ahead of the official opening of the African Development Bank's annual meeting. "Chinese companies are not deeply rooted in Africa, therefore we must be well-prepared for all kinds of challenges and problems," he said.
In one of the most widely publicised examples, guards shot six workers amid rioting over low pay at a Chinese-financed copper mine in Zambia in 2006, and labour conditions among Chinese enterprises became an issue in the country's general election.
"Some companies have learnt a lesson from these experiences. China is a developing country as well - there is not sufficient protection of labour rights," Lu said. "Although it was not the intention of Chinese companies to cause these issues, some companies did not meet problems head on," Lu said, without referring to specific cases. "This demands some attention. Chinese companies should strictly observe local laws and regulations," he said.
A $5-billion development fund for Africa, offered by Chinese President Hu Jintao at a China-Africa summit in Beijing last year, has recently been officially approved. Chinese media cited China Development Bank vice president Gao Jian as saying it had permission from China's cabinet to start raising the first $1-billion of the fund.
But despite China's growing aid commitment to the continent, officials said Chinese companies would have to do better to counter perceptions about their social responsibility in African markets. "There also are concerns about the extent to which Chinese construction companies are developing local skills and local supplies and that needs to be taken into consideration. It is a sensitive subject," said Jonathan Wood, head of project finance at Standard Bank.
Sensitivity to African communities would mean greater commercial success for Chinese companies operating there, officials said.
"A key success factor is to ensure that you engage the local population and make sure that they see that there is a payback for the investment, that there is a social responsibility associated with that corporate activity," said Timothy Turner, director of the private sector and microfinance department at the African Development Bank.
"Yes, investment is important, profitability is important, but there needs to be something in it for the local population."
IOL
China's engagement with Africa has been deepening, with more than 800 companies, most state-owned, operating there as China covets Africa's oil and mineral wealth to feed its economic boom and invests heavily in improving Africa's infrastructure. But as China's presence increases in Africa, so does criticism its companies violate labour and environmental standards and leave little to trickle down to local communities.
"Chinese companies still lack knowledge of African people and African markets," Lu Bo, a deputy director at China's ministry of commerce, told a conference ahead of the official opening of the African Development Bank's annual meeting. "Chinese companies are not deeply rooted in Africa, therefore we must be well-prepared for all kinds of challenges and problems," he said.
In one of the most widely publicised examples, guards shot six workers amid rioting over low pay at a Chinese-financed copper mine in Zambia in 2006, and labour conditions among Chinese enterprises became an issue in the country's general election.
"Some companies have learnt a lesson from these experiences. China is a developing country as well - there is not sufficient protection of labour rights," Lu said. "Although it was not the intention of Chinese companies to cause these issues, some companies did not meet problems head on," Lu said, without referring to specific cases. "This demands some attention. Chinese companies should strictly observe local laws and regulations," he said.
A $5-billion development fund for Africa, offered by Chinese President Hu Jintao at a China-Africa summit in Beijing last year, has recently been officially approved. Chinese media cited China Development Bank vice president Gao Jian as saying it had permission from China's cabinet to start raising the first $1-billion of the fund.
But despite China's growing aid commitment to the continent, officials said Chinese companies would have to do better to counter perceptions about their social responsibility in African markets. "There also are concerns about the extent to which Chinese construction companies are developing local skills and local supplies and that needs to be taken into consideration. It is a sensitive subject," said Jonathan Wood, head of project finance at Standard Bank.
Sensitivity to African communities would mean greater commercial success for Chinese companies operating there, officials said.
"A key success factor is to ensure that you engage the local population and make sure that they see that there is a payback for the investment, that there is a social responsibility associated with that corporate activity," said Timothy Turner, director of the private sector and microfinance department at the African Development Bank.
"Yes, investment is important, profitability is important, but there needs to be something in it for the local population."
IOL
G8 cautions against unsustainable African debt
G8 finance ministers have warned against giving African countries cheap loans that they will struggle to repay. But in statements issued at the end of a two-day meeting in Germany, the group stressed African countries must manage their own finances responsibly.
Attendees included Britain's next prime minister Gordon Brown and Robert Kimmitt, US Deputy Treasury Secretary. The G8 countries include the US, Britain, Canada, France, Germany, Italy, Japan and Russia.
Ministers said Africa would be a focal point of the wider G8 summit in July in Heiligendamm, on the Baltic sea coast. They reinforced their commitment to deliver on aid commitments and called for responsible investment in the continent.
