1 Libya's oil output cut by up to 75 percent as turmoil escalates
2 Foreign oil, construction workers scramble to flee chaos in Libya
3 Sun sets on trade with Ivory Coast
4 Europe's lucrative interests in troubled Libya
5 Sierra Leone closely eying upheavals in investor Libya
6 Brazil seeks a different approach as it competes with China in Africa
7 Chinese investments in Africa to surge to US$ 50 billion by 2015
8 Zimbabwe to nationalise mines, spare Chinese firms
9 Brazil's big trade players in Africa
10 Ivory Coast banks close amidst crisis
11 U.S. needs a new trade framework for Africa
12 Mozambique aims to attract $4 billion in foreign investment in 2011
13 Lesotho plans for life without U.S. trade lifeline AGOA
14 Malaysia aims for double-digit growth in trade with South Africa
15 Mining bosses wary of doing business in South Africa over nationalization fears
16 Ghana is UK's 10th largest African export market
17 China to crack down on counterfeit exports to Africa
18 Shell Oil pulls out of African downstream market
19 South Africa losing interest in SADC Customs Union
20 U.S. anti-war rules on minerals may amount to an embargo on trade with central Africa
21 Trade between US and Ghana grows
22 Senegalese power cuts affect business and life in general
23 Ivory Coast banks, stock exchange close as political impasse continues
February 24, 2011
Foreign oil, construction workers scramble to flee chaos in Libya
by Selcan Hacaoglu
Foreigners fled the turmoil in Libya by the thousands on February 23, climbing aboard ships, ferries and planes or fleeing in overloaded vans to the country's borders with Egypt and Tunisia. Tripoli's airport was overwhelmed with stranded people seeking a way out.
Two Turkish ships whisked 3,000 citizens away from the chaos engulfing the North African nation and a 600-foot U.S.-chartered ferry arrived to evacuate Americans to the nearby Mediterranean island of Malta, a five-hour journey. Several countries — including Russia, Germany and Ukraine — sent more planes in to help their citizens escape an increasingly unstable situation.
"The airport was mobbed, you wouldn't believe the number of people," said Kathleen Burnett, of Baltimore, Ohio, as she stepped off an Austrian Airlines flight from Tripoli to Vienna. "It was total chaos."
Turkey was cranking up the largest evacuation in its history, seeking to protect some 25,000 citizens and more than 200 Turkish companies involved in construction projects in Libya worth more than $15 billion. Some of the construction sites have come under attack by protesters.
Two Turkish commercial ships left the eastern Libyan port of Benghazi on February 23 escorted by a navy frigate, with the first one expected to reach Turkey's Mediterranean port of Marmaris around midnight. Authorities began setting up a soup kitchen and a field hospital at Marmaris and arranged buses to transfer the evacuees. Turkey has also sent two more commercial ships to Libya.
Two planes brought around 250 Turkish citizens back home February 23, reports said. Turkey has now evacuated some 5,350 citizens from Libya over the last three days, about 2,250 of them by plane.
"We are carrying out the largest evacuation operation in our history," Turkish Foreign Minister Ahmet Davutoglu said, adding that Turkey was also helping other nations. "So far, a total of 21 countries have asked Turkey to evacuate their citizens as well." Davutoglu stressed that Turkey was not leaving Libya and would send "food and medicine to Libyan brothers by ships."
Foreigners fled the turmoil in Libya by the thousands on February 23, climbing aboard ships, ferries and planes or fleeing in overloaded vans to the country's borders with Egypt and Tunisia. Tripoli's airport was overwhelmed with stranded people seeking a way out.
Two Turkish ships whisked 3,000 citizens away from the chaos engulfing the North African nation and a 600-foot U.S.-chartered ferry arrived to evacuate Americans to the nearby Mediterranean island of Malta, a five-hour journey. Several countries — including Russia, Germany and Ukraine — sent more planes in to help their citizens escape an increasingly unstable situation.
"The airport was mobbed, you wouldn't believe the number of people," said Kathleen Burnett, of Baltimore, Ohio, as she stepped off an Austrian Airlines flight from Tripoli to Vienna. "It was total chaos."
Turkey was cranking up the largest evacuation in its history, seeking to protect some 25,000 citizens and more than 200 Turkish companies involved in construction projects in Libya worth more than $15 billion. Some of the construction sites have come under attack by protesters.
Two Turkish commercial ships left the eastern Libyan port of Benghazi on February 23 escorted by a navy frigate, with the first one expected to reach Turkey's Mediterranean port of Marmaris around midnight. Authorities began setting up a soup kitchen and a field hospital at Marmaris and arranged buses to transfer the evacuees. Turkey has also sent two more commercial ships to Libya.
Two planes brought around 250 Turkish citizens back home February 23, reports said. Turkey has now evacuated some 5,350 citizens from Libya over the last three days, about 2,250 of them by plane.
"We are carrying out the largest evacuation operation in our history," Turkish Foreign Minister Ahmet Davutoglu said, adding that Turkey was also helping other nations. "So far, a total of 21 countries have asked Turkey to evacuate their citizens as well." Davutoglu stressed that Turkey was not leaving Libya and would send "food and medicine to Libyan brothers by ships."
Libya is one of the world's biggest oil producers — producing nearly 2 percent of the world's oil — and many oil companies were evacuating their expatriate workers and families.
China was also gearing up for a massive evacuation. There are reportedly 30,000 or more Chinese workers in Libya building railways and other infrastructure and providing oilfield services. Greece is making plans to help evacuate around 13,000 of them to Crete by ship.
China's first chartered evacuation flight, staffed with relief officials and stocked with food and medicine, left for Libya on February 23.
Chinese media reports said a site run by China's Huafeng Construction Co., Ltd. in eastern Libya was attacked by armed looters over the weekend who stole computers and other equipment and forced nearly 1,000 Chinese workers out of their dormitories.
The International Organization for Migration said several Asian, African and one European government requested its help in evacuating citizens.
Migrants were also pouring into Libya's land borders with Egypt and Tunisia on February 23. Vans piled high with luggage and furniture lined up at the Salloum border crossing with Egypt.
The U.N. migration agency was trying to help find accommodation for those at the border, said Jemini Pandya, a spokeswoman for the Geneva-based organization, who said thousands of migrants were fleeing Libya.
Libyan leader Moammar Gadhafi has urged his supporters to strike back against the Libyan protesters, escalating a crackdown that has led to widespread shooting in the streets. Nearly 300 people have been killed in the nationwide wave of anti-government protests.
A Bulgaria Air plane carrying 110 Bulgarians and six Romanians from Tripoli — mostly medical and construction workers — arrived in Sofia. Some passengers said they had heard gunfights.
"I saw horror," a nurse who gave only her first name, Polly, told reporters. "We decided to return because the situation is unstable. When we left Tripoli there was some kind of euphoria, everybody was celebrating some kind of victory," engineer Natalia Vakova said. "But that's Libya — absolutely unpredictable."
The first planeload of Russians to be evacuated landed in Moscow, bringing 118 Russians. Three more planes were expected later February 23. A ship was also setting sail for Ras Lanuf, the site of Libya's largest refinery and port, to evacuate up to 1,000 Russians, Turks, Serbs and Montenegrins there.
Two French military planes evacuated 335 French people and 56 foreigners to Paris from Libya, and a third plane was en route from France to evacuate French tourists.
China was also gearing up for a massive evacuation. There are reportedly 30,000 or more Chinese workers in Libya building railways and other infrastructure and providing oilfield services. Greece is making plans to help evacuate around 13,000 of them to Crete by ship.
China's first chartered evacuation flight, staffed with relief officials and stocked with food and medicine, left for Libya on February 23.
Chinese media reports said a site run by China's Huafeng Construction Co., Ltd. in eastern Libya was attacked by armed looters over the weekend who stole computers and other equipment and forced nearly 1,000 Chinese workers out of their dormitories.
The International Organization for Migration said several Asian, African and one European government requested its help in evacuating citizens.
Migrants were also pouring into Libya's land borders with Egypt and Tunisia on February 23. Vans piled high with luggage and furniture lined up at the Salloum border crossing with Egypt.
The U.N. migration agency was trying to help find accommodation for those at the border, said Jemini Pandya, a spokeswoman for the Geneva-based organization, who said thousands of migrants were fleeing Libya.
Libyan leader Moammar Gadhafi has urged his supporters to strike back against the Libyan protesters, escalating a crackdown that has led to widespread shooting in the streets. Nearly 300 people have been killed in the nationwide wave of anti-government protests.
A Bulgaria Air plane carrying 110 Bulgarians and six Romanians from Tripoli — mostly medical and construction workers — arrived in Sofia. Some passengers said they had heard gunfights.
"I saw horror," a nurse who gave only her first name, Polly, told reporters. "We decided to return because the situation is unstable. When we left Tripoli there was some kind of euphoria, everybody was celebrating some kind of victory," engineer Natalia Vakova said. "But that's Libya — absolutely unpredictable."
The first planeload of Russians to be evacuated landed in Moscow, bringing 118 Russians. Three more planes were expected later February 23. A ship was also setting sail for Ras Lanuf, the site of Libya's largest refinery and port, to evacuate up to 1,000 Russians, Turks, Serbs and Montenegrins there.
Two French military planes evacuated 335 French people and 56 foreigners to Paris from Libya, and a third plane was en route from France to evacuate French tourists.
Dutch Foreign Ministry spokesman Christoph Prommersberger said a Dutch KDC-10 air force transport plane left Tripoli late February 22 with 32 Dutch evacuees and 50 other nationalities. "What we hear from our people is it is chaotic but functioning," he said of the Tripoli airport.
British Airways and Emirates, the Middle East's largest airline, canceled flights to Tripoli on February 22. Unease over the safety of U.S. citizens intensified after failed attempts to get some out on Feb 21 and 22.
Britain is redeploying a warship, the HMS Cumberland, off the Libyan coast for a possible sea-borne evacuation of British citizens.
Italians continued to take Alitalia flights from Tripoli home, and a few hundred have already returned to Italy. An Italian air force plane landed in Libya on Feb 23 to evacuate more people.
Separately, two Italian naval vessels are headed to eastern Libyan ports to rescue citizens from Benghazi and other cities where airports are damaged. Italian citizens based in Misurata, Libya, said their private company was arranging evacuation by sea because the airfield at that coastal city was damaged by the protests.
About 450 Romanians were in the process of being evacuated but some lived far away from Tripoli and it was not clear how they would get to the Libyan capital. Germany was also trying to evacuate about 150 Germans still there.
Associated Press
British Airways and Emirates, the Middle East's largest airline, canceled flights to Tripoli on February 22. Unease over the safety of U.S. citizens intensified after failed attempts to get some out on Feb 21 and 22.
Britain is redeploying a warship, the HMS Cumberland, off the Libyan coast for a possible sea-borne evacuation of British citizens.
Italians continued to take Alitalia flights from Tripoli home, and a few hundred have already returned to Italy. An Italian air force plane landed in Libya on Feb 23 to evacuate more people.
Separately, two Italian naval vessels are headed to eastern Libyan ports to rescue citizens from Benghazi and other cities where airports are damaged. Italian citizens based in Misurata, Libya, said their private company was arranging evacuation by sea because the airfield at that coastal city was damaged by the protests.
About 450 Romanians were in the process of being evacuated but some lived far away from Tripoli and it was not clear how they would get to the Libyan capital. Germany was also trying to evacuate about 150 Germans still there.
Associated Press
Sun sets on trade with Ivory Coast
by Mike King
Trade to and from the Ivory Coast is in rapid decline, due to economic sanctions imposed by the EU following November’s disputed presidential election.
Almost all shipping lines have now stopped taking bookings for cargo destined for the West African country.
“We are not currently shipping to Ivory Coast and most of the shipping lines have suspended their services,” confirmed a spokesman for major forwarder Tuscor Lloyd.
EU companies are banned from doing business with Ivorian institutions linked to incumbent leader Laurent Gbagbo. He has refused to cede power to Alassane Ouattara, recognised by most international bodies as the country’s legitimate President after winning last year’s elections.
Several hundred Ivorian farmers marched on EU offices on February 18 to protest against the sanctions which have seen cocoa exports – the country’s economic mainstay – disintegrate.
The country’s banking system is also teetering on the brink of collapse, after virtually all commercial banks shut down last week in response to the sanctions.
Dalila Berritane, head of communication at Bolloré Africa Logistics, which runs a container terminal at the gateway port of Abidjan and claims to be Africa’s biggest integrated logistics operator, insisted the port remained open.
However, she would not confirm what shipping services were available at the port, or clarify whether France-based Bolloré was able to offer any logistics services to shippers trying to move cargo to the Ivory Coast or neighbouring countries, such as Mali and Burkina Faso, which rely on its ports for supplies.
Air connections from the EU remained open last week, but traffic was rapidly declining, said a spokesperson for DHL.
The director of TNT’s agent said the economy had dramatically slowed, impacting volumes. Frequency cuts by leading carriers had also increased transit times, he added.
Air France -KLM Cargo confirmed that bellyhold capacity on its daily flights between France and Ivory Coast had been reduced.
Passenger numbers and cargo volumes had reduced quite significantly in past weeks, said a spokesman.
“As a consequence, we had to use smaller aircraft, and we shall also have to reconsider the frequencies between Paris and Abidjan – we currently are operating a daily non-stop flight.”
IFW
Trade to and from the Ivory Coast is in rapid decline, due to economic sanctions imposed by the EU following November’s disputed presidential election.
Almost all shipping lines have now stopped taking bookings for cargo destined for the West African country.
“We are not currently shipping to Ivory Coast and most of the shipping lines have suspended their services,” confirmed a spokesman for major forwarder Tuscor Lloyd.
EU companies are banned from doing business with Ivorian institutions linked to incumbent leader Laurent Gbagbo. He has refused to cede power to Alassane Ouattara, recognised by most international bodies as the country’s legitimate President after winning last year’s elections.
Several hundred Ivorian farmers marched on EU offices on February 18 to protest against the sanctions which have seen cocoa exports – the country’s economic mainstay – disintegrate.
The country’s banking system is also teetering on the brink of collapse, after virtually all commercial banks shut down last week in response to the sanctions.
Dalila Berritane, head of communication at Bolloré Africa Logistics, which runs a container terminal at the gateway port of Abidjan and claims to be Africa’s biggest integrated logistics operator, insisted the port remained open.
However, she would not confirm what shipping services were available at the port, or clarify whether France-based Bolloré was able to offer any logistics services to shippers trying to move cargo to the Ivory Coast or neighbouring countries, such as Mali and Burkina Faso, which rely on its ports for supplies.
Air connections from the EU remained open last week, but traffic was rapidly declining, said a spokesperson for DHL.
The director of TNT’s agent said the economy had dramatically slowed, impacting volumes. Frequency cuts by leading carriers had also increased transit times, he added.
Air France -KLM Cargo confirmed that bellyhold capacity on its daily flights between France and Ivory Coast had been reduced.
Passenger numbers and cargo volumes had reduced quite significantly in past weeks, said a spokesman.
“As a consequence, we had to use smaller aircraft, and we shall also have to reconsider the frequencies between Paris and Abidjan – we currently are operating a daily non-stop flight.”
IFW
Europe's lucrative interests in troubled Libya
The European Union has condemned Libya for its crackdown on opposition protesters, but for many nations in the bloc, straining ties with Tripoli presents an awkward situation.
Western nations forged close trade ties with the north African nation after Muammar Gaddafi agreed in 2003 to end the production of weapons of mass destruction, ending nearly two decades of sanctions.
European energy firms were quick to invest in the holder of Africa's largest proven oil reserves, the eighth-largest in the world, while many others signed lucrative arms and construction deals.
Tony Blair, Britain's former prime minister, signed a so-called "Deal in the Desert" in March 2004, which paved the way for oil contracts worth billions, leading to a close relationship that has come under increasing criticism.
It included Anglo-Dutch company Shell signing an agreement worth up to $1bn and three years later BP agreeing its largest exploration commitment to date, in a deal worth at least $900m in Libya.
It sparked significant controversy around the world and led to US claims that BP lobbied Britain for the release of Abdelbaset Ali al-Megrahi, the man convicted of the 1988 Lockerbie bombing.
