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The Africa Confidential Blog

  • 18th June 2019

NIGERIA/EUROPEAN UNION: Buhari promises consolidation in his second term but faces chorus of criticism on political shortcomings and security crises

Patrick Smith

This week we start in Abuja with President Muhammadu Buhari's goals for his second term which look much like the ones for his first term. And then to East Africa where a temporary reopening of a key crossing point between Rwanda and Uganda has done little to build confidence. Still in East Africa, President John Magufuli mixes bullish forecasts for the economy with a bulldozer-like strategy towards the opposition. And then in West Africa, cooperation between Ghana and Côte d'Ivoire is showing positive results as they use their producers' strength to take on the international cocoa market.

NIGERIA/EUROPEAN UNION: Buhari promises consolidation in his second term but faces chorus of criticism on political shortcomings and security crises

With his counterparts from Ghana, Rwanda, Senegal, and Zimbabwe in attendance, President Muhammadu Buhari celebrated Democracy Day on 12 June as the effective start of his second term. It would be a period of consolidating growth, economic restructuring and fighting corruption, said Buhari. He says he wanted to lay the foundations for taking 100 million Nigerians out of poverty in the next decade.

Yet the data is currently pointing in the opposite direction. Economic growth per capita is shrinking, the jobless figures are rising and conditions for most of the country's 200 million people are getting tougher.

All the data shows the government is still struggling to turn around the economy, to boost farm production and diversify away from dependence on oil exports. This is despite the government's impressive team of technocrats in the key economic ministries and an agreed medium-term strategy.
Some blame a hollowed out civil service and a lack of a strong middle management in the public service. Others think that a ministerial reshuffle could change the dynamic.

Buhari is yet to name any of his new ministerial team; meanwhile the incumbents are continuing in their posts and there are likely to be several holdovers from his first term.

The first changes may be announced at the beginning of July when the new National Assembly starts sitting with the new leaders of the Senate and the House of Representatives. There is growing pressure for a wide-ranging shake up in the ministries of defence and internal affairs, as well as the command structure in the armed forces in the wake of a series of deadly attacks on civilians and security installations by fighters from Boko Haram and the Islamic State West Africa Province.

There will also be renewed pressure for political reform in the wake of a damning report on this year's elections by the European Union. Its election observers identified 'systemic failings' marked by operational and transparency shortcomings, security problems and low turnout in the presidential, parliamentary and governorship vote.

'Fundamental electoral reform' was needed 'to allow time for debate, legislative changes and implementation well in advance of the next elections,' said EU chief observer Marie Arena, a Belgian Socialist MEP.

RWANDA/UGANDA: The political row behind the border closure is starting to change regional trading patterns

Despite an announcement by President Paul Kagame's government on 10 June re-opening the Gatuna border (known as Katuna on the Uganda side) for 12 days, there has been no resolution of its political dispute with President Yoweri Museveni's government. The crisis is blocking one of the main trade arteries in East Africa.

The two leaders met in South Africa last month, where they sat next to each other for Cyril Ramaphosa's presidential inauguration but there has been no movement on the main gripes between their governments or signs of follow-up discussions.

Shortly after re-opening the border, Rwanda paraded 20 of its citizens who it said had been illegally detained in Uganda and had been deported by road to the border.

Observers say that Gatuna/Katuna, once one of the busiest crossing points and trade hubs in the region, is now a ghost town.

The causes of the dispute are political – Kagame and Museveni trade accusations of destabilisation – but its main side effects are economic. Ugandan traders have been advised by their government to seek alternative markets in South Sudan, Tanzania and Congo-Kinshasa to compensate for the loss of the Rwandan market.

Rwanda is following a similar path, signing agreements on cross-border trade, aviation and elimination of non-tariff barriers with Congo-K and holding a private sector bilateral investment forum with Tanzania.

TANZANIA: Cracking down on dissidents, President Magufuli ploughs on with state-led economic growth strategy

On Thursday, (20 June) Finance Minister Philip Mpango is due to unveil his budget plans in detail but has already outlined measures that will include 2.3 trillion shillings (US$1billion) of new commercial borrowing and predicts the economy will grow at 7.1% next year. That would make it one of Africa's fastest expanding economies. However, the IMF is far less bullish, forecasting growth levels at just over 4%.

At the same time the political climate has become far harsher. Leading opposition politician Zitto Kabwe of the Alliance for Change and Transparency reported on social media that he had been detained by immigration officials last Tuesday (11 June) as he tried to leave the country, and accused of publishing false information under the media services act. Kabwe added that he has been banned from foreign travel.

Oppositionists and civic activists say that Magufuli is seeking to crush them via repeated arrests, crackdowns on public meetings and intimidation ahead of next year's presidential elections.
Tundu Lissu, the MP for the opposition Chadema party who narrowly survived an assassination attempt linked to the regime, plans to return to Tanzania in early September. Whether he will be allowed to re-enter the country will be the next test for Magufuli's increasingly intolerant regime.

GHANA/CÔTE D'IVOIRE: New collaboration between Africa's two biggest cocoa producers tries to strengthen bargaining power and push up prices

The governments of Ghana and Côte d'Ivoire have long sought to establish what they called 'Choc-pec' – some sort of market cooperation through which they could defend the price of their cocoa crops. The two countries, which produce nearly two-thirds of the world's cocoa production, have been stepping up efforts to boost local processing of the beans, and to get a better price for beans sold on the terminal markets in Europe.

Last week they suspended sales of their cocoa crop for the 2020/21 season. The move, which followed a demand for a minimum $2,600 per tonne price, quickly hit cocoa futures, pushing up prices by almost 10% to $2,550 – their highest level since July 2018.

The two governments are seeking a better deal for existing farmers as well as to encourage younger farmers to move into the business and attract fresh investment. It is unclear whether the market reaction is merely temporary, but it will encourage both governments to double down ahead of talks with the industry.


THE WEEK AHEAD IN BRIEF

EGYPT: Death of former President Mohammed Mursi in Cairo courtroom will reinforce criticism of the El-Sisi government's rights record

SUDAN: Junta brings ousted leader El Beshir to court on corruption charges but makes no concessions to restart talks about handover to civil rule

ALGERIA: Former premier Ahmed Ouyahia back in court to face second round of corruption charges while protestors keep up the pressure for free elections

SWITZERLAND/UNITED KINGDOM: Metalor, the giant Swiss-based refinery company, will no longer accept gold from artisanal gold miners citing compliance concerns