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The Africa Confidential Blog

  • 9th July 2019

The week ahead in Africa: ACFTA, Sudan, Nigeria, Tanzania, Telecoms, Cameroon

Patrick Smith

This week we start in Niamey with economic history in the making and then to Khartoum where activists are demanding a political breakthrough. Although the new government is yet to be announced in Nigeria, state regulators are taking a tougher line and in Kenya, the death of a telecoms pioneer is concentrating minds about the future of the industry. Tanzania's president is blocking a Chinese port project and Cameroon's president can no longer escape his country's crisis at his holiday retreat in Switzerland.

AFRICAN UNION SUMMIT: Fanfare for the world's newest trade bloc as Ghana wins race to host its headquarters but negotiations over the rules are just starting

The grand AU summit in Niamey, Niger, heralding agreement for the African Continental Free Trade Area, brought together national leaders and corporations at the launch of what the International Monetary Fund calls a 'a game changer' for the region's economies.

ACFTA sets up a stronger economic base for the political club, the AU. Modelled on the European Union's single market, the goal is to create the world's biggest free-trade bloc, including 1.3 billion people and a $3.4 trillion market. The AU summit ends tomorrow (10 July).

After delays due to local concerns about dumping, Nigeria's President Muhammadu Buhari finally signed up to the accord on Sunday (6 July). Eritrea is the only hold-out among the continent's 55 nations, but only 25 states have ratified so far.

Tough negotiations over the rules and regulations lie ahead.

Accra will host the ACFTA secretariat tasked with making the bloc a reality and reducing or scrapping all tariffs.

So far, the regional trade blocs have a mixed record on cutting customs costs and import taxes. It is hard to see how the regional blocs can continue to exist in their current form without some kind of strong co-ordination from the AU.

The blocs, including the 12-nation Economic Community of West African States and the East African Community, introduced protectionist measures to boost local manufacturing at the expense of other regions. Those interests will have to be reconciled if the continental bloc is to work.

SUDAN: There is scepticism and mistrust over the military's belated agreement with civilians for a transitional authority

The outline of the political deal between the ruling generals and pro-democracy activists for a transitional authority dates back to the immediate aftermath of the overthrow of Omer el Beshir on 11 April. After three months of protests and a brutal military crackdown, the two sides are to sign a formal agreement this week to set up a 10-member sovereign ruling council and a cabinet of technocratic ministers.

Activists are sceptical about the council, which will be equally divided between military and civilians but chaired initially by a military appointee. They want access to the internet and social media restored and the Rapid Support Forces confined to barracks.

NIGERIA: No government yet but officials are sending out tough messages

Although President Muhammadu Buhari, who won a second term in March, has yet to announce his new cabinet, the central bank and the main anti-corruption agency are stepping up the fight against errant financiers and politicians.

Last week, the Economic and Financial Crimes Commission (EFCC) seized jewellery worth $40 million from a house belonging to former oil minister Diezani Allison Madueke, who is under investigation in London on money-laundering charges. With stronger support from the National Assembly, the EFCC looks set to pursue several high-profile politicians.

And Central Bank of Nigeria Governor Godwin Emefiele is telling the country's banks to ramp up lending to local businesses or face tougher capital requirements. In a circular on 3 July, the central bank warned that lenders who fall short of a target minimum loan-to-deposit ratio of 60% by September would have to maintain higher cash reserves. Some lenders have complained that being forced to lend will inevitably increase the volume of bad loans on their books – these already stand at 9% of the total balance sheets, above the central bank's target of 5%.

TANZANIA: President Magufuli slams brakes on China's port project at Bagamoyo, condemning 'exploitative terms'

The 'bulldozer' – President John Magufuli's apt nickname – looks set to flatten the plan for China to build a $10 billion port at Bagamoyo after rejecting the financing terms and operating conditions.