The Italian government of Silvio Berlusconi has also strengthened its ties with Tripoli in recent years, taking the largest proportion of oil from Libya for its national needs.
At the end of 2008, Italy's energy company Eni was operating 13 oil and gas permits and its production was 306,000 barrels per day of oil equivalent, about one-fifth of Britain's total daily oil production.
Spain's Repsol also has rights to 15 hydrocarbon blocks.
Arms deals with Libya have also proved contentious, particularly in light of the recent crackdown.
In August 2007 France signed contracts with Libya to sell anti-tank missiles and radio communications equipment worth a reported $405m. The European aerospace and defence giant EADS now has an office in Tripoli, and has sold civilian aircraft to the country.
According to the Campaign Against Arms trade, the UK licensed over $6m worth of ammunition to Libya, including sniper rifles.
Russia also announced a small-arms and weapons deal to the value of $1.8bn in January 2010, worth nearly a quarter of its state arms exports.
A building boom in Libya has also seen strong investment from Turkey, which has around 200 construction companies in the country working on projects worth an estimated $15.3bn.
Sovereign wealth has also attracted business ties from Europe.
Many of the investments made by the $65bn sovereign wealth fund have been in Italian stocks. It holds a 4.6 per cent stake in Italy's second-biggest bank, Unicredit and has a small stake in car maker Fiat, the Reuters news agency reported.
European nations are also interested in preserving relations with Libya for the sake of national security.
Italy, the closest entry gate for illegal migrants attempting to enter the EU, is especially concerned about an influx of refugees, following the crisis in Tunisia.
Tripoli has already warned it could suspend co-operation in the fight against illegal immigration if European countries continue to criticise its action against protesters.
Al Jazeera
Western nations forged close trade ties with the north African nation after Muammar Gaddafi agreed in 2003 to end the production of weapons of mass destruction, ending nearly two decades of sanctions.
European energy firms were quick to invest in the holder of Africa's largest proven oil reserves, the eighth-largest in the world, while many others signed lucrative arms and construction deals.
Tony Blair, Britain's former prime minister, signed a so-called "Deal in the Desert" in March 2004, which paved the way for oil contracts worth billions, leading to a close relationship that has come under increasing criticism.
It included Anglo-Dutch company Shell signing an agreement worth up to $1bn and three years later BP agreeing its largest exploration commitment to date, in a deal worth at least $900m in Libya.
It sparked significant controversy around the world and led to US claims that BP lobbied Britain for the release of Abdelbaset Ali al-Megrahi, the man convicted of the 1988 Lockerbie bombing.
The Italian government of Silvio Berlusconi has also strengthened its ties with Tripoli in recent years, taking the largest proportion of oil from Libya for its national needs.
At the end of 2008, Italy's energy company Eni was operating 13 oil and gas permits and its production was 306,000 barrels per day of oil equivalent, about one-fifth of Britain's total daily oil production.
Spain's Repsol also has rights to 15 hydrocarbon blocks.
Arms deals with Libya have also proved contentious, particularly in light of the recent crackdown.
In August 2007 France signed contracts with Libya to sell anti-tank missiles and radio communications equipment worth a reported $405m. The European aerospace and defence giant EADS now has an office in Tripoli, and has sold civilian aircraft to the country.
According to the Campaign Against Arms trade, the UK licensed over $6m worth of ammunition to Libya, including sniper rifles.
Russia also announced a small-arms and weapons deal to the value of $1.8bn in January 2010, worth nearly a quarter of its state arms exports.
A building boom in Libya has also seen strong investment from Turkey, which has around 200 construction companies in the country working on projects worth an estimated $15.3bn.
Sovereign wealth has also attracted business ties from Europe.
Many of the investments made by the $65bn sovereign wealth fund have been in Italian stocks. It holds a 4.6 per cent stake in Italy's second-biggest bank, Unicredit and has a small stake in car maker Fiat, the Reuters news agency reported.
European nations are also interested in preserving relations with Libya for the sake of national security.
Italy, the closest entry gate for illegal migrants attempting to enter the EU, is especially concerned about an influx of refugees, following the crisis in Tunisia.
Tripoli has already warned it could suspend co-operation in the fight against illegal immigration if European countries continue to criticise its action against protesters.
Al Jazeera
Sierra Leone closely eying upheavals in investor Libya
Sierra Leone's Information Minister Ibrahim ben Kargbo said on February 22 his government was keeping a close watch on Libya, which has promised significant investment in the poverty-stricken nation.
"We are watching the situation closely as we did with Egypt," he told reporters, adding that "the prevailing political situation in Libya remains in the hands of Libyans themselves."
"We have meanwhile advised the more than 4,000 Sierra Leoneans (most of them agricultural students and Muslim clerics in Libya) not to get involved in that country's internal affairs."
Ministry of Development officials here said Libyan investment in the west African state was "relatively at middle level" with the latest investment of 50 million dollars (36 million euros) in an new mobile network meant to begin operation in April.
The Libyan government, currently challenged by protests which have been violently repressed, built Sierra Leone's largest mosque three years ago, which can accommodate over 1,000 worshippers.
Libyan leader Moamer Kadhafi visited the country two years ago, promising "huge financial support" and assistance in the sectors of banking, agriculture, aviation, tourism and health.
The New Age
"We have meanwhile advised the more than 4,000 Sierra Leoneans (most of them agricultural students and Muslim clerics in Libya) not to get involved in that country's internal affairs."
Ministry of Development officials here said Libyan investment in the west African state was "relatively at middle level" with the latest investment of 50 million dollars (36 million euros) in an new mobile network meant to begin operation in April.
The Libyan government, currently challenged by protests which have been violently repressed, built Sierra Leone's largest mosque three years ago, which can accommodate over 1,000 worshippers.
Libyan leader Moamer Kadhafi visited the country two years ago, promising "huge financial support" and assistance in the sectors of banking, agriculture, aviation, tourism and health.
The New Age
Brazil seeks a different approach as it competes with China in Africa
by David Lewis
In the muggy forest of central Liberia, a gang of workers is inching its way along a railway track, cut long and straight through an otherwise impenetrable mesh of trees and vines. The drone of insects is interrupted by a high-pitched drill and the clang of hammers as workers put the finishing touches to the perfectly aligned steel tracks.
Casting a watchful eye over the crew of workers is Lewis C. Dogar, a veteran of Liberia's railway. Dogar and a handful of colleagues have been brought out of retirement to help reclaim hundreds of kilometres of track from the jungle. The softly spoken 64-year-old remembers Liberia's booming 1960s and 1970s, when trains laden with iron ore wound south from the mine on the mist-shrouded Mount Nimba to the sweaty port town of Buchanan. That finished with the outbreak of fighting, and two back-to-back civil wars that lasted 14 years. The conflict, which finally ended in 2003, left more than 200,000 people dead and Liberia's finances and infrastructure in ruins.
The gang of Liberian railway workers is a small sign things may finally be improving. Some of the men have only recently swapped their weapons for blue overalls and yellow hard hats. "We have a few young boys coming out of high school," Dogar says. "I am happy that I am around to train people."
Hiring locals might seem unremarkable on a continent with an oversupply of cheap labour. But the issue of who works on Africa's big infrastructure projects has come into sharp focus in recent years. At building sites from Angola to Zambia, teams of Chinese workers often do the work instead of Africans. Where locals are employed, their rough treatment by Chinese managers has stirred bitterness. In Zambia last October, the Chinese managers of Collum Mine shot and wounded 11 local coal miners protesting over pay and working conditions.
That growing resentment is one reason why Brazilian engineering group Odebrecht, contracted to get Liberia's railway rolling again, made a conscious decision to employ locals for the job -- and treated them well.
"It worked perfectly," says project manager Pedro Paulo Tosca, who decided to divide the 240 km (149 miles) of track into sections and assign dozens of separate villages along the way to clear them. "The majority of the heavy work … was activities that we could perform with local manpower instead of bringing sophisticated equipment to the site."
Odebrecht's initiative is not solely altruistic, of course. The unlisted company sees big profits in Africa. But as it pushes into the continent, Odebrecht and other Brazilian firms are using every chance they have to keep up with their Chinese rivals, who often enjoy a massive financing advantage thanks to the deep pockets of Beijing, and who rarely pay much attention to factors like human rights.
As investment in Africa grows -- foreign direct investment surged to just under $59 billion in 2009 from around $10 billion at the turn of the century, according to UNCTAD, the U.N.'s agency that monitors global trade -- so too do the expectations of host nations, who want not just trade, roads and bridges, but also jobs and training.
Casting a watchful eye over the crew of workers is Lewis C. Dogar, a veteran of Liberia's railway. Dogar and a handful of colleagues have been brought out of retirement to help reclaim hundreds of kilometres of track from the jungle. The softly spoken 64-year-old remembers Liberia's booming 1960s and 1970s, when trains laden with iron ore wound south from the mine on the mist-shrouded Mount Nimba to the sweaty port town of Buchanan. That finished with the outbreak of fighting, and two back-to-back civil wars that lasted 14 years. The conflict, which finally ended in 2003, left more than 200,000 people dead and Liberia's finances and infrastructure in ruins.
The gang of Liberian railway workers is a small sign things may finally be improving. Some of the men have only recently swapped their weapons for blue overalls and yellow hard hats. "We have a few young boys coming out of high school," Dogar says. "I am happy that I am around to train people."
Hiring locals might seem unremarkable on a continent with an oversupply of cheap labour. But the issue of who works on Africa's big infrastructure projects has come into sharp focus in recent years. At building sites from Angola to Zambia, teams of Chinese workers often do the work instead of Africans. Where locals are employed, their rough treatment by Chinese managers has stirred bitterness. In Zambia last October, the Chinese managers of Collum Mine shot and wounded 11 local coal miners protesting over pay and working conditions.
That growing resentment is one reason why Brazilian engineering group Odebrecht, contracted to get Liberia's railway rolling again, made a conscious decision to employ locals for the job -- and treated them well.
"It worked perfectly," says project manager Pedro Paulo Tosca, who decided to divide the 240 km (149 miles) of track into sections and assign dozens of separate villages along the way to clear them. "The majority of the heavy work … was activities that we could perform with local manpower instead of bringing sophisticated equipment to the site."
Odebrecht's initiative is not solely altruistic, of course. The unlisted company sees big profits in Africa. But as it pushes into the continent, Odebrecht and other Brazilian firms are using every chance they have to keep up with their Chinese rivals, who often enjoy a massive financing advantage thanks to the deep pockets of Beijing, and who rarely pay much attention to factors like human rights.
As investment in Africa grows -- foreign direct investment surged to just under $59 billion in 2009 from around $10 billion at the turn of the century, according to UNCTAD, the U.N.'s agency that monitors global trade -- so too do the expectations of host nations, who want not just trade, roads and bridges, but also jobs and training.
Ngozi Okonjo-Iweala, World Bank managing director and a former finance minister in Nigeria, told one of China's biggest mining conferences in November that investors in Africa need to work with local communities to avoid conflicts and start building the real economy rather than just stripping resources. If it can build a reputation for doing just that, Brazil thinks, it might help it stay in the game.
"If (Brazil) wants to distinguish itself from the other emerging powers, it needs to demonstrate what is different about its engagement with Africa based on the principles it espouses as a democratic country," says Sanusha Naidu, research director of the China/Emerging Powers in Africa Programme at Fahamu, a Cape Town-based organisation that promotes human rights and social justice. "It will also have to reconcile its economic ambitions in Africa with its posture of being a democracy, especially in cases where it does business with essentially corrupt and malevolent regimes in Africa."
Odebrecht's decision to employ people who live along the track is clearly popular. After seven years of peace, Liberia's economy is only slowly getting back on its feet. In Buchanan, the port, small businesses are feeding off the rebirth of the railway, winning contracts to clean offices, transport material or put food on the plates of workers. Though accurate figures are hard to come by, Liberia's unemployment rate is believed to top 80 percent. Such is the hunger for jobs that a number of the new railway workers have come from the capital, Monrovia, hundreds of miles away.
As you head north towards the mines the only real signs of development are the rubber-tapping collection points in the clearings that pepper the thick green forest. President Ellen Johnson-Sirleaf may have stabilised the nation but she faces re-election later this year and is struggling to convince people the economy is on the mend. Odebrecht's 2007 decision to employ 3,000 villagers was a significant boost.
"We are happy with what we are earning… Something is better than nothing," says Abraham Browne, a village contractor, between scooping mountains of rice into his mouth during a lunch break. Browne has swapped subsistence farming for a daily wage of about $4.50 for hammering nails into the tracks: "It helps us send our brothers and sisters to school because some of our parents are dead, killed in the war. It helps us a lot."
Odebrecht asked each community along the track to select a leader, with whom the Brazilian firm then signed a contract. The company has completed more than 75 percent of the work with Liberian labour, says manager Tosca. It has also trained up teams of engineers, technicians and accountants to help run its offices. The first iron ore, from a mine run by Luxembourg-based ArcelorMittal, is due in mid-2011.
In terms of cost, the decision to hire locally "is cheaper because labour here is not expensive," says Tosca. "Of course, you have a learning curve. The risk of accidents is higher -- therefore you have to invest more time in training. (But with machines), if you have a breakdown, to have a part here, to replace it, takes several weeks, if not months."
Tosca says the company believes it has an obligation to help the local economy, which in turn helps the company. "You create loyalty. They wear the shirt of the company … It is (a) kind of chemistry," he says.
Former human rights activist Kofi Woods, now Liberia's minister for public works, says Brazil is an "important partner" in developing the country.
Reuters
"If (Brazil) wants to distinguish itself from the other emerging powers, it needs to demonstrate what is different about its engagement with Africa based on the principles it espouses as a democratic country," says Sanusha Naidu, research director of the China/Emerging Powers in Africa Programme at Fahamu, a Cape Town-based organisation that promotes human rights and social justice. "It will also have to reconcile its economic ambitions in Africa with its posture of being a democracy, especially in cases where it does business with essentially corrupt and malevolent regimes in Africa."
Odebrecht's decision to employ people who live along the track is clearly popular. After seven years of peace, Liberia's economy is only slowly getting back on its feet. In Buchanan, the port, small businesses are feeding off the rebirth of the railway, winning contracts to clean offices, transport material or put food on the plates of workers. Though accurate figures are hard to come by, Liberia's unemployment rate is believed to top 80 percent. Such is the hunger for jobs that a number of the new railway workers have come from the capital, Monrovia, hundreds of miles away.
As you head north towards the mines the only real signs of development are the rubber-tapping collection points in the clearings that pepper the thick green forest. President Ellen Johnson-Sirleaf may have stabilised the nation but she faces re-election later this year and is struggling to convince people the economy is on the mend. Odebrecht's 2007 decision to employ 3,000 villagers was a significant boost.
"We are happy with what we are earning… Something is better than nothing," says Abraham Browne, a village contractor, between scooping mountains of rice into his mouth during a lunch break. Browne has swapped subsistence farming for a daily wage of about $4.50 for hammering nails into the tracks: "It helps us send our brothers and sisters to school because some of our parents are dead, killed in the war. It helps us a lot."
Odebrecht asked each community along the track to select a leader, with whom the Brazilian firm then signed a contract. The company has completed more than 75 percent of the work with Liberian labour, says manager Tosca. It has also trained up teams of engineers, technicians and accountants to help run its offices. The first iron ore, from a mine run by Luxembourg-based ArcelorMittal, is due in mid-2011.
In terms of cost, the decision to hire locally "is cheaper because labour here is not expensive," says Tosca. "Of course, you have a learning curve. The risk of accidents is higher -- therefore you have to invest more time in training. (But with machines), if you have a breakdown, to have a part here, to replace it, takes several weeks, if not months."
Tosca says the company believes it has an obligation to help the local economy, which in turn helps the company. "You create loyalty. They wear the shirt of the company … It is (a) kind of chemistry," he says.
Former human rights activist Kofi Woods, now Liberia's minister for public works, says Brazil is an "important partner" in developing the country.
Reuters
Chinese investments in Africa to surge to US$ 50 billion by 2015
Standard Bank estimates that Chinese investments into Africa will surge to USD50 billion by 2015, a 70 percent increase compared with the 2009 level. In addition, the South African bank predicts the China-Africa bilateral trade will reach USD300 billion by 2015, doubling the trade volume of USD150 billion in 2010. China is now a clear leader in the race for Africa’s resources and can be expected to continue developing these interests for the mutual benefit of Africa and China’s surging economies, it notes.
