Jump to navigation

confidentially speaking

The Africa Confidential Blog

  • 24th September 2019

AFRICA'S PUSH FOR GLOBAL WARMING CASH: Youth and emerging economies face wall of opposition to demands for a climate change emergency at UN General Assembly

Patrick Smith

This week we start in New York at the UN General Assembly where African and Asian leaders are pressing governments in Europe and North America to do more to combat climate change and contribute more to measures to mitigate the damage that it's causing to some of the poorest countries in the world. Foreign exchange and now maize shortages are worsening in Zimbabwe as Ghana and Côte d'Ivoire plot a cocoa consortium. The fall-out from Kenya's dodgy dams gets worse and yet another report castigates South Sudan's Salva Kiir.

AFRICA'S PUSH FOR GLOBAL WARMING CASH: Youth and emerging economies face wall of opposition to demands for a climate change emergency at UN General Assembly

It was to be a day of action, said UN Secretary General António Guterres ahead of the Climate Action Summit in New York on 23 September. African governments had wanted the declaration of a climate change emergency, binding rich countries to policy changes and funding commitments, ahead of the international climate conference in Chile in December. But participating countries fell far short of the demands from the African Union, agreed at a special meeting in Addis Ababa last month.

Instead there were fine speeches from activists, including 16-year-old Greta Thunberg, some promises of international funding but stark indifference to the cause from leaders such as United States President Donald TrumpBrazil's President Jair Bolsonaro and Saudi Arabia's Crown Prince Mohammed bin Salman.

These governments are determined to block attempts to impose sanctions on countries flouting rules aimed to cut carbon emissions, country by country. However, over 50 countries are due to sign up to tougher regulations to fight climate change under the Paris Accord, from which President Trump extricated the US.

The latest research from the UN's environmental programme reports that well over half of Africa's 54 countries have been hit by extreme weather linked to climate change, weakening economies and prompting mass migration.

ZIMBABWE ECONOMY IN FREE-FALL: Government is responding with political repression to crashing currency and chronic shortages of maize

The controversies over the funeral rites of Independence leader Robert Mugabe are being overshadowed by the deepening national economic crisis. Now the country faces its worst drought for 40 years.

On every level – the human suffering and the extreme statistics – the country is being dragged to a new low as shops and stalls empty out and more jobs are cut. On Monday (23 September) the government shut down the main water works in Harare, claiming that it lacked the foreign exchange to import the required purification chemicals.

The crisis is setting the economic policy-makers, who are trying to secure some financial support from the Paris Club and the IMF and World Bank, against the securocrats in President Emmerson Mnangagwa's government. Some of the top officials in the regime stand accused of indifference to worsening conditions, or, in some cases, of profiting from the collateral damage by betting against their country's own currency.

The newly-reintroduced Zimbabwe dollar has lost half its value in the last two weeks and then recovered slightly on 23 September after the government pressurised forex traders. At the end of last week, it took 20 Zim dollars to buy a US dollar.

That rate was down from just ten at the beginning of the month. After the government announced it was cracking down on forex bureaux, the rate recovered to around US$1=Zim$15. Finance minister Mthuli Ncube said the new Zim dollar was under-valued but bankers are keeping quiet about the exchange rate they use in private business to business transactions.

Civic activists and opposition politicians accuse senior figures in the Mnangagwa government of round-tripping deals: using their privileged access to foreign exchange to take advantage of the plummeting national currency.

The crashing Zimbabwe dollar – now the only legal tender allowed by the government – makes it still tougher for hard-pressed citizens to find ways to buy essential commodities. This coincides with a vertiginous fall in local maize production – less than half of last year's harvest.

Much of this is due to the drought and flooding that followed Cyclone Idai. The government is now buying 100,000 tonnes of maize from Tanzania.

KENYA'S DAM PROBLEM: The price ticket for managing big project corruption may involve write-offs of $190 million

Desperate to contain the fall-out from the Kimwarer and Arror dam scandals, President Uhuru Kenyatta has cancelled the building projects, a decision which could mean writing off around Sh19 billion ($190 million) which has already been paid out in project costs.