Germany singled out China, which relies on access to raw materials to feed its fast-growing economy, as one of the biggest risks to mineral-rich Africa. "It is critical that both borrowers and creditors agree on approach to debt sustainability that prevents the re-emergence of debt distress," said Kimmitt, standing in for Treasury Secretary Henry Paulson.
The world's eight wealthiest countries have pledged to boost annual aid to $50 billion a year by 2010, but critics say they are falling well short of this promise.
"Heiligendamm is the last chance for the G8 leaders to rescue their reputation," said Oliver Buston, European director of Debt Aids Trade Africa.
BBC
Attendees included Britain's next prime minister Gordon Brown and Robert Kimmitt, US Deputy Treasury Secretary. The G8 countries include the US, Britain, Canada, France, Germany, Italy, Japan and Russia.
Ministers said Africa would be a focal point of the wider G8 summit in July in Heiligendamm, on the Baltic sea coast. They reinforced their commitment to deliver on aid commitments and called for responsible investment in the continent.
Germany singled out China, which relies on access to raw materials to feed its fast-growing economy, as one of the biggest risks to mineral-rich Africa. "It is critical that both borrowers and creditors agree on approach to debt sustainability that prevents the re-emergence of debt distress," said Kimmitt, standing in for Treasury Secretary Henry Paulson.
The world's eight wealthiest countries have pledged to boost annual aid to $50 billion a year by 2010, but critics say they are falling well short of this promise.
"Heiligendamm is the last chance for the G8 leaders to rescue their reputation," said Oliver Buston, European director of Debt Aids Trade Africa.
BBC
Are Africa's EPA trade-offs worth it?
by Mathabo le Roux
On the surface, the European Commission's argument on how it sees economic partnership agreements with developing countries in the African, Caribbean and Pacific regions playing out, is compelling. The trade in these regions is governed by the Cotonou agreement, a decidedly one-sided affair that ensures developing countries enjoy preferential access to European markets with no reciprocal treatment for European goods.
In fact, Cotonou is so one-sided that it is incompatible with World Trade Organisation (WTO) rules, and elicited grumbles from other developing markets, who challenge the advantages these select markets enjoy from the European Union (EU) as prejudicial. A WTO-granted waiver to allow for this trade relationship to become compliant with international trade rules expires at the end of 2007, which is why the economic partnership agreements (EPAs) are currently being renegotiated.
But even though African, Caribbean and Pacific (ACP) countries have enjoyed preferential access to European markets, they still export only a few basic commodities. And the prices of many of these commodities are in long-term decline.
EU trade commissioner Peter Mandelson described the situation in a briefing on the partnership agreements in Brussels in April as a case of the ACP countries trading a "shrinking island of commodities in an ocean of the global economy", which was simply not sustainable.
Part of the problem is supply-side constraints and market capacity. The EU wants the EPAs to aim at integrating the ACP into the world trading economy and increasing the quantity and diversity of their trade. The core objective is to bring each EPA region under a single trade regime to encourage regional integration, the growth of regional markets and the creation of regional supply chains.
To tackle market constraints, the EU wants to implement a deal that covers services, including financial services, telecoms, transport and government procurement. Services, the argument goes, are the basis on which other sectors of the economy depend and therefore should be central to the development aim.
An agreement on services, the European Commission believes, would create more homogeneous standards across participating regions, and this would enhance legal predictability, lower costs, enhance competitiveness and ultimately stimulate foreign direct investment.
But the question many are asking is for whom the EU wants this predictability. Peter Draper, a research fellow at the South African Institute of International Affairs, points out that services reforms, which mostly relate to regulatory issues, are likely to have a knock-on effect on the markets which accede to the reforms. Developing countries should be given time to study the effect that reforms would have on their markets before making commitments.
However, with the deadline for the conclusion of a deal set for the end of the year, there simply will not be enough time. As it is, the EU took a year to positively respond to a request that SA be included in the partnership agreement negotiations. The delay is understandable, since the EU had to establish whether any sectors in the EU in particular would be at risk from an influx of South African goods if duty-free access was granted to SA.
A study on the effect of SA joining the EPA found that the supply response from SA to duty-free access to the EU was likely to be minimal, with the possible exception of sugar and beef. The likelihood of SA compromising the access of other developing countries was found by the study to be modest, again with the possible exception of sugar and beef.