“Trade and investment routes into Africa are being recalibrated as economic momentum shifts to the East. This has been further intensified by the current turmoil in advanced economies and has been exemplified by sovereign debt challenges across Europe. China is an absolutely critical partner to Africa in the new multi-polar world. Through trade and direct investment, China is broadening its resources supply base with Africa as one of its key partners,” says George Fang, head of mining and metals China at Standard Bank.
“China is adding infrastructure capacity to link resources in countries as diverse as Mauretania, Sudan, Nigeria, DRC, Gabon, Angola and Zambia. This type of strategy is key to China’s investment on the continent, making the investment viable while also leaving a future economic legacy for the host countries,” he adds.
Africa is already beginning to reap the rewards of reforms, better macroeconomic management, investments in infrastructure, more constructive trade partnerships and other pro-active initiatives. Standard Bank predicts that Africa’s GDP is likely to double from USD1.5 trillion today to about USD3 trillion in 2015. By contrast, the advanced economies are only expected to increase by a mere quarter.
According to Standard Bank’s statistics, real GDP growth rate of African countries rebounded from a subdued 2.6 percent in 2009 to 4.9 percent in 2010 after Africa’s economic rate halved in 2009. The number of economies actually shrinking has declined from 10 in 2009 to one in 2010. Meanwhile, 20 countries are expected to expand by more than five percent in 2011, while Africa will expand by about six percent p.a. through to 2015.
The trade link between Africa and China has been the essential ingredient to Africa’s growth. Over the past 15 years, China-Africa trade has doubled every three years to surpass USD100 billion in 2008. Today, China buys one-tenth of all of Africa’s exports. Last year, China continued to be Africa’s largest trade partner with bilateral trade of nearly USD150 billion. Indeed, integration has been so swift that in 1990 no African countries had trade with China above five percent of GDP, yet by 2008, almost two dozen had. Plus, more than half list China as a top five trade partner. An example of the rapid explosion in trade is when Mauritania exported a mere USD100 million worth of ore to China in 2007, with that number increasing six times within just one year.
Africa mostly exports its resources to BRIC nations, whose GDP is set to increase from USD9 trillion to around USD18 trillion over the next five years, according to Standard Bank estimates.
Standard Bank is a leading African banking group focussed on emerging markets globally which now spans 17 countries across the African continent and 15 countries outside Africa. The international expansion has taken it to key financial centres of the world including Brazil, Russia and China. Its expertise are in industries such as mining and metals; oil, gas and renewables; telecommunications and media and power and infrastructure.
The Asset
Zimbabwe to nationalise mines, spare Chinese firms
by Alfonce Mbizwo
Zimbabwe will proceed with plans to take majority stakes in foreign-owned diamond mines in the east of the country but will spare a Chinese-owned mine from a state takeover, a minister said on February 15.
"Cabinet will meet on February 22 to decide on action to take on foreign-owned companies that fail to meet requirements to cede majority ownership to locals," Saviour Kasukuwere, youth and indigenisation minister, told Reuters.
Referring to the Chinese firm which owns a diamond mine in the east of the country, he said: "We have companies that are already on the ground and have agreed to partner with us. We will respect the conditions offered to such companies."
Zimbabwe's government announced last year it would nationalise all alluvial diamond mines in Marange, in the east of the country. Local media have reported that the army had formed a diamond mining company there. The army has not commented on the reports.
Kasukuwere said the decision to nationalise alluvial mining operations in December was an attempt to curb diamond smuggling.
His comments come as the coalition government formed in 2009 between Mugabe and Prime Minister Morgan Tsvangirai is embroiled in a row over diamond revenues. Finance Minister Tendai Biti, a Tsvangirai ally, has said proceeds have not reached the treasury.
Local media quoted Biti on Wednesday as saying he had commissioned an audit of revenues from diamond sales after receiving $62 million so far against the projected $174 million.
"As a result of these discrepancies, I have since instructed the accountant-general and the Zimbabwe Revenue Authority to verify figures of the diamond proceeds received so far," he was quoted by the state-owned Herald as having told parliament.
Global gem trade regulator Kimberly Process last year allowed Zimbabwe to conduct two auctions for diamonds from Marange. Biti says the country has since secretly sold more but the money remains unaccounted for.
Zimbabwe will proceed with plans to take majority stakes in foreign-owned diamond mines in the east of the country but will spare a Chinese-owned mine from a state takeover, a minister said on February 15.
"Cabinet will meet on February 22 to decide on action to take on foreign-owned companies that fail to meet requirements to cede majority ownership to locals," Saviour Kasukuwere, youth and indigenisation minister, told Reuters.
Referring to the Chinese firm which owns a diamond mine in the east of the country, he said: "We have companies that are already on the ground and have agreed to partner with us. We will respect the conditions offered to such companies."
Zimbabwe's government announced last year it would nationalise all alluvial diamond mines in Marange, in the east of the country. Local media have reported that the army had formed a diamond mining company there. The army has not commented on the reports.
Kasukuwere said the decision to nationalise alluvial mining operations in December was an attempt to curb diamond smuggling.
His comments come as the coalition government formed in 2009 between Mugabe and Prime Minister Morgan Tsvangirai is embroiled in a row over diamond revenues. Finance Minister Tendai Biti, a Tsvangirai ally, has said proceeds have not reached the treasury.
Local media quoted Biti on Wednesday as saying he had commissioned an audit of revenues from diamond sales after receiving $62 million so far against the projected $174 million.
"As a result of these discrepancies, I have since instructed the accountant-general and the Zimbabwe Revenue Authority to verify figures of the diamond proceeds received so far," he was quoted by the state-owned Herald as having told parliament.
Global gem trade regulator Kimberly Process last year allowed Zimbabwe to conduct two auctions for diamonds from Marange. Biti says the country has since secretly sold more but the money remains unaccounted for.
Brazil's big trade players in Africa
by David Cutler
Brazil works hard to increase trade with Africa. Here's a look at the big players:
* Mining giant Vale is to invest a total of $15-20 billion in Africa within the next five years with most of the money spent in Mozambique, Zambia, Guinea and Liberia. The aim is to become the third-biggest copper producer on the continent. Total investment in Africa so far is about $2.5 billion but as most of the projects are in the exploration phase, there is a chance to significantly increase investment.
*Infrastructure firm Odebrecht operates in Angola, Lybia, Liberia, Mozambique and Ghana and has also completed projects in Congo, Botswana, South Africa, Gabon and Djibouti. In 2009, Africa accounted for $2.427 billion in revenues for the group, or about 10 percent of its earnings.
*Oil company Petrobras plans to invest some $3 billion in Africa from now until 2013, mainly in Angola and Nigeria. Following 2009 discoveries of huge reserves far below ultra-deep waters off the Brazilian coast, some experts believe similar deposits may exist along the West African coast. In Nigeria the company operates one block and is a non-operating partner in two others.
*Agriculture is one of the main areas of technical cooperation with Africa. Brazil provides technical assistance to the cotton sector in Benin, Burkina-Faso, Chad and Mali through EMBRAPA, a state agricultural research institute. In 2008, Brazil opened an EMBRAPA office in Accra to facilitate the transfer of agricultural technology from Brazil to Africa.
Reuters
Brazil works hard to increase trade with Africa. Here's a look at the big players:
* Mining giant Vale is to invest a total of $15-20 billion in Africa within the next five years with most of the money spent in Mozambique, Zambia, Guinea and Liberia. The aim is to become the third-biggest copper producer on the continent. Total investment in Africa so far is about $2.5 billion but as most of the projects are in the exploration phase, there is a chance to significantly increase investment.
*Infrastructure firm Odebrecht operates in Angola, Lybia, Liberia, Mozambique and Ghana and has also completed projects in Congo, Botswana, South Africa, Gabon and Djibouti. In 2009, Africa accounted for $2.427 billion in revenues for the group, or about 10 percent of its earnings.
*Oil company Petrobras plans to invest some $3 billion in Africa from now until 2013, mainly in Angola and Nigeria. Following 2009 discoveries of huge reserves far below ultra-deep waters off the Brazilian coast, some experts believe similar deposits may exist along the West African coast. In Nigeria the company operates one block and is a non-operating partner in two others.
*Agriculture is one of the main areas of technical cooperation with Africa. Brazil provides technical assistance to the cotton sector in Benin, Burkina-Faso, Chad and Mali through EMBRAPA, a state agricultural research institute. In 2008, Brazil opened an EMBRAPA office in Accra to facilitate the transfer of agricultural technology from Brazil to Africa.
Reuters
Ivory Coast banks close amidst crisis
by Pauline Bax
Morocco’s Attijariwafa Bank said on February 21 it has closed its unit in Ivory Coast, becoming at least the 10th lender to halt operations as the West African nation’s financial system collapses and concern mounts of renewed violence.
The unit, Societe Ivoirienne de Banque, closed because of the “deterioration of the situation in the financial sector,” according to a statement published late yesterday. The head offices of other major banks were still closed this morning in the commercial capital, Abidjan, including the units of BNP Paribas SA, Societe Generale SA and Ecobank Transnational Inc.
The banks closed last week citing security concerns following a disputed Nov. 28 presidential election that left the country with two rival administrations. Alassane Ouattara is the internationally recognized winner of the vote, while Laurent Gbagbo refuses to cede power, alleging fraud in parts of the north.
“The absence of a properly functioning banking system will rapidly bring the entire economy to its knees,” said Samir Gadio, emerging-markets analyst at Standard Bank Plc, in an e- mailed note Feb. 18.
Some shops in the Abidjan neighborhood of Adjame, a main commercial hub, were closed today. “Everybody here is worried about safety, we have been told it’s better to stay at home today,” said Malick Konate, a shop owner, by phone.
The unit, Societe Ivoirienne de Banque, closed because of the “deterioration of the situation in the financial sector,” according to a statement published late yesterday. The head offices of other major banks were still closed this morning in the commercial capital, Abidjan, including the units of BNP Paribas SA, Societe Generale SA and Ecobank Transnational Inc.
The banks closed last week citing security concerns following a disputed Nov. 28 presidential election that left the country with two rival administrations. Alassane Ouattara is the internationally recognized winner of the vote, while Laurent Gbagbo refuses to cede power, alleging fraud in parts of the north.
“The absence of a properly functioning banking system will rapidly bring the entire economy to its knees,” said Samir Gadio, emerging-markets analyst at Standard Bank Plc, in an e- mailed note Feb. 18.
Some shops in the Abidjan neighborhood of Adjame, a main commercial hub, were closed today. “Everybody here is worried about safety, we have been told it’s better to stay at home today,” said Malick Konate, a shop owner, by phone.
U.S. needs a new trade framework for Africa
by Witney Schneidman
As the White House scrambles to keep pace with the fast changes taking place across North Africa, the administration should reassess another vital aspect of U.S. policy toward the continent – preferential trade.
For more than a decade, the African Growth and Opportunity Act (Agoa) has been the cornerstone of commercial and trade relations between the United States and sub-Saharan Africa. By providing African countries with non-reciprocal access to the American market, Agoa was a bold effort to employ trade as a stimulus for economic development.
The story of Agoa, unfortunately, is that of a promise unfulfilled.
The United States and Africa should move beyond the arrangement toward free trade agreements when Agoa expires in 2015, especially with middle-income African nations. Meanwhile, more can be done to enhance U.S.-Africa commercial relations.
Of the more than 6,000 products that can be exported to the United States duty- and quota-free under Agoa, only 50 of the exempted categories have been utilized. For the last decade, petroleum products have accounted for more than 90 percent of all U.S. imports under Agoa.
Thirty-eight countries in sub-Saharan Africa are Agoa beneficiaries, but only a few have taken meaningful advantage of the trade legislation. These include South Africa, Lesotho, Swaziland, Kenya, Mauritius and Madagascar (which was suspended in 2009).
Agoa is credited with creating some 300,000 jobs on the continent. Measured against a labor force of over 300 million, however, and with half of Africa's youth unemployed, Agoa has not created sufficient jobs to make the intended impact.
As someone who worked to formulate and implement Agoa - both while serving in the administration of Bill Clinton and, more recently, through private sector work – I do not advance these conclusions lightly. But this is the true picture, as I see it.
To complicate matters further, the United States is in the process of being shut out of the African market.
China has overtaken America as Africa's largest trading partner, and its trade with Africa has expanded 30 percent annually for the last decade. During the last five years, China has invested over U.S.$43 billion in the region and has signed bilateral trade deals with 45 African countries.
As significantly, the European Union has initiated or concluded Economic Partnership Agreements (EPAs) with a similar number of countries, guaranteeing European companies preferential treatment. South Africa's trade and industry minister, Rob Davies, expects the Southern Africa Development Community, representing a regional market of over 200 million people, to finish an EPA by mid-2011.
The administration of George Bush spent three years trying to negotiate a free trade agreement with the Southern African Customs Union. The effort failed, in part due to South Africa - the largest Agoa beneficiary. South Africa concluded that the cost of granting reciprocal access to its markets made no sense given the unilateral benefits the country enjoys exporting into the U.S. market.
So how does the administration of Barack Obama build on Agoa and create a more sustainable relationship that benefits both Africa and the United States?
First, Washington needs to broaden its engagement in Africa beyond crisis diplomacy and such development initiatives as Feed the Future and Millennium Challenge Compacts, as important as those are. The town hall meeting convened by the White House in August with youth from 40 African countries to celebrate Africa's half-century of independence was a welcome show of support for the continent's future leaders.
The administration should now engage broadly with Africa's current leaders. There are regular U.S. summits with Europe, Asia and Latin America. Similar sessions with Africa would enhance cooperation at the highest levels and promote partnerships around common priorities, from conflict resolution to global warming and trade and investment.
More immediately, the Obama administration needs to energize the U.S. commercial presence in Africa. With 300 million middle income consumers, a rate of return on foreign investment higher than any other developing region, and a regional economy projected to grow at annual average rate of seven percent over the next 20 years, according to Standard Chartered Bank, the United States cannot afford to ignore the African market.
An initial step should be to step up our commercial diplomacy. Almost a decade has passed since a secretary of commerce visited the region. The new White House chief of staff, William Daley, led one of the last trade missions to the continent when he served in former president Clinton's Cabinet in the late 1990s.
Work should also begin on a free trade agreement with the East African Community, made up of Kenya, Uganda, Tanzania, Rwanda and Burundi, and to include South Sudan after it formally becomes a nation in July.
The region is a market of 126 million with a combined GDP of $80 billion - roughly the size of Vietnam. With an annual growth rate of five percent for the last decade, East Africa represents an attractive American trading partner.
The reality is that doing business in Africa does not even qualify as an afterthought for most American companies. Yet it is a market with more consumers than India.
A larger U.S. commercial presence would bolster progress in governance and economic growth and would positively impact other U.S. interests such as access to natural resources, deepening democracy and transparency, and accelerating economic development.
Last month, the White House said that President Obama is "quietly but strategically" stepping up his engagement in Africa. It is a strategic U.S. interest not to be sidelined on a fast-growing continent.
It is also in American as well as African interests to develop commercial policies that encourage and enable American companies to take advantage of Africa's expanding opportunities – in agriculture, infrastructure, services, retail, finance and other sectors.
And President Obama should make a lot of noise doing it.
allafrica.com
As the White House scrambles to keep pace with the fast changes taking place across North Africa, the administration should reassess another vital aspect of U.S. policy toward the continent – preferential trade.
For more than a decade, the African Growth and Opportunity Act (Agoa) has been the cornerstone of commercial and trade relations between the United States and sub-Saharan Africa. By providing African countries with non-reciprocal access to the American market, Agoa was a bold effort to employ trade as a stimulus for economic development.
The story of Agoa, unfortunately, is that of a promise unfulfilled.
The United States and Africa should move beyond the arrangement toward free trade agreements when Agoa expires in 2015, especially with middle-income African nations. Meanwhile, more can be done to enhance U.S.-Africa commercial relations.
Of the more than 6,000 products that can be exported to the United States duty- and quota-free under Agoa, only 50 of the exempted categories have been utilized. For the last decade, petroleum products have accounted for more than 90 percent of all U.S. imports under Agoa.
