DR Congo – Missing Mining Revenue

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More than double the amount spent on health and education disappears into corrupt financial networks. 

Between 2013 and 2015 more that US$750m in mining revenues went missing from the Treasury, moving instead into a dysfunctional state mining firm and other national level tax agencies, according to a report by Global Witness released on July 21st.

Although there is no solid evidence of where the cash has ended up, there is evidence that some of it has made its way into corrupt networks linked to the Congolese President Joseph Kabila.

Around $129.9m made its way to provincial tax agencies, around $95m to state-owned companies, around $52m to national tax agencies, and around $70m to other government agencies.

These funds, amounting to around a fifth of mining revenues, are stifling finance from already embattled health, infrastructure and essential public services, which across much of the country, are underfunded.

Since 2012, Global Witness also claims that the government has siphoned off $1.4bn in deals with offshore mining companies, twice that spent on health and education, this is alongside the funds lost amidst an inefficient and opaque tax system, headed by powerful individuals close to the Kabila regime.

State mining company Gécamines has been engaged in numerous suspicious transaction while also failing to contribute to the national treasury, with billions of dollars of debt. The company’s collapse in the 1990s has been attributed to many years of “looting” by former President, Mobutu Sese Seko.

The DR Congo is the largest producer of copper and supplier of cobalt in the world with cobalt resources though to be worth as much as $10bn, but regions such as Katanga, where huge multinational mining firms are at work, are also some of the poorest.

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Artisanal miners in Kailo – CC 2007. 

In a separate report, the Congo Research Group (CRG) found that president Joseph Kabila’s family “either partially or wholly owns” more than 80 businesses operational inside and outside the country.

Alongside over 100 mining permits for diamond and gold, President Kabila owns 70,000 hectares of farmland. The President’s sister Jaynet Kabila owns a stake in the country’s largest mobile network Vodacom Congo, while the President’s brother Zoe Kabila has business interests with several mining firms, reported Quartz Africa. 

United Nations (UN) experts have voiced concern that Congolese military officer, Major-General Gabriel Amisi Kumba, appears to own gold mining operations in the northeast of the country, on the Awimi River in Tshopo province.

In November 2012, Amisi was suspended as commander of Congo’s land forces after a report accused him of distributing weapons to armed groups and poachers operating in the east. Amisi was cleared by the military authorities in July 2014 and appointed to his current position the following September.

The UN also said that “almost all artisanally sourced gold in the DR Congo was exported illegally and underestimated in both value and volume.” It is estimated that during 2013, 98% of artisanally produced gold, valued at around $409m, was smuggled out of the country, reported Bloomberg

On August 17th the government announced it was suspending VAT payments on mining imports, intended to assist the government in a $700m backlog of payments owed to mining companies. Following mineral price falls in 2016 the Congolese currency lost around 21% of its value.

Find out more in the Africa Research Bulletin:

RWANDA – DR CONGO: Cross Border Market
Economic, Financial & Technical Series
Vol. 54, Issue. 4, Pp. 21669A–21670C

GENERAL: Mining Indaba
Economic, Financial & Technical Series
Vol. 54, Issue. 2, Pp. 21621C–21622A

Gold: DR Congo – Mine Collapse
Economic, Financial & Technical Series
Vol. 53, Issue. 12, Pp. 21549A

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South Sudan – Cholera Epidemic

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The threat of an uncontrollable outbreak looms large as the rainy season progresses. 

The International Organisation for Migration (IOM) has called for rapid action to prevent a cholera epidemic in South Sudan; more than 18,000 cases, including 328 deaths, have been reported in the country since June 2016.

The IOM warned that the number of cases and deaths is likely to increase significantly as the rainy season approaches, which will leave as much as 60% of the country inaccessible by road, hindering the delivery of important services.

IOM spokeswoman Olivia Headon said that a combination of factors including the rainy season, the movement of displaced persons and the ongoing conflict in the country, means that the disease is becoming increasingly difficult to contain.

“If you are maybe infected with cholera or someone in your family, if you come in contact with this and then you move to a different part of the country, you are also bringing the infection with you,” Headon said.