Work started in 2015 on what was meant to become the biggest port in east Africa and a key part of China's $900bn Belt and Road Initiative. 'They want us to give them a guarantee of 33 years and a lease of 99 years, and we should not question whoever comes to invest there once the port is operational,' Magufuli told local businesspeople last week. He added that the Bagamoyo port would undermine the $500m expansion of the Dar es Salaam port, due for completion this year.

AFRICAN TELECOMS: After the Collymore revolution, a new era of rivalries between finance, tech and digital companies is coming

On 3 July, business and political leaders paid tribute to Bob Collymore, chief executive of Safaricom, who died of leukaemia a week earlier. He presided over a revolution that put Kenya on the global telecoms map with its pioneering mobile money. 'We've lost part of our soul,' President Uhuru Kenyatta told mourners at the funeral, standing alongside his deputy William Ruto and Britain's former prime minister Tony Blair.

Safaricom's mobile money service M-Pesa became ubiquitous across Kenya and made the company the second most profitable in the country. Tough questions face Africa's telecoms giants as they struggle to find new paths for expansion.

Under Collymore Safaricom became one of the firms most closely connected to the Jubilee government. As a Guyana-born Briton – with a Kikuyu wife – he had an outsider status that deflected partisan criticism. The appointment of his successor, and the political calculation behind it, will be one of the most significant in Kenyatta's second term.

Kenya's continental lead in technology looks vulnerable. And there are signs that the continent's biggest markets – Nigeria and South Africa – may have peaked for now.

The battle for market share is intensifying. Banks, and now social media companies, are getting into the mobile money and remittances markets.

South Africa's MTN tried to dissipate criticism in Nigeria by listing locally but got embroiled in controversy. India's Bharti Airtel, hot on the heels of MTN, listed in London and is planning a $4.4bn listing in Nigeria this week.

Then there's Ethiopia's plan to sell two telecoms licences to foreign firms and sell off 49% of the state-owned Ethio Telecom. Telecoms reform has been earmarked ahead of banking as the first major sector to be opened up by Prime Minister Abiy Ahmed's government. Last month, lawmakers agreed to establish an independent regulator accountable to the Prime Minister's office. South Africa's MTN, Britain's Vodafone and France's Orange are among the firms to have shown interest in investing in Ethiopia's market.

CAMEROON CRISIS COMES TO SWITZERLAND: President Biya's annual sojourn at the Geneva Intercontinental is marred by protests

Authoritarianism, grand corruption and economic mismanagement have laid the groundwork for a catastrophic dénouement to President Paul Biya's 37-year-rule. Yet the African Union and the United Nations have said almost nothing as the crisis escalates.

While security in northern Cameroon crumbles as Boko Haram jihadists mount terrorist attacks from neighbouring Nigeria, grievances about discrimination in the two predominantly Anglophone provinces have erupted into armed insurrection over the last three years.

None of this has broken Biya's annual custom of spending several weeks of the summer at the Intercontinental Hotel in Geneva. Biya and entourage take the Presidential suite and the entire top floor of the hotel at an estimated cost of US$40,000 a night.

This year, Biya's holiday in Geneva triggered noisy street protests in the usually serene city. Six of Biya's security officers were arrested after a local journalist covering the protest was assaulted.
The Geneva confrontation has drawn attention to Cameroon's crisis. Mediators from the Geneva-based Centre for Humanitarian Dialogue are trying to host negotiations between Cameroonian officials and oppositionists. Biya will take no part in those and his holidaying presence in one of Switzerland's most luxurious hotels is regarded as a provocation by oppositionists.


BENIN: Activists rail against President Talon's continuing crackdown on oppositionists and journalists despite release of ex-President Boni Yayi from detention

ETHIOPIA/ISRAEL: Policeman's fatal shooting of Ethiopian in Tel Aviv prompts mass rallies, accusations of worsening racism and social division

ZIMBABWE: Foreign Minister Sibusiso Moyo due in London this week to woo investors after Zim dollar 2.0 loses over a quarter of its value in two weeks