Treasury Cabinet Secretary Henry Rotich, his Permanent Secretary Kamau Thugge, and over 20 other senior officials have been charged with fraud and corruption, relating to the award of tenders totalling $456m in the mainly Kalenjin Elgeyo Marakwet County, to Italian firm CMC Di Ravenna.
A new technical report found that the Sh22.2 billion ($220m) Kimwarer dam had been grossly overpriced and the project is neither technically nor financially viable.

This is the most politically damaging graft scandal during Kenyatta's presidency, putting Kenyatta on collision course with his deputy William Ruto, whose Kalenjin allies have been enveloped by the scandal. Ruto has repeatedly defended the project, and dismissed claims of malfeasance.

But the net is closing. Last week, the High Court in Nairobi ordered directors of CMC Di Ravenna to appear in court and enter pleas, and the government is seeking to extradite at least one company official.

GHANA AND COTE D'IVOIRE'S CHOCO-PACT: West Africa bids to defend cocoa price as regional economies come under pressure

Neighbours with chequered political histories and fierce rivals in continental football tournaments, Ghana and Côte d'Ivoire are determined to shore up prices of their cocoa exports. Together they produce about 65% of the world's demand.

They will try to protect prices by introducing a cocoa production ceiling and agree to cut production if necessary, regulators from Ghana and Côte d'Ivoire told their counterparts at the European Cocoa Forum last week.

Five years ago, Ivorian President Alassane Ouattara and the President of Ghana, John Mahama, proposed forming 'Choc-Pec' which they said could shore up prices and fix production like its oil industry counterpart, OPEC.

Ghana's current President Nana Addo Akufo-Addo has moved still closer to coordinate with the Ivorian President. One plan is that African producers could suspend the sale of cocoa beans to the open market for the 2020/21 crop season to get higher prices.

Last week, Ghana said it expects to produce 850,000 tonnes of cocoa in 2019/20 season, lower than expected, due to an outbreak of swollen shoot disease. They have already introduced a fixed 'living income differential (LID)' or premium of $400 a tonne in July on all cocoa sales for the 2020/21 season.
PLUNDER IN SOUTH SUDAN: Foreign agencies set to cut back peace-funding after US-based activists accuse President Salva Kiir and family of stealing state resources

A new report on war finance and corruption in South Sudan, focusing on the country's political leaders and their business allies, will prompt more scepticism about the country's tortuous negotiations over peace and restructuring.

It comes as the President Salva Kiir and his former Vice-President Riek Machar are still at odds over how to implement a power-sharing deal.

The report, produced by The Sentry, a lobbying organisation in Washington DC, claims that President Kiir, his family, close advisors and securocrats own stakes in banks, foreign exchange bureaux, airlines, oil companies, logistics firms, and private security companies, many of them foreign-owned.
It also says the China National Petroleum Corporation provided direct support to militias.

The report also embarrasses Gideon Moi, a Senator in Kenya and son of former President Daniel arap Moi, who is accused of having a stake in a South Sudan-registered firm Lukiza Ltd. This company formed a joint venture called Caltec Corporation with Conex Energy, a company said to be controlled by President Kiir's daughter Adut.

Whether or not any of those named are indicted, this report raises serious questions about Kiir's requests for international funding for the transitional government envisaged under the peace deal.


NIGERIA'S LATEST GAS PLANT SCANDAL: A London court is to rule on 26 September on whether US hedge fund and Irish firm can seize Abuja's assets to satisfy $9billion award

BREXIT BRITAIN'S FIRST DEAL: London has signed a trade deal with the Southern African Customs Union prior to its planned exit from European Union – but the terms merely rollover the existing terms of the EU deal

PROTESTORS BRAVE EGYPT'S CRACKDOWN: After a military contractor accuses of grand President Abdel Fatteh El-Sisi and family of grand corruption, activists return to the streets – planned protests on 27 September will be key test

ACCOUNTABILITY QUESTIONS IN KENYA: Government critics turn up volume demanding publication of latest oil supply contracts to Chinese importers and prosecution of officials linked to school collapse in Nairobi