Despite these findings, the EU still argues for differential treatment for SA. Moreover, it appears that SA's inclusion in the EPA has hardened the EU's stance on pushing through binding commitments on services from developing countries.
At the briefing in Brussels, Mandelson reiterated that the EPAs were agreements and the EU, had "no desire to impose a decision" on the ACP. But, given the tight time frame, developing countries may feel pressured to concede on services to get a deal concluded before the expiry of the deadline, making Mandelson's words ring rather hollow.
An overhasty agreement on services without proper scrutiny of the likely effect of reforms achieves the opposite of what the EU is envisaging with the partnership agreements and undermines development.
Also at the Brussels briefing, Mandelson said assumptions that the ACP regions could not negotiate their own deals was "patronising and wrong". But the direction the economic partnership agreement is taking seems to suggest that the ACP's negotiating space is clearly delineated by the framework the EU dictates.
AllAfrica
On the surface, the European Commission's argument on how it sees economic partnership agreements with developing countries in the African, Caribbean and Pacific regions playing out, is compelling. The trade in these regions is governed by the Cotonou agreement, a decidedly one-sided affair that ensures developing countries enjoy preferential access to European markets with no reciprocal treatment for European goods.
In fact, Cotonou is so one-sided that it is incompatible with World Trade Organisation (WTO) rules, and elicited grumbles from other developing markets, who challenge the advantages these select markets enjoy from the European Union (EU) as prejudicial. A WTO-granted waiver to allow for this trade relationship to become compliant with international trade rules expires at the end of 2007, which is why the economic partnership agreements (EPAs) are currently being renegotiated.
But even though African, Caribbean and Pacific (ACP) countries have enjoyed preferential access to European markets, they still export only a few basic commodities. And the prices of many of these commodities are in long-term decline.
EU trade commissioner Peter Mandelson described the situation in a briefing on the partnership agreements in Brussels in April as a case of the ACP countries trading a "shrinking island of commodities in an ocean of the global economy", which was simply not sustainable.
Part of the problem is supply-side constraints and market capacity. The EU wants the EPAs to aim at integrating the ACP into the world trading economy and increasing the quantity and diversity of their trade. The core objective is to bring each EPA region under a single trade regime to encourage regional integration, the growth of regional markets and the creation of regional supply chains.
To tackle market constraints, the EU wants to implement a deal that covers services, including financial services, telecoms, transport and government procurement. Services, the argument goes, are the basis on which other sectors of the economy depend and therefore should be central to the development aim.
An agreement on services, the European Commission believes, would create more homogeneous standards across participating regions, and this would enhance legal predictability, lower costs, enhance competitiveness and ultimately stimulate foreign direct investment.
But the question many are asking is for whom the EU wants this predictability. Peter Draper, a research fellow at the South African Institute of International Affairs, points out that services reforms, which mostly relate to regulatory issues, are likely to have a knock-on effect on the markets which accede to the reforms. Developing countries should be given time to study the effect that reforms would have on their markets before making commitments.
However, with the deadline for the conclusion of a deal set for the end of the year, there simply will not be enough time. As it is, the EU took a year to positively respond to a request that SA be included in the partnership agreement negotiations. The delay is understandable, since the EU had to establish whether any sectors in the EU in particular would be at risk from an influx of South African goods if duty-free access was granted to SA.
A study on the effect of SA joining the EPA found that the supply response from SA to duty-free access to the EU was likely to be minimal, with the possible exception of sugar and beef. The likelihood of SA compromising the access of other developing countries was found by the study to be modest, again with the possible exception of sugar and beef.
Despite these findings, the EU still argues for differential treatment for SA. Moreover, it appears that SA's inclusion in the EPA has hardened the EU's stance on pushing through binding commitments on services from developing countries.
At the briefing in Brussels, Mandelson reiterated that the EPAs were agreements and the EU, had "no desire to impose a decision" on the ACP. But, given the tight time frame, developing countries may feel pressured to concede on services to get a deal concluded before the expiry of the deadline, making Mandelson's words ring rather hollow.
An overhasty agreement on services without proper scrutiny of the likely effect of reforms achieves the opposite of what the EU is envisaging with the partnership agreements and undermines development.