The scale of the problem in South Sudan is said to be unprecedented, with more than 7.5 million people dependent on humanitarian aid. Headon said that IOM and partners are promoting cholera vaccination campaigns, distributing cholera kits, repairing boreholes and conducting hygiene promotion campaigns, reported Voice of America (VOA). 

On July 28th the World Health Organisation (WHO) also launched a vaccination campaign. The WHO received 500,000 doses of oral cholera vaccine and between July 28th and August 3rd carried out a vaccination campaign in four high risk areas: Tonj East, Kapoeta South, Kapoeta North, and Kapoeta East.

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Children collecting water, South Sudan – CC 2014

Since April 2017 around 2,500 new cases have been recorded, a significant increase on previous months. Persistent drought has also led to the drying of water points, leading to populations in some regions relying on contaminated water, reported CISA

Speaking on July 19th, WHO epidemiologist Joseph Wamala said, “South Sudan has suffered from several major cholera outbreaks in the last four years. Following other successful oral cholera vaccine campaigns, WHO and partners can make a real difference in controlling the outbreak.”

However preventative measures are difficult as the country continues to grapple with ongoing conflict which emerged in 2013, pitting President Salvir Kirr against and his former deputy Riek Machar, with the ethnic Dinka, loyal to Kirr, clashing with the Nuer, allied to Machar.

The conflict has killed tens of thousands of people and displaced millions, many of whom have sought refuge in neighbouring countries. The United Nations (UN) children’s charity (UNICEF) estimates that 900,000 children in South Sudan need psychological help, with at least 150,000 living in camps

“South Sudan has a generation of traumatised children, but there aren’t enough therapists – neither in Juba, nor in remote local communities,” explained Duop Dak, one of the country’s few practicing psychologists, reported Reuters.

The German Foreign Minister Sigmar Gabriel issued a statement on August 10th, following a visit to the capital Juba, urging President Kirr to include the opposition and rebels in national dialogue. The conflict, tensions and factional violence is only exacerbating the risk of a deadly epidemic.

Find out more in the Africa Research Bulletin: 

SOUTH SUDAN: Fresh Offensive Against Rebels
Political, Social & Cultural Series
Vol. 54, Issue. 7, Pp. 21517B–21518B

South Sudan – Graft Claims Denied
Political, Social & Cultural Series
Vol. 54, Issue. 6, Pp. 21484B–21484C

SOUTH SUDAN: Humanitarian Relief Impeded
Political, Social & Cultural Series
Vol. 54, Issue. 4, Pp. 21410A–21411A

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Zambia – Media Repression

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As the government extends the state of emergency there are concerns that it is being used to stifle independent media. 

The Independent Press Institute (IPI) on July 5th expressed concern over the imposition of emergency powers and comments made by the Inspector-General of police, Kakoma Kanganja, that some media publications could be closed while the 90-day state of emergency was in place.

On July 5th, Zambian President Edgar Lungu initiated a “state of threatened public emergency” and indicated that he might declare a full state of emergency if the “existing situation” in the country is “allowed to continue.”

The move came amid a string of arson attacks, including one that burnt down Lusaka’s main market. Lungu alleged that supporters of the opposition United Party for National Development (UPND) were behind the attacks.

On July 11th the National Assembly approved emergency powers and extended the state of emergency for 90 days, although the vote was held without 48 UPND members who had been suspended after they reportedly boycotted an address by Lungu.

Inspector-General Kanganja said that some media publications could be shut down. “During this period, police will regulate and prohibit publication and dissemination of matters [that are] pre-judicial to public safety,” he said.

Others commentators have expressed concern that the emergency powers are politically motivated. IPI Director of Advocacy and Communication, Steven Ellis said, “the partial state of emergency would seem to be part of a broader effort that we have observed to silence critical voices, including the country’s remaining independent media outlets, and to step up the crackdown on the main opposition party, while at the same time fending off challenges from within his own party.”

“We fear that emergency rule could facilitate human rights violations and we call on Zambia’s government to respect the vital role of media freedom in a democracy and to refrain from exerting political pressure on the country’s media outlets,” Ellis continued.

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Edgar Lungu – Ventures Africa

Zambia has often been regarded a model for stability, democracy and human rights in Africa, but events surrounding the disputed August 2016 general elections, in which President Lungu was re-elected to a second term, have raised concerns about the state of democracy and media freedom.