Thirty-eight countries in sub-Saharan Africa are Agoa beneficiaries, but only a few have taken meaningful advantage of the trade legislation. These include South Africa, Lesotho, Swaziland, Kenya, Mauritius and Madagascar (which was suspended in 2009).
Agoa is credited with creating some 300,000 jobs on the continent. Measured against a labor force of over 300 million, however, and with half of Africa's youth unemployed, Agoa has not created sufficient jobs to make the intended impact.
As someone who worked to formulate and implement Agoa - both while serving in the administration of Bill Clinton and, more recently, through private sector work – I do not advance these conclusions lightly. But this is the true picture, as I see it.
To complicate matters further, the United States is in the process of being shut out of the African market.
China has overtaken America as Africa's largest trading partner, and its trade with Africa has expanded 30 percent annually for the last decade. During the last five years, China has invested over U.S.$43 billion in the region and has signed bilateral trade deals with 45 African countries.
As significantly, the European Union has initiated or concluded Economic Partnership Agreements (EPAs) with a similar number of countries, guaranteeing European companies preferential treatment. South Africa's trade and industry minister, Rob Davies, expects the Southern Africa Development Community, representing a regional market of over 200 million people, to finish an EPA by mid-2011.
The administration of George Bush spent three years trying to negotiate a free trade agreement with the Southern African Customs Union. The effort failed, in part due to South Africa - the largest Agoa beneficiary. South Africa concluded that the cost of granting reciprocal access to its markets made no sense given the unilateral benefits the country enjoys exporting into the U.S. market.
So how does the administration of Barack Obama build on Agoa and create a more sustainable relationship that benefits both Africa and the United States?
First, Washington needs to broaden its engagement in Africa beyond crisis diplomacy and such development initiatives as Feed the Future and Millennium Challenge Compacts, as important as those are. The town hall meeting convened by the White House in August with youth from 40 African countries to celebrate Africa's half-century of independence was a welcome show of support for the continent's future leaders.
The administration should now engage broadly with Africa's current leaders. There are regular U.S. summits with Europe, Asia and Latin America. Similar sessions with Africa would enhance cooperation at the highest levels and promote partnerships around common priorities, from conflict resolution to global warming and trade and investment.
More immediately, the Obama administration needs to energize the U.S. commercial presence in Africa. With 300 million middle income consumers, a rate of return on foreign investment higher than any other developing region, and a regional economy projected to grow at annual average rate of seven percent over the next 20 years, according to Standard Chartered Bank, the United States cannot afford to ignore the African market.
An initial step should be to step up our commercial diplomacy. Almost a decade has passed since a secretary of commerce visited the region. The new White House chief of staff, William Daley, led one of the last trade missions to the continent when he served in former president Clinton's Cabinet in the late 1990s.
Work should also begin on a free trade agreement with the East African Community, made up of Kenya, Uganda, Tanzania, Rwanda and Burundi, and to include South Sudan after it formally becomes a nation in July.
The region is a market of 126 million with a combined GDP of $80 billion - roughly the size of Vietnam. With an annual growth rate of five percent for the last decade, East Africa represents an attractive American trading partner.
The reality is that doing business in Africa does not even qualify as an afterthought for most American companies. Yet it is a market with more consumers than India.
A larger U.S. commercial presence would bolster progress in governance and economic growth and would positively impact other U.S. interests such as access to natural resources, deepening democracy and transparency, and accelerating economic development.
Last month, the White House said that President Obama is "quietly but strategically" stepping up his engagement in Africa. It is a strategic U.S. interest not to be sidelined on a fast-growing continent.
It is also in American as well as African interests to develop commercial policies that encourage and enable American companies to take advantage of Africa's expanding opportunities – in agriculture, infrastructure, services, retail, finance and other sectors.
And President Obama should make a lot of noise doing it.
allafrica.com
Mozambique aims to attract $4 billion in foreign investment in 2011
by Fred Katerere
Mozambique aims to attract $4 billion in foreign direct investment this year, double last year’s figure, the head of the state-run Investment Promotion Center Lourenco Sambo said February 24.
The southern African nation expects investment in agriculture, mining, energy and infrastructure from India, China and Europe, Sambo said in an interview in Maputo, Mozambique’s capital.
A government delegation led by Prime Minister Aires Ali is expected to visit India next month on a trade mission to woo investors, he said.
Agriculture will be the priority of the mission, Sambo said, so Mozambique can improve productivity to reduce its dependence on imports and bring down food prices.
Mozambique aims to attract $4 billion in foreign direct investment this year, double last year’s figure, the head of the state-run Investment Promotion Center Lourenco Sambo said February 24.
The southern African nation expects investment in agriculture, mining, energy and infrastructure from India, China and Europe, Sambo said in an interview in Maputo, Mozambique’s capital.
A government delegation led by Prime Minister Aires Ali is expected to visit India next month on a trade mission to woo investors, he said.
Agriculture will be the priority of the mission, Sambo said, so Mozambique can improve productivity to reduce its dependence on imports and bring down food prices.
Lesotho plans for life without U.S. trade lifeline AGOA
by Robyn Curnow
All around Lesotho, the tiny nation surrounded by South Africa, thousands of workers ply their trade in the country's many textile factories.
For 35-year-old Esther Maphatle, her job demands that she stands on the production line for sometimes 10 hours a day, looking through pair after pair of jeans for imperfections.
But Maphatle, who is HIV-positive, doesn't complain about the strenuous task. She is considered to be among the lucky ones to have a job in a country where nearly half the population is unemployed and one in four is HIV-positive or has AIDS.
"It's better to work in this factory, because if I didn't work in this factory, maybe I think I would be dead," said Maphatle, who works at the Taiwanese-run Nien Hsing garment factory in Lesotho's capital city of Maseru.
Lesotho is one of Africa's largest textile manufacturers, boasting some 40 cloth and apparel plants, most of which are owned by Asian immigrants.
The country's industry has been boosted in recent years by the influx of Asian investors who haven taken advantage of the African Growth and Opportunities Act (AGOA), a tariff-preference program designed to help Africa achieve greater prosperity.
Passed by the U.S. Congress in 2004, AGOA provides duty-free access to the U.S. market for a number of products, including apparel, made in qualifying sub-Saharan countries.
"I think Lesotho is a good example of how even the poorest countries can begin to take advantage of more open markets, if those opportunities in the global markets are made available to them -- and Lesotho has taken advantage of the African Growth and Opportunities Act," said Faizel Ismail, South African trade representative to the World Trade Organization.
The act has given textile manufacturers in Lesotho a big advantage over their international competitors, helping the country become Africa's largest exporter of garments to the United States.
The industry has now grown to be Lesotho's single largest employer with some 40,000 jobs, compared to only about 10,000 in 1999.
But with AGOA poised to expire in 2015, Lesotho's preferential status with the United States is under threat. On top of that, the act will require countries to source fabric locally from next year, a condition that Lesotho is unlikely to meet.
Lin Chin Yi, the head of the Nien Hsing group, said the end of the AGOA deal would signal a crisis for Lesotho's textile manufacturers. Without the act, he said, it would be difficult for the country's producers to compete against other regions, especially Asia.
For the industry to survive, analysts say, it must end its reliance on AGOA.
"Lesotho must begin now to develop its strategy to diversify from a dependence on this preference and move into areas where it can become more competitive and develop niche products," Ismail said.
According to Lin, whose company has some 2,200 employees, the industry is already working toward that direction, finding its niche by transforming Lesotho into a maker of ethically sourced products. He says that in Lesotho there is no child or forced labor, with each factory trying to provide a comfortable working environment for its employees.
This means that workers in the industry earn a salary that is five times higher than in Bangladesh and two to three times higher than in China.
It also means that women like Maphatle have access to HIV/AIDS treatment on site.
"Buyers can feel at ease sourcing the products, knowing the workers in those factories are cared for," said Bart Vander Plaetse, who runs the Apparel Lesotho Alliance to fight AIDS.
But while Vander Plaetse stressed that turning Lesotho into a sweat-free label is a good prospect for workers, he added that it remains to be seen whether it will be good for business.
The real test for Lesotho will come when preferential treatment from the United States ends and U.S. consumers are asked to pay more for clothes made in Lesotho.
CNN
All around Lesotho, the tiny nation surrounded by South Africa, thousands of workers ply their trade in the country's many textile factories.
For 35-year-old Esther Maphatle, her job demands that she stands on the production line for sometimes 10 hours a day, looking through pair after pair of jeans for imperfections.
But Maphatle, who is HIV-positive, doesn't complain about the strenuous task. She is considered to be among the lucky ones to have a job in a country where nearly half the population is unemployed and one in four is HIV-positive or has AIDS.
"It's better to work in this factory, because if I didn't work in this factory, maybe I think I would be dead," said Maphatle, who works at the Taiwanese-run Nien Hsing garment factory in Lesotho's capital city of Maseru.
Lesotho is one of Africa's largest textile manufacturers, boasting some 40 cloth and apparel plants, most of which are owned by Asian immigrants.
The country's industry has been boosted in recent years by the influx of Asian investors who haven taken advantage of the African Growth and Opportunities Act (AGOA), a tariff-preference program designed to help Africa achieve greater prosperity.
Passed by the U.S. Congress in 2004, AGOA provides duty-free access to the U.S. market for a number of products, including apparel, made in qualifying sub-Saharan countries.
"I think Lesotho is a good example of how even the poorest countries can begin to take advantage of more open markets, if those opportunities in the global markets are made available to them -- and Lesotho has taken advantage of the African Growth and Opportunities Act," said Faizel Ismail, South African trade representative to the World Trade Organization.
The act has given textile manufacturers in Lesotho a big advantage over their international competitors, helping the country become Africa's largest exporter of garments to the United States.
The industry has now grown to be Lesotho's single largest employer with some 40,000 jobs, compared to only about 10,000 in 1999.
But with AGOA poised to expire in 2015, Lesotho's preferential status with the United States is under threat. On top of that, the act will require countries to source fabric locally from next year, a condition that Lesotho is unlikely to meet.
Lin Chin Yi, the head of the Nien Hsing group, said the end of the AGOA deal would signal a crisis for Lesotho's textile manufacturers. Without the act, he said, it would be difficult for the country's producers to compete against other regions, especially Asia.
For the industry to survive, analysts say, it must end its reliance on AGOA.
"Lesotho must begin now to develop its strategy to diversify from a dependence on this preference and move into areas where it can become more competitive and develop niche products," Ismail said.
According to Lin, whose company has some 2,200 employees, the industry is already working toward that direction, finding its niche by transforming Lesotho into a maker of ethically sourced products. He says that in Lesotho there is no child or forced labor, with each factory trying to provide a comfortable working environment for its employees.
This means that workers in the industry earn a salary that is five times higher than in Bangladesh and two to three times higher than in China.
It also means that women like Maphatle have access to HIV/AIDS treatment on site.
"Buyers can feel at ease sourcing the products, knowing the workers in those factories are cared for," said Bart Vander Plaetse, who runs the Apparel Lesotho Alliance to fight AIDS.
But while Vander Plaetse stressed that turning Lesotho into a sweat-free label is a good prospect for workers, he added that it remains to be seen whether it will be good for business.
The real test for Lesotho will come when preferential treatment from the United States ends and U.S. consumers are asked to pay more for clothes made in Lesotho.
CNN
Malaysia aims for double-digit growth in trade with South Africa
Malaysia expects to see double-digit growth in annual trade with South Africa this year, says Malaysia External Trade Development Corporation (Matrade).
Chief Executive Officer Datuk Noharuddin Nordin said Malaysia's total trade with South Africa last year was 35 per cent higher than in 2009, amounting to RM5.3 billion, with exports totalling RM2.79 billion and imports RM2.57 billion.
Globally, South Africa ranks Malaysia's 25th largest trading partner, and among African countries, South Africa was Malaysia's largest trading partner last year.
"It was also the second largest export destination and the largest source of import last year, he told reporters after delivering his welcoming speech at a "Doing Business in South Africa" seminar.
Malaysia's major exports to South Africa are electrical and electronic products, palm oil-based products, chemical and chemical products and processed food.
"There are a lot of opportunities there. Matrade is not only looking to just invest, but want Malaysian businessmen to explore and market their products and services and make South Africa the gateway to other African nations," he said.
Meanwhile, South Africa's major imports are iron and steel products, metalliferious ores, metal scrap and metal manufactures.
Last year, Malaysia was the 23rd largest export market and 20th biggest source of imports in South Africa.
South Africa's High Commissioner to Malaysia Thami Mseleku, who was at the seminar, said businessmen in his country were looking for competitive products.
In Asian context, he said, Malaysia produced good quality products compared to China even though they may be cheaper.
Meanwhile, market intelligence compiled by Matrade showed franchising was one of the business sectors that contributed to South Africa's economy, which could be one of the opportunities for Malaysia.
Another opportunity was in the security services as currently South Africa was really concerned about security and was willing to pay up to 50 billion rands per year to be safe, according to the intelligence report.
Bernama
Chief Executive Officer Datuk Noharuddin Nordin said Malaysia's total trade with South Africa last year was 35 per cent higher than in 2009, amounting to RM5.3 billion, with exports totalling RM2.79 billion and imports RM2.57 billion.
Globally, South Africa ranks Malaysia's 25th largest trading partner, and among African countries, South Africa was Malaysia's largest trading partner last year.
"It was also the second largest export destination and the largest source of import last year, he told reporters after delivering his welcoming speech at a "Doing Business in South Africa" seminar.
Malaysia's major exports to South Africa are electrical and electronic products, palm oil-based products, chemical and chemical products and processed food.
"There are a lot of opportunities there. Matrade is not only looking to just invest, but want Malaysian businessmen to explore and market their products and services and make South Africa the gateway to other African nations," he said.
Meanwhile, South Africa's major imports are iron and steel products, metalliferious ores, metal scrap and metal manufactures.
Last year, Malaysia was the 23rd largest export market and 20th biggest source of imports in South Africa.
South Africa's High Commissioner to Malaysia Thami Mseleku, who was at the seminar, said businessmen in his country were looking for competitive products.
In Asian context, he said, Malaysia produced good quality products compared to China even though they may be cheaper.
Meanwhile, market intelligence compiled by Matrade showed franchising was one of the business sectors that contributed to South Africa's economy, which could be one of the opportunities for Malaysia.
Another opportunity was in the security services as currently South Africa was really concerned about security and was willing to pay up to 50 billion rands per year to be safe, according to the intelligence report.
Bernama
Mining bosses wary of doing business in South Africa over nationalization fears
by Mandy Rossouw
"If my clients want to invest billions of rands in your mining industry but they're worried about nationalisation, I'll tell them to rather go to West Africa. Things are better there."
These chilling words from a South African adviser to one of the world's largest mining companies graphically underscores the effect that South Africa's nationalisation "debate" has had on foreign perceptions.
At the African mining indaba hosted by the South African government this week in Cape Town, the Mail & Guardian spoke to representatives from large mining concerns. They asked for their names not to be published.
The adviser said that he was telling clients to "tread carefully" when it came to investing in South Africa.
"Business operates on sentiment -- it reacts to what is being debated, not necessarily what has been decided," he said. "So the minister [of mineral resources, Susan Shabangu] can say government is not nationalising now, but what happens in the future?
"Those are risks we can't take and we're saying to clients you may have better and more exciting prospects in West Africa."
The mining ministries of West African countries, including Gabon, Ghana and Guinea, were well represented at the indaba but the most popular was the Democratic Republic of Congo. Even the government of Afghanistan hired a stall at the indaba, which drew more than 5 000 delegates, according to government officials.
Although delegates say a strategy is under way to develop an industry position on nationalisation, industry players are wary of talking about it because this might imply that companies "have accepted nationalisation and are now willing to discuss the modalities," one delegate said.
A South African delegate, linked to an international mining company with interests in many parts of Africa, said bluntly that foreign direct investment in South African mining ventures had already declined.
"There's been a sense of holding back. There are so many resources in this country. South Africa is considered one of the most underinvested countries. But this debate is making people take a wait-and-see approach because they're worried about security of tenure," the delegate said.
Delegates said that mining operations required investments that could span two decades. "They don't just think of what is happening right now, they're thinking generations ahead," another delegate said.
