confidentially speaking
The Africa Confidential Blog
GHANA/COTE D'IVOIRE: Accra wins oil border dispute but will step up economic cooperation with its neighbour
Patrick Smith
This week we follow on from developments at the United Nations
General Assembly, which opened in New York last week and was attended
by most African heads of state. Ghana's President Nana
Addo Akufo-Addo had most to celebrate. Others were left
bewildered after an encounter with United States President Donald Trump. Some investors are warning Tanzania that its nationalist economic policies could be counter-productive. The
blowback from South Africa's Gupta-gate
crisis continues to hit KPMG. And Congo-Kinshasa President
Joseph Kabila's promise to investigate the
murder of two UN officials leaves many unconvinced.
GHANA/CÔTE D'IVOIRE: Accra wins oil border dispute but
will step up economic cooperation with its neighbour
Ghana is to step up production in the Tweneboa, Enyenra
and Ntomme oilfields after an international ruling found in its favour
and against Côte d'Ivoire in a dispute over their
maritime border. Production is likely to increase to 80,000 barrels per
day from the current level of 50,000 bpd.
The award of most of the disputed oil field by the
Hamburg-based International Tribunal for the Law of the Sea to Ghana
gave a fillip to its delegation at the UN General Assembly. It has also
boosted the share price of Tullow Oil, the lead operator.
Along with Finance Minister Ken Ofori Atta,
President Nana Addo Akufo-Addo made a strong pitch to US investors in
the energy and financial services sectors. The message was that the
economy is being revived and the debt burden is being reduced.
Diplomatic and commercial relations between Côte d'Ivoire and
Ghana are likely to remain cordial despite the ruling. Earlier in the
month Akufo-Addo and Ivorian President Alassane Ouattara,
who have been personal friends for some years, announced plans for a
joint-venture cocoa-processing factory and to set up a buffer stock of
cocoa beans to stabilise prices. The two countries grow over half of
the world's cocoa: global production is forecast at about 4.7 million
tonnes for 2016-17. The buffer stock plan has been dubbed 'Chocpec'
because it would involve voluntary curbs on production to maintain
prices.
KENYA: Supreme Court calm as Kenyatta accuses it of
judicial coup and opposition calls for new election officials
Multiple disputes are flaring up ahead of the planned
rerun of the presidential election. Unconvinced by the Supreme Court's
detailed ruling last week explaining its reasons for annulling the
election, President Uhuru Kenyatta accused it of
negating the will of the people and mounting a coup which could lead
the country into 'judicial chaos'. The Court is standing by its 1
September ruling that the election didn't meet constitutional
requirements.
Kenyatta's rival, opposition leader Raila Odinga,
is focusing his fire on the Independent Electoral and Boundaries
Commission, insisting that most of its top management be replaced
before another round of elections can be held. This week Odinga's
National Super Alliance (NASA) organisation is to launch a campaign of
mass protests to force the commission's hand.
Already, the commission has postponed the planned date for the
rerun to 27 October from 16 October after one of its IT providers said
the earlier date would not leave enough time for preparations. As the
political temperature heats up, Odinga has accused Kenyatta of steering
the country into crisis, comparing his stance to that of the defeated
President of Gambia, Yahya Jammeh.
TANZANIA: Magufuli's tough line on mining laws faces
investment test as corporate grumblings increase
More and more mining companies are clashing with
President John Magufuli's nationalist economic
strategy to boost local processing and extract more taxes. Behind the
scenes, the mining companies are saying there will be an investment
strike if the government persists in this vein.
Yet there is no sign that Magufuli or his close circle is
prepared to change course. Rather, they look set to double down on
their main policy goal: to boost the government's share of revenue from
mining. The government view was neatly summed up in an off-the-record
comment by a senior official to Africa Confidential:
'Tanzania is now one of Africa's fastest-growing economies but we have
seen little benefit from that in terms of revenues or jobs… and we have
to change that balance.'