UPND leader Hakainde Hichilema, who narrowly lost the 2016 presidential election to Lungu, has been arrested on treason charges after his motorcade allegedly blocked Lungu’s presidential motorcade in April 2017.

In worrying signs, the independent media has largely been suppressed. Tabloid newspaper The Post was closed in late 2016. In February 2017, a warrant was issued for the arrest of Post owner and Editor-in-Chief Fred M’membe.

In August 2016, the government also suspended the operating licences of the country’s largest privately-owned television channel, Muvi TV, and two private radio stations on “national security” grounds, although the suspensions were lifted after the broadcasters apologised.

The government later acknowledged that the broadcasters were targeted because of their perceived bias against Lungu’s Patriotic Front (PF) party before and after the elections, reported the Independent Press Institute.

Earlier in June African Arguments commented that with 48 opposition MPs suspended, an opposition leader in jail, and clear signs of growing authoritarianism, the International Monetary Fund (IMF) still decided to agree an aid package of US$1.2bn, only strengthening further Lungu’s position.

Some analysts have said that real debt in the country stands at around $30bn, in contrast to figures quoted by Finance Minister Felix Mutati of $7.2bn. Based on projections from current economic growth rates, some analysts claim that the country will not be able to pay off the debts in a sustainable way, according to Zambia Reports.

Find out more in the Africa Research Bulletin:

ZAMBIA: Slide To Dictatorship?
Political, Social & Cultural Series
Vol. 54, Issue. 6, Pp. 21465A–21466C

ZAMBIA: Hakainde Hichilema Arrested
Political, Social & Cultural Series
Vol. 54, Issue. 4, Pp. 21396C–21397A|

ZAMBIA: Re-Election Bid?
Political, Social & Cultural Series
Vol. 54, Issue. 1, Pp. 21287C–21288C

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Ethiopia – Grand Renaissance Dam

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As the government pushes forward with huge dam project, concerns resurface about the downstream impact.

The government of Ethiopia is currently constructing the Grand Ethiopian Renaissance Dam (GERD), which once completed will be the largest hydropower facility in Africa.

The huge project will contribute around 6000 MegaWatts (MW) of power, nearly triple the country’s current electricity generation capacity, and will also present an important source of economic revenue for the government.

The project is seen by Ethiopia as a strong symbol of unity, with the Ethiopian Herald claiming that it fills Ethiopians with hope, not just a development project but a symbol demonstrating the wish to overcome poverty.

Statistics from 2016 show that around 30% of Ethiopia’s population have access to electricity with more than 90% of households still relying on traditional fuels for cooking, leading to respiratory infections, which are the main cause of death in the country.

The Ethiopian government rationalises the project in these terms and the economic benefits are clear. Critical commentators, however, have pointed out that in areas in which 70% of the population rely on subsistence agriculture, standard of living needs to improve before Ethiopians will consume additional electricity. Unless the electricity is subsidised by the government.

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Grand Renaissance Dam – All Africa

The government also sees crucial revenue opportunities, particularly through electricity exports. Power purchase agreements have already been signed with Djibouti, Kenya, Rwanda, Sudan and Tanzania.

But there are concerns about how this dam will affect downstream states, in particular Sudan and Egypt. Initially, Sudan was opposed to the construction of the dam, but has since agreed to purchase electricity upon its completion, and the respective countries have agreed to collaborate on a ‘free economic zone’.

In May 2017, the Middle East Monitor concluded that Egypt, Ethiopia and Sudan had just finished their 14th round of unsuccessful discussions about how to manage the Nile River.

The Ethiopian government expects it will take y five or six years to fill the GERD reservoir. In contrast, Diaa Al-Din Al-Qousi from Egypt’s Ministry of Water Resources and Irrigation said 12 to 18 years is needed to guarantee water security for Egypt.

The Geological Society of America said that the Nile’s fresh water flow to Egypt may be cut by as much as 25%, with the electricity generated by the Aswan High Dam in Egypt cut by a third. Egypt is already one of the most water-stressed countries in the world, reported the Institute of Security Studies.

