confidentially speaking
The Africa Confidential Blog
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.
THE WEEK AHEAD IN BRIEF
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