Also at the Brussels briefing, Mandelson said assumptions that the ACP regions could not negotiate their own deals was "patronising and wrong". But the direction the economic partnership agreement is taking seems to suggest that the ACP's negotiating space is clearly delineated by the framework the EU dictates.
AllAfrica
Taiwan accuses China of 'buying' former ally Senegal
Taiwan's new de facto envoy to the United States has accused China of using hundreds of millions of dollars to lure a key ally, in the latest round of diplomatic jostling between the two rivals. Joseph Wu said Beijing, which regards Taiwan as part of its territory, aimed to isolate it internationally, the Taipei-based China Times said in a dispatch from Washington.
To that goal, "Beijing pledged 600 million dollars in aid to Senegal" as they set up diplomatic ties in October 2005, said Wu, who served as the head of Taiwan's top China policy-making Mainland Affairs Council, before he was named as the island's representative to the US last month.
Taiwan and China have accused one another in the past of using money to lure each other's allies. However, Wu denied the allegation with regards to his own country's foreign relations, saying "chequebook diplomacy" is unlikely in a democratic country like Taiwan, where any foreign aid project must be approved by parliament and monitored by media. Taipei cannot possibly compete with Beijing's deep pockets, Wu said, referring to China's growing economic clout.
25 countries recognise Taiwan. Latin America, the South Pacific and Africa are the main diplomatic battlegrounds for Taipei and China, which split in 1949 at the end of a civil war. Taiwan suffered a diplomatic setback when Chad switched recognition to Beijing in 2006.
Africasia
To that goal, "Beijing pledged 600 million dollars in aid to Senegal" as they set up diplomatic ties in October 2005, said Wu, who served as the head of Taiwan's top China policy-making Mainland Affairs Council, before he was named as the island's representative to the US last month.
Taiwan and China have accused one another in the past of using money to lure each other's allies. However, Wu denied the allegation with regards to his own country's foreign relations, saying "chequebook diplomacy" is unlikely in a democratic country like Taiwan, where any foreign aid project must be approved by parliament and monitored by media. Taipei cannot possibly compete with Beijing's deep pockets, Wu said, referring to China's growing economic clout.
25 countries recognise Taiwan. Latin America, the South Pacific and Africa are the main diplomatic battlegrounds for Taipei and China, which split in 1949 at the end of a civil war. Taiwan suffered a diplomatic setback when Chad switched recognition to Beijing in 2006.
Africasia
Kenya is top exporting country within COMESA
Kenya tops the list of highest exporting countries in the 19-member COMESA trading bloc. According to the latest annual report produced by the Common Market for Eastern and Southern Africa secretariat, the country raked in 60.7 Kenya Shillings billion (1US$= 67KSh) in 2005, emerging as the top beneficiary in the regional market.
Kenya also re-exported in the vast market, goods worth Sh32.5 billion and imported products valued at Sh12.7 billion. Egypt came in second, exporting goods worth Sh30.6 billion and importing from other COMESA member states goods valued at Sh12.6 billion. Zambia ranked third, selling goods worth Sh18 billion and re-exporting products valued at Sh602 million. It however, bought an equally higher amount worth Sh17.2 billion.
Zimbabwe, the southern African country currently facing a major economic crisis, came fourth exporting goods worth Sh11.7 billion and re-exporting Sh693 million. It also imported semi and finished products from other member states valued at Sh4.3 billion.
The report shows that the landlocked country of Uganda leads in the category of countries with the highest imports, buying from other members states products worth Sh39.5billion, and is closely followed by Sudan, which imports goods worth Sh32.7 billion.
The Democratic Republic of Congo, emerging from years of turmoil, comes in third importing products worth Sh25.5 billion, Zambia Sh17.2 billion, followed by Ethiopia, which imported goods valued at Sh13.4 billion.
The report says the economic performance of the COMESA region has been good, though still below the desired target for the Millennium Development Goals. "At the end of 2005, the Gross Domestic Product growth for the region was estimated at only five per cent, but more recent estimates put the growth rate at 5.8 per cent," it adds. Last year's growth, the document says was buoyed by the high prices of petroleum and metal products.
In the 2005/06 financial period, the oil exporting economies witnessed the highest growth, with Sudan's economy growing at 13.4 per cent in 2005, before settling at 12 per cent in 2006. Non-oil economies exporting mineral and metal commodities also witnessed strong growth.