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Nile Basin – Global Water Forum

Ethiopia insists that the project has been conducted with adequate transparency but since it was announced in 2011 Cairo has periodically demanded that construction cease, claiming it is protected by a 1959 treaty, that divides the river between Sudan and Egypt, but does not include Ethiopia.

Ethiopia, however, claims that it never signed the treaty and highlights that Egypt has not signed the Cooperative Framework Agreement (CFA) of the Nile Basin States.

Analysts at the US-based consulting group Stratfor have said that Egypt’s reaction will be determined by its political leadership, but that a large-scale reduction in water from the Nile would be intolerable to any Egyptian government’, reported the Institute of Security Studies.

Find out more in the Africa Research Bulletin:

WATER: Ethiopia
Economic, Financial & Technical Series
Vol. 54, Issue. 5, Pp. 21732B–21733C

WATER PROJECTS: Ethiopia – Kenya
Economic, Financial & Technical Series
Vol. 54, Issue. 2, Pp. 21624B–21625C

ETHIOPIA: Regional Powerhouse
Economic, Financial & Technical Series
Vol. 53, Issue. 9, Pp. 21411A–21412C

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Botswana – Masire Obituary

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The erstwhile premier is credited with bringing stability to the southern African nation. 

President of Botswana between 1980-1998, Katumile Masire was a cattle herder turned politician who led the country through turbulent economic, social and political times. He was heralded by many as a model leader on the continent.

In 1966 when Botswana – then Bechuanaland – became independent from the UK, it had just two miles of paved roads and a single public secondary school. Diamond discoveries changed this and Masire and his predecessor Seretse Khama used revenues to fund education, healthcare and infrastructure.

In 1989, he shared the Africa Prize for Leadership, awarded by the Hunger Project in recognition of the food distribution efforts that helped the country avoid starvation and famine.

Masire also managed to negotiate a delicate relationship with neighbouring South Africa, a major economic partner but the Botswanan government was opposed to apartheid policies. “He had to walk a line in a really rough neighbourhood,” said Chester Crocker, a former US Assistant Secretary of State for African affairs.

Botswana is in many respects remarkable when compared to other African nations, with a relatively robust democracy and limited, noticeable corruption. This has meant the tourism industry has bloomed, particularly wildlife tourism.

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Masire – Premium Times. 

Masire was born in Kanye in southern Botswana near the South African border in 1925. He was a herder before enrolling in a primary school at 13. After his parents died when he was in his early twenties, he became e a teacher to support his siblings.

He also worked as a journalist, served on tribal and regional councils, and was a founder and secretary-general of the Botswana Democratic Party (BDP), now the dominant political party in the country.

After leaving office, he advised other African leaders and chaired the International Panel of Eminent Personalities that investigated the Rwandan genocide of 1994. He made important contributions to peace efforts in DR Congo and helped to end Mozambique’s civil war.

Masire stepped down in 1998 after overseeing a lengthy period of economic growth, largely oriented around effective management of diamond wealth. In retirement, Masire established the Sir Ketumile Masire Foundation, which aims to improve agriculture, governance and children’s health across the region.

He died on June 22nd 2017 aged 91.

(the Independent 27/6; BBC News 23/7)

Find out more in the Africa Research Bulletin:

BOTSWANA: Spat Over Vice President
Political, Social & Cultural Series
Vol. 51, Issue. 11, Pp. 20344A–20344C

BOTSWANA: Khama Wins
Political, Social & Cultural Series
Vol. 51, Issue. 10, Pp. 20308C–20309B

Botswana: Inquiry into Opposition Leader’s Death
Political, Social & Cultural Series
Vol. 51, Issue. 8, Pp. 20242B

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Nigeria – Borrowing Limit

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Diversification efforts fail to bear fruit as the country can no longer afford to keep borrowing.

According to Finance Minister Kemi Adeosun, who was speaking during a quarterly business forum in Abuja on July 11th, the country can no longer afford to keep borrowing and must find alternative fundraising mechanisms.

Adeosun said that the country should seek to continue to diversify its economy to generate more revenue.

“We have got to get our budget bigger and to do that we cannot borrow anymore. We simply have to generate more revenue, we have to plug the leakages, we have to improve tax collection so that we can manage our borrowing,” she said.

“The problem is that we have been relying on oil and oil gave us a big budget size,” the minister added.