First came the government's demand that Acacia Mining, the
London-listed subsidiary of Canada's Barrick Gold,
should stop exports of ore until it built a local smelter. Then the
government presented Acacia with a $190 billion bill for what it said
was unpaid taxes, adding the under-reporting of exports to the charge
sheet. Then the government pushed through new laws implementing yet
more resource-nationalist measures, and then accused Petra Diamonds of
under-reporting exports and avoiding taxes. Other mining companies fear
they are in the firing line. The big test will be whether any of them
shut up shop and walk away.
SOUTH AFRICA: Gordhan steps up pressure on KPMG to
examine its suspect political and commercial links
The troubles of Dutch-based KPMG
International and its South African affiliate are set to multiply after
the company came under fire for auditing companies run by the Gupta
family, who are accused of using their relations with President Jacob
Zuma to win state contracts, for 15 years before dropping them
last year.
There is also the charge that KPMG aided and lent
respectability to a politically-motivated investigation into the South
African Revenue Service whose findings were used to oust the respected
Finance Minister Pravin Gordhan. Although KPMG has
withdrawn the conclusions of its investigation, it has not apologised
either to Gordhan or the many senior officials who lost their jobs as a
result of the affair.
Two weeks ago KPMG International purged its local management
in Johannesburg and issuing a qualified apology for work that fell
below its usual standards (AC Vol 58 No 19, KPMG
feels the Gupta heat). On 21 September, Gordhan met KPMGI Chairman John
Veihmeyer and has called for 'full and proper disclosure' of
the company's operations in South Africa. In turn, KPMG has agreed to
an inquiry by the South African Institute of Chartered Accountants.
But this is unlikely to be enough. Gordhan has been speaking
to his lawyers about the case; the opposition Democratic Alliance has
announced that all local and provincial governments under its control
would review their contracts with KPMG. The current Finance Minister Malusi
Gigaba has also called for all national and local departments
to review with contracts with KPMG.
Alongside that reputational damage in the public sector, the
bigger financial threat to KPMG is whether or not the country's biggest
companies and banks will also drop it. Already, several medium-size
financial service companies have dropped the firm and three of the
biggest banks are reviewing their contracts. The question that
presumably motivated KPMGI Chairman Veihmeyer to travel to South Africa
and apologise personally for the company's record is whether it can
stop the contagion there. Or will KPMG's Gupta crisis wreck its
business across Africa and beyond?
CONGO-KINSHASA: Kabila pledges full investigation into
killing of UN experts but UN Secretary General favours independent probe
Demonstrators gathered on New York's First Avenue last
week waving placards accusing President Joseph Kabila of killing
oppositionists and trying to extend his term of office
unconstitutionally while the target of their outrage was inside the UN
headquarters addressing the assembly.
Kabila had nothing to say about his plans to prolong his
tenure but did assure the assembly that his government would punish
those responsible for the murder of two UN experts, Zaida
Catalán and Michael J Sharp, in
Kasaï in March. A UN Board of Inquiry report examining the
circumstances of the murder has not satisfied relatives of the victims
or other critics (AC Vol 58 No 19, Storm
over probe into UN experts murder).
Among Congolese civic activists and many UN staff, there is
extreme scepticism that the trial of nine murder-suspects by a
Congolese military tribunal will uncover the truth. Facing pressure to
commission an independent investigation, UN Secretary General Antonio
Guterres has been talking about a 'follow-on mechanism',
expressing hopes that 'independent experts' may be able to work
alongside Congolese state investigators.
IN VERY BRIEF
ZIMBABWE: Pastor Evan Mawarire
due in court on subversion charges after he criticises government's
economic record
RWANDA: Police have arrested activist Diane
Rwigara and family for 'security offences'
LIBYA: US airstrike on Da'ish
fighters points to growing cooperation with General Khalifa
Haftar
MAURITIUS: Critic drops accusations of
money laundering against Attorney-General, claiming he was manipulated
by media