Shabangu drew the ire of the stridently pro-nationalisation ANC Youth League recently when she told indaba delegates that nationalisation was "not the option" for South Africa. Anglo American chief executive Cynthia Carroll added fuel to the fire by saying mining companies would not invest if they could not be sure that the assets they created would be secure.
"In ignoring this truth, the false prophets who argue for nationalisation are advocating the road to ruin, a path we must not follow."
Hitting back, the league called for "maximum [ANC] discipline" for Shabangu, presumably on the grounds that she pre-empted the ANC's internal inquiry into the merits of nationalisation. But government insiders said her position as a member of the ANC's national working committee member meant that she had the backing of the party's top leadership.
Government officials continue to insist that the nationalisation debate has no influence on decisions by mining companies to do business in South Africa.
Said one: "The Carrolls of the world know government is not going to wake up one day and tell them their time is over. No CEOs [chief executive officers] are losing sleep over [ANC youth leader] Julius Malema's comments," a mining official said.
Shabangu plans to travel to the United States later this year to explain to shareholders of mining companies that nationalisation poses no threat to their assets. She was due to begin her charm offensive last November, but moved the trip to 2011.
"The problem is that the money that Anglo invests in mining in South Africa comes from pension funds around the world. People know what happens to their investments if Anglo's share price drops," said an official involved in planning the visit.
Bheki Khumalo, Shabangu's spokesperson, said the government was working on factors that could inhibit investment, such as a complicated regulatory environment and the lack of dependable energy. Also being studied was the removal of the human element in the granting of mining licences to lessen the risk of corruption.
Mail and Guardian
Ghana is UK's 10th largest African export market
Mr Henry Bellingham, UK Foreign and Commonwealth Office Minister has said Ghana ranked the 10th largest export market and the 12th largest import market in Africa to his country.
"Ghana's export partners includes The Netherlands 13.45 per cent; UK 7.87 per cent; France 5.85 per cent; Ukraine 5.84 per cent and Malaysia 3.97 per cent, whilst the import partners include China 16.8 per cent; Nigeria 11.88 per cent; United States 6.63 per cent; Cote d'Ivoire 5.99 per cent; India 5.57 per cent; France 5.09 per cent; and the UK, 4.23 per cent.
"Top export from the UK to Ghana, textile fibres hits 31 million pounds; miscellaneous manufactured articles 22 million pounds; general industrial machinery and equipment 21 million pounds, whilst top imports to the UK from Ghana covers cocoa and spices 95 million pounds; fish and preparations thereof 51 million pounds and vegetables and fruits 25 million pounds," Mr Bellingham said at a public lecture in Accra.
The public lecture on the theme: "Shared Prosperity, Shared Security and Shared Values; A Solid Foundation for the Future," was organised by the Institute of Economic Affairs and attended by Vice President John Dramani Mahama, Ministers of State, politicians, economic experts and media practitioners.
Mr Bellingham outlined new initiatives launched in the UK Government's Trade and Investment White paper to boost African trade through reduced bureaucracy, improve transport infrastructure and more efficient border crossings.
"Under the African Free Trade Initiative (AFTI), the UK will provide technical expertise to help unblock issues that continue to hold back economic growth across the region. This will include advising African countries on the design of border posts, infrastructure investment and analysis of major transport bottlenecks.
"Expected results include cutting the time it takes to travel the length of Africa's north-south corridor from nine to seven days. The initiative will help break down trade barriers and open up opportunities for entrepreneurs, both large and small, to access new markets and invest in expanding production and trade," he stated.
GNA
"Ghana's export partners includes The Netherlands 13.45 per cent; UK 7.87 per cent; France 5.85 per cent; Ukraine 5.84 per cent and Malaysia 3.97 per cent, whilst the import partners include China 16.8 per cent; Nigeria 11.88 per cent; United States 6.63 per cent; Cote d'Ivoire 5.99 per cent; India 5.57 per cent; France 5.09 per cent; and the UK, 4.23 per cent.
"Top export from the UK to Ghana, textile fibres hits 31 million pounds; miscellaneous manufactured articles 22 million pounds; general industrial machinery and equipment 21 million pounds, whilst top imports to the UK from Ghana covers cocoa and spices 95 million pounds; fish and preparations thereof 51 million pounds and vegetables and fruits 25 million pounds," Mr Bellingham said at a public lecture in Accra.
The public lecture on the theme: "Shared Prosperity, Shared Security and Shared Values; A Solid Foundation for the Future," was organised by the Institute of Economic Affairs and attended by Vice President John Dramani Mahama, Ministers of State, politicians, economic experts and media practitioners.
Mr Bellingham outlined new initiatives launched in the UK Government's Trade and Investment White paper to boost African trade through reduced bureaucracy, improve transport infrastructure and more efficient border crossings.
"Under the African Free Trade Initiative (AFTI), the UK will provide technical expertise to help unblock issues that continue to hold back economic growth across the region. This will include advising African countries on the design of border posts, infrastructure investment and analysis of major transport bottlenecks.
"Expected results include cutting the time it takes to travel the length of Africa's north-south corridor from nine to seven days. The initiative will help break down trade barriers and open up opportunities for entrepreneurs, both large and small, to access new markets and invest in expanding production and trade," he stated.
GNA
China to crack down on counterfeit exports to Africa
China's Ministry of Commerce said on February 19 that eight major exporting regions have been ordered to set out specific plans to crack down on the export of pirated and counterfeit products to African nations.
The move is designed to contain an issue which has the potential to harm further economic cooperation between the two sides.
The ministry, which is heading a six-month campaign to combat infringements of intellectual property rights (IPR), summoned commerce directors from eight regions to discuss the issue.
"To clamp down on counterfeit commodities in China's exports to Africa is a crucial part of the whole campaign," said Jiang Zengwei, vice-minister of commerce and also director of the national leadership team of the six-month campaign.
The eight regions include Beijing and Shanghai municipalities, as well as the provinces of Jiangsu, Guangdong and Zhejiang.
According to the ministry, the local governments are required to investigate large-scale, high-profile cases and expose them to the public as a warning to illegal manufacturers and traders. Each region has been told to produce a plan of action and a schedule for the campaign.
The move followed a pledge by eight major Chinese export associations on February 18 to prevent counterfeit products being exported to Africa.
China emerged as the continent's largest trading partner in 2010, outpacing the European Union and the United States.
Last year, bilateral trade jumped to a record US$126.9 billion, with Chinese investment exceeding $1 billion, according to the ministry.
However, counterfeit products have often been found among the growing number of Chinese exports to Africa. Most of these fake products were discovered in the areas of textiles, medicine, electrical appliances and food. As such, they have the potential to hinder the future development of the Sino-African economic relationship, according to experts.
The Beijing-based magazine, Africa, said data from the Kenya Association of Manufacturers showed that counterfeit products cost Kenyan businesses more than US$650 million in 2008 alone, in addition to lost taxes totaling $250 million. Most of these commodities were made in China, according to the report.
"Low-quality Chinese products in the African market have been a long-standing issue and the reasons are complicated," said Yang Lihua, director of the Center of Southern African Studies at the Chinese Academy of Social Sciences.
"People in Africa with low incomes prefer lower-priced goods, but those prices often result in goods of poorer quality," she explained.
Chen Deming, China's minister of commerce, said on Friday, during the final day of his visit to Morocco, Equatorial Guinea and Ghana, that China will further boost bilateral trade with Africa and promote the export of quality products to the region, according to an interview with the Xinhua News Agency.
"China will expand its imports of high value-added merchandise from Africa while encouraging large-scale Chinese enterprises to set up logistic hubs in the continent," Chen said.
www.china.org.cn
The move is designed to contain an issue which has the potential to harm further economic cooperation between the two sides.
The ministry, which is heading a six-month campaign to combat infringements of intellectual property rights (IPR), summoned commerce directors from eight regions to discuss the issue.
"To clamp down on counterfeit commodities in China's exports to Africa is a crucial part of the whole campaign," said Jiang Zengwei, vice-minister of commerce and also director of the national leadership team of the six-month campaign.
The eight regions include Beijing and Shanghai municipalities, as well as the provinces of Jiangsu, Guangdong and Zhejiang.
According to the ministry, the local governments are required to investigate large-scale, high-profile cases and expose them to the public as a warning to illegal manufacturers and traders. Each region has been told to produce a plan of action and a schedule for the campaign.
The move followed a pledge by eight major Chinese export associations on February 18 to prevent counterfeit products being exported to Africa.
China emerged as the continent's largest trading partner in 2010, outpacing the European Union and the United States.
Last year, bilateral trade jumped to a record US$126.9 billion, with Chinese investment exceeding $1 billion, according to the ministry.
However, counterfeit products have often been found among the growing number of Chinese exports to Africa. Most of these fake products were discovered in the areas of textiles, medicine, electrical appliances and food. As such, they have the potential to hinder the future development of the Sino-African economic relationship, according to experts.
The Beijing-based magazine, Africa, said data from the Kenya Association of Manufacturers showed that counterfeit products cost Kenyan businesses more than US$650 million in 2008 alone, in addition to lost taxes totaling $250 million. Most of these commodities were made in China, according to the report.
"Low-quality Chinese products in the African market have been a long-standing issue and the reasons are complicated," said Yang Lihua, director of the Center of Southern African Studies at the Chinese Academy of Social Sciences.
"People in Africa with low incomes prefer lower-priced goods, but those prices often result in goods of poorer quality," she explained.
Chen Deming, China's minister of commerce, said on Friday, during the final day of his visit to Morocco, Equatorial Guinea and Ghana, that China will further boost bilateral trade with Africa and promote the export of quality products to the region, according to an interview with the Xinhua News Agency.
"China will expand its imports of high value-added merchandise from Africa while encouraging large-scale Chinese enterprises to set up logistic hubs in the continent," Chen said.
www.china.org.cn
Shell Oil pulls out of African downstream market
The major oil company Shell has sold its downstream businesses in 14 African countries for around US$ 1 billion. Shell products however still would be sold to Africa.
The giant transaction was announced by the oil product trading company Vitol and the "Africa-focused" finance investor company Helios, which jointly were buying Royal Dutch Shell's downstream operations in most African countries. This included retail, commercial fuels, liquefied petroleum gas, lubricants, bitumen, aviation and marine products under the Shell brand.
Under the agreements, two new joint venture companies said they would "assure continued availability of Shell fuels and lubricants in 14 African countries under the Shell brand," according to a statement issued by the Vitol Group.
The signed-off deal covers existing Shell downstream businesses in Morocco, Tunisia, Egypt, Côte d'Ivoire, Burkina Faso, Ghana, Senegal, Mali, Guinea, Cape Verde, Kenya, Uganda, Madagascar and Mauritius.
"Shell's downstream businesses in Namibia, Botswana, Togo, Tanzania and La Réunion are under review for potential inclusion in the deal at a later date," according to the Vital statement.
However, Shell's fuels, lubricants and refining activities in South Africa, the company's lubricants business in Egypt and its exploration and production businesses, liquefied natural gas interests and most international trading activities in Africa were "not part the proposed deal."
"Africa is a continent we know well," stated Vital CEO Ian Taylor. "These two new ventures allow us to invest in Africa and its fast-growing economies, and grow all the businesses under the umbrella of the world-class Shell brand for the benefit of our customers," he added.
The deal, which now needs to be authorised by government in several countries, was set to be effectuated in the first half of 2012, the three companies noted.
The sale of most of Shell's downstream assets in Africa represents one of the largest business transactions ever done regarding the African consumer market. It comes at a time with massive economic growth in Africa and a strongly growing middle class all over the continent.
Afrol
The giant transaction was announced by the oil product trading company Vitol and the "Africa-focused" finance investor company Helios, which jointly were buying Royal Dutch Shell's downstream operations in most African countries. This included retail, commercial fuels, liquefied petroleum gas, lubricants, bitumen, aviation and marine products under the Shell brand.
Under the agreements, two new joint venture companies said they would "assure continued availability of Shell fuels and lubricants in 14 African countries under the Shell brand," according to a statement issued by the Vitol Group.
The signed-off deal covers existing Shell downstream businesses in Morocco, Tunisia, Egypt, Côte d'Ivoire, Burkina Faso, Ghana, Senegal, Mali, Guinea, Cape Verde, Kenya, Uganda, Madagascar and Mauritius.
"Shell's downstream businesses in Namibia, Botswana, Togo, Tanzania and La Réunion are under review for potential inclusion in the deal at a later date," according to the Vital statement.
However, Shell's fuels, lubricants and refining activities in South Africa, the company's lubricants business in Egypt and its exploration and production businesses, liquefied natural gas interests and most international trading activities in Africa were "not part the proposed deal."
"Africa is a continent we know well," stated Vital CEO Ian Taylor. "These two new ventures allow us to invest in Africa and its fast-growing economies, and grow all the businesses under the umbrella of the world-class Shell brand for the benefit of our customers," he added.
The deal, which now needs to be authorised by government in several countries, was set to be effectuated in the first half of 2012, the three companies noted.
The sale of most of Shell's downstream assets in Africa represents one of the largest business transactions ever done regarding the African consumer market. It comes at a time with massive economic growth in Africa and a strongly growing middle class all over the continent.
Afrol
South Africa losing interest in SADC Customs Union
by Servaas van den Bosch
A schism about the division of revenues in the world’s oldest customs union threatens to derail the process of regional economic integration in Southern Africa.
The internal problems plaguing the Southern African Customs Union (SACU) for the past year have entered a new phase. A concept study looking into revenue sharing from the SACU pool proposes a radical overhaul in which South Africa receives more money, while Botswana, Lesotho, Namibia and Swaziland (BLNS) see their shares drop.
In some cases this drop is significant. In the SACU-commissioned study the Australian Centre for International Economics proposes a drop in revenue for Swaziland from nine to three percent of the pool by 2019.
Botswana in the same period would go from 17 to a paltry 6.7 percent, while Namibia’s share declines from 15 to nine percent. Only Lesotho would see a marginal increase from 8.5 to nine percent.
South Africa, which presently receives less than 50 percent, would receive 72 percent of the pool.
While it is unlikely that the proposal will be accepted in its current form, it is a welcome stick for Pretoria. South Africa has long lamented the pressure the current system puts on its treasury while the BLNS states use their share to fill their coffers.
In the case of Swaziland, the mighty Congress of South African Trade Unions (COSATU) has openly condemned the use of SACU revenue for "extravagant activities such as the purchase of luxury cars for the king’s birthday," referring to the ruling autocrat Mswati III.
The South Africans want the money used for development while the BLNS argue it is a rightful compensation for allowing the sub-region’s behemoth to usurp their economic policy space.
"South Africa’s insistence on putting the money towards development projects might very well be interpreted as another drive to access markets for South African industry," says Sanusha Naidu, research director of communication network Fahamu’s emerging powers in Africa programme. "South Africa needs to take care it respects the sovereignty of the other members in the discussion that takes place."
This is a major concern in the region where South Africa’s dominance is increasingly frowned upon. It could harm the fragile process of regional integration in the Southern African Development Community (SADC). States Naidu: "SADC wants to have a fully fledged customs union by 2016. That means that SACU, as a building block for such a customs union, needs to sort out its issues."
The current tiff between the SACU members has a much wider impact, she argues. "It is not just about revenue sharing. The outcome of this process will affect how other SADC countries structure tariffs or introduce trade barriers."
On the other hand, as Roman Grynberg of the Botswana Institute of Development Policy Analysis recently pointed out in an opinion piece in the South African press, it is very unlikely that SACU would agree to let additional members benefit from the current revenue-sharing arrangement.
In that sense successful reform of SACU would be a prerequisite for building it into a larger SADC customs union.
"The showdown in SACU has been a long time coming," according to Paul Kruger, researcher with the independent Trade Law Centre of Southern Africa (TRALAC), based near Cape Town, South Africa. "Integration in the region will depend on the outcome of this process but South African policymakers have come to see SACU - with its common negotiating mechanisms - as an irritation."
This has consequences for the regional integration agenda: "South Africa is getting less and less interested in a SADC customs union. The other countries favour the idea because of the transfers they currently see in SACU but South Africa knows that, in a customs union, it is at the short end."
Instead, South Africa is eyeing a tripartite free trade area (FTA) between SADC, the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC), argues Kruger.