According to the report, agriculture remains the major driver of the trading bloc, accounting for the lion's share of GDP the leading source of foreign exchange. "The agricultural sector remains the most important sector in the COMESA region and the one with the highest potential for generating export growth," the document added. The report adds that the agricultural sector must grow rapidly to address rural poverty, adding that the minimum agricultural sector growth rate required in the region to halve hunger and poverty rates by 2015 is an annual growth of six per cent.
Member countries, the document adds, must allocate at least 10 per cent of their national budget to agricultural development. To address intermittent food shortages, Comesa member countries are planning to adopt a "maize without borders" policy, to ensure that the grain moves from surplus to deficit areas, without impediments by policy regulations. The report adds that formal grain trade across the region, in 2005, reduced due to severe drought conditions in a million during the 2001 baseline period," it says.
Daily Nation
Kenya also re-exported in the vast market, goods worth Sh32.5 billion and imported products valued at Sh12.7 billion. Egypt came in second, exporting goods worth Sh30.6 billion and importing from other COMESA member states goods valued at Sh12.6 billion. Zambia ranked third, selling goods worth Sh18 billion and re-exporting products valued at Sh602 million. It however, bought an equally higher amount worth Sh17.2 billion.
Zimbabwe, the southern African country currently facing a major economic crisis, came fourth exporting goods worth Sh11.7 billion and re-exporting Sh693 million. It also imported semi and finished products from other member states valued at Sh4.3 billion.
The report shows that the landlocked country of Uganda leads in the category of countries with the highest imports, buying from other members states products worth Sh39.5billion, and is closely followed by Sudan, which imports goods worth Sh32.7 billion.
The Democratic Republic of Congo, emerging from years of turmoil, comes in third importing products worth Sh25.5 billion, Zambia Sh17.2 billion, followed by Ethiopia, which imported goods valued at Sh13.4 billion.
The report says the economic performance of the COMESA region has been good, though still below the desired target for the Millennium Development Goals. "At the end of 2005, the Gross Domestic Product growth for the region was estimated at only five per cent, but more recent estimates put the growth rate at 5.8 per cent," it adds. Last year's growth, the document says was buoyed by the high prices of petroleum and metal products.
In the 2005/06 financial period, the oil exporting economies witnessed the highest growth, with Sudan's economy growing at 13.4 per cent in 2005, before settling at 12 per cent in 2006. Non-oil economies exporting mineral and metal commodities also witnessed strong growth.
According to the report, agriculture remains the major driver of the trading bloc, accounting for the lion's share of GDP the leading source of foreign exchange. "The agricultural sector remains the most important sector in the COMESA region and the one with the highest potential for generating export growth," the document added. The report adds that the agricultural sector must grow rapidly to address rural poverty, adding that the minimum agricultural sector growth rate required in the region to halve hunger and poverty rates by 2015 is an annual growth of six per cent.
Member countries, the document adds, must allocate at least 10 per cent of their national budget to agricultural development. To address intermittent food shortages, Comesa member countries are planning to adopt a "maize without borders" policy, to ensure that the grain moves from surplus to deficit areas, without impediments by policy regulations. The report adds that formal grain trade across the region, in 2005, reduced due to severe drought conditions in a million during the 2001 baseline period," it says.
Daily Nation
Africa's unfair battle : The West's poverty subsidies
Farmers in Kenya, Burkina Faso and Senegal used to be able to make ends meet. Today they have trouble selling their goods because of subsidized exports from industrial nations that are sold in Africa at dumping prices. But will the West ever change?
It's a big day for a little boy, but it's also a day that will more than likely end on a depressing note. The fishermen know this, but none of them is willing to dampen the boy's enthusiasm on his first day of work.
The eight-year-old boy is visibly excited as he jumps through the surf off the beach of Mbour, a Senegalese fishing town, until someone hoists him up onto a brightly painted boat known locally as a pirogue. With two dozen fishermen crowded on board, the 18-meter wooden craft can barely remain afloat.
Captain Badou Ndoye stands at the rudder and reads the waves. He has 62 years of experience at sea. The 67-year-old is a third-generation fisherman. Five of his sons are also on board. As the boat traces a wide circle, the wide net is tossed over the edge of the boat. This is the moment when the men grab the boy and throw him into the sea, and into a future that no longer quite exists. No matter how hard the boy tries to drive the fish into the net, in this coming-of-age ritual, it won't be enough for the fishermen to survive.