Nigeria has been in talks with the World Bank and the African Development Bank (AfDB) for at least US$2bn in loans, with another $1.5bn proposed from international sources. President Muhammadu Buhari has also proposed borrowing of up to $30bn to finance major infrastructure projects across the country, although this continues to remain stalled.

The Naira (N) 7.44trn (about $24.39bn) 2017 budget has a deficit of N2.2trn, according to the Premium Times. Meanwhile, Nigeria’s external debt increased to $13.8bn in the first quarter of 2017 from $11.4bn in the fourth quarter of 2016, reported Vanguard.

The government had planned to borrow extensively from overseas to fund this record budget, aimed at enabling the country spend its way out of its first economic recession in around 25 years.

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Finance Minister Kemi Adeosun – Premium Times

However, some lawmakers, sceptical about the proposal, expressed fears that it might not be favourable in the long run, especially as the government presented no clear plans of how it will utilise the proposed loans.

When Buhari was elected in 2014 he was hailed as the saviour, a transformer of the economy, and the man to lead the country away from fossil fuel reliance and susceptibility to oil price volatility.

Since then little has changed and he has spent much of the past year being treated for a unspecified illness. According some commentators and analysts his financial and economic policies have been largely incoherent.

The push for economic diversification and boosts for manufacturing have not materialised. Many manufacturers were banned from receiving important foreign exchange and in 2016 the manufacturing sector shrank, reported the Financial Times.

However according to reports from BBC News, Buhari is now “recuperating fast” and will soon return to Nigeria from London, where he has been receiving treatment since May. His absence has led to speculation about whether he will be able to resume his position. In his place Buhari has given Vice-President Yemi Osinbajo full powers to act.

Find out more in the Africa Research Bulletin:

NIGERIA: Emergency Aid Shortfall
Economic, Financial & Technical Series
Vol. 54, Issue. 5, Pp. 21707C–21709A

NIGERIA: Dim Light at End of Tunnel
Economic, Financial & Technical Series
Vol. 54, Issue. 4, Pp. 21675A–21676A

NIGERIA: Forex Boost
Economic, Financial & Technical Series
Vol. 54, Issue. 3, Pp. 21649A–21651C

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Kenya – University Strike

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Staff at universities across the country threaten to walk out again over long-running pay dispute. 

The Universities Academic Staff Union (UASU) and the Kenya Universities Staff Union (KUSU) on June 30th gave the government until midnight to fully implement the Collective Bargaining Agreement (CBA), which had been agreed in March 13th after teachers ended a 54-day strike.

UASU Secretary General Constantine Wasonga told the press that lecturers are yet to receive the pay they had been promised in March and are now owed a considerable amount in arrears.

“If the CBA is not implemented by close of business today all university lecturers and professors in all Kenyan public universities shall withhold their services effective from today and the strike shall continue until the registered 2013-2017 CBA is fully implemented,” Wasonga said.

“This will be the grandmother of all strikes. Lecturers are more energetic and determined than ever to fight for their dignity and constitutional rights,” Mr Wasonga continued.

At least 33 public universities and their constituent colleges across the country with more than 500,000 students will be affected should the lecturers and university staff carry out their threat.

In March this year, UASU and university councils agreed to sign the 2013-2017 CBA ending the 54-day strike that paralysed learning and research in public universities since January 19th.

The CBA stipulated that lecturers would get a 17.5% increase in basic salary and a 3.9% increase in house allowance, despite those such as the Maasai Mara University, which already had higher pay increments.

Early February, the union rejected a Kenyan Shillings 10 billion offer by on grounds that it was inadequate and failed to harmonise salaries.

KUSU Secretary General Charles Mukhwaya said lecturers are extremely disappointed by the government for their failure to implement a CBA that they signed and registered in court, reported the Daily Nation.

Find out more in the Africa Research Bulletin:

KENYA: Pre-Election Violence
Political, Social & Cultural Series
Vol. 54, Issue. 5, Pp. 21436B–21437B

KENYA: Gender Quota
Political, Social & Cultural Series
Vol. 54, Issue. 4, Pp. 21392A–21392C

KENYA: Land Clashes
Political, Social & Cultural Series
Vol. 54, Issue. 3, Pp. 21366C–21368A

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