This would give Pretoria the benefits of liberalised trade without the headache of administering a customs union. Says Kruger: "South Africa has discovered a customs union is not necessary to access the benefits of liberalisation and lowering tariff barriers."
Moreover, South Africa’s foreign policy agenda has shifted since the formation of the India, Brazil, South Africa (IBSA) tripartite grouping and the invitation to South Africa to join the BRIC (Brazil, Russia, India and China) formation. It is keen to project itself as "the gateway to Africa" within these international partnerships.
Whether SACU can formulate a common outlook is unsure. "Namibia and South Africa seem to be playing a subtle game geared towards structural change in SACU," remarks South African trade expert Dot Keet. "Botswana is restructuring its economy entirely differently, while Swaziland and Lesotho are almost completely dependent on a combination of SACU revenue and foreign aid.
"It is possible that reform of the revenue stream will lead to a development fund, controlled for instance by the Development Bank of Southern Africa (DBSA). However, countries would need to be ensured proper representation on the board of such a fund for it to work," she adds.
But the problems in SACU might run too deep.
Grynberg warned that other SADC countries are weary of South Africa controlling almost all of the production benefits in SACU. Because of the customs union, SACU members have no means of protecting their industries from competition by South African products.
It is a point that was recently made by Namibian deputy finance minister Calle Schlettwein, chairperson of the workgroup tasked with SACU reform, when he said that South Africa’s dominance prohibits other countries from developing.
In the past, SACU revenue compensated for that. Abandoning this arrangement would cause polarisation, said Schlettwein, which could culminate in the trade barriers Naidu warns of. (END)
A schism about the division of revenues in the world’s oldest customs union threatens to derail the process of regional economic integration in Southern Africa.
The internal problems plaguing the Southern African Customs Union (SACU) for the past year have entered a new phase. A concept study looking into revenue sharing from the SACU pool proposes a radical overhaul in which South Africa receives more money, while Botswana, Lesotho, Namibia and Swaziland (BLNS) see their shares drop.
In some cases this drop is significant. In the SACU-commissioned study the Australian Centre for International Economics proposes a drop in revenue for Swaziland from nine to three percent of the pool by 2019.
Botswana in the same period would go from 17 to a paltry 6.7 percent, while Namibia’s share declines from 15 to nine percent. Only Lesotho would see a marginal increase from 8.5 to nine percent.
South Africa, which presently receives less than 50 percent, would receive 72 percent of the pool.
While it is unlikely that the proposal will be accepted in its current form, it is a welcome stick for Pretoria. South Africa has long lamented the pressure the current system puts on its treasury while the BLNS states use their share to fill their coffers.
In the case of Swaziland, the mighty Congress of South African Trade Unions (COSATU) has openly condemned the use of SACU revenue for "extravagant activities such as the purchase of luxury cars for the king’s birthday," referring to the ruling autocrat Mswati III.
The South Africans want the money used for development while the BLNS argue it is a rightful compensation for allowing the sub-region’s behemoth to usurp their economic policy space.
"South Africa’s insistence on putting the money towards development projects might very well be interpreted as another drive to access markets for South African industry," says Sanusha Naidu, research director of communication network Fahamu’s emerging powers in Africa programme. "South Africa needs to take care it respects the sovereignty of the other members in the discussion that takes place."
This is a major concern in the region where South Africa’s dominance is increasingly frowned upon. It could harm the fragile process of regional integration in the Southern African Development Community (SADC). States Naidu: "SADC wants to have a fully fledged customs union by 2016. That means that SACU, as a building block for such a customs union, needs to sort out its issues."
The current tiff between the SACU members has a much wider impact, she argues. "It is not just about revenue sharing. The outcome of this process will affect how other SADC countries structure tariffs or introduce trade barriers."
On the other hand, as Roman Grynberg of the Botswana Institute of Development Policy Analysis recently pointed out in an opinion piece in the South African press, it is very unlikely that SACU would agree to let additional members benefit from the current revenue-sharing arrangement.
In that sense successful reform of SACU would be a prerequisite for building it into a larger SADC customs union.
"The showdown in SACU has been a long time coming," according to Paul Kruger, researcher with the independent Trade Law Centre of Southern Africa (TRALAC), based near Cape Town, South Africa. "Integration in the region will depend on the outcome of this process but South African policymakers have come to see SACU - with its common negotiating mechanisms - as an irritation."
This has consequences for the regional integration agenda: "South Africa is getting less and less interested in a SADC customs union. The other countries favour the idea because of the transfers they currently see in SACU but South Africa knows that, in a customs union, it is at the short end."
Instead, South Africa is eyeing a tripartite free trade area (FTA) between SADC, the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC), argues Kruger.
This would give Pretoria the benefits of liberalised trade without the headache of administering a customs union. Says Kruger: "South Africa has discovered a customs union is not necessary to access the benefits of liberalisation and lowering tariff barriers."
Moreover, South Africa’s foreign policy agenda has shifted since the formation of the India, Brazil, South Africa (IBSA) tripartite grouping and the invitation to South Africa to join the BRIC (Brazil, Russia, India and China) formation. It is keen to project itself as "the gateway to Africa" within these international partnerships.
Whether SACU can formulate a common outlook is unsure. "Namibia and South Africa seem to be playing a subtle game geared towards structural change in SACU," remarks South African trade expert Dot Keet. "Botswana is restructuring its economy entirely differently, while Swaziland and Lesotho are almost completely dependent on a combination of SACU revenue and foreign aid.
"It is possible that reform of the revenue stream will lead to a development fund, controlled for instance by the Development Bank of Southern Africa (DBSA). However, countries would need to be ensured proper representation on the board of such a fund for it to work," she adds.
But the problems in SACU might run too deep.
Grynberg warned that other SADC countries are weary of South Africa controlling almost all of the production benefits in SACU. Because of the customs union, SACU members have no means of protecting their industries from competition by South African products.
It is a point that was recently made by Namibian deputy finance minister Calle Schlettwein, chairperson of the workgroup tasked with SACU reform, when he said that South Africa’s dominance prohibits other countries from developing.
In the past, SACU revenue compensated for that. Abandoning this arrangement would cause polarisation, said Schlettwein, which could culminate in the trade barriers Naidu warns of. (END)
U.S. anti-war rules on minerals may amount to an embargo on trade with central Africa
by Michael J. Kavanagh
U.S. rules aimed at stopping mineral sales from funding war in central Africa, and signed into law by President Barack Obama, will amount to a trade embargo on the region unless nations get more time to adapt, a Rwandan official said.
Guidelines for mineral smelters set by Electronic Industry Citizenship Coalition Inc., grouping companies including Apple Inc., IBM Corp. and Intel Corp., become effective April 1 after the new U.S. law required companies to confirm their purchases of gold, coltan, tungsten and tin ore from 10 African countries aren’t funding armed groups in the Democratic Republic of Congo.
“It was not the intention of the U.S. government to impose a trade embargo but unfortunately this may be the outcome if we don’t come to a workable solution,” Michael Biryabarema, director of Rwanda’s Geology and Mines Authority, said in a letter to the EICC.
Congo, economically exhausted from more than a decade of war, has failed to stamp out fighting in its mineral-rich eastern region bordering Uganda, Rwanda and Burundi. Industry programs to tag and trace coltan and tin from Congo and Rwanda began last year as armed groups and some members of the Congolese army support themselves and buy arms through illicit sales of minerals.
Rwanda, producer of about 5 percent of the world’s coltan and 4 percent of its tungsten, has asked the EICC for at least another year to prepare before the guidelines go into effect.
‘“Rwanda’s mineral exporters have been informed by all the large buyers that they are unable to take untagged, untraceable material after the end of March,” Biryabarema wrote in the letter. The reduction in purchases would affect 30,000 small miners and damage Rwanda’s mineral trade, which accounts for about 30 percent of the country’s exports, he said.
The EICC is reviewing the letter, spokeswoman Wendy Dittmer said by e-mail. Its timeline is based on requirements of the U.S. law on so-called conflict minerals, she said.
The law, signed by Obama in July, gave the U.S. Securities and Exchange Commission 270 days, or by mid-April, to set up regulations governing the minerals. The SEC is seeking comments on the proposed regulations on its website through March 2. A commission spokeswoman declined to comment by phone yesterday.
ITRI Ltd., a tin industry group, has also asked for a transition period before the rules take full effect.
“The timelines of the SEC rules, the requirements of smelter auditing systems, and the feasibility of the implementation on the ground in Africa need to align in order to avoid the negative consequences that will otherwise result,” Kay Nimmo, manager of ITRI’s Sustainability and Regulatory Affairs, said by e-mail yesterday.
“An SEC delay sends the wrong signals to armed commanders and the traders whom they work with,” Sasha Lezhnev, policy consultant with the Washington-based Enough Project, which lobbied for the conflict minerals law, said today in an e-mail. “Developing a legitimate minerals trade from central Africa is important, but the conflict traders must first be cut out.”
U.S. rules aimed at stopping mineral sales from funding war in central Africa, and signed into law by President Barack Obama, will amount to a trade embargo on the region unless nations get more time to adapt, a Rwandan official said.
Guidelines for mineral smelters set by Electronic Industry Citizenship Coalition Inc., grouping companies including Apple Inc., IBM Corp. and Intel Corp., become effective April 1 after the new U.S. law required companies to confirm their purchases of gold, coltan, tungsten and tin ore from 10 African countries aren’t funding armed groups in the Democratic Republic of Congo.
“It was not the intention of the U.S. government to impose a trade embargo but unfortunately this may be the outcome if we don’t come to a workable solution,” Michael Biryabarema, director of Rwanda’s Geology and Mines Authority, said in a letter to the EICC.
Congo, economically exhausted from more than a decade of war, has failed to stamp out fighting in its mineral-rich eastern region bordering Uganda, Rwanda and Burundi. Industry programs to tag and trace coltan and tin from Congo and Rwanda began last year as armed groups and some members of the Congolese army support themselves and buy arms through illicit sales of minerals.
Rwanda, producer of about 5 percent of the world’s coltan and 4 percent of its tungsten, has asked the EICC for at least another year to prepare before the guidelines go into effect.
‘“Rwanda’s mineral exporters have been informed by all the large buyers that they are unable to take untagged, untraceable material after the end of March,” Biryabarema wrote in the letter. The reduction in purchases would affect 30,000 small miners and damage Rwanda’s mineral trade, which accounts for about 30 percent of the country’s exports, he said.
The EICC is reviewing the letter, spokeswoman Wendy Dittmer said by e-mail. Its timeline is based on requirements of the U.S. law on so-called conflict minerals, she said.
The law, signed by Obama in July, gave the U.S. Securities and Exchange Commission 270 days, or by mid-April, to set up regulations governing the minerals. The SEC is seeking comments on the proposed regulations on its website through March 2. A commission spokeswoman declined to comment by phone yesterday.
ITRI Ltd., a tin industry group, has also asked for a transition period before the rules take full effect.
“The timelines of the SEC rules, the requirements of smelter auditing systems, and the feasibility of the implementation on the ground in Africa need to align in order to avoid the negative consequences that will otherwise result,” Kay Nimmo, manager of ITRI’s Sustainability and Regulatory Affairs, said by e-mail yesterday.
“An SEC delay sends the wrong signals to armed commanders and the traders whom they work with,” Sasha Lezhnev, policy consultant with the Washington-based Enough Project, which lobbied for the conflict minerals law, said today in an e-mail. “Developing a legitimate minerals trade from central Africa is important, but the conflict traders must first be cut out.”
Trade between US and Ghana grows
Trade between the United States (US) and Ghana grew by 48 per cent in 2010, reaching nearly $1.3 billion.
This consisted of diverse exports, such as cocoa, vegetables, machinery, and vehicles.
Mr Demetrios J. Marantis, Deputy United States Trade Representative (DUSTR), who announced this, said US investment in Ghana was valued at nearly $1 billion and likely to increase, as new economic opportunities materialise and bilateral links multiply, including the recently inaugurated direct flight link between Accra and Washington D.C.
Ninety-two per cent of Ghana's exports to the US enter duty-free, under the Generalised System of Preferences (GSP) and African Growth and Opportunity Act (AGOA) trade preference programmes.
Ghana has profited from these opportunities, exporting a growing range of products, including over $800,000 in textiles during 2010, more than double the amount in 2009.
In 2010, Ghanaian workers and farmers exported nearly $48 million dollars in goods to the US under AGOA, more than double the amount during the same period of 2009, and in addition to apparel, Ghana's future prosperity is a testament to what can be achieved when both countries work together.
Mr Marantis said one of the most exciting partnerships with Ghana was the US Agency for International Development (USAID) funded West Africa Trade Hub in Accra. He explained that the Trade Hub strengthened not only US-Ghanaian trade ties, but provided economic development and job creation opportunities in 21 West African countries.
The Trade Hub offers technical assistance and training to producer groups and export-ready firms in apparel, cashews, handmade home décor, shea, foods, and sustainable fish and seafood. In addition, it helps to make companies in these sectors more competitive by tackling cross-cutting problems in finance, transport governance and costs, business environment, and telecommunications.
In 2009, the West Africa Trade Hub facilitated over $20 million in exports, drew investment of more than $1 million, and created nearly 800 new jobs, including over 300 jobs for women.
In 2009 alone, the Hub trained nearly 2,300 entrepreneurs and provided technical assistance directly to almost 700 firms.
GNA
This consisted of diverse exports, such as cocoa, vegetables, machinery, and vehicles.
Mr Demetrios J. Marantis, Deputy United States Trade Representative (DUSTR), who announced this, said US investment in Ghana was valued at nearly $1 billion and likely to increase, as new economic opportunities materialise and bilateral links multiply, including the recently inaugurated direct flight link between Accra and Washington D.C.
Ninety-two per cent of Ghana's exports to the US enter duty-free, under the Generalised System of Preferences (GSP) and African Growth and Opportunity Act (AGOA) trade preference programmes.
Ghana has profited from these opportunities, exporting a growing range of products, including over $800,000 in textiles during 2010, more than double the amount in 2009.
In 2010, Ghanaian workers and farmers exported nearly $48 million dollars in goods to the US under AGOA, more than double the amount during the same period of 2009, and in addition to apparel, Ghana's future prosperity is a testament to what can be achieved when both countries work together.
Mr Marantis said one of the most exciting partnerships with Ghana was the US Agency for International Development (USAID) funded West Africa Trade Hub in Accra. He explained that the Trade Hub strengthened not only US-Ghanaian trade ties, but provided economic development and job creation opportunities in 21 West African countries.
The Trade Hub offers technical assistance and training to producer groups and export-ready firms in apparel, cashews, handmade home décor, shea, foods, and sustainable fish and seafood. In addition, it helps to make companies in these sectors more competitive by tackling cross-cutting problems in finance, transport governance and costs, business environment, and telecommunications.
In 2009, the West Africa Trade Hub facilitated over $20 million in exports, drew investment of more than $1 million, and created nearly 800 new jobs, including over 300 jobs for women.
In 2009 alone, the Hub trained nearly 2,300 entrepreneurs and provided technical assistance directly to almost 700 firms.
GNA
Senegalese power cuts affect business and life in general
by Mark John
When Senegalese tailor Ousmane Tom threw out the foot-operated machines in his Dakar workshop and converted to electricity, he thought business would take off.
But six years later, he is regretting the move as power cuts paralyze thousands of small outfits like his in a West African country whose long-held ambition of becoming an emerging market economy looks as remote as ever.
"When there is no current, there is no work. And when there is no work, things are bad at home," said Tom, 44, surrounded by piles of half-finished garments at his six-man workshop in the poor Medina district of the capital.
A year before a general election, President Abdoulaye Wade's liberal government is feeling the heat from an energy crisis it says it merely inherited, but which critics insist has gone from bad to worse during his 10-year rule.
Angered by power cuts lasting up to 30 hours at a time, youths last month set fire to one Dakar branch of Senelec, the state power company dubbed by the local media as "Societe des tenebres" -- literally, "Darkness Inc."
In a separate display of power-envy, a house used by members of the extended Wade family across town came under assault from stone-throwing neighbors as it alone enjoyed electricity from its private generator throughout another cut.
The economic growth Senegal needs to start pulling its 12 million people out of poverty is suffering.
Officials estimate the crisis is costing the country about two percentage points of growth a year -- about half the overall rate predicted for 2011 -- and vow to turn round the situation in a matter of months.