Since the fleets of "toubabs," or white men, took over the fishing grounds, individual fishermen no longer stand a chance. Dragging giant nets and guided by highly sensitive sonar equipment, the industrial-size trawlers are literally pulling the life from the sea off the coast of West Africa. Some of these floating factories can hold up to 2,000 tons of fish at a time. It would take Captain Badou decades to catch that many fish.
But even if the local fishermen didn't have to use pure muscle power to pull their nets out of the sea, and if they had ice to keep their catch fresh and ships that didn't have to return to shore after a day's fishing, it would still be an unequal match. Unlike their well-equipped competitors from the north, these fishermen actually depend on selling their catches to feed their families.
It's a difficult concept for Mbour's fishermen to grasp : The supposedly market-oriented, industrialized countries of the north spend almost twice as much on catching fish as they earn from the catch. Fishing companies from Europe, Japan and the United States are literally paid to pack their boats with state-of-the-art equipment. They buy discounted fuel and benefit from low-interest loans. Shipping is subsidized, and so are exports, all with taxpayers' money.
Once their own waters are over-fished, they buy their way into other ones. Last year the European Union spent more than 200 million euro ($270 million) so its fleets could fish in foreign waters. From 2002 to 2006, the European Commission paid 12 euro million a year to Senegal alone for fishing rights. New contract negotiations have been underway since 2006.
This is all necessary, we are told, to safeguard jobs. But Captain Badou Ndoye is worried about his job, too.
The more valuable fish species are becoming rare because the foreign trawlers, in violation of international fishing regulations, have been pulling up young fish in their nets and not returning them to the water. Ndoye has also heard this from seamen who work on the foreigners' ships. On this particular day, after seven hours at sea, he returns home almost empty-handed. The day's catch consists of a few cheap sardines and anchovies, two squids and a few rosefish.
The mood on board is somber. Each fishermen will go home with no more than the equivalent of one or two euros, hardly enough to feed a family. Fish is Senegal's biggest export, with the fishing industry providing 15 percent of all jobs. Many of them are now threatened.
Spiegel
It's a big day for a little boy, but it's also a day that will more than likely end on a depressing note. The fishermen know this, but none of them is willing to dampen the boy's enthusiasm on his first day of work.
The eight-year-old boy is visibly excited as he jumps through the surf off the beach of Mbour, a Senegalese fishing town, until someone hoists him up onto a brightly painted boat known locally as a pirogue. With two dozen fishermen crowded on board, the 18-meter wooden craft can barely remain afloat.
Captain Badou Ndoye stands at the rudder and reads the waves. He has 62 years of experience at sea. The 67-year-old is a third-generation fisherman. Five of his sons are also on board. As the boat traces a wide circle, the wide net is tossed over the edge of the boat. This is the moment when the men grab the boy and throw him into the sea, and into a future that no longer quite exists. No matter how hard the boy tries to drive the fish into the net, in this coming-of-age ritual, it won't be enough for the fishermen to survive.
Since the fleets of "toubabs," or white men, took over the fishing grounds, individual fishermen no longer stand a chance. Dragging giant nets and guided by highly sensitive sonar equipment, the industrial-size trawlers are literally pulling the life from the sea off the coast of West Africa. Some of these floating factories can hold up to 2,000 tons of fish at a time. It would take Captain Badou decades to catch that many fish.
But even if the local fishermen didn't have to use pure muscle power to pull their nets out of the sea, and if they had ice to keep their catch fresh and ships that didn't have to return to shore after a day's fishing, it would still be an unequal match. Unlike their well-equipped competitors from the north, these fishermen actually depend on selling their catches to feed their families.
It's a difficult concept for Mbour's fishermen to grasp : The supposedly market-oriented, industrialized countries of the north spend almost twice as much on catching fish as they earn from the catch. Fishing companies from Europe, Japan and the United States are literally paid to pack their boats with state-of-the-art equipment. They buy discounted fuel and benefit from low-interest loans. Shipping is subsidized, and so are exports, all with taxpayers' money.
Once their own waters are over-fished, they buy their way into other ones. Last year the European Union spent more than 200 million euro ($270 million) so its fleets could fish in foreign waters. From 2002 to 2006, the European Commission paid 12 euro million a year to Senegal alone for fishing rights. New contract negotiations have been underway since 2006.
This is all necessary, we are told, to safeguard jobs. But Captain Badou Ndoye is worried about his job, too.