The root cause, officials and sector specialists say, is years of poor management and misdirected investment that have left Senegal with the wrong energy mix and a power sector weighed down by hundreds of millions of dollars of debt.
In the past decade, Senegal embarked on a program to bring electricity to remote villages at a time when many were getting a first taste of appliances from refrigerators to televisions.
Demand for electricity is still growing at an annual eight to 10 percent, a rate Senegal would just be able to cover with its 477 Megawatts of installed capacity if it was all working.
Yet its reliance on fuel-based generators has saddled the aid-dependent country with one of the most expensive power sectors in the world, meaning it can barely afford to keep 70 percent of it running at any one time.
Even retailing electricity at 115 CFA francs (24 U.S. cents) a kilowatt-hour -- double the price in more affluent Morocco but still below cost -- Senelec has amassed 286 billion CFA of debt which means it can neither maintain its plants nor buy fuel.
"It's turned into a vicious circle," Alioune Fall, chairman of the emergency committee set up to turn the sector round, said of the growing stress on those over-worked power plants that are still up and running.
Things reached a head last July with the collapse of an 88-MW generator blamed on a batch of bad fuel. The subsequent power cuts sparked street protests that prompted Wade to hand the energy portfolio to his son Karim, already in charge of a super-ministry covering transport and infrastructure.
The latest bout of cuts comes as a tanker spends a second month languishing off the coast of Dakar waiting to deliver fuel to the country's generators -- a delay which despite official denials is widely put down to Senelec's inability to pay.
"It pains me that, 50 years after independence, we are in this situation of load-shedding," Karim Wade told a 90-minute TV special on the power cuts this week, conceding that Senelec was effectively bankrupt.
Whether Karim Wade, a Sorbonne-educated banker seen by many Senegalese as distant from their everyday concerns, solves the energy crisis or not could determine whether his 84-year-old father wins a third term next February.
Longer term, it could also decide whether Senegal finally turns its decades of political stability into economic gains, or whether it gets left behind by a near-neighbor such as Ghana which also eyes the mantle of a regional business hub.
"Without electricity, there is no development. Period," U.S. economist Jeffrey Sachs, a long-time adviser to governments on tackling poverty, said on a recent trip to Dakar. "There isn't anything in development that is done now without electricity."
Senegal will within days announce the winner of a tender to supply 150 Megawatts of leased capacity that is due to kick in from April. The cost of the measure has not yet been revealed.
At the same time it is diverting budget revenues, donor cash and receipts from a tax on telecommunications traffic into a special fund to pay for a national fuel bill which, with crude at over $100 a barrel, will hit 150 billion CFA this year.
"By then (the elections), we'll have done the main part," long-time Wade party ally El Hadj Amadou Sall said.
"It's not ideal but this is an emergency and at least the present situation will be behind us," he added of a plan aimed ultimately at bridging the gap before the scheduled 2014 arrival of a coal-fired plant brings cheaper, more ample electricity.
For now, many are skeptical. In his Dakar workshop, Ousmane Tom says he was among those who brought Wade to power on the back of promises to cut poverty, but has become disenchanted with the lack of progress since then.
"I voted for Wade in 2000, but I won't vote for him this time. When you promise things which you don't do, it's a bit like betrayal."
Reuters
But six years later, he is regretting the move as power cuts paralyze thousands of small outfits like his in a West African country whose long-held ambition of becoming an emerging market economy looks as remote as ever.
"When there is no current, there is no work. And when there is no work, things are bad at home," said Tom, 44, surrounded by piles of half-finished garments at his six-man workshop in the poor Medina district of the capital.
A year before a general election, President Abdoulaye Wade's liberal government is feeling the heat from an energy crisis it says it merely inherited, but which critics insist has gone from bad to worse during his 10-year rule.
Angered by power cuts lasting up to 30 hours at a time, youths last month set fire to one Dakar branch of Senelec, the state power company dubbed by the local media as "Societe des tenebres" -- literally, "Darkness Inc."
In a separate display of power-envy, a house used by members of the extended Wade family across town came under assault from stone-throwing neighbors as it alone enjoyed electricity from its private generator throughout another cut.
The economic growth Senegal needs to start pulling its 12 million people out of poverty is suffering.
Officials estimate the crisis is costing the country about two percentage points of growth a year -- about half the overall rate predicted for 2011 -- and vow to turn round the situation in a matter of months.
The root cause, officials and sector specialists say, is years of poor management and misdirected investment that have left Senegal with the wrong energy mix and a power sector weighed down by hundreds of millions of dollars of debt.
In the past decade, Senegal embarked on a program to bring electricity to remote villages at a time when many were getting a first taste of appliances from refrigerators to televisions.
Demand for electricity is still growing at an annual eight to 10 percent, a rate Senegal would just be able to cover with its 477 Megawatts of installed capacity if it was all working.
Yet its reliance on fuel-based generators has saddled the aid-dependent country with one of the most expensive power sectors in the world, meaning it can barely afford to keep 70 percent of it running at any one time.
Even retailing electricity at 115 CFA francs (24 U.S. cents) a kilowatt-hour -- double the price in more affluent Morocco but still below cost -- Senelec has amassed 286 billion CFA of debt which means it can neither maintain its plants nor buy fuel.
"It's turned into a vicious circle," Alioune Fall, chairman of the emergency committee set up to turn the sector round, said of the growing stress on those over-worked power plants that are still up and running.
Things reached a head last July with the collapse of an 88-MW generator blamed on a batch of bad fuel. The subsequent power cuts sparked street protests that prompted Wade to hand the energy portfolio to his son Karim, already in charge of a super-ministry covering transport and infrastructure.
The latest bout of cuts comes as a tanker spends a second month languishing off the coast of Dakar waiting to deliver fuel to the country's generators -- a delay which despite official denials is widely put down to Senelec's inability to pay.
"It pains me that, 50 years after independence, we are in this situation of load-shedding," Karim Wade told a 90-minute TV special on the power cuts this week, conceding that Senelec was effectively bankrupt.
Whether Karim Wade, a Sorbonne-educated banker seen by many Senegalese as distant from their everyday concerns, solves the energy crisis or not could determine whether his 84-year-old father wins a third term next February.
Longer term, it could also decide whether Senegal finally turns its decades of political stability into economic gains, or whether it gets left behind by a near-neighbor such as Ghana which also eyes the mantle of a regional business hub.
"Without electricity, there is no development. Period," U.S. economist Jeffrey Sachs, a long-time adviser to governments on tackling poverty, said on a recent trip to Dakar. "There isn't anything in development that is done now without electricity."
Senegal will within days announce the winner of a tender to supply 150 Megawatts of leased capacity that is due to kick in from April. The cost of the measure has not yet been revealed.
At the same time it is diverting budget revenues, donor cash and receipts from a tax on telecommunications traffic into a special fund to pay for a national fuel bill which, with crude at over $100 a barrel, will hit 150 billion CFA this year.
"By then (the elections), we'll have done the main part," long-time Wade party ally El Hadj Amadou Sall said.
"It's not ideal but this is an emergency and at least the present situation will be behind us," he added of a plan aimed ultimately at bridging the gap before the scheduled 2014 arrival of a coal-fired plant brings cheaper, more ample electricity.
For now, many are skeptical. In his Dakar workshop, Ousmane Tom says he was among those who brought Wade to power on the back of promises to cut poverty, but has become disenchanted with the lack of progress since then.
"I voted for Wade in 2000, but I won't vote for him this time. When you promise things which you don't do, it's a bit like betrayal."
Reuters
Facts: Senegal's energy crunch
Here are some figures behind an energy shortage in Senegal that has triggered street riots and which the government says is costing the country two percentage points of lost economic growth each year.
- It costs state power company Senelec 167 CFA francs (34 U.S. cents) to produce a kilowatt-hour of electricity which it sells to consumers at a loss-making 115 CFA.
- Any attempt at a major increase in prices would likely trigger major protests in a country where gross national income per head is just over $1,000 a year.
- Yet annual losses of around 60 billion CFA mean Senelec is now saddled with 286 billion CFA of ($589 million) of debt -- around 2.5 percent of Senegal's total national output.
- With crude oil currently at over $100 a barrel on world markets, Senelec does not have the means to meet an annual bill of 150 billion CFA for the fuel needed to run its generators.
- Load-shedding -- the use of power cuts to ease the burden on the grid --- amounted to 20 Gigawatt-hours of electricity in 2005, rising five-fold to 100 GWh by 2008. Businesses and households face power cuts of up to 30 hours at a time.
Ivory Coast banks, stock exchange close as political impasse continues
by Olivier Monnier and Baudelaire Mieu
Ivory Coast’s financial system is grinding to a halt with banks closing and the stock market suspended, sparking a run on the banks left open as the West African nation’s political crisis drags on.
Standard Chartered Plc, Citigroup Inc. and BNP Paribas SA have all closed their units in the world’s top cocoa producer because of security fears after a disputed Nov. 28 election left the country with two rival administrations.
The Central Bank of West African States has demanded banks in the region halt all transactions with its agencies in Ivory Coast after they were seized by Laurent Gbagbo, the incumbent president. Alassane Ouattara, the internationally recognized winner of the election, has also called on companies to stop paying taxes to Gbagbo’s administration and told coffee and cocoa shippers to halt exports for one month in a bid to starve Gbagbo of funds.
“This is a significant setback for Gbagbo’s administration,” Samir Gadio, a London-based emerging market strategist at Standard Bank Plc, wrote in an e-mailed note yesterday. “The financial system has virtually come to a standstill, which is likely to erode the regime’s base of support going forward, especially if public and private sector salaries are not serviced later this month.”
Gbagbo’s administration will take “judicial proceedings” against the local units of BNP and Citigroup for shutting their local branches, his Justice Ministry said on Feb. 15. That may further alienate global investors after the government defaulted on $2.3 billion of Eurobonds this month.
Clients formed long lines at the banks that were left open in the commercial capital of Abidjan yesterday.
“We are living in a state of uncertainty,” said Alain Doffou, a 45-year-old high school teacher who waited with about 40 others in line for an automated teller machine in the Plateau neighborhood of Abidjan. “I want to withdraw my money because I prefer keeping my savings with me.”
Abou Traore, a 31-year-old police officer, said he tried to close his account and withdraw all his money at a branch of SGBCI, the unit of France’s Societe Generale SA in Ivory Coast. The lender denied the request, he said, “because it doesn’t have enough liquidity.”
“Given the increasingly challenging operating environment in the Ivory Coast, we have decided to temporarily suspend our operations there until it is safe to reopen,” Shaun Gamble, a London-based spokesman at Standard Chartered, said by e-mail yesterday.
The Bourse Regionale des Valeurs Mobilieres, where companies from eight West African nations trade their shares, was closed “until further notice” following the Feb. 9 seizure of its offices by Gbagbo’s administration, according to a statement issued Feb. 14 in Ouagadougou, Burkina Faso. Gbagbo called the move to halt trading on the market “void,” according to a statement.
The nation failed to make a $29 million interest payment on its Eurobonds on Jan. 31 after a grace period, prompting the London Club group of commercial bank creditors to declare an “event of default” on Feb. 1.
The 2.5 percent note maturing in December 2032, sold in April 2020, fell to a record low of 36.25 cents on the dollar on Feb. 2, according to Bloomberg data.
Ivory Coast’s economy, once the second-biggest in West Africa after Nigeria, may contract in the first half of the year as the crisis deepens, Gadio and other Standard Bank researchers said last month. The European Union levied trade and travel sanctions on Gbagbo, his supporters, and institutions that aided his bid to stay in power last month.
At least 296 people have been killed in post-election violence, according to the United Nations. Ouattara remains holed up in the Golf Hotel in Abidjan, where he is protected by UN peacekeepers. Gbagbo retains control over the army, state television and over public institutions.
The UN has authorized the deployment of three more infantry companies and one aviation unit, including three armed helicopters, for its peacekeeping mission in Ivory Coast, according to Deutsche Presse-Agentur.
Bloomberg
February 14, 2011
Nestle to invest 1 billion Swiss francs in Africa over next 2 years
Nestle, the world's biggest food group, said on February 3 it would invest 1 billion Swiss francs expanding capacity in Africa over the next two years.
Chief Executive Paul Bulcke made the comments at the opening of a 12 billion naira factory to produce Maggi seasoning cubes in the southwestern state of Ogun in Nigeria, sub-Saharan Africa's second-biggest economy.
"This latest investment is proof of our commitment to Africa in which we will invest 1 billion Swiss francs over the next two years," Bulcke said.
Nestle has operated in Nigeria for five decades. The new factory in Ogun is its 27th in Africa.
Several global brands in the fast-moving consumer goods sector have announced investment in Nigeria in recent weeks, including the world's largest Coke bottler Coca-Cola Hellenic (CCH) and British soap and shampoo maker PZ Cussons.
Nigeria is Africa's most populous nation, with more than 150 million people, and is seen as one of the world's last relatively untapped but scaleable frontier markets.
Reuters
Chief Executive Paul Bulcke made the comments at the opening of a 12 billion naira factory to produce Maggi seasoning cubes in the southwestern state of Ogun in Nigeria, sub-Saharan Africa's second-biggest economy.
"This latest investment is proof of our commitment to Africa in which we will invest 1 billion Swiss francs over the next two years," Bulcke said.
Nestle has operated in Nigeria for five decades. The new factory in Ogun is its 27th in Africa.
Several global brands in the fast-moving consumer goods sector have announced investment in Nigeria in recent weeks, including the world's largest Coke bottler Coca-Cola Hellenic (CCH) and British soap and shampoo maker PZ Cussons.
Nigeria is Africa's most populous nation, with more than 150 million people, and is seen as one of the world's last relatively untapped but scaleable frontier markets.
Reuters
Zimbabwe ivory stockpile grows amid sale ban
Zimbabwe's ivory stockpile has rocketed to 42,000 kilos up from a previous record of 29,000, but the country cannot sell it due to a ban, state media reported on Sunday.
"At the moment there is a nine-year moratorium on the international sale of ivory from Zimbabwe, it will end in 2016," Romana Nyahwa, acting director for Zimbabwe National Parks and Wildlife told the Sunday Mail newspaper.
The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) imposed the moratorium in an attempt to curb pouching.
"But it is not definite that after 2016 we will be able to sell our ivory," added Nyahwa.
She said the country would have to apply for a special permission from CITES to sell the tusks. It costs Zimbabwe $13 million annually to secure the stockpile.
"The proposal will be discussed and if it passes, permission will be granted for the sale to take place. The sale will be conducted under some agreed conditions, for example, selling to specific countries," she said.
Most of the tusks, valued at $10 million, were collected from conservation areas and rural districts countrywide.
In 2008, the southern African country sold 3.7 tonnes of ivory for $487,162 approved under an international agreement.
The auction was open only to buyers from China and Japan, who were required to only sell it within their countries.
According to official statistics, Zimbabwe has an elephant population of 100,000 but a large number fell prey to poachers during the country's economic crisis.
--------------------------------------------------------------------------------------------------------------
Ivory stockpiles soar to US$10m
Saturday, 05 February 2011 22:29 Business
IvoryBy Prince Mushawevato
ZIMBABWE’S ivory stockpile has increased to nearly 42 000 kilogrammes amid heightened appeals by Government to be granted special permission to dispose of part of it as exports.
The current stock is valued at close to US$10 million.
Following a nine-year moratorium sanctioned by the Convention on International Trade in Endangered Species (CITES) in 2007 on ivory trade, Zimbabwe’s elephant population continues to grow unabated and has since exceeded 45 000, which is the holding capacity.
The export ban has affected a number of countries on the continent including Kenya, Zambia and Ghana.
Zimbabwe National Parks and Wildlife Management Authority acting director-general Mrs Romana Nyahwa said accumulating stocks were now at levels that made storage expensive.
Last year the country’s stock soared by 43 percent from the previous record of 29 724 kg. Most of this ivory was collected from conservancies and local rural districts countrywide.
According to Mrs Nyahwa, if the ivory moratorium was suspended, various communities would benefit from the export proceeds. “At the moment there is a nine-year moratorium on international sale of ivory from Zimbabwe, it will end in 2016. But it is not definite that after 2016 we will be able to sell our ivory,” she said.