The more valuable fish species are becoming rare because the foreign trawlers, in violation of international fishing regulations, have been pulling up young fish in their nets and not returning them to the water. Ndoye has also heard this from seamen who work on the foreigners' ships. On this particular day, after seven hours at sea, he returns home almost empty-handed. The day's catch consists of a few cheap sardines and anchovies, two squids and a few rosefish.
The mood on board is somber. Each fishermen will go home with no more than the equivalent of one or two euros, hardly enough to feed a family. Fish is Senegal's biggest export, with the fishing industry providing 15 percent of all jobs. Many of them are now threatened.
Spiegel
Hurdles remain in Africa-EU trade talks - officials
Debate over how much aid the European Union should give poor African countries to help them upgrade their production is at the heart of finding a new trade deal between the two regions, African officials have said. Although there are no official trade barriers for African goods into the European Union, onerous regulations, health and safety standards effectively block many of the continent's products from the lucrative market.
Brussels' European Development Fund will give developing countries 2 billion euros per year from 2010 for training, infrastructure and easier export procedures, but the African nations say they need about $28-billion to be more competitive. "We are saying that is not enough. Give us more to address this specific element of economic partnership agreements," said Erastus Mwencha, the head of the Common Market for Eastern and Southern Africa (COMESA) to which most Eastern and southern African (ESA) countries belong. The funds would be for programmes such as infrastructure upgrades and generation of cheaper energy but Mwencha did not give a time frame in which it would be spent.
ESA nations and the EU need to agree on a new pact to replace an existing preferential market access deal granted to African, Caribbean and Pacific (ACP) countries by December 31, in order to meet World Trade Organisation rules.
Kenyan trade officials said project financing and non-tariff barriers were the key hurdles to the new pact. "Market access and development are some of the main sticky areas," David Nalo, a senior official in the Kenyan trade ministry said during a meeting of the region's trade officials to discuss the so-called Economic Partnership Agreements (EPAs). "The text is 70 percent done," he said. "We are waiting for the European Union to engage in meaningful discussions and remove all the brackets in the text."
Without elaboration, Mwencha said the talks would be completed in time but that some issues needed more discussion. "I believe that it is clear that even the best of efforts and will, we cannot expect to complete all the negotiations by December 31. Some issues will need to be finalised well beyond that time," he told the trade officials.
Many of the countries in the region are classified as Least Developed Countries and will still have access to the European market should the deal not fall through. Those that are not in that category, such as Kenya, a leading flower exporter to the EU, are pushing for a deal to be in place by the deadline so they can still trade.
The EU is also negotiating separate agreements with five other regional groups in the ACP.
Engineering News
Brussels' European Development Fund will give developing countries 2 billion euros per year from 2010 for training, infrastructure and easier export procedures, but the African nations say they need about $28-billion to be more competitive. "We are saying that is not enough. Give us more to address this specific element of economic partnership agreements," said Erastus Mwencha, the head of the Common Market for Eastern and Southern Africa (COMESA) to which most Eastern and southern African (ESA) countries belong. The funds would be for programmes such as infrastructure upgrades and generation of cheaper energy but Mwencha did not give a time frame in which it would be spent.
ESA nations and the EU need to agree on a new pact to replace an existing preferential market access deal granted to African, Caribbean and Pacific (ACP) countries by December 31, in order to meet World Trade Organisation rules.
Kenyan trade officials said project financing and non-tariff barriers were the key hurdles to the new pact. "Market access and development are some of the main sticky areas," David Nalo, a senior official in the Kenyan trade ministry said during a meeting of the region's trade officials to discuss the so-called Economic Partnership Agreements (EPAs). "The text is 70 percent done," he said. "We are waiting for the European Union to engage in meaningful discussions and remove all the brackets in the text."
Without elaboration, Mwencha said the talks would be completed in time but that some issues needed more discussion. "I believe that it is clear that even the best of efforts and will, we cannot expect to complete all the negotiations by December 31. Some issues will need to be finalised well beyond that time," he told the trade officials.
Many of the countries in the region are classified as Least Developed Countries and will still have access to the European market should the deal not fall through. Those that are not in that category, such as Kenya, a leading flower exporter to the EU, are pushing for a deal to be in place by the deadline so they can still trade.
The EU is also negotiating separate agreements with five other regional groups in the ACP.
Engineering News
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