Added Mrs Nyahwa: “Zimbabwe would have to apply to the CITES for special permission to sell. What it means is that after 2016, if Zimbabwe wants to sell its ivory it will formulate a proposal for submission to the CITES. The proposal will be discussed and if it passes, permission will be granted for the sale to take place. The sale will be conducted under some agreed conditions, for example, selling to specific countries.”
As the ban on ivory trade remains in force, Zimbabwe has been forking out close to US$13 million annually on security and administration costs.
She added that Zimbabwe would soon run out of storage space.
The country last sold its ivory in 2008 to Japan and China following a permission by CITES to conduct a once-off sale. Since then, the country has only been conducting domestic trade.
“Domestic trade in raw ivory to registered ivory manufacturers is not controlled by CITES and is going on. In 2010 we sold a total of 320kg for US$250/kg, a figure which is insignificant considering the rate at which the stock is piling up,” she said.
“There are significant costs involved in retrieving ivory from the field, treating the ivory for preservation, transporting to different centres for storage including security at various stations and at the head office, which needs to be meet,” Mrs Nyahwa said.
Southern African countries have over the years supported Hong Kong and Japanese ivory traders to maintain trade. This has been stated to be because these countries claim to have well-managed elephant populations and they needed the revenue from ivory sales to fund conservation. These countries are South Africa, Zimbabwe, Botswana, Namibia and Swaziland.
Meanwhile, local ivory dealers have not been able to consume much of the ivory owing to what they have described as prohibitive costs of the product and other licence registration restrictions.
At present, a kilogramme of ivory is costing US$250 while licence fees are pegged at US$800 annually.
Zimbabwe’s elephant population presently stands at around 100 000.
"At the moment there is a nine-year moratorium on the international sale of ivory from Zimbabwe, it will end in 2016," Romana Nyahwa, acting director for Zimbabwe National Parks and Wildlife told the Sunday Mail newspaper.
The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) imposed the moratorium in an attempt to curb pouching.
"But it is not definite that after 2016 we will be able to sell our ivory," added Nyahwa.
She said the country would have to apply for a special permission from CITES to sell the tusks. It costs Zimbabwe $13 million annually to secure the stockpile.
"The proposal will be discussed and if it passes, permission will be granted for the sale to take place. The sale will be conducted under some agreed conditions, for example, selling to specific countries," she said.
Most of the tusks, valued at $10 million, were collected from conservation areas and rural districts countrywide.
In 2008, the southern African country sold 3.7 tonnes of ivory for $487,162 approved under an international agreement.
The auction was open only to buyers from China and Japan, who were required to only sell it within their countries.
According to official statistics, Zimbabwe has an elephant population of 100,000 but a large number fell prey to poachers during the country's economic crisis.
--------------------------------------------------------------------------------------------------------------
Ivory stockpiles soar to US$10m
Saturday, 05 February 2011 22:29 Business
IvoryBy Prince Mushawevato
ZIMBABWE’S ivory stockpile has increased to nearly 42 000 kilogrammes amid heightened appeals by Government to be granted special permission to dispose of part of it as exports.
The current stock is valued at close to US$10 million.
Following a nine-year moratorium sanctioned by the Convention on International Trade in Endangered Species (CITES) in 2007 on ivory trade, Zimbabwe’s elephant population continues to grow unabated and has since exceeded 45 000, which is the holding capacity.
The export ban has affected a number of countries on the continent including Kenya, Zambia and Ghana.
Zimbabwe National Parks and Wildlife Management Authority acting director-general Mrs Romana Nyahwa said accumulating stocks were now at levels that made storage expensive.
Last year the country’s stock soared by 43 percent from the previous record of 29 724 kg. Most of this ivory was collected from conservancies and local rural districts countrywide.
According to Mrs Nyahwa, if the ivory moratorium was suspended, various communities would benefit from the export proceeds. “At the moment there is a nine-year moratorium on international sale of ivory from Zimbabwe, it will end in 2016. But it is not definite that after 2016 we will be able to sell our ivory,” she said.
Added Mrs Nyahwa: “Zimbabwe would have to apply to the CITES for special permission to sell. What it means is that after 2016, if Zimbabwe wants to sell its ivory it will formulate a proposal for submission to the CITES. The proposal will be discussed and if it passes, permission will be granted for the sale to take place. The sale will be conducted under some agreed conditions, for example, selling to specific countries.”
As the ban on ivory trade remains in force, Zimbabwe has been forking out close to US$13 million annually on security and administration costs.
She added that Zimbabwe would soon run out of storage space.
The country last sold its ivory in 2008 to Japan and China following a permission by CITES to conduct a once-off sale. Since then, the country has only been conducting domestic trade.
“Domestic trade in raw ivory to registered ivory manufacturers is not controlled by CITES and is going on. In 2010 we sold a total of 320kg for US$250/kg, a figure which is insignificant considering the rate at which the stock is piling up,” she said.
“There are significant costs involved in retrieving ivory from the field, treating the ivory for preservation, transporting to different centres for storage including security at various stations and at the head office, which needs to be meet,” Mrs Nyahwa said.
Southern African countries have over the years supported Hong Kong and Japanese ivory traders to maintain trade. This has been stated to be because these countries claim to have well-managed elephant populations and they needed the revenue from ivory sales to fund conservation. These countries are South Africa, Zimbabwe, Botswana, Namibia and Swaziland.
Meanwhile, local ivory dealers have not been able to consume much of the ivory owing to what they have described as prohibitive costs of the product and other licence registration restrictions.
At present, a kilogramme of ivory is costing US$250 while licence fees are pegged at US$800 annually.
Zimbabwe’s elephant population presently stands at around 100 000.
India's Jindal Steel wins 25-year coal licence in Mozambique
Mozambique has awarded India's Jindal Steel & Power a 25-year licence to explore and mine for coal in the northwest Tete province, in return for a $180 million investment, the country's resources ministry said on February 4.
Jindal will invest $180 million in the Tete coal mine, as part of a project that will cover 2,1540 hectares and directly employ 1,500 people, the Mineral Resources Ministry said in a statement.
The government will own a 10 percent stake.
Jindal will invest $180 million in the Tete coal mine, as part of a project that will cover 2,1540 hectares and directly employ 1,500 people, the Mineral Resources Ministry said in a statement.
The government will own a 10 percent stake.
Sanctions bite in Côte d'Ivoire
by Emmanuel Peuchot
International sanctions against Côte d'Ivoire strongman Laurent Gbagbo are beginning to bite with ordinary Ivorians feeling the pinch as the country's once-vibrant economy suffers.
Banks and businesses are closed, petrol threatens to run dry and pay cheques are not arriving as the outside world tries to oust Gbagbo in favour of his rival Alassane Ouattara, deemed to have won November elections.
The situation threatens unrest which may or may not bring a backlash against Gbagbo, who continues to hold the reins of power in Abidjan while Ouattara, whose support base is mainly in the north, remains holed up in a seafront hotel under UN protection.
Choi Young-Jin, head of the UN mission in Côte d'Ivoire, said on Friday Gbagbo was struggling to pay workers and a halt to African funding had swung the pendulum of the country's political crisis back in favour of Ouattara.
The West African regional central bank, the BCEAO, for countries including Côte d'Ivoire which use the CFA franc, has cut links with Gbagbo and choked off funding.
At the end of January Côte d'Ivoire failed to pay $30-million in interest on loans from private creditors.
Buying loyalty
Diplomats say Gbagbo needs $100-million to $150-million dollars a month to pay 55 000 troops and 104 000 civil servants, which one analyst said had to be kept loyal.
"It must be very difficult for him to continue to have financial resources," Choi told reporters after briefing a closed session of the Security Council in New York.
"In December, he paid everybody. In January, he retained payments to teachers and pensions. We do not know if this was just a delay. We have to see carefully how this unfolds," Choi added.
The money question would be "crucial" to the result of the political battle, the envoy said.
But a Gbagbo aide said "we can still go for at least a couple of months without a problem".
When Gbagbo tried to take over the BCEAO's high street branches the central bank retaliated by halting the electronic clearing arrangement, throwing Côte d'Ivoire's banking system into chaos.
Gbagbo's regime ordered the banks to resort to the old manual system, but a banker said some were refusing to do so as it was time-consuming and lacked security.
"In a week or 10 days everything risks freezing up," he said.
Gbagbo's spokesperson Ahoua Don Mello admitted some "technical difficulties" but said a new system was being rolled out.
However sanctions are forcing some businesses to shut down or lay off workers, prices are rising and trade operations are disrupted.
"The economic and social situation is deteriorating drastically," the Côte d'Ivoire business federation has warned.
Ouattara's camp has ordered a halt in exports of the country's main revenue earner, cocoa, until the end of February to bring more pressure on Gbagbo, and the main exporters appear to have obeyed, sending prices soaring on world markets.
'Stealing money'
The national refinery company is having increasing difficulty in obtaining supplies of oil, and experts predict shortages of petrol and gas before long but
In Washington US ambassador to Côte d'Ivoire Phillip Carter said Gbagbo had resorted to "stealing money" from companies through extortion to pay salaries.
Choi, who has been sleeping in his Abidjan office for the past two months, said there had been several swings in the balance of power since the crisis erupted.
"Ouattara's camp had the momentum in his favour because he won the election," Choi said. But after a planned anti-Gbagbo march had to be called off on December 16, the strongman took the upper hand.
"Now with the decision of the West African central bank in favour of President Ouattara, the momentum is shifting in his favor again. So the dynamics are always changing."
In Abidjan each side claims it has time on its side on the economic front, as the African Union prepares a new mediation push and West African states hold off on threatened military action against Gbagbo.
If people are not paid, "are they going to stand by until they starve? A riot would be directed against Ouattara, not Gbagbo," one of the strongman's aides said.
Ouattara spokesperson Patrick Achi replied that Ivorians would be prepared to make sacrifices for a time to secure peace and prosperity in the future. - AFP
International sanctions against Côte d'Ivoire strongman Laurent Gbagbo are beginning to bite with ordinary Ivorians feeling the pinch as the country's once-vibrant economy suffers.
Banks and businesses are closed, petrol threatens to run dry and pay cheques are not arriving as the outside world tries to oust Gbagbo in favour of his rival Alassane Ouattara, deemed to have won November elections.
The situation threatens unrest which may or may not bring a backlash against Gbagbo, who continues to hold the reins of power in Abidjan while Ouattara, whose support base is mainly in the north, remains holed up in a seafront hotel under UN protection.
Choi Young-Jin, head of the UN mission in Côte d'Ivoire, said on Friday Gbagbo was struggling to pay workers and a halt to African funding had swung the pendulum of the country's political crisis back in favour of Ouattara.
The West African regional central bank, the BCEAO, for countries including Côte d'Ivoire which use the CFA franc, has cut links with Gbagbo and choked off funding.
At the end of January Côte d'Ivoire failed to pay $30-million in interest on loans from private creditors.
Buying loyalty
Diplomats say Gbagbo needs $100-million to $150-million dollars a month to pay 55 000 troops and 104 000 civil servants, which one analyst said had to be kept loyal.
"It must be very difficult for him to continue to have financial resources," Choi told reporters after briefing a closed session of the Security Council in New York.
"In December, he paid everybody. In January, he retained payments to teachers and pensions. We do not know if this was just a delay. We have to see carefully how this unfolds," Choi added.
The money question would be "crucial" to the result of the political battle, the envoy said.
But a Gbagbo aide said "we can still go for at least a couple of months without a problem".
When Gbagbo tried to take over the BCEAO's high street branches the central bank retaliated by halting the electronic clearing arrangement, throwing Côte d'Ivoire's banking system into chaos.
Gbagbo's regime ordered the banks to resort to the old manual system, but a banker said some were refusing to do so as it was time-consuming and lacked security.
"In a week or 10 days everything risks freezing up," he said.
Gbagbo's spokesperson Ahoua Don Mello admitted some "technical difficulties" but said a new system was being rolled out.
However sanctions are forcing some businesses to shut down or lay off workers, prices are rising and trade operations are disrupted.
"The economic and social situation is deteriorating drastically," the Côte d'Ivoire business federation has warned.
Ouattara's camp has ordered a halt in exports of the country's main revenue earner, cocoa, until the end of February to bring more pressure on Gbagbo, and the main exporters appear to have obeyed, sending prices soaring on world markets.
'Stealing money'
The national refinery company is having increasing difficulty in obtaining supplies of oil, and experts predict shortages of petrol and gas before long but
In Washington US ambassador to Côte d'Ivoire Phillip Carter said Gbagbo had resorted to "stealing money" from companies through extortion to pay salaries.
Choi, who has been sleeping in his Abidjan office for the past two months, said there had been several swings in the balance of power since the crisis erupted.
"Ouattara's camp had the momentum in his favour because he won the election," Choi said. But after a planned anti-Gbagbo march had to be called off on December 16, the strongman took the upper hand.
"Now with the decision of the West African central bank in favour of President Ouattara, the momentum is shifting in his favor again. So the dynamics are always changing."
In Abidjan each side claims it has time on its side on the economic front, as the African Union prepares a new mediation push and West African states hold off on threatened military action against Gbagbo.
If people are not paid, "are they going to stand by until they starve? A riot would be directed against Ouattara, not Gbagbo," one of the strongman's aides said.
Ouattara spokesperson Patrick Achi replied that Ivorians would be prepared to make sacrifices for a time to secure peace and prosperity in the future. - AFP
Zimbabwe the next telecoms investment opportunity?
by Candice Jones
Could Zimbabwe be the next big investment opportunity for emerging markets-focused telecommunications operators? A new report from Renaissance Capital suggests it might be.
After years of decline, Zimbabwe’s economy has begun showing encouraging signs of recovery, with a projected 8,1% growth rate in 2010 and government forecasts of a 9,3% lift in gross domestic product in 2011.
Renaissance Capital says the turnaround in Zimbabwe’s economic prospects means that country’s largest mobile operator, Econet Wireless, could become a takeover target for telecoms operators looking to expand on the continent.
With cellular penetration of less than 60%, Zimbabwe represents a good growth opportunity for many large international telecoms players, Renaissance Capital says.
Econet Wireless controls about 70% of the Zimbabwean mobile market. Renaissance Capital reckons the “benign competitive environment” is at least one reason larger players should be eyeing Econet as an investment opportunity. Econet has Zimbabwe’s most extensive telecoms network, offers the best quality service and has the largest dealer network.
The report says SA’s MTN and India’s Bharti Airtel, among others, could be interested in entering Zimbabwe.
“If MTN were to enter the market, we believe it would turn out to be a rational competitor focused on profitability, as is the case in Zambia and Nigeria.”
Tariffs in Zimbabwe have remained fairly stable. But political risks remain. “The key risks are political in nature, whereas the regulatory and competitive environments for now seem less of concern,” says Renaissance Capital.
Concerns that Zimbabwe’s government will try to prevent foreigners from owning more than 49% of local businesses appear to be receding. In December, the plan was shelved, at least until the economy recovers.
The potential for broadband in Zimbabwe could also entice global telecoms players. “Given the low fixed-line penetration, customers seeking Internet connectivity have little choice but to go for Econet’s 3G product, launched in October 2010.”
Since it launched 3G, the company has signed up 700 000 customers, or about 15% of its total subscriber base.
“International connectivity, which previously was a bottleneck, improved substantially after Econet secured access to the Seacom submarine cable. Econet was also able to decrease international calling rates by 50% in September 2010 once it got access to the international fibre capacity.”
Renaissance Capital’s report attributes the strength of Econet Wireless to its strong management team. “Econet successfully muddled through a period of political instability and severe economic downturn, and following dollarisation appeared to be the major beneficiary of growth in mobile penetration.”
The operator is also enjoying management stability, with CEO Douglas Mboweni having been at the helm since 2002, and chief financial officer Krison Chirairo having worked there since 2004, the report says.
For the time being, Zimbabwe does not appear to have any plans to licence additional mobile operators, which makes the environment even more attractive to potential investors. Also, unlike many other countries in the region, Zimbabwe has made no attempt to decrease mobile termination rates, the fees operators charge each other to carry calls between their networks.
Renaissance Capital warns that conditions may change, especially since many Southern African countries, including SA, have licensed new operators and reduced termination rates, which may result in Zimbabwe following suit.
Subscribe to:
Posts